Q1 2021 Longeveron Inc Earnings Call
Good morning, welcome to the longevity runs 20, punchy, one soft quarter and earnings and business update conference call.
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I would now like to turn the conference over to Brendan Payne with Stern Investor Relations, the company's Investor Relations Bob Pease go ahead Sir.
Thank you Bethany.
Morning, everyone and thank you for joining today's conference call to discuss longevity on the corporate developments and financial results for the 2021 first quarter ended March 31 2021.
With us today are Jeff Green the company CEO, Dr. Joshua Harris co founder and Chief Scientific Officer of Chairman as well as James Globule, The company's Chief Financial Officer.
Day longevity released financial results for the first quarter ended March 31, 2021, if you have not received longevity rounds earnings release. Please visit the company's website at longevity of on Dot com.
During this call we will be making forward looking statements regarding future events and the performance of all logged every day.
The forward looking statements are subject to risks and uncertainties that could cause actual events and results to differ materially from the forward looking statements. These risks are described in further detail of the company's press releases and reports filed with the SEC. These forward looking statements represent of the company's judgment as of today Friday may 14th 2021, and we assume no.
<unk> to update any of these forward looking statements unless we are required to do so by applicable law or by Securities regulatory authority.
Now ill turn the call over to Jeff Green longevity of Ards Chief Executive Officer. Thank you, Jeff you may begin.
Thank you Brendan and thank you Bethany and good morning, everyone and welcome to the longevity of on its first quarter 2021 business update and earnings call. We're very excited to describe its share of the tremendous progress. We've made the so far this year and to lay out near term catalysts, we are targeting in our various clinical development programs.
As a high level summary, however, our Loma <unk> cell therapy program has three data readouts in three trials over the next two quarters and we expect to initiate three new phase II trials in the second half of 2021.
So needless to say we are executing on our clinical plan as outlined in our IPO and it will be an exciting and very active half year for the company.
On <unk> as the leading clinical stage biotechnology company developing cell therapies for chronic aging related diseases and other life threatening conditions for which there are no approved treatments aging of the number one risk factor for chronic disease stem cell exhaustion cellular senescence and chronic inflammation together referred to as inflammation.
Compromise, our ability to repair and regenerate damaged tissues and organs inflammation is linked to the rise of progressive chronic diseases, such as Alzheimers disease and aging frailty. Our focus since day, one has been to develop safe and effective allogeneic cell therapy solutions for the treatment of prevention of these diseases.
On <unk> lead therapeutic investigational product called low Ms. L. B as of living cell biologic made from the specialized cells isolated from the bone marrow of young healthy adult donors H 18 to 45, the specialized cells called medicinal signaling sales or mfc's reside within various tissues in our body.
And are considered to be the body's endogenous or built in repair mechanism that promotes regeneration of damaged tissues and organs. When we're young we have an adequate supply of the cells and the function as needed as intended unfortunately in both humans and animals. There is a clear age related decline in both number and potency of these cells.
And this is believed to be one of the primary reasons for age associated increase in chronic disease.
Now I'd like to provide an update on our LOE Michele <unk> clinical research programs, beginning with the Alzheimers disease program.
This past April we announced additional results from our phase one all timers disease clinical study. We are extremely excited about the preliminary efficacy results that showed that the low dose low michelle be treated subjects had a slower decline in cognitive function compared to the placebo treated subjects over 52 weeks as measured by the commonly use <unk>.
Any mental state exam at 13 weeks post infusion the low Michele <unk> treated groups cognitive function score was nearly unchanged from baseline by contrast, the placebo group had declined by nearly two seven points, which is statistically significantly worse than the <unk>.
Hello, Michelle the group, we saw the statistically significant difference again at 39 weeks and by 52 weeks. The placebo group score declined by nearly six points compared to a drop of only two points in the loan so in the low dose of wellness lb group.
So with the initial safety hurdle overcome and the exciting results related to cognitive function as well as statistically significant results related to activities of daily living quality of life assessments and various inflammation related biomarkers of interest. We are enthusiastically moving this program forward into a phase II trial, we are on track to initiate.
This phase two trial in the second half of this year.
Furthermore, we have submitted the data for publication and we plan to present at the upcoming Alzheimers Association International Conference in July.
Alzheimers as the leading form of dementia in this disease affects nearly 6 million Americans annually leads to early mortality and creates a tremendous burden on families and societies with no cure all of <unk> is currently the sixth leading cause of death in the U S. So this transition to phase II is very is a very important program and we look forward to enrolling the first patient.
In the phase II trial.
Now, let's turn our attention to the aging frailty program aging frailty as of clinically defined an extreme form of unsuccessful aging. It is readily recognized by combination of hallmark clinical signs and symptoms, which can include involuntary muscle loss weakness slowing down fatigue and unintentional weight loss.
The low activities, well low activity levels as well as being an of chronic inflammatory state of <unk>.
Agnosis of aging frailty indicates of the individual is at elevated risk for poor clinical outcomes, such as hospitalization institutionalization and death.
