Q2 2021 Capricor Therapeutics Inc Earnings Call

August 12, 2021

Ladies and gentlemen.

Operator: Ladies and gentlemen, good day, and welcome to the Capricor Therapeutics, Inc. Q2 2021 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to AJ Bergmann for the forward-looking statement. Please go ahead, sir.

Good day and welcome to the Capri called Therapeutics, Inc. Second quarter 2021 earnings call. Today's conference is being recorded at this time I would like to turn the conference over to a J berkman for the forward looking statements. Please go ahead Sir.

Thank you before we start I would like to state that we will be making certain forward looking statements. During today's presentation. These statements may include statements regarding among other things the efficacy safety and intended utilization of our product candidates, our future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies are.

AJ Bergmann: Thank you. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentation. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our product candidates, our future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates, and our possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports.

Plans to present or report additional data our plans regarding regulatory filings central regulatory developments involving our product candidates.

And our possible uses of existing cash and investment resources.

Forward looking statements are based on current information assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic filings made with the SEC.

AJ Bergmann: These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. With that, I'll turn the call over to Linda Marbán, CEO.

Including our quarterly and annual reports Europe.

Cautioned not to place undue reliance on these forward looking statements and we disclaim any obligation to update such statements with that I'll turn the call over to Linda Mcmahon CEO.

AJ Bergmann: You are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. With that, I'll turn the call over to Linda Marbán, CEO.

Thank you a J.

Linda Marbán: Thank you, AJ. This has been a busy quarter for Capricor, with progress on all fronts. Today, we will review the progress of our two clinical programs with our lead asset, CAP-1002. The first program involves Duchenne muscular dystrophy or DMD, and the second involves the treatment of the hyperimmune response caused by COVID-19. I will provide an update on our engineered exosome platform technology. Before I discuss our clinical updates, I would like to announce that we will be expanding our footprint to San Diego, California. We have selected a facility that will enable us to continue to build out our pipeline products, both CAP-1002 and the exosome. This expansion will include enhancements to our research, clinical, and executive teams. As we evaluated the talent landscape, we felt that San Diego area would provide more opportunity for us to continue this expansion.

This has been a busy quarter for copper core with progress on all fronts. Today, We will review the progress of our two clinical programs with our lead asset cap N O two.

The first program involves duchenne muscular dystrophy or D. M D and a second involves the treatment of the hyper immune response caused by COVID-19.

Then I will provide an update on our engineered extra the old platform technology.

Before I discuss our clinical updates I would like to announce that we will be expanding our footprint to San Diego, California. We have selected a facility that we'll able to enable us to continue to build out our pipeline products. Both cap 10 O two and the extra sale.

This expansion will include enhancements to our research clinical and executive team.

As we evaluated the talent landscape, we felt the San Diego area would provide more opportunity for us to continue this expansion.

Well, let me start with D M D.

Linda Marbán: Now let me start with DMD. As we have been talking about for a while, we have been working with the Office of Tissues and Advanced Therapies, otherwise known as OTAT, which is a division of CBER of the FDA, to see if there was a path to accelerated or full approval for CAP-1002 in DMD based on the positive data from the HOPE-2 clinical study. I am delighted to tell you for the first time, after the final statistical analysis of the data in our HOPE-2 clinical trial, we hit our primary efficacy endpoint of PUL 1.2, our secondary endpoint of the PUL 2.0, and secondary cardiac endpoint of ejection fraction. The full data set has been submitted for publication.

We have been talking about for a while.

We have been working with the office of advanced tissue therapeutics, otherwise known as <unk>, which is a division of cheaper of the FDA.

See if there was a path to accelerated or full approval for cop 10 O. Two N D. M D based on the positive data from the hope to clinical study.

I am delighted to tell you for the first time.

After the final statistical analysis of the data and our hope to clinical trial.

We hit our primary efficacy endpoint of mid Paul one point to.

Our secondary end point of the full pull two point Joe.

And second party secondary cardiac endpoint of ejection fraction.

The full dataset has been submitted for publication.

We have of course shared this data with FDA.

Linda Marbán: We have, of course, shared this data with FDA and will provide further updates on it after its publication or presentation at a scientific meeting. Based on the strength of the clinical data, we had an end of phase meeting with OTAT. Although it was a productive discussion, the consensus was that we should proceed to a phase 3 clinical study. The principal thinking was that the size of the HOPE-2 data set with 20 patients was relatively small. We now plan to move forward with a phase 3 pivotal trial. Currently, we are treating patients in an open label extension study of HOPE-2, in which all patients are eligible to receive CAP-1002.

And we'll provide further updates on it after its publication or presentation at a scientific meeting.

Based on the strength of the clinical data, we had an end of phase meeting with O tests and although it was a productive discussion. The consensus was that we should proceed to a phase III clinical study.

The principal thinking was that the size of the hope to dataset with 20 patients with relatively small we now plan to move forward with a phase III pivotal trial.

Currently we are treating patients in an open label extension study of hoped to in which all patients are eligible to receive cap to know too.

In order to track progression of these patients and to enhance our safety database, where youre using the pole two point, Joe and a relatively new but exciting measure a function called the D V. A gorgeous Shen video assessment tool.

Linda Marbán: In order to track progression of these patients and to enhance our safety database, we are using the PUL 2.0 and a relatively new but exciting measure of function called the DVA, or Duchenne Video Assessment tool. Recently, at the annual Parent Project Muscular Dystrophy, or PPMD meeting, we showed a video of a HOPE-2 OLE patient before receiving CAP-1002 and after treatment, changing his position in his bed, which is targeted as one of the most important domains related to quality of life in Duchenne muscular dystrophy. The video showed marked improvement, including his visage, which was more relaxed as he more easily negotiated the task. This video is available on the PPMD conference website. This video has made its way through the DMD community, so the patients are more excited than ever about CAP-1002.

Recently Abbvie.

The annual parents project for muscular dystrophy or P. P. M. D meeting, we showed a video of a hope to Oh, well the patient before receiving captain or two and after treatment changing his position in his bed, which is targeted at one of the most important domain related.

Quality of life, and Duchenne muscular dystrophy.

The video showed market improvement, including his assange, which was more relaxed I've seen more easily negotiated the task.

This video is available on the P. P M D Conference website.

This video has made its way through the DMD community.

So the patients are more excited than ever about cap 10 O two.

We are committed to getting captured O two to them as quickly as possible as we work towards potential registration.

Linda Marbán: We are committed to getting CAP-1002 to them as quickly as possible as we work towards potential registration. Now, let me briefly summarize the design of the HOPE-3 trial. It will be a Phase 3 study with approximately 65 to 75 patients in a 1-to-1 randomization scheme. As is common, we are building in a pre-specified interim analysis. The national principal investigator will again be Dr. Craig McDonald of UC Davis, who is one of the leading experts of DMD worldwide. Currently, we are planning on approximately 20 sites in the US. In terms of clinical readiness, we have begun engaging sites and securing clinical operations as our goal is to be ready to start the trial. In terms of manufacturing, we continue to work with Lonza, as we have previously discussed, to have commercial-ready clinical supply at the appropriate time.

