Q3 2021 Caladrius Biosciences Inc Earnings Call

November 4, 2021

[music].

Welcome to the collateral Biosciences third quarter 2021 financial results and business update conference call. Currently all participant lines are in a listen only mode. Following management's prepared remarks, there will be a question and answer session to ask a question at that time. Please press the star key followed by the one on your Touchtone.

Phone if anyone has difficulty hearing the conference call. Please press star zero for the operator assistance as a reminder, this call is being recorded today Thursday November 4th 2021 I will now turn the call over to John Mendieta, Vice President of Investor Relations and corporate Communications at <unk>. Please go ahead Sir.

Thank you operator, and good afternoon, everyone welcome to cloud versus third quarter 2021 conference call to discuss our financial results and provide a business update.

With me today from our management team are Dr. David Mazzo, President and Chief Executive Officer, Dr. Christopher Buck Executive Vice President of research and development and Chief Medical Officer, and James <unk>, Vice President of Finance and Treasury.

Not received this news release or would like to be added to the company's email distribution list. Please email me at Jay and detail at collateral Dot com.

Before we begin I will remind you that comments made by management. During this conference call will contain forward looking statements that involve risks and uncertainties regarding the operations and future results of collateral.

I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation. Its forms 10-K, 10-Q, and 8-K, which identify specific risk factors that may cause actual results or events to differ materially from those described in the forward looking statements. Furthermore, the content of this conference call contains time sensitive information that is <unk>.

Accurate only as of the date of live broadcast Thursday November four 2021.

<unk> Biosciences undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call. Please keep in mind that the company continues to conduct calls from different locations. During the COVID-19 pandemic. So we appreciate your patience should we have any technical difficulties with that I'll now turn.

The call over to Dr. Mazzo.

Thank you John and good afternoon, everyone.

As always in these continued trying times I hope you're all in good health and remain safe. Thank you for joining us today on our third quarter business update conference call.

During this quarter <unk> continued to advance and optimize its feet. It's CD 34 positive shell technology based clinical programs, while maintaining a strong financial position that will fund operations for the next several years. All this despite the challenging environment brought on by the COVID-19 pandemic, notably.

Notably the company strengthened and further diversified its operations and management team with the addition of several highly qualified and experienced personnel, including the appointment of Kristian K Buck M D. As executive Vice President of research and development and Chief Medical Officer.

Christians wealth of knowledge and extensive medical regulatory and safety expertise across many therapeutic areas will prove instrumental during the company's evolution as we continue to advance and expand our clinical development programs and execute upon our vision.

Kristen is particularly adept at focusing research and development on product development and already has made great impact on the execution and efficiency of our current programs we.

We are delighted to have someone of her caliber as part of our executive team here at <unk>, you will have the opportunity to hear from her firsthand as she will provide an update on our clinical development programs in a few moments before that though I'll turn the call over to James <unk>, Our Vice President of Finance and Treasury to review and provide commentary on our.

Financial results for the quarter James.

Thanks, Dave I'm pleased to join today to present, a summary of our third quarter financial results.

Starting with operating expenses.

Research and development expenses for the three months ended September 32021 were approximately $4 1 million compared to $3 million for the three months ended September 32020.

Research and development in both periods focused on the advancement of our ischemic repair platform and related too.

Expenses associated with efforts to continue execution and acceleration of enrollment of the freedom trial.

Expenses associated with the planning and preparation of an I N D and phase one proof of concept protocol for C. L. B S 201, as a treatment for diabetic kidney disease and <unk>.

Ongoing expenses for hone edra, and critical limb ischemia and burgers disease in Japan associated with maintenance of manufacturing facility and personnel qualification as well as contract research organization engagement.

General and administrative expenses, which focus on general corporate related activities were approximately $2 8 million for the three months ended September 32021, compared to $2 3 million for the three months ended September 32020, representing an increase of 20.

2%.

This increase was mostly due to a large increase in D&O insurance premiums as generally experienced across our industry and strategic consulting expenses.

Overall net losses were $6 9 million for the three months ended September 32021, compared to $5 3 million for the three months ended September 32020.

Turning now to our balance sheet and cash flow.

As previously announced in January 2021, we successfully closed on a $25 million capital raised through the sale of the company's common stock and warrants to several institutional and accredited investors.

In a private placement priced at the market under NASDAQ rules.

Shortly thereafter in February 2021, the company announced that it closed a $65 million capital raised through the sale of its common stock and warrants to several institutional and accredited investors and two registered direct offering priced at the market under NASDAQ rules.

In addition in May 2021, we announced that we received $1 4 million and non dilutive funding as an approved participant of the technology business tax certificate transfer program sponsored by the New Jersey Economic development Authority.

That program enables qualifying new Jersey, based biotechnology or technology companies to sell a percentage of their new Jersey, net operating losses, and research and development tax credits unrelated qualifying corporations.

Even at the tail end of the COVID-19 pandemic, while many small biopharma companies continue to experience difficulties and competed for capital, we successfully and Opportunistically secured $90 million in new capital gross proceeds year to date in 2021.

These resources have afforded us the financial security to focus on the execution of our business plan.

As of September 32021.

