Capricor Therapeutics Inc. Q1 2023 Earnings Call
Speaker 2: Good afternoon, ladies and gentlemen. This is the conference operator. Welcome to the Capricor first quarter 2023 financial results and corporate update call.
Speaker 2: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0.
Speaker 2: As a reminder, this conference call is being recorded. I would now like to turn the conference over to our host, Mr. A.J. Bergman, Capricor's Chief Financial Officer.
Speaker 3: Thank you, and thank you for joining today's call. 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.
Speaker 3: 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, manufacturing capabilities, potential milestone payments, and our possible uses of existing cash and investment resources.
Speaker 3: 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 statement. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports. We are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements.
Speaker 3: With that, turn the call over to Linda Marban, CEO . Thank you, AJ. Good afternoon, and thank you for joining our first quarter, 2023 conference call. Today, I will provide important updates on our Phase 3 DMG program, as well as our 26035X's on platform.
Speaker 4: We are pleased with the progress that we have made in the first few months of 2023 and believe we are well positioned to execute on our key priorities and reach multiple milestones throughout this year, which include continuing discussions with FDA regarding pathway towards a biologics license application for CAP 1002,
Speaker 4: 23 as well as exploring opportunities for additional strategic partnerships outside of the United States and Japan to support the potential commercialization of Cap 1002 and DMG.
Speaker 4: We also are looking forward to the expansion of our ex-Zone pipeline, focusing on securing partnerships, as well as other opportunities for non-diludo funding.
Speaker 4: Now let me begin my remarks today by providing an update on our recent FDA interactions.
Speaker 4: RMAT designation, we held a Type B, CMC, or Chemistry, Manufacturing, and Controls meeting with the FDA where we outlined our plans for production of commercial scale GMP CAP-1002.
Speaker 4: We were also able to outline plans for our post-integacing and other release criteria in order to support the filing of the BLA, which is a great accomplishment.
Speaker 4: of our development program. There was a discussion about the possible need for some patients to be treated with product manufacturers from our GMP San Diego site.
Speaker 4: That discussion has not yet been finalized and is still ongoing. I would like to reiterate that our goal is to work with FDA on the shortest path to filing a BLA. And to that end, we are currently working closely with them on this important issue and will provide updates on our clinical development plan.
Speaker 4: as it becomes available.
Speaker 4: This now leads me to an update on our San Diego manufacturing facility for Capp 1002. As you know, we designed a facility within our R&D headquarters to be able to produce commercial-scale GMP Capp 1002 doses.
Speaker 4: We see the facility as a versatile and cost effective way to potentially bring cap 10 or two to the market. I am pleased to inform you that we are on track to release GMP cap 10 or two doses in the third quarter of this year.
Speaker 4: Should Cappton