Now let me briefly summarize the design of the hope three trial it will be a phase III study with approximately 65 to 75 patients in a one to one randomization scheme.

As is common we are building in a prespecified interim analysis.

The National principal investigator will again be Doctor, Craig Mcdonald of UC Davis, who is one of the leading experts a D M D worldwide.

Currently we are planning on approximately 20 sites in the U S.

In terms of clinical readiness, we have begun engaging sites is it shrink clinical operations.

As our goal is to be ready to start the trial.

In terms of manufacturing, we continue to work with Wanda as we have previously discussed to have commercial ready clinical supply at the appropriate time.

We plan on meeting with FDA to secure our C. M C plan for commercialization.

Linda Marbán: We plan on meeting with FDA to secure our CMC plan for commercialization. As we are gearing up for the pivotal trial, we have also had multiple discussions with payers who have been positive in terms of the reimbursement potential for CAP-1002 for DMD. Their projected price target is in line with other cell and gene therapies for rare diseases. This is instructive as we continue to evaluate the long-term value of CAP-1002 in DMD. Further, as we have previously stated, our plan is to secure a partner to take CAP-1002 through commercialization. To that end, our discussions with potential partners have accelerated, and we look forward to providing updates to the extent that they materialize into a definitive agreement. Now, let me turn my attention to INSPIRE, which is the clinical trial we are conducting in patients with COVID-19.

As we are gearing up for the pivotal trial, we have also had multiple discussions with payers.

Who have been positive in terms of the reimbursement potential for cap 10 O two for D. M D. There.

Projected price target is in line with other cell and gene therapies for rare diseases.

This is instructive as we continue to evaluate the long term value of Captain O U N G M D.

Further.

As we have previously stated our plan is to secure a partner to take top 10 O two through commercialization.

To that end, our discussions with potential partners have accelerated.

We look forward to providing updates to the extent that they materialize into a definitive agreement.

Now, let me turn my attention to inspire.

Which is the clinical trial, we are conducting in patients with COVID-19.

As you know very few if any of the therapies that have been tried to combat the actor a virus or it's the quality has been effective.

Linda Marbán: As you know, very few, if any, of the therapies that have been tried to combat the active virus or its sequelae have been effective. Based on a series of emergency use authorization cases conducted by us in 2020 and published in a peer-reviewed journal, Basic Research in Cardiology, we decided to conduct a randomized, placebo-controlled, double-blinded trial of CAP-1002 in these patients with severe but not critical COVID. Now, what does that type of patient look like? They are in the hospital and are in need of oxygen supplementation but are not on a ventilator. We carefully selected this particular patient population because they were the most responsive to CAP-1002's immunomodulatory properties in the emergency use series of patients. Plus, it is widely known that once patients are on a ventilator, the outcome is usually not positive, no matter which treatments have been utilized.

Based on a series of emergency use authorization cases conducted by us in 'twenty 'twenty and published in a peer reviewed journal basic research in cardiology.

We decided to conduct a randomized placebo controlled double blinded trial of Cop 10 O. Two in these patients with severe but not critical COVID-19 now.

Now what does that type of patient look like they are in the hospital and are in need of oxygen supplementation, but are not on events later.

We carefully selected this particular patient population because they were the most responsive to cap 10 O two immuno modular toy properties and the emergency use series of patients.

Plus it is widely known that once patients are on a ventilator outcome is usually not positive no matter, which treatments have been utilized.

The trial was designed to enroll up to 60 patients with a variety of exploratory endpoint.

Linda Marbán: The trial was designed to enroll up to 60 patients with a variety of exploratory endpoints, the purpose of which was to evaluate how CAP-1002 was helping in severe COVID-19. We have been careful in patient selection at our sites so that we will have the best data set possible to move forward with. Enrollment slowed for a while when COVID cases fell in the US, but now with the resurgence of the virus and the nature of the Delta variant, we are seeing increased enrollment and will be looking forward to seeing the impact of CAP-1002 on severe COVID-19. At this time, based on our current plan, we anticipate top-line data in the near future. One of the reasons we are encouraged about the potential impact of CAP-1002 in COVID-19 has been in the data from a recently co-published paper with the United States Army Institute of Surgical Research.

The purpose of which was to evaluate how cap trop, two with helping and severe COVID-19.

We have been careful and patient selection at our sites. So that we will have the best data set possible to move forward with.

Enrolment slowed for a while when Covid cases fell in the U S.

But now with the resurgence of the virus and the nature of the Delta area. We are seeing increased enrollment and we'll be looking forward to seeing the impact of cockpit or two on severe COVID-19.

At this time based on our current plan, we anticipate topline data in the near future.

One of the reasons, we are encouraged about the potential impact of Cop 10 O two and COVID-19 has been in the data from our recently co published paper with United States Army Institute, a surgical research. The paper is called extracellular vesicles derived from cardio spear derived cells.

Linda Marbán: The paper is called Extracellular Vesicles Derived from Cardiosphere-Derived Cells as a Potential Antishock Therapeutic. The data from which supported our use of CAP-1002 in COVID-19. We have published that the mechanism of action of CAP-1002 is the exosomes that the cells release. This paper highlights that mechanism by showing the impact of CDC-derived EVs or exosomes on shock and trauma, the pathophysiology of which is similar to that seen in severe and critical COVID. Taken together, we are enthusiastically waiting for the data from INSPIRE to evaluate the clinical potential of CAP-1002 in COVID and other indications of hyperimmune activation. Now I'd like to provide an update on our exosomes platform technology. A year ago, we announced that we would be expanding our portfolio of products to engineered exosomes.

As a potential anti shock therapeutic.

The data from which supported our use of cap 10 O two in COVID-19.

We have published that the mechanism of action of Cop 10 O. Two is he acts as always that the cells release.

This paper highlights that mechanism by showing the impact of C. D C ev's or exosomes on shock and trauma, the pathophysiology of which is similar to that seen in severe and critical COVID-19.

Taken together, we are enthusiastically waiting for the data from aspire to evaluate the clinical potential of top 10, O two or COVID-19 and COVID-19 and other indications of hyper immune activation.

Now I'd like to provide an update on our <unk> platform technology.

A year ago, we announced that we would be expanding our portfolio of products to engineered axes O I.

As we realize the power of the Exosomes derived from cap tonneau too. We also learned that they were natures communication device.