Cash cash equivalents and marketable securities of approximately $100 1 million.

Based on existing programs and projections.

The company remains confident that its current cash balances will fund its operations for the next several years.

That completes the financial overview with that I will now turn the call to Doctor Buck Kristen.

Thank you James and good afternoon, everyone.

I'm excited to join you today on my first collateral quarterly conference call and look forward to engaging with all of you in person in the months and years ahead.

My focus throughout the first months at the company has been spent on evaluating and refining development strategies for existing programs in order to maximize the probability of clinical and commercial success.

All while minimizing the capital outlay needed to achieve the next developmental milestone in each program.

In addition, I've been immersed in the company's search for new assets to add to our development portfolio.

To diversify development risk.

And to increase development opportunity.

As most of you know collagenase is focused on the development of autologous cellular therapies.

That's designed to both treat and or reverse disease.

We have clinical programs underway based on a large database of human clinical data.

To date.

Our therapies have shown strong signs of efficacy and durability with an excellent safety profile. Unlike many allogeneic therapies.

Accordingly.

We believe that curative cell therapy products when applied to the right indication and at the right price can restore human health and improved quality of life with a single administration of the therapy.

Rather than a treatment that requires frequent re administration.

Our CD 34 positive cell therapy technology.

Has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia.

A condition in which the supply of oxygenated blood to healthy tissue is restricted.

Previously published preclinical and human clinical studies have demonstrated that administration.

Of CD 34 positive cells induces angiogenesis of the micro vasculature.

That is T cells prompt the development of new blood capillaries.

Thereby country contributing to the prevention of tissue death.

By facilitating blood flow to the area of ischemic insult.

We believe that several conditions caused by underlying ischemic injury can be improved through the application of our CD 34 cell technology.

Including but not limited to <unk>.

Critical limb ischemia.

We call CLI and burgers disease.

Coronary microvascular dysfunction or C M D and diabetic kidney disease known as D. K D.

That said I will now expand on each of our clinical programs in numerical order taking off with C. L. B S 12, who nedra in Japan.

Our product candidate for the treatment of C L I and burgers disease.

Who nedra was awarded a sakigake designation from the Japanese regulatory authorities for the treatment of CLI and burgers disease, an orphan size subset of CLI.

The sakigake designation is akin to an arm that designation in United States.

And affords the recipient prioritized regulatory consultation.

A dedicated review system to support the development and review process, including the option of a rolling registration submission.

As well as reduced review time of six months for the registration application once filed.

Additionally.

Japan's regenerative medicine guidelines.

Products, such as whole Nedra are eligible for early conditional approval and possibly <unk>.

Full approval in Japan.

Just on the assessment by the regulatory authorities all the data from the trial or trials designed in direct collaboration with the Japanese P. M D. A.

Note the conditional approval of soccer Gawky product only requires the demonstration of a trend toward therapeutic effect.

Together with acceptable safety.

Now as you might expect the sakigake designation is a highly sought regulatory classification in Japan.

And we hope that this coupled with positively trending data from our trial will make her nedra and attractive product product for partnering to a Japanese pharmaceutical company.

The company's study of <unk> in Japan for the treatment of CLI and burgers disease has shown positive results to date.

The initial responses observed in the subjects, who have reached an endpoint in this study are consistent with.

With a therapeutic effect.

And safety profile previously reported and published clinical trials in both Japan, and the United States.

However, as discussed in prior quarters.

The multiple states of emergency declared by the Japanese government over the last 18 months due to the COVID-19 pandemic have made incremental enrollment exceedingly challenging.

While the trial is demonstrating positive trends in both efficacy and safety, which are the key criteria for consideration of conditional approval in Japan under the Sakigake designation.

We have concluded that it's in the companies and our shareholders' best interest too.

To suspend our enrollment efforts with the objective of minimizing the operational and financial burden that we have.

And continue to incur due to enrollment delays and the lack of visibility on time to completion.

Our near term for near term focus in Japan will be on securing a partner to complete the study.

By enrolling the four remaining no option critical limb ischemia subjects.

If deemed necessary.

And or to explore the possibility of submitting the existing data to.

To the Japanese regulatory authorities under the Sakigake designation.

Now earlier this year.

We reported that the United States food and drug administration. The F D. A granted orphan designation to <unk>.

C L. B S 12, as a treatment for burgers disease.

We very recently received a response from the FDA regarding our briefing document and questions about a potential.

C L. B S 12 development program in the United States for Burgers disease.

The Fda's response has led us to believe.

That a clinical program of some size and cost would be required for U S approval.

Especially since they felt that the existing data out of Japan would not be representative of the burgers disease patients in.

In the United States.

Based on that guidance from F D a.

We have decided not to pursue the development of C. L. B S 12, and burgers disease.

In the U S. At this time.

Yeah.

Turning now to Zelma C. L. B S 16 for the treatment of coronary Microvascular D. C M D.

C. M. D is a disease that continues to be under diagnosed and potentially afflicts millions annually.

Vast majority of whom are female with no current treatment options.

The company is committed to raising awareness of this growing womens health crisis, and finding an effective treatment.

In may of 2020.