Despite the pressing need for interventions there are no FDA approved therapies that can slow down reverse or prevent aging for LT frailty would be considered of new indication from a regulatory standpoint, and thus will require discussions with FDA and other health authority authorities has the potential clinical and regulatory pathways for our future approval. So we are evaluating.
<unk> as a treatment for aging frailty, because the potential mechanisms of action may address the biological underpinnings of this condition. Our goal is to improve health independence and quality of life. In these individuals who are at risk from becoming dependent and disabled.
In the first quarter of 2021, we completed our two U S clinical studies and we plan to announce the data from these trials in the third quarter of this year.
Yes.
Our U S phase II trial as are our most advanced clinical trial and aging Frailty program. This 149 subject trial is evaluating the effect of loan the Selby infusion compared to placebo on physical function and endurance by using the six minute walk test as the primary efficacy endpoint in addition to walking.
Since some of the on the other endpoints in the trial include grip strength walking speed balance fear and risk of following sexual function patient questionnaires and biomarkers of inflammation.
Our other U S royalty trial, which will be read out in the third quarter is the phase one two HERA trial, which was designed to evaluate whether <unk> can improve immune response to influenza vaccine in aging frailty subjects as well as to evaluate Lois lvs possible effects on the frailty endpoints I just.
Listed for the larger 149 subject trial the.
The primary measure of efficacy in this study is serum antibody production as measured by Hemagglutinin coordination of inhibition assay, which is a measure of the amount of circulating antibodies that would be considered protective against the flu virus.
And then finally in our aging Frailty program, our Japanese phase III aging frailty clinical study is on track to initiate this year. This trial will be led by the National Center for Geriatrics in Gerontology, which is the Japanese equivalent to the National Institute on aging in the U S. Japan is of progressive and favorable regulatory framework for regenerative medicine products and offer.
Several expedited pathways to market, including potentially of conditional approval after phase II, which is solely at the discretion of the Japanese <unk> as well as the hospital based approval using of self pay model. We use it we view this as a very significant opportunity for the company because of the potentially faster pathway to marketing authorization.
And finally in the frailty of dementia Research program, we sponsor of registry in the Bahamas under the approval of authority of the National stem cell Ethics Committee, the Bahamas registry trial administered <unk> to eligible patients at two private clinics in Nassau for a variety of indications while <unk> is considered an investigational product in the Bahamas.
Under the approval terms from the National stem cell Ethics Committee, we are permitted to charge a fee to participants, which offsets the cost of sponsoring the registry trial.
Participation in the registry hasnt slowed over the past year is the result of COVID-19, but it's as possible it's possible that as travel restrictions ease and vaccination rates increase in the elderly population, we will see an increase in interest in the registry trial.
Now let's touch.
On our acute respiratory distress syndrome or <unk> program. In 2020, we were approved by the U S. FDA to conduct the phase one study in <unk> caused by either COVID-19 of our influenza virus approximately 200000 people suffer from all cause of <unk> in the U S annually with the mortality rate of roughly 40%. These <unk>.
<unk> are likely to increase as a result of the COVID-19, pandemic, which could become a seasonal epidemic older persons those with aging frailty and those with the metabolic syndrome are of significantly increased risk for severely poor outcomes from <unk> due to viral infection, including prolonged hospitalization and death.
We are currently enrolling subjects in our phase <unk> randomized double blind placebo trial and expect this trial to be completed with data in 2022.
Lastly, I'd like to discuss our hypoplastic left heart syndrome, or HLA Chess program HLA Hs is a severe congenital birth defect in which the left ventricle of the heart is either severely underdeveloped or is missing babies born with HLA. Just now undergo a complex three stage heart reconstruction over the course of years, which improves the survival rates.
Of the babies. Unfortunately, the need for heart transplant transplant is still high in this population do the right ventricular failure as such there is an important unmet medical need to improve right ventricular function in these patients to improve both short term and long term outcomes to that end, we have completed our 10 patient multicenter.
Open label Phase, one clinical trial, and we expect phase one top line results in the second quarter of this year. The phase II trial is on track to initiate in the second half of 2021.
So to close I want to summarize the near term milestones that we believe will drive significant shareholder value, including one initiate phase of our phase II clinical trial in Alzheimer's disease, we will announce phase one results from the HOS HLA Jeff's trial in the second quarter and announce the results of two phase III aging frailty trials in the third quarter.
<unk>, we plan to initiate our phase two Japanese aging frailty trial in the second half of this year as well as initiate the phase II HLA Hs trial in the second half of this year.
As I hope, you'll agree where we are working aggressively to advance <unk> through clinical trials in various indications as evidenced by our progress thus far our core business strategy is to become a world leading regenerative medicine company through development and commercialization of novel cell therapy products for unmet medical needs needs with an emphasis on aging related.
Patients with that I will now turn the discussion over to James <unk>, who will provide detailed information about our financial results for the quarter ended March 31 2021 James.