Linda Marbán: As we realized the power of the exosomes derived from CAP-1002, we also learned that they were nature's communication device, able to deliver messages from cell to cell and, furthermore, able to deliver payloads across the cell membrane, an area of active investigation in therapeutics for many years. We saw this as a great opportunity to capitalize on our knowledge of exosomes but not be harnessed by any particular feature of the exosome. We envisioned a technology that would allow us to custom-load the exosomes and deliver payloads of choice rather than happenstance. We have spent the last year laying the groundwork for that exciting opportunity. First, we have recruited a team of people who have experience with engineering exosomes, starting at the vice president level, where we have recruited Dr. Kristi Elliott. Dr.

Table to deliver messages from cell to cell and Furthermore, able to deliver payloads across the cell membrane and area of active investigation and therapeutics for many years.

We saw this as a great opportunity to capitalize on our knowledge of exosomes, but not be hardest by any particular feature of the XL.

We envisioned a technology that would allow us to custom low the exosomes and deliver payloads of choice rather than happenstance.

We have spent the last year laying the groundwork for that exciting opportunity.

First we have recruited a team of people who have experience with engineering extra though starting at the vice president level, where we have recruited Doctor Christy Elliott.

Dr. Elliott received her ph D from Johns Hopkins University and has more than a decade of experience in exosomes for therapeutic development.

Linda Marbán: Elliott received her PhD from Johns Hopkins University and has more than a decade of experience in exosomes for therapeutic development, and who has assembled a team of approximately 10 scientists working on our exosome platform technology. As I previously stated, this team will be primarily based in San Diego at our new research facility. This team is continuing to build out our vaccine program while advancing our exosome-based therapeutic pipeline. The research and development efforts continue to yield results, and in Q2, we have advanced the clinical development of our novel multivalent COVID-19 vaccine. As seen in recent months, mutations in the spike protein on SARS-CoV-2 have resulted in highly contagious variants, specifically the Delta variant. These mutations in viral spike proteins may allow the virus to escape the immune response elicited by current vaccines.

Who has assembled a team of approximately 10 scientists working on our <unk> platform technology.

As I previously stated this team will be primarily based in San Diego at our new research facilities.

This team is continuing to build out our vaccine program, while advancing our excess on base therapeutic pipeline.

Research and development efforts continue to yield results in the second quarter, we have advanced the clinical development of our novel Multivalent <unk> COVID-19 vaccine.

I've seen in recent months mutations on the spike protein on Sars Covid two have resulted in highly contagious serious specifically the delta area.

These mutations in viral spike proteins may allow the virus to escape the immune response elicited by current vaccine.

Therefore annual vaccines are likely to become necessary to protect against various of the Corona virus.

Linda Marbán: Therefore, annual vaccines are likely to become necessary to protect against variants of the coronavirus. It is becoming clear that existing vaccines will therefore need boosters to enhance immunity. That leads to the concept that new innovative vaccine approaches may be necessary to continue to combat this virus globally. As such, our hypothesis is that our vaccine may offer greater protection and less toxicity, and we are planning for our COVID-19 vaccine to be administered as a booster to any currently available vaccines in a Phase 1 clinical trial. Now, let me tell you what is different about our vaccine. First, our mRNA payload is delivered in an exosome. Exosomes are nature's delivery vehicle, which we believe may confer advantages to intracellular delivery of nucleic acids specifically and may lead to more natural antigen processing. Secondly, we have a multivalent construct of both the S and N proteins.

It is becoming clear that existing vaccines will therefore need boosters to enhance immunity.

That leads to the concept that new innovative vaccine approaches maybe necessary to continue to combat this virus globally.

As such our hypothesis is that our vaccine may offer greater protection.

The last time.

And we are planning for.

Our COVID-19 vaccine to be administered as a booster to any currently available vaccine and a phase one clinical trial.

Now let me tell you what is different about our vaccine.

First our mrna payload is delivered in an extra though actually those are natures delivery vehicle, which we believe may confer advantages to intracellular delivery of nucleic acids, specifically and may lead to more natural antigen processing.

Secondly, we have a multifamily construct construct of both the S and N proteins. The N is highly conserved which means it doesn't mutate as rapidly and in fact, it is what is measured and traditional antibody testing of coronavirus.

Linda Marbán: The N is highly conserved, which means it doesn't mutate as rapidly, and in fact, it is what is measured in traditional antibody testing of coronavirus. Our hypothesis is that the addition of the N protein may confer longer-lasting immunity to SARS-CoV-2. Because the spike protein mutates rapidly, it may be more difficult to develop vaccines that protect against the rapidly mutating virus. It is important to mount both an antibody and B cell response, which the current vaccines do very well. For continued protection, it is important to have a T cell and memory response as well. We believe that by delivering multiple RNAs, which are processed intracellularly by natural processes, we may have a vaccine that could potentially offer stronger protection against the variants of COVID-19.

Our hypothesis is that the addition of the N protein may confer longer lasting immunity to Sars cov two.

Because the spike protein mutates rapidly it may be more difficult to develop vaccines that protect against our rapidly mutating virus.

It is important to Mt. Both an antibody or B cell response, which the current vaccines do very well, but for continued protection. It is important to have a T cell or memory response as well.

We believe that by delivering multiple army, which our profit entrust seller, you're literally by natural processes. We may have a vaccine that could potentially offer stronger protection against the various of COVID-19.

I N D, enabling studies for our COVID-19 vaccines are underway.

Linda Marbán: IND enabling studies for our COVID-19 vaccines are underway, and we are on track to submit an IND in Q4 of this year. Although this timeline has been delayed from our original projections, we have worked through supply chain challenges and conducting multiple non-clinical CMC-related studies at FDA's request for one of the first exosome-based vaccines, to our knowledge, that may be moving into the clinic. Furthermore, this non-clinical work lays the groundwork for the development of exosome-based pipeline, as the basic platform is the same, which is an exosome loaded with a biologic molecule. I continue to believe that exosomes present an opportunity for other vaccines beyond COVID.

We're on track to submit an ILD in the fourth quarter of this year.

Although this timeline has been delayed from our original projections.

We have worked through supply chain challenges and conducting multiple non clinical CMC related studies at Fda's request for one of the first access all based vaccines to our knowledge that may be moving into the clinic.

Furthermore, this non clinical work lays the groundwork for the development of <unk> based pipeline.

The basic platform is the same which is in excess are loaded with a biologic molecules.

I continue to believe that Exosomes presents an opportunity for other vaccines beyond COVID-19.

At this time, we were exploring the power of an extra some based vaccine for other indications by conducting studies with a large pharmaceutical company.

Linda Marbán: At this time, we are exploring the power of an exosome-based vaccine for other indications by conducting studies with a large pharmaceutical company with the hope that the data from such studies may be used to support the overall efficacy of an exosome-based vaccine approach. Finally, in addition, expansion of our exosome platform technology is ongoing. We have and are continuing to expand our R&D and product development teams to enable additional exosome-based programs. We are actively working to identify multiple indications over the next few quarters as part of our expanded exosome pipeline, and some of these we plan to take into the clinic. We are investigating the use of both mRNA and siRNA as part of these therapeutic programs. Proof-of-concept studies for two new exosome programs are underway, with initial data expected in Q4 of this year.