<unk> announced the full data results from the escape C. M. D trial at the society for cardiovascular angiography and interventions Twenty-twenty scientific Session's virtual conference.

Showing a highly statistically significant improvement in coronary flow reserve.

Correlating with symptom relief for patients with C. M D. After a single.

Intra coronary injection of Downer.

Subsequently earlier this year the company initiated and is currently treating patients in a rigorous phase two b clinical.

Clinical trial known as the freedom trial.

Which to our knowledge is the first controlled regenerative medicine trial and C. M D in the United States.

The freedom trial is a double blind randomized placebo controlled trial design.

Designed to assess the efficacy and safety of delivering autologous CD 34 cells.

Our zelma product.

Subjects with C M D and without obstructive coronary artery disease.

Investigator and potential subject response to the freedom trial has been favorable.

And while early enrollment in the trial proceeded as planned with the first patient treated in January of 2021.

The impact of the COVID-19 pandemic in the United States has contributed to the general slowing of enrollment to date.

In an effort to accelerate enrollment.

The company has expanded the number of participating investigators occasional sites and modified the study protocol to broaden the array of available techniques acceptable for diagnosing C. M D.

Thereby opening trial participation to a much larger number of sites throughout the U S.

This and other protocol amendments intended to facilitate enrollment were implemented in the latter part of the quarter.

After agreement with the F D a.

And we will assess the impact of the protocol changes on enrollment in the coming months.

At which time, we expect to provide an update on enrollment feasibility and completion.

With final data expected approximately six months after last patient last visit in the study.

Yeah.

Lastly, and most recently.

Proposed development program for C. L. B S 201 for the treatment of diabetic kidney disease decay D.

The company plans to initiate a phase one.

Open label.

Proof of concept trial evaluating C. L. B S 201, our CD 34 positive regenerative cell therapy.

For intra renal artery administration in patients with Dk D.

Although still pre dialysis.

These patients exhibit rapidly progressing stage three b disease.

Progressive kidney failure is associated with attrition of the micro circulation of the kidney.

In pre clinical studies in kidney disease and injury models.

Have demonstrated that protection.

Or replenishment of the micro circulation results in improved kidney function.

The protocol pending final approval from the institutional review board.

Calls for an open label staggered sequentially dose cohort of six patients overseen by an independent data safety monitoring board.

A key readout of the data will occur at the six month follow up visit for all patients.

The company projects enrollment of this study to begin in the first quarter of 2022 with data from all subjects expected by the first quarter of 2023.

Finally, as I mentioned previously we are in the midst of a concerted effort to.

To identify and secure and additional development asset or assets.

To complement our current portfolio of product development candidates.

Based on the quality and breadth of available opportunities as.

As well as the continued advancement of our existing development portfolio.

I am excited about our prospects and see a bright future ahead of us for Calabria.

And I look forward to discussing specifics with you in the future.

With that I will now turn the call over to Dave.

Thank you Kristen.

Overall, we are very pleased with the corporate and development achievements made in the third quarter throughout the remainder of the year, we expect to maintain and even build on our execution and strategic evolution with a focus as always on driving shareholder value and with that overview operator, we're now ready to take questions.

As a reminder to ask a question. Please press the star key followed by the one on your Touchtone phone. Please offer only one question per listener at a time and then B b.

They prepare to return into the queue for any additional questions.

Our first question is from Kumar Roger with Brookline capital.

Thanks for taking my question.

So first with regard to the ordinary dry in Japan.

How does this impact the expenses near term, where do you think that all the expenses in Japan will be taken care off.

Sure I would agree mark. Thank you very much thanks very much for your question.

So I think it's worthy to spend a little bit more time on homes that you sold some.

To answer your question is we expect to save.

Several million dollars or I should say avoid.

About several million dollars of expense in 2022.

As a result of the decisions that we've taken here with <unk>.

Born quite a quite a large expense since February of 2020 in Japan, maintaining manufacturing facilities personnel qualifications, shiro engagements et cetera, and have unfortunately been able to enroll essentially no patients during that period of time because of the states of emergency. So we believe.

This is a prudent action going forward from a financial perspective.

And with regard to the diabetic kidney disease.

Typically how much do these patients deteriorate if their product suite there.

Well I'm going to ask Christine to comment in a moment, but as you heard or say what we're looking to do is to identify patients who are likely in the roughly stage three b.

Section of the disease, and who are rapidly progressing so that will be in a position to measure a change in the rate of progression. During the period of time that there'll be followed Christian do you want to add anything to that.

Yeah. Thanks, Dave the only thing I would add is you know, it's it's almost impossible.

Possible to to come up with a number that determines their rate of deterioration as Dave said, we're looking for patients who are sort of maxed out on their medications who have diabetes.

Sort of are under control with their medications, but we think that they will be rapidly progressing in an effort to find them you know a rate of change in such patients, but I think to answer your question succinctly, one can't determine that and that's been the bane of a lot of clinical drug developers you know problems over the years.

We're able to identify who who and how quickly these people.

Decline.

So the expectation is that potentially there will be a stability in that disease progression.

They want progress as much.

Well our goal here Kumar again to be very clear is we see this as a regenerative therapy. If it will work and if it does work then it will compete in a marketplace, where there are currently oral daily medications that already slow the progression of the disease our goal with <unk> 201 instead.