Thank you Jeff.
Good morning, everyone and thank you for joining us most of what I'll be covering this morning has been presented in more detail on our consolidated financial statements and in our management's discussion and analysis of operations for the three months ended March 31, 2021, and 2020, which has been filed or will be filed today.
First quarter ended March 31, 2021, and 2020 revenues for the three months ended March 31, 2021, and 2020 were approximately <unk> 4 million and $1 $7 million, respectively revenues from the three months ended March 31, 2021 were approximately $1 3 million or 78% lower when compared to the same period in 2002.
Primarily due to a decrease in clinical trial revenue year over year and grant revenue compared to that recorded in 2020.
Net revenue for the three months ended March 31, 2021, and 2020 was <unk> 2 million and <unk> 9 million respectively.
Net revenue for the three months ended March 31, 2021 was approximately $7 million of 78% lower when compared to the same period. In 2020. This resulted from less research grant funds of being available as various company clinical trial programs concluded in the quarter.
Clinical trial revenue, which comes from the companies Bahamas Registry trial for the three months ended March 31, 2021 and 2020.
Was approximately <unk>.
6 million of 78% lower when compared to the same period in 2020.
During the first quarter of 2021 clinical trial revenue, which is comprised of the Bahamas registry trial was negatively impacted by the COVID-19 travel restrictions as the participants continue to have concerns with respect to for international travel.
Research and development expenses for the three months ended March 31, 2021 increased to approximately $1 4 million from approximately <unk> 3 million for the same period in 2020.
This increase of $1 1 million of 367% was primarily due to an increase in research and development expenses that were not reimbursable by grants, including also a <unk> 4 million charge for equity based compensation recorded from RSC was granted.
General and administrative expenses for the three months ended March 31, 2021 increased to approximately $2 2 million compared to <unk> 7 million from the same period in 2020, the increase of approximately $1 5 million of 221% was primarily related to an increase for compensation insurance and professional expenses incurred.
During this current period, including <unk> 8 million of equity based compensation recorded four hours use grant.
Net loss increased to approximately $3 1 million from the three months ended March 31, 2021 from a net loss of <unk> 2 million from the same period in 2020.
Our cash as of March 31, 2021 was $24 5 million compared to <unk> 8 million as of December 31 2020 the.
The increase in cash period over the period was the result of the completion of the company's IPO in February of this year.
Our cash in the first quarter of 2021 had increased by $29 1 million in funds received from our IPO.
Therefore, we believe our based on our current operating plan of financial resources that our existing cash on hand will be sufficient to cover expenses and capital requirements through at least the fourth quarter of 2022.
With that I will turn the call back over to Jeff. Thank you.
Great. Thank you James.
Yes.
At this time I think we will open the conference call for questions and turn it back over to Bethany.
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We got in the patch be having any questions coming through on the telephone sales.
Brendan.
Perfect well, thank you everyone for joining us today.
Did have one questions submitted online per management with so many events to look forward to in this coming year, which of the milestones upcoming do you think will be most significance from an investor's standpoint in terms of value inflection.
Super Thank you for the question.
The value driving events for all companies in this space for biotech companies.
That are conducting clinical research as always.
The ability to generate.
Both compelling data and data that allows you to transition into later stage trials. So the company's deep in the phase one and two trials and.
Having the ability to go from phase one into phase two.
And launch of larger trial in such a difficult disease, such as all timers.
For us is of very significant event.
And I think youll see that in the industry when companies are able to advance programs to the next stage towards commercialization in that disease. There's a lot of enthusiasm around that so I think thats. The major step for the company. The fact that there isn't a single drug approved or of therapeutic approved anywhere in the world.
For the indication of aging for LT.
Two trials of our events that we really look forward to we have been working on aging frailty research for almost four years now we have partners in the National Institute on aging.
We have a program that's ready to roll in Japan, which is of Super age Society. So I think everybody everybody out there should be looking forward to the data and looking forward to see if there is a.
Potential treatment on the horizon that can prevent or reverse the the sort of progressive degenerative and devastating.
<unk>.
Syndromes like aging related for LTC.
It's the release of data and the transition to these new phases of development that for US are really the catalysts that we're looking forward to I would ask our Chief Science officer, Josh share to maybe add to that.
Sure.
Thanks, Jeff.
Yes.
Lately I agree that.
We face a very exciting upcoming two quarters, where we will be releasing a substantial amounts of.
New clinical information and disseminating that information at that important venues such as the.
Alzheimers Association.
National meeting in July and the.
The International Society for <unk> and <unk> research.
So the.
The timing is is very fortunate in that we have a large amount of data being released in the short amount of time.
Net together will catalyze the future direction of the of the company and the op.
Allow us to optimize the development strategies that we'll be using to take the product from where it is now.
Through to approval and major major venues like the United States and Japan.
Excellent. Thank you.
This concludes today's conference call, ladies and gentlemen, thank you for joining US and you may now disconnect your lines.
Okay.
Okay.