With the hope that the data from such studies may be used to support the overall efficacy of an exercise base vaccine approach.

Finally in addition expansion of our <unk> platform technology is ongoing we have and are continuing to expand our R&D and product development teams to enable additional exon based programs.

We're actively working to identify multiple indications over the next few quarter as part of our expanded access on pipeline and some of these we plan to take into the clinic.

We are investigating the use of both mrna and S. IR day as part of these therapeutic program.

Roof of concept studies for two new extra don't programs are underway with initial data expected in the fourth quarter of this year.

Taken together it has indeed been a busy quarter for copper corp, or you're anticipating finishing the year off strong with multiple clinical programs and the advancement of our engineered extra zelle platform technology.

Linda Marbán: Taken together, it has indeed been a busy quarter for Capricor, and we are anticipating finishing the year off strong with multiple clinical programs on the advancement of our engineered exosome platform technology. In addition, we recently added Karima S. Sabar to our board, who brings over 30 years of experience as a senior life sciences leader to our team. She successfully directed the global launch of two first-in-class vaccine and biotherapeutic products, and we look forward to her guidance as we embark on Capricor's next phase of growth. Lastly, please stay tuned regarding the announcement of a new leader to our senior management team. In closing, we will be presenting at various banking and corporate conferences later this year, as well as several leading scientific and medical conferences, including the Cantor Fitzgerald Global Healthcare Conference and the Cell & Gene Meeting on the Mesa.

In addition, we recently added Korea S. A bar to our board who brings over 30 years of experience as a senior life Sciences leader to our team.

She has successfully directed the global launch of two first in class vaccine and biotherapeutic products.

We look forward to our guidance as we embark on Capricorn next phase of growth.

Lastly, please stay tuned regarding the announcement of a new leader to our senior management team.

In closing, we will be presenting at various banking and corporate conferences later this year as well as several leading scientific and medical conferences.

Including the Cantor Fitzgerald Global Healthcare conference and the annual cell and gene therapy meeting on the Mesa.

We look forward to providing continuing updates on all of our programs.

Linda Marbán: We look forward to providing continuing updates on all of our programs. Thank you. Now I will turn the call over to AJ Bergmann, our CFO, for an update on the financials.

Now I will turn the call over to AJ Bergmann, our CFO for an update on the financials.

Linda This afternoon's press release provided a summary of our second quarter 2021 financials on a GAAP basis. You may also refer to our quarterly report on Form 10-Q, which we expect to become available in the next few days will be accessible on the SEC website as well as the financial section of our website.

AJ Bergmann: Thank you, Linda. This afternoon's press release provided a summary of our Q2 2021 financials on a GAAP basis. You may also refer to our quarterly report on Form 10-Q, which we expect to become available in the next few days and will be accessible on the SEC website as well as the financial section of our website. As of 30 June 2021, the company's cash and cash equivalents totaled approximately $38.1 million, compared to approximately $32.7 million on 31 December 2020. Based on our current pipeline and operating plan, the company's cash position is expected to be sufficient to support operations for at least two years. Turning to the financials, in H1 2021, our net cash used in operating activities was approximately $7.8 million.

As of June 30, 2021 the company's cash and cash equivalents totaled approximately $38.1 million compared to approximately $32.7 million on December 31.2020.

Based on our current pipeline and operating plan. The Companys cash position is expected to be sufficient to support operations for at least two years.

Turning to the financials in the first half of 2021 our net cash used in operating activities was approximately $7.8 million.

For the second quarter of 2021 excluding stock based compensation, our research and development expense was approximately $3.4 million compared to approximately $1.8 million in Q2 'twenty 'twenty.

AJ Bergmann: For Q2 2021, excluding stock-based compensation, our research and development expense was approximately $3.4 million, compared to approximately $1.8 million in Q2 2020. Again, excluding stock-based compensation, our general and administrative expense was approximately $1.2 million in Q2 2021 and approximately $1 million in Q2 2020. Net loss for H1 2021 was approximately $9.9 million, compared to a net loss of approximately $5.6 million for H1 2020. As Linda noted earlier, we continue to explore our business development opportunities with our CAP-1002 program and are committed to the development of our exosome program. We will now open the line for questions.

Again, excluding stock based compensation, our general and administrative expense was approximately $1.2 million in Q2, 2021 and approximately $1 million in Q2, 'twenty 'twenty not.

Net loss for the first half of 2021 was approximately $9.9 million compared to a net loss of approximately $5.6 million for the first half of 'twenty 'twenty.

Linda noted earlier, we continue to explore business development opportunities with our top ones here. There are two program and are committed to the development of our axes one program.

We'll now open the line for question.

Thank you, ladies and gentlemen, if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you all using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Once again. Please press star one to ask the question well.

Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal. We will take our first question from Emanuela Branchetti from H.C. Wainwright. Your line is open. Please go ahead.

Pause for just a moment to allow everyone an opportunity to signal.

Yeah.

We will take our first question from Manuel up on chassis from H C. Wainwright. Your line is open. Please go ahead.

Good afternoon, guys and thank you for taking my questions is very exciting to hear that captain I'll do with moving Florida War. So congrats on that and maybe you can share more details on the trial endpoints and it's so easy to point to point in time.

Emanuela Branchetti: Good afternoon, guys, and thank you for taking my questions. It's very exciting to hear that CAP-1002 is moving forward, so congrats on that. Maybe you can share more details on the trial endpoint. Is the PUL 2.0 the primary endpoint? What about the cardiac measure? Are you including those in the trial design as well?

And going to and what about the Caribbean measure.

Are you, including dose the Indy our Italian design as well.

Yeah. Thank you for that question, yes. The primary efficacy end point is going to be the pole two point, though you know from the topline data and we will see very soon from the published or presented data. The final data set from hope two was a very positive and belly very compelling. So we're very calm.

Linda Marbán: Yeah. Thank you for that question. Yes, the primary efficacy endpoint is going to be the PUL 2.0. As you know from the top-line data, and we'll see very soon from the published or presented data, the final data set from HOPE-2 was very positive and very, very compelling. We're very confident in the selection of the PUL 2.0 as the primary. Yes, we're going to build in and have built in the cardiac secondary endpoints of ejection fraction and volume, also very significant in HOPE-2. The P value for ejection fraction in HOPE-2 was 0.004. The P value for the PUL 2.0 in HOPE-2 was 0.04. We're very excited to take this into its pivotal trial.

And the selection of the poultry pointed out was the primary and yes, we're going to build in and have built in the cardiac secondary endpoints of ejection fraction and volumes also very significant and hope to the P value for ejection fraction and hope to acquaint zero zero for the P value for the pole two pointed out.