Demonstrate that we can regenerate kidneys function. So we're not looking simply too slow or stop the progression of the disease, we actually would like to see a regeneration and as manifested by an increase in GFR rather than a continued decrease in GFR. So high hurdle, but we think it's one that's appropriate for.

What could be a regenerative therapy.

Okay and in terms of the background.

Diabetic levels of these patients.

How long are you willing to come to the floor that then how is that going to have impact on this.

Again, I'll, let Christine respond yes.

Did the procedure during the Covid times so.

We expect that a number of the protocol changes that Kristen is implemented which will expand the types of CFR measurements that are being allowed well actually minimize the number of invasive invasive treatments and generally facilitate enrollment in a number of other ways will hopefully increase enrollment and all.

Also as the Covid pandemic becomes more and more under control, but a number of these protocol amendments have really just been implemented and it will take several months for us to be in a position to measure the impact. So we're hoping that by the end of the year will be able to measure the impact in on our next conference call will be able to give you an update on where we stand.

Okay, great. Thank you so much.

Thank you for humor.

Yeah.

Right.

Hi.

Good afternoon, and thank you for taking my question.

Wanted to whack I'm getting back to the team.

Then another question regarding the try and enrollment across the different programs and the current game packed up the pandemic and it seems to be as all of them.

But still present, so I I guess <unk> what are you eating more specifically from the site at eight issues I'll stop short that your aura uhm, there still are related to less patient seeking treatment because of COVID-19 or a combination of all of these factor and it was so I guess it honey that I is.

A specific case about do you find that these issues that are different in different geographies.

Thanks, the menu yeah, I think you've hit it right on the head here as it relates to our programs not to be repetitive, but I think it's worth making sure that everyone on the call understands when a patient wants to go through a an autologous cell therapy treatment for with one of our products. They have two under.

Go a number of office visits with a physician they have to undergo an a pheresis procedure, which usually occurs either in a dialysis unit or an a for research unit, which is often in a hospital or clinical setting and then they have to go through the actual administration, which takes place either in the hospital and the <unk>.

Catheter laboratory and operating room et cetera, all these facilities have been.

Patient access restricted to one extent or another during the COVID-19 pandemic because patient needed facilities, we're either trying to limit the number of patients coming in without COVID-19 since they wouldn't be exposed because staff has been migrated to those units treating COVID-19 because there has.

Been a great increase in the number of people with Covid because patients and then we had the issue as you mentioned a patient.

Being reluctant to seek treatment during these times they've been staying home isolating and facilities have lost staff because they would either move them to COVID-19 units or staff has been relocated to work remotely fits administrative staff and coordinating staff were simply they'd become burnt out and they've left the jobs.

So we felt impacts from all of that across all geographies and then in Japan, We had the added impact of the Japanese government.

Indicating health states of emergency almost <unk>.

Consecutively beginning in February of 2020 until very recently and during those states of emergencies, all major hospital facilities, we're restricted.

From treaty anything other than Covid related illnesses, so clinical trials like hours, which required hospital facilities, we're simply stopped and we couldn't enroll any patients during that period of time. So it was a little worse from an enrollment perspective in Japan, but we have to a great extent many of the same challenge.

As in all geographies.

Yeah, Yeah. Thank you for that.

<unk> and you're getting done yoga, and we don't need for patients remaining and given that the seasons are the situation I.

I was wondering if you talk more recently it'll it'll go that somebody out targets evening, Japan about submitting the existing dataset and then also.

How did that in the past that could support the positive outcome for this person <unk> and then and then I have another question about D. They're calling from Michigan.

Okay. So so the the the idea of precedent is is a little tricky because.

Under the regenerative medicine law and with the soccer cocky designation the Japanese regulatory authorities.

Essentially worked directly with us to define a trial of.

I'm going to say arbitrary size arbitrary because it's not statistically driven at all so they decided that 30 patients.

And no option CLI and five patients in burgers disease would be an interesting enough population that if.

If we were able to demonstrate safety and a trend toward efficacy in that population that that would be sufficient for them to consider us for at least a conditional approval if not a full approval.

To date, we have 26.

So we've been at all from that perspective, as well and that's why we're not in a position to start the rolling submission and we would need a partner to work with us on that in any case.

Okay, Okay got it got it.

Thank you for that very helpful.

And then I guess I wanted to follow up on the where he was talking about a building or the English techniques.

For CMV diagnosis.

For the Zona programs.

Maybe if you can just hum.

Dr. <unk> has a little bit more about the protocol amendment implemented to facilitate enrollment.

Sure I'll make a brief comment and then I'll turn it over to Christian to give you some more details, but just recall that at the beginning of the trial, we had stipulated that.

CFR was can be measured using the adopters technique using a specific catheters that was made by by Philips and.

Since the start of the trial Phillips has decided to discontinue that trial. So it's only got very limited availability that was a particular issue and then only use the innovation topless technique also pose some challenges relative to patient enrollment. So we've opened it up to a very.

Alrighty of additional invasive and noninvasive techniques and then I'll, let Christian gave you some of the specifics about those.

Yeah, Hi, and thank you for the warm welcome.