Hope to a 1.04, so we're very excited to take this into a pivotal trial.

Well, thank you for that and you mentioned that you.

Emanuela Branchetti: Yes. Thank you for that. You mentioned that the patients enrolled in the HOPE-2 are gonna be eligible for moving forward to HOPE-3. Are all the patients that completed HOPE-2 eligible to access HOPE-3 directly? How is that gonna work?

The patient and they'll probably do you hope to and I'm gonna be eligible if water and we'll be moving forward well see and all the patients that completed op two <unk>.

Hum.

Oh pretty directly how is that going to work.

So they're not going to roll into a three of the patients that were in hooked to whether they received cells in the treated group or the placebo group and the patient still are blinded. So they don't know what they received in the first iteration of the trial are currently and the open label extension.

Linda Marbán: They're not going to roll into HOPE-3. The patients that were in HOPE-2, whether they received cells in the treated group or the placebo group, and the patients still are blinded, so they don't know what they received in the first iteration of the trial, are currently in the open-label extension part of HOPE-2. They're currently receiving doses. Many of them are verbally reporting feeling and seeing improvements since going back onto the cells. We're very excited at the patient reports, and this also gives us a lot of energy moving into Phase 3.

Art of hope to there currently receiving doses many of them or verbally reporting are feeling and seeing improvements since going back onto the sell so we're very excited.

At the patient reports and this also gives us a lot of energy moving into phase III.

Got it. Thank you for that and then just last question about the attack in your Shadow, you're asking me to on behalf of the study.

Emanuela Branchetti: Got it. Thank you for that. Just last question about this. Can you share your estimate on the cost of this study?

I'm, sorry, I didn't understand that was estimated.

Linda Marbán: I'm sorry, I didn't understand that last. Estimated?

Cost of another guidance.

Emanuela Branchetti: The cost of the study.

Yeah.

Linda Marbán: Oh, the cost of the study.

Yeah, Yeah. So we haven't disclosed that but were estimating that it will be around $15 million, which sounds a low for a phase III clinical trial, but we've been really careful to make sure. We're only measuring what we needed to take it through to registration are we've worked with FDA on the phase II.

Emanuela Branchetti: Of your study, yeah.

Linda Marbán: Yeah. We haven't disclosed that, but we're estimating that it will be around $15 million, which sounds low for a phase 3 clinical trial. We've been really careful to make sure we're only measuring what we need to take it through to registration. We've worked with FDA on the phase 3 protocol, and feel very confident that it is a laser-focused clinical effort to take this through registration.

Protocol.

Feel very confident that it is a laser focused clinical effort to take this through registration.

Got it got it thank you and as we can complete the booster in a back seat and I think that that is my strategy, but could you sort of your thoughts around because it'll be tied on the clinical development has seen seasons, a booster, but hum sequent to other vaccines that are that are particularly requirements. So you have to meet for the idea.

Emanuela Branchetti: Got it. Thank you. Switching to the booster vaccine, I think that's very much strategy, but could you share your thoughts a little bit around the clinical development? Since this is a booster, subsequent to other vaccines, are there particular requirements that you have to meet for the IND approval and for moving forward? I just wanted to have your thoughts on that.

Prove out that we're moving for work.

I just wanted to have your thoughts on that.

Yeah. So we have been exploring actively our we'll have more feedback once we file the I M. D. A we had a pre NDA meeting, which we announced in the spring and we've been finishing up those I N D. Enabling studies it seems like it might have taken a long time, but the reality is it sets the foundation for extra zone based platform therapeutic.

Linda Marbán: Yeah. We've been exploring that actively. We'll have more feedback once we file the IND. We had a pre-IND meeting, which we announced in the spring, and we've been finishing up those IND enabling studies. Seems like it might have taken a long time, but the reality is it sets the foundation for exosome-based platform therapeutics, both in the vaccinology space but also in the therapeutic development space. It's been a really good use of our research team's time. In terms of, you know, the acceptance of a booster strategy, while I can't disclose exactly how we've been working with the US government, on their perception of need for viral vaccine boosters, and they seem supportive of this opportunity and the work that we're doing to prepare for it.

Both in the vaccine allergy space, but also in the therapeutic development space. So it's been a really good use of art research teams time.

And in terms of you know the acceptance of a booster strategy will I cant disclose exactly how we've been working with the U S government them on their perception of need for that for a viral vaccine boosters and they seem supportive of this opportunity and the work that we're doing to prepare for it so we haven't completely baked.

Linda Marbán: We haven't completely baked in with the FDA, and we won't heave that huge sigh of relief till we have the IND. Our current plan is to provide a booster to anybody that's been vaccinated with any of the previously available vaccines.

And then with the FDA and we won't have that huge sigh of relief till we have the I N D. But our current plan is to provide a booster to anybody that's been vaccinated with any of the previously available vaccine.

Got it thank you very much and congrats on the project.

Emanuela Branchetti: Got it. Thank you very much, and congrats on the progress.

Thank you.

Linda Marbán: Thank you.

We'll take our next question from Doctor box Swaim from Torrey Hills Capital. Your line is open. Please state your question.

Operator: We'll take our next question from Dr. Mark Swaim from Torrey Hills Capital. Your line is open. Please state your question.

Hi, Linda.

Mark Swaim: Hi, Linda. Nice to hear from you and nice to hear the wonderful presentation. A couple of questions. As regards to your booster vaccine planning, what would be the proposed route of administration of that? I'm asking because does it mean the administration IV of a modified CAP-1002, you know, type cell line or some other route of administration of prepared exosomes?

Here for me relates to he was a wonderful presentation couple of questions. As regards your booster vaccines planning what would be the proposed route of administration with Bud light.

I'm asking because does it need the administration.

Modified GAAP to do.

As I turn the T cell, one or some of the route of administration or prepare to exit them.

So it's a straight intramuscular injection, it's exactly the same as we had been vaccinated with either the Pfizer the maternal vaccine that would be the same type of thing a quick shot in the arm that you don't even know happens.

Linda Marbán: It's a straight, intramuscular injection. It's exactly the same as if you've been vaccinated, with either the Pfizer or the Moderna vaccine. It would be the same type of thing, a quick shot in the arm that you don't even know happened.

Okay Alright.

Mark Swaim: Okay. All right. Does the company plan to, if the data are positive in the COVID-19 trial, to submit CAP-1002 for EUA?

Does the company plan to if the data are positive as the COVID-19 trial to submit kept on a tube or UA.

Yeah, well you know we're open to all possibilities. We built that trial are based on as I said in my prepared remarks I'm. The emergency use authorization a set of patients that we did way back at the beginning of the pandemic and the data was very positive both in terms of preservation of of life.