I really haven't had any recent success in obtaining nondilutive funding you know from foundations or patient interest groups or whatever are there differences in the availability of funding you know the amount of money that these different organizations would have available for for the three main.

Disease areas that.

That you're dealing with you know cardio vascular and and kidney.

It's so that there there are some that are are more.

Opportunistic targets than than others without regard or they're basically not a whole lot of money available for any for non dilutive funding.

Well, yeah, Thanks, Chris Peach for that for that question in and I'll. Just reminded you know that we we did get you.

About $3 million, if non dilutive funding from the state of New Jersey from the sale of I know, but.

Kind of operating losses, you've already had that it was just a matter of monetizing it so I'm not counting down I'm talking about you know getting money.

From Okay. So so you know go I'm not from the grants perspective.

You know the there are a number of sources, but the principal sources for non dilutive grants come from either the federal government to a variety of its agencies or specific disease related foundations like right, Yeah American diabetes Association or the American Heart Association most of those.

Yeah.

[noise] organizations have a a cycle for grant application and review that runs on the calendar year.

So that you typically put in the the proposals you know in the early part of the year. The reviews take place in by mid year. If you're funded you find out and you often get the funding by the end of the year and then that funding you know depending upon its magnitude can be spread out over one or multiple years the.

[noise] of funding available from a lot of the alcohol. It disease related foundations is often specifically directed to.

New clinical investigators to to clinical sites.

And I can't speak for them, specifically, we've not received feedback.

With that being the reason why they wouldn't be interested I think what most people would assume is that for a curative treatment or treatment that has a very infrequent dosing spread out by by years. For example that the pricing would be commensurate and so that they would still be able to.

Make a profit and appropriate profit over time, so I don't think that that's really been the biggest issue I think the bigger issue is simply that they are.

Understanding that the.

The pandemic has had an influence on the kinds of things that can be advanced during the clinical development trials and.

They're just waiting to see when we're able to generate some additional data and we're hoping that that's something that you know.

Certainly in 2022 is something that we're looking forward to doing okay. Well. Thanks, that's very helpful. Thank you.

Thanks Pete.

This concludes the question and answer portion of the presentation and now I will turn the call back to Dr. <unk> for closing remarks.

Well again, thank you all for participating on today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on the company's achievements and progress.

We remain grateful for your continued interest in and the support of <unk> Biosciences stay well and have a good evening.

Bye.

This does conclude today's presentation you may now disconnect.

[music].

Corporate communications at Collagenase. Please go ahead Sir.

Thank you operator, and good afternoon, everyone welcome to <unk> third quarter 2021 conference call to discuss our financial results and provide a business update.

Joining me today from our management team are Dr. David <unk>, President and Chief Executive Officer, Dr. Christopher Buck Executive Vice President of research and development and Chief Medical Officer, and James <unk>, Vice President of Finance and Treasury.

Earlier today, we issued a press release announcing our third quarter 2021 financial results, which is available under the investors and news section of the company website, along with the webcast replay of this call. If you have not received this news release or would like to be added to the company's email distribution list. Please email me at Jay Mandigo at collateral stock.

Com.

His knowledge and extensive medical regulatory and safety expertise across many therapeutic areas will prove instrumental during the company's evolution as we continue to advance and expand our clinical development programs and execute upon our vision.

Kristen is particularly adept at focusing research and development on product development and already has made great impact on the execution and efficiency of our current programs.

We are delighted to have someone of her caliber as part of our executive team here at <unk> and you will have the opportunity to hear from her firsthand that she will provide an update on our clinical development programs in a few moments before that though I'll turn the call over to James NIPSCO, Our Vice President of Finance and Treasury to review and provide commentary on our.

Financial results for the quarter James.

Thanks, Dave I'm pleased to join today to present, a summary of our third quarter financial results.

Starting with operating expenses.

Research and development expenses for the three months ended September 32021, or approximately $4 1 million compared to $3 million for the three months ended September 32020.

Research and development in both periods focused on the advancement of our ischemic repair platform and related too.

Expenses associated with efforts to continue execution and acceleration of enrollment of the freedom trial.

Expenses associated with the planning and preparation of an IMD and phase one proof of concept protocol for C. L. B S 201, as a treatment for diabetic kidney disease and <unk>.

Even at the tail end of the COVID-19 pandemic, while many small biopharma companies continue to experience difficulties and competed for capital.

We successfully and Opportunistically secured $90 million in new capital gross proceeds year to date in 2021.

These resources have afforded us the financial security to focus on the execution of our business plan.

As of September 32021, we had cash cash equivalents and marketable securities of approximately $100 1 million.

Based on existing programs and projections.

The company remains confident that its current cash balances will fund its operations for the next several years.

That completes the financial overview with that I will now turn the call to Doctor Buck Kristen.

Thank you James and good afternoon, everyone.

I'm excited to join you today on my first collateral quarterly conference call and look forward to engaging with all of you in person in the months and years ahead.

My focus throughout the first months at the company has been spent on evaluating and refining development strategies for our existing programs in order to maximize the probability of clinical and commercial success.

All while minimizing the capital outlay needed to achieve the next developmental milestone in each program in.

In addition, I've been immersed in the company's search for new assets to add to our development portfolio, both to diversify development risk and to increase development opportunity.

As most of you know collagenase is focused on the development of autologous cellular therapies designed to both treat and or reverse disease.

We have clinical programs underway based on a large database of human clinical data.

To date.

Our therapies have shown strong signs of efficacy and durability with an excellent safety profile. Unlike many allergenic therapies.

Importantly.

We believe that curative cell therapy products, when applied to the right indication and at the right price.

Can restore human health and improved quality of life with a single administration of the therapy.

We call CLI and burgers disease.

Coronary microvascular dysfunction or C M D and diabetic kidney disease known as D. K D.

That said I will now expand on each of our clinical programs in numerical order taking off with C. L. B S 12, who nedra in Japan.

Our product candidate for the treatment of C L I and burgers disease.

Her nedra was awarded a sakigake designation from the Japanese regulatory authorities for the treatment of CLI and burgers disease, an orphan size subset of CLI.

The sakigake designation is akin to an arm that designation in United States.

And affords the recipient prioritized regulatory consultation.

Dedicated review system to support the development and review process, including the option of a rolling registration submission.

As well as reduced review time of six months for the registration application once filed.

Additionally, under Japan's regenerative medicine guidelines <unk>.

Products, such as Ho Nedra are eligible for early conditional approval and possibly.

Full approval in Japan.

Just on the assessment by the regulatory authorities over the data from the trial or trials designed in direct collaboration with the Japanese P. M D. A.

Note the conditional approval of soccer Gawky product only requires the demonstration of a trend toward therapeutic effect.

Together with acceptable safety.

Now as you might expect the sakigake designation is a highly sought regulatory classification in Japan.

And we hope that this coupled with positively trending data from our trial.

We'll make her nedra and attractive product product for partnering to a Japanese pharmaceutical company.

The company's study of <unk> in Japan for the treatment of CLI and burgers disease has shown positive results to date.

The initial responses observed in the subjects, who have reached an endpoint in this study are consistent.

With a therapeutic effect.

Sure.

We reported that the United States food and drug administration the F D. A.

Granted orphan designation to C. L. B S 12, as a treatment for burgers disease.

We very recently received a response from the F D. A regarding our briefing document and questions about a potential.

C L. B S 12 development program in the United States for Burgers disease.

The F D. A's response has led us to believe.

That are clinical program of some size and cost would be required for U S approval.

In January of 2021.

The impact of the COVID-19 pandemic in the United States has contributed to the general slowing of enrollment to date.

In an effort to accelerate enrollment.

The company has expanded the number of participating investigators occasional sites and modified the study protocol to broaden the array of available techniques acceptable for diagnosing C. M D.

And thereby opening trial participation to a much larger number of sites throughout the U S.

This and other protocol amendments intended to facilitate enrollment were implemented in the latter part of the quarter.

After agreement with the F D a.

And we will assess the impact of the protocol changes on enrollment in the coming months at.

At which time, we expect to provide an update on enrollment feasibility and completion.

Covid by the first quarter of 2023.

Finally, as I mentioned previously we are in the midst of a concerted effort.

To identify and secure and additional development asset or assets.

Complement our current portfolio of product development candidates.

Based on the quality and breadth of available opportunities as.

As well as the continued advancement of our existing development portfolio.

I am excited about our prospects and see a bright future ahead of us for collateral.

And I look forward to discussing specifics with you in the future.

With that I will now turn the call over to Dave.

Thank you Kristen.

As a reminder to ask a question. Please press the star key followed by the one on your Touchtone phone. Please offer only one question per listener at a time and then B b.

They prepare to return into the queue for any additional questions.

Our first question is from Kumar Roger with Brookline capital.

Thanks for taking my question.

So first with regard to the Hornet line Japan.

Yeah. Thanks, Dave the only thing I would add is you know, it's it's almost impossible.

Possible to to come up with a number that determines their rate of deterioration as Dave said, we're looking for patients who are sort of maxed out on their medications who have diabetes.

Sort of are under control with their medications, but we think that they will be rapidly progressing in an effort to find a rate of change in such patients, but I think to answer your question simply one can't determine that and that's been the bane of a lot of clinical drug developers you know problems over the years too.

We're able to identify who who and how quickly these people.

Decline.

So the expectation is that will eventually there'll be stability in their disease progression.

They want to focus as much.

What could be a regenerative therapy.

Okay.

Tom's background.

Diabetes that will help these patients.

How are you willing to kind of hold as part of that and how is that going to have impact on this.

Again, I'll, let Christine respond yes.

Thank you Kumar the eligibility criteria for the trial defined the diabetic kidney disease patients that they should be on stable diabetic medications stable kidney medications for periods of time prior to study entry and they have studied defined lab criteria, which are akin to the other chronic kidney disease.

Trials Youll find on a clinical trials dot Gov. So they will be stable for a period of time prior to study entry.

Okay.

Finally with regard to CMV.

<unk>.

So it looks like.

We will have an update soon on that.

Is it mostly driven by what's happening with the COVID-19 situation.

Yes, I think generally want to classify this as a program that's been greatly impacted by Covid remember the original protocol required patients to have a CFO measurement.