Linda Marbán: Well, you know, we're open to all possibilities. We built that trial based on, as I said in my prepared remarks, the emergency use authorization set of patients that we did way back at the beginning of the pandemic. The data was very positive, both in terms of preservation of life and also biomarkers. You know, we'll see what this data set teaches us. Certainly, especially in this patient population where literally nothing has been successful, we'll work very carefully with FDA to see if we can move this forward as rapidly as possible should the data be positive.

And also Biomarkers and so you know, we'll see what this dataset teaches us certainly, especially in this patient population where literally nothing has been successful will work very carefully with FDA to see if we can move this forward as rapidly as possible should the data be positive.

Particularly epigenetic modification Grupo wielded by recapture the two Exosomes are is really good at suppressing IL six expression or has that been quantified or examined.

Mark Swaim: Okay. Can the epigenetic, you know, modification profile wielded by the CAP-1002 exosomes, is it any good at suppressing IL-6 expression? Has that been quantified or examined?

I mean, we've seen that in a lot of preclinical work that we've done it we've worked on a captain O. Two for many many years and it seems to suppress sort of the Irish cytokines IL, one IL two IL six and and augment you know IL 10, and some of the.

Linda Marbán: I mean, we've seen that in a lot of preclinical work that we've done. You know, we've worked on CAP-1002 for many, many years, and it seems to suppress sort of the angry cytokines, IL-1, IL-2, IL-6, and augments, you know, IL-10 and some of the inflammatory suppressing cytokines. But we haven't seen it in this study. We are measuring it. We did see some interesting data in the emergency use authorization patients in terms of biomarkers. But in those days, you know, let me emphasize, we were treating all comers. A lot of the patients, by the time we got to them, they had been on ventilator for a while. We know now that those patients, as I mentioned, sadly, don't do very well.

And so I would try suppressing cytokines, but we haven't seen it in this study we are measuring it we did see some interesting data in the emergency use authorization patients in terms of Biomarkers, but in those days you know let me emphasize we were treating all comers and so a lot of the patients by the time, we got to them there had been a ventilator.

For a while we know now that those patients as I mentioned sadly don't do very well. So we're really going to be able to look at the data in a very careful way from the study and I hope you're as excited as I am about it because I think it could give us some really interesting clues on how to treat COVID-19.

Linda Marbán: We're really going to be able to look at the data in a very careful way from the study, and I hope you're as excited as I am about it, because I think it could give us some really interesting clues on how to treat COVID.

And pathophysiology, but yes I agree totally.

Mark Swaim: Pathophysiology insights. Yes, I agree totally. Changing subjects a little bit. It's been some time since we had talked, but the last interaction I guess I'd understood there to be a really avid gung-ho plan to seek a kind of priority for preemptive authorization, you know, CAP-1002 and DMD. Now I'm hearing the plan to pursue phase 3. Are you doing? Is it a two-pronged approach that you're pursuing both, or is it the plan just to primarily move ahead with phase 3 now?

Changing subjects a little bit.

Sometimes we talk but I the last interaction I guess I'd understood there to be a really avid gung Ho.

Kind of a priority for preemptive authorization.

Kept them to two M D M D.

Now I'm hearing good plan to pursue a phase three or are you doing is it a two pronged approach that you're pursuing both or is it. The planes are still primarily move ahead with phase III email.

So we spent about a year working with FDA in multiple conversations that I know you know many of our investors as well as the Duchenne community. We're sitting on the edge of their seats waiting to see what happened in Europe.

Linda Marbán: We spent about a year working with FDA in multiple conversations, and I know, you know, many of our investors, as well as the Duchenne community, were sitting on the edge of their seats waiting to see what happened.

Basically.

Mark Swaim: Yes.

Linda Marbán: Basically, FDA, it's the OTAT, which is the Office of Tissues and Advanced Therapies at CBER, have come down and said, listen, this was really interesting data, but it was a small data set. We really need you to do this phase 3 to validate, you know, what you've seen. We are, rather than to continue to push the envelope and potentially keep fighting a battle that we might not win, I wanna just jump right in. Let's get this trial done, and let's get this product registered and commercialized. I will say, as I mentioned, but I wanna highlight, we are not going to start the study until we identify an appropriate partner to take it through with.

D. A it's the OTA, which is the office of tissue and advanced Therapeutics of Seeber have come down and said listen this was really interesting data, but it was a small dataset, we really need you to do this phase III to validate you know what you've seen and so we are rather than to continue to push the edge.

Hello, Ben and potentially keep fighting a battle that we might not win I wanted to just jump right in and let's get this trial done and let's get this product registered in commercialized and I will say as I mentioned, but I want to highlight we are going not going to start the study until we identify an appropriate partner to take it through with no need to.

Linda Marbán: You know, we need to validate that we get the appropriate funding and that we have a path all the way through to commercialization. We're ready to go and actively talking to partners now.

To validate that we get the appropriate funding and that we have a path all the way through to commercialization. So we're ready to go and actively talking to partners now.

Yeah, I was going to ask David.

Mark Swaim: Yeah, I was gonna ask AJ. I think some $38 million and two years of funding. Would the cost of this trial be subsumed? You answered it in a different way, so thanks for that. That's all I have. Great hearing from you. Thank you very much.

And two years of funding, we would that would cause a distraught be subsumed but.

In a different way so thanks for that.

That's all I got great hearing from you. Thank you very much.

Thank you for your time.

Linda Marbán: Thank you for your time.

Well take our next question from Alethia Young from body Wash News. Your line is open. Please go ahead.

Operator: We'll take our next question from Alan Leong from BioWatch News. Your line is open. Please go ahead.

When they age a congratulations on the San Diego expansion them for grabbing Doctor I went out of Johns Hopkins along with their team.

Alan Leong: Linda Marbán, AJ Bergmann, congratulations on the San Diego expansion and for grabbing Dr. Elliott out of Johns Hopkins along with her team. To me, and I think to everyone, this is a major signpost, so congratulations.

To me and I can't so everyone's listen as a major signposts so congratulations.

Thank you. Thank you.

Linda Marbán: Thank you. Thank you.

Yeah, a couple of.

Alan Leong: Yeah. I've actually been waiting for that shoe to drop. I'm really happy. You know, I'm gonna ask something about the pivotal trial. You mentioned the interim looks. Are they safety only or no-go signal or are they on the other extreme, like, where you get a full peek at the ongoing endpoints?

He's been waiting for a shoe to drop.

Really happy.

Good.

Yeah, I'm going to ask you about the pivotal trial you mentioned that interim look look all these safety only or a no go no go no go to zero or are they on the other extreme like.

Where do you get a full peak kept their onboarding that important.

For the whole three trial. So we're in the process of deciding how to pursue that interim now we haven't disclosed that and we will give you more information as it becomes available.

Linda Marbán: For the HOPE-3 trial?

Alan Leong: Yeah.