Screening CFO measurement at baseline and then our CFO measurement at six months all of those required visits to the Cath lab, which involved visits obviously two facilities that are impacted by Covid and in many cases, we're restricting the access to non COVID-19 patients. In addition, as part of the treatment patient has.

To sit through and a pheresis and that's another facility restricted procedure during the Covid times. So we expect that a number of the protocol changes that Christian is implemented which will expand the types of CFR measurements that are being allowed will actually minimize the <unk>.

Number of invasive invasive treatments and generally facilitate enrollment in a number of other ways will hopefully increase enrollment and also as the COVID-19 pandemic becomes more and more under control, but a number of these protocol amendments have really just been implemented and it will take several months for us to be in a position to measure.

The impact so we're hoping that by the end of the year, we'll be able to measure the impact on our next conference call, we'll be able to give you an update on where we stand.

Okay, great. Thank you so much.

Thank you Kumar.

Your next question is from Manuela <unk> with HC Wainwright.

Yes.

Hi.

Good afternoon, and thank you for taking my questions and they wanted to work on the tobacco and the team.

First and then another question regarding the try and enrollment across the different programs and the current impact of the pandemic and it seems to be evolving but still present. So I guess what are you eating more specifically from the site.

These issues.

That chart that you or they.

They are still obligated to less patients seeking treatment because of COVID-19.

The nation of all these factors and so I guess plenty there is a.

A specific case.

Do you find that these issues that are different in different geographies.

Thanks, Emmanuel I think you've hit it right on the head here as it relates to our programs not to be repetitive, but I think it's worth making sure that everyone on the call understands when a patient wants to go through a an autologous cell therapy treatment with one of our products.

<unk> have to undergo a number of office visits with a physician they have to undergo an <unk> procedure, which usually occurs either in a dialysis unit or an <unk> unit, which is often in a hospital or clinical setting and then they have to go through the actual administration, which takes place either in a hospital.

And the catheter laboratory, an operating room et cetera, all of these facilities have been.

Patient access restricted to one extent or another during the COVID-19 pandemic because patient needed facilities, we're either trying to limit the number of patients coming in without COVID-19. So they wouldn't be exposed because staff has been migrated to those units treating COVID-19 because there has been a.

Great increase in the number of people with Covid because patients and then we had the issue as you mentioned of patients.

Being reluctant to seek treatment during these times they've been staying home isolating and facilities have lost out because they either move them to COVID-19 units or staff has been relocated to work remotely.

Administrative staff and coordinating SaaS or simply they become burnt out and they've left their jobs. So we felt impacts from all of that across all geographies and then in Japan, We had the added impact of the Japanese government.

Indicating health states of emergency almost.

Consecutively beginning in February of 2020 until very recently and during those states of emergencies, all major hospital facilities were restricted.

Treaty anything other than Covid related illnesses, so clinical trials like ours, which required hospital facilities, we're simply stopped and we couldnt enrolled any patients during that period of time. So it was a little worse from an enrollment perspective in Japan, but we have to a great extent many of the same challenge.

As in all geographies.

Yeah, Yeah. Thank you for that.

And regarding go Nathan.

With only four patients remaining and given the persistence of the situation.

Was wondering if you talk more recently to go that's already alternatives in Japan about submitting <unk> dataset.

And also.

How did that any precedence that could support a positive outcome for <unk>.

And then I have another question about the rolling submission.

Okay. So.

So the.

The idea of precedent is is a little tricky because.

Under the regenerative medicine law and with the Sakigake designation.

The Japanese regulatory authorities SM.

Essentially worked directly with us to define a trial of.

I'm going to say arbitrary size arbitrary because it is not statistically driven at all so they decided that 30 patients.

And no option CLI and five patients and burgers disease would be an interesting enough population that.

If we were able to demonstrate safety and a trend towards efficacy in that population that that would be sufficient for them to consider us for at least a conditional approval if not a full approval.

To date, we have 26.

Critical limb ischemia patients and seven burgers disease, we have two more than the original five in agreement with the regulatory authorities. So we have a total of 33 patients instead of instead of 35. The number is not statistically driven and so so we think that there is the opportunity for.

Flexibility here, but it does require the Japanese regulatory authorities to agree to that and the particular issue that we have as a non Japanese company is that these discussions are typically held in person with the Japanese regulatory authorities and Americans are.

Not allowed to travel to Japan for anything other than essential services. So we are we've been prohibited since February of 2020 from going to Japan, and having this discussion with the Japanese authorities and.

Our best guess is that it won't be until early 2022, when we would be allowed to go to Japan and have that meeting and of course, we have to request that meeting and then have it scheduled so it's probably going to be.

Well into the spring for that reason, we think that the Japanese company would be better placed to have that conversation because they're already there and they can go whenever they want and thats why were focusing on efforts on trying to secure the partnership now.

Oh, Okay. That's very helpful. Thank you.

I don't I don't know if it is possible that CFO.

Planning for day running some Wilson could you potentially begin the process ahead of the completion of the study enable when you have a sense of.

It's going to take you to complete the study.

What is that number or the railroad the rolling submission in theory could start.