Linda Marbán: We're in the process of deciding how to pursue that interim now. We haven't disclosed that, and we'll give you more information as it becomes available. What we want to do is make sure that the trial is as airtight as possible for approval, and we'll follow the guidance of FDA on how to build that interim.

We want to do is make sure that the trial is as airtight as possible for approval and so we'll follow the guidance of F. D. A on how to build that interim.

I see well you have to be pretty much wanting to look out 12 or 18 months primary endpoint early.

Alan Leong: I see. The FDA's pretty much wanting to look at the 12 or 18-month primary endpoint, an early peak wouldn't move their hand for any early approval then?

And it really.

Moving him for for any early approval.

Those are the primary is going to be 12 months and.

Linda Marbán: Yeah. The primary is gonna be 12 months. You know, the Performance of the Upper Limb is measuring shoulder, arm, and hand function. Then we've built in some other measures of skeletal muscle performance as well as the cardiac muscle measurements in terms of function. That will be similar to what we did in HOPE-1 and HOPE-2. We're very confident about the cardiac impact of CAP-1002 as well as the skeletal muscle impact. We don't believe we need to go out to 18 months. FDA said 12 months is representative of long-term effectiveness.

You know the performance of the upper limit is measure in shoulder arm and hand function and then we've built in some other measures of skeletal muscle performance as well as the cardiac muscle measurements.

In terms of function and that will be similar to what we did in hope one I'd hope too. So we're very confident about the cardiac impact of cap 10, or two as well as the skeletal muscle impact. We don't believe we need to go out to 18 months FDA is it 12 months is representative of long term effectiveness.

Wonderful.

Alan Leong: Wonderful. I wanted to get your thoughts and quick view on the INSPIRE trial. It looks at treating severe COVID-19 respiratory deterioration. Are you thinking about generalizing to respiratory deterioration overall, requiring a CPAP? Several years ago, there were several failed trials for respiratory recovery, and frankly, those companies would have given their right arm for your results. I can see, for example, the military, and you talked about that, using for general just respiratory deterioration for trauma. Or is it for now just confined to severe, you're thinking just confined, but and focus confined to severe COVID-19 for now?

I wanted to get your thoughts.

Thoughts.

So I'll go for few faults on the inspire trial it looks like treating severe COVID-19 respiratory deterioration.

Or you can't hear about generalizing to Russell, which encourage deterioration overall, requiring a CPAP several years ago. There were several field trials for respiratory recovery and frankly, both coke coffee, we're giving them the right arm for your results.

For example, the military you talked about using for general Oh, that's matured.

Respiratory solution for travel or was it for now just confined to severe Ah just thinking just combine but unfocused confined to severe COVID-19.

Sunil.

So you know Covid has done many terrible things globally, which none of US I think would argue against but it really has opened the door in a large way to the expansion of our biopharmaceutical and the treatment of different diseases and one of them is really this laser focus on respiratory distress.

Linda Marbán: You know, COVID has done many terrible things globally, which none of us, I think, would argue against. It really has opened the door in a large way to the expansion of biopharmaceuticals and the treatment of different diseases. One of them is really this laser focus on respiratory distress. Once we get the data from the INSPIRE trial, we'll be able to decide a path forward. Yes, we have absolutely not ruled out the possibility that this could be generalizable for many different types of respiratory distress syndrome.

And so once we get the data from the inspire trial, we will be able to decide a path forward and yes, we have absolutely I'm not ruled out the possibility that this could be generalizable for many different types of of respiratory distress syndrome.

Okay see you know our.

Alan Leong: Well, thanks. You know, I and just one more question, if I may. I recognize this is an old question, but I'm getting lots of inquiries. Can you comment on the projected ease, in relative terms, the ease of manufacturing costs and scalability of exosomes? There's a little bit of fear that this is actually more complicated than or as complicated as the usual cell therapy manufacturing.

And just one more question if I may and I recognize this is an old question Barton getting lots of inquiries.

Can you comment on that.

We kept it and.

In relative terms ease of manufacturing costs and scalability all buccal film so there's a little bit of fear that pushes out some more complicated.

Oh, it was complicated and what was unusual cells a cell therapy manufacturing.

You know.

Linda Marbán: You know, we are in scale-up mode. We have, as I mentioned, built a new team of research and development, and part of that is a scale-up team. I'm very confident that this is an engineering problem that can be solved. One of the reasons we decided to move into engineered exosomes originally was because we felt that it would be much easier to manufacture a synthetic exosome with a payload as opposed to trying to convince a natural cell to do exactly what you want it to do. I think when the field talks about the difficulties in scaling up manufacturing, it's the people that are taking cells like CAP-1002 and turning them into CDC exosomes, which is one of our products and one of the ones that we reserve for rare diseases because they are harder to manufacture.

We are in scale up mode. We have as I mentioned built a new team of research and development and part of that is a scale up team I'm very confident that this is an engineering problem that can be solved one of the reasons, we decided to move into engineered Exxon's. Originally was because we felt that it would be much easier to manufacture.

For a synthetic xs AUM with a payload as opposed to trying to convince a natural cell to do exactly what you wanted to do I think when the field talks about the different difficulties in scaling up manufacturing at the people that are taking cells like cap 10, O two and turning them until the CDC Exosomes, which is one of our products and one of the ones that we reserve for rare disease.

Because they are harder to manufacture, but we plan on building this out as a generalizable manufactured product and I think the world is following along you know I think lawns that has Oh manufacturing program now as well as many of the other global manufacturers. So I have a lot of confidence in this space.

Linda Marbán: We plan on building this out as a generalizable manufactured product. I think the world is following along. You know, I think Lonza has a exosome manufacturing program now, as well as many of the other global manufacturers. I have a lot of confidence in this space.

Well congratulations Linda.

Alan Leong: Well, congratulations, Linda, and AJ, for making the strategic turn and being able to carry it out. I'm looking forward to your next year.

For making a strategic to them.

I'm doing that being able to carry it out so I'm looking forward to Europe.

Thank you we are too.

Linda Marbán: Thank you. We are too.

Ladies and gentlemen, once again, please press star one to ask a question that is star one on your telephone keypad.

Operator: Ladies and gentlemen, once again, please press star one to ask a question. That is star one on your telephone keypad. We'll take our next question from Brian Corday from BullBear Partners. Your line is open. Please state your question.

We'll take our next question from Brian Carr des from Bluebird Partners. Your line is open. Please state your question.

Island, and they did great job thanks for the update.

Brian Corday: Hi, Linda and AJ. Great job. Thanks for the updates. I had a question for you regarding the program for Dr. McDonald, where you said you're gonna have 65 to 75 patients. How many are you planning to enroll per month? Do you have several on the waiting list? 'Cause I know you told me that in the past, you've told me there's people that really want to join this study. Will you be giving updates on enrollment throughout the next 3 to 6 months?