Point in time, but the trigger for the rolling submission is a face to face meeting with the PD M&A. So we've been told from that perspective, as well and that's why we're not in a position to start the rolling submission and we would need a partner to work with us on that in any case, okay. Okay got it got it.

Okay. Thank you for that.

Hum.

I guess I wanted to follow up on the one he was talking about a building or the techniques.

Before I do that nowadays.

For the <unk> program.

Maybe if you can just oh Dr.

A bit more about the profit question, London implemented to facilitate and Garland.

Sure I'll make a brief comment and then I'll turn it over to Christian to give you some more details, but just recall that at the beginning of the trial, we had stipulated that.

CFR was can be measured using the adopters technique using a specific catheters that was made by by Philips.

Since the start of the trial Phillips has decided to discontinue that.

That trial. So it's only got very limited availability that was a particular issue and then only use the innovation topless technique also posed some challenges relative to patient enrollment. So we've opened it up to a variety of additional invasive and noninvasive techniques among all of them.

Christian to give you some of the specifics about those.

Yeah, Hi, and thank you for the warm welcome.

As Dave said, we've opened it to both invasive and noninvasive and what we're looking for is things like coronary blood flow response to see the choline myocardial perfusion reserve myocardial flow reserve.

Our index of my of vascular resistance and we are looking at different methods without getting into too much granular detail as.

Thermodilution techniques, MRI and cardiac pet scans and so what this allows our investigators to do is to use whatever their site typically uses or coronary ray activity and functional coronary activity test. So it has allowed us to open up our enrollment.

Quite significantly and hopefully we will see those results in the coming quarter.

Got it that makes sense. Thank you very much.

Thanks Emmanuel.

Your next question is from Pete Enderlin with MAZ partners.

Okay.

Hi, Hello, Pete how are you good thank you.

You've given us a lot of.

Specific information I just have a couple of broader questions left at this 0.1 is we're looking at.

In fact, I guess, you can say that you really haven't had any recent success.

Obtaining non dilutive funding.

Foundations or patient interest groups or whatever.

Are there differences in the availability of funding.

The amount of money that these different organizations would have available for the three main disease areas.

Youre dealing with cardio and vascular in and kidney.

So there are some that are more <unk>.

Albert touristic targets than others without regard or they're basically not a whole lot of money available for Eddie for non dilutive funding.

Well thanks for that for that question and I'll, just remind you that we did get some.

About $3 million of non dilutive funding from the state of New Jersey from the sale of <unk>.

Net operating losses, you already had that it was just a matter of monetizing it so I'm not counting that I'm talking about getting money.

From okay. So so.

From the grants perspective.

There are a number of sources, but the principal sources for non dilutive grants come from either the federal government through a variety of its agencies or specific disease related foundations like American diabetes Association or the Americans.

Heart Association.

Most of those.

Organizations have a.

Our cycle for grant application and review that runs on the calendar year. So that you typically put in the the proposals in the early part of the year the reviews to take place in by mid year. If you funded you find out and you often get the funding by the end of the year and then that funding dependent.

Its magnitude can be spread out over one or multiple years.

The types of fundings available from a lot of the I'll call. It disease related foundation is often specifically directed to <unk>.

New clinical investigators to.

Two clinical sites and often to academic institutions, it's very unusual for those organizations to provide financial support to public companies for research and development. They may help by working with them.

Patient groups to help with your recruitment et cetera, but they often just simply don't give money now in the case of the NIH and other government.

Government organizations every year. They have a stated focus on the types of diseases that they would like to see.

Treated and so they put out a request for proposals in those areas and we typically apply for every single grant for.

<unk>, which we have even a small chance of being able to achieve and we've made those applications but.

The number of applicants far exceeds the amount of money, that's being distributed and so that's where we stand but we continue to make application whenever there is a mix.

Something for which we're eligible and we hope that we will.

Eventually get some additional grants and notwithstanding the fact that you don't count at $3 million of real cash in our pocket is real money.

It's important to not discount that and there'll be more new Jersey Nols in the future. Okay, well, thanks for that clarification and I just have one more which also relates to funding I guess in a way and that is when you consider opportunities for strategic funding or partnerships.

Does the fact that all of your programs and you've emphasized that on this call are for.

For onetime therapies does.

Does that in a way limit the appeal to some of these larger companies because.

And big biotech companies as recurring treatments.

I think onetime treatments are a great thing, but maybe that's not as appealing to some of the potential strategic partners.

Well.

I can't speak for them, specifically, we've not received feedback.

Make a profit and appropriate profit over time, so I don't think that that's really been the biggest issue I think the bigger issue is simply that they are.

Understanding that the.

The pandemic has had an influence on the kinds of things that can be advanced during.

The clinical development trials and they.

They're just waiting to see when we're able to generate some additional data and we're hoping that that's something that.

Certainly in 2022 is something that we're looking forward to doing it.

Okay well. Thanks, that's very helpful. Thank you.

Thanks Pete.

This concludes the question and answer portion of the presentation and now I will turn the call back to Doug Amato for closing remarks.

We remain grateful for your continued interest in and the support of <unk> Biosciences stay well and have a good evening.

Bye.

This does conclude today's presentation you may now disconnect.

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