I had a question for you regarding the <unk> program for Doctor Excuse me, Doug Macdonald, where you said youre going to have 65 to 75 patients are you planning. How many are you planning to enroll per months do you have several on the waiting list because I know you told me that.

There's in the past you've got people really want to join this study.

And will you be giving updates on enrollment throughout the next three to six months.

Yeah, Thanks, Brian Great to hear from you. So we typically don't provide enrollment updates I'm. You know we are really moving quickly getting the sites up and running as I mentioned, we're not going to start the trial until we found a partner or how funding that you know come in in a non dilutive fashion. So.

Linda Marbán: Yeah, thanks. Brian, great to hear from you. We typically don't provide enrollment updates. You know, we are really moving quickly, getting the sites up and running. As I mentioned, we're not gonna start the trial until we found a partner or have funding that's, you know, come in a non-dilutive fashion so that we can continue to build out this program efficiently. In terms of the wait list, yes, my email blows up every day, more with patients and families that want CAP-1002 than even investors. I'm very confident that the field will meet this trial with great expectation.

We can continue to build out this program them efficiently.

Terms of the waitlist, yes.

My email blows up every day I'm more with patients and families don't want cap set or two then even investors.

And so I'm very confident that the field will meet this Ah trial with great expectations I will provide a cautionary tale that the clinical trial arena is quite complicated and a lot of times, even amazing therapeutics takes a long time to get up and running because sites are so slow, but we're working with sites that we've already had we work.

Linda Marbán: I will provide a cautionary tale that the clinical trial arena is quite complicated, and a lot of times even amazing therapeutics take a long time to get up and running because sites are so slow. We're working with sites that we've already had. We're working with investigators that are very excited and, of course, we'll let you know sort of milestones along the way.

With investigators are very excited and of course, we'll let you know sort of milestones along the way.

Alright, and the San Diego, a dish and where you're bringing in 10 clients who started they are going to be full time for capricorn. The subbing out and did you build the facility did you buy the facility or you're leasing it.

Brian Corday: All right. The San Diego addition, where you're bringing in 10 scientists, are they gonna be full-time for Capricor? Are they subbing out? Did you build the facility? Did you buy the facility? Are you leasing it? The last part of that is the total cost you think it's going to be.

The last part of that is the total cost do you think it's going to be.

So at least previously occupied lab space I'm extremely excited to be moving into this really nice basis in Torrey Pines, San Diego It allows us to expand our research and development group, which we needed to do that we already have six of them working for a full time, we anticipate.

Linda Marbán: We leased previously occupied lab space. I'm extremely excited to be, you know, moving into this really nice space. It's in Torrey Pines, San Diego. It allows us to expand our research and development group, which we needed to do. We already have six of them working for us full time. We anticipate adding about four more full time working for Capricor, primarily on our exosomes, but also on some of the late stage products work we need to do for CAP-1002. We'd encourage you to come visit us. We can go take a walk to the beach.

Adding about four more full time working for copper core primarily on our accident, but also on some of the late stage product work, we need to do for cap 10 O two and we'd encourage you to come visit US. We can go take a walk to the beach.

Good and last question and I would like to come out there question on.

Brian Corday: Oh, good. Last question, and I would like to come out there. Question on the exosome platform, when you said you were conducting, excuse me, talks with a large pharmaceutical company, what would be your ideal scenario to develop out of that? Full cost or a partnership with royalties? What are you envisioning?

The Exosomes platform. When you said you were conducting excuse me talks with a large pharmaceutical company what would be your ideal scenario to go about that full cost or.

Our partnership with royalties what are you envisioning.

So right now I'm really excited by this program I can't talk much about it but we're actually working on you know X's old base vaccine technologies for other diseases. Besides Covid. My vision is that this would be something and we've been talking about this really since we started building out the X as a platform that.

Linda Marbán: Right now I'm really excited by this program. I can't talk much about it. We're actually working on, you know, exosome-based vaccine technologies for other diseases besides COVID. My vision is that this would be something, and we've been talking about this really since we started building out the exosome platform, that these are ripe and ready for licensing, right? That this particular partner or some combination of partners would be interested in licensing in the technology that we've built of using exosomes, loading it with mRNA or some other type of way of eliciting an immune response and then driving vaccinology.

These are ripe and ready for licensing rights at this particular partner or some combination of partners would be interested in licensing in the technology that we've built of using exosomes loading it with mrna or some other type of way of eliciting an immune response, and then driving vaccinology.

So are you going to look at partnering for regions or selling off worldwide, how how do you envision that.

Brian Corday: Are you gonna look at partnering for regions or selling off worldwide? How do you envision that?

Yeah. So right now what I'm envisioning is showing that it works that the strategy is effective which I'm fully expecting and then I will provide more updates as we sort of flush out our plans with our potential partners.

Linda Marbán: Yeah. Right now what I'm envisioning is showing that it works, that the strategy is effective, which I'm fully expecting. We'll, you know, provide more updates as we sort of flesh out our plans with our potential partners.

And then the last question you might have for us any update on the peer reviewed journal.

Brian Corday: All right. The last question I have for you is there any update on the peer-reviewed journal?

Yup its still under review, which we think is a really good sign a method a very major highly credible journal and we expect to have that published either there are or somewhere equally exciting over the next few months. In addition, we plan on presenting the data at a meeting.

Linda Marbán: Yep. It's still in review, which we think is a really good sign. It's at a very major, highly credible journal. We expect, you know, to have that published either there or somewhere equally exciting over the next few months. In addition, we plan on presenting the data at a meeting in the near future.

In the near future.

Alright, well I appreciate it.

Brian Corday: All right. Well, I appreciate it. Keep up the good work.

Good work.

Thank you Brian I appreciate your time and attention.

Linda Marbán: Thank you, Brian. We appreciate your time and attention.

Ladies and gentlemen, once again, please press star one to ask a question that is star one to ask a question.

Operator: Ladies and gentlemen, once again, please press star one to ask a question. That is star one to ask a question. It appears we have no further question. I will hand over the call back to Linda for any additional closing remarks. Please go ahead.

Yeah.

It appears we have no further question I would hand over the call back to Linda for any additional closing remarks. Please go ahead.

Yeah.

Thank you for your time and attention today, we look forward to hopefully seeing you out and about in person or at the very least in zoom meetings as the quarters roll forward and please stay healthy and well during these very challenging times. Thank you very much.

Linda Marbán: Thank you for your time and attention today. We look forward to hopefully seeing you out and about in person or at the very least in Zoom meetings as the quarters roll forward. Please stay healthy and well during these very challenging times. Thank you very much.

That concludes today's conference call. Thank you everyone for your participation you may now disconnect.

Operator: That concludes today's conference call. Thank you everyone for your participation. You may now disconnect.

Yeah.

Okay.

Yeah.

Okay.

Yeah.

[music].

Yeah.

[music].

Okay.

Yeah.

Okay.

Uh huh.

Hum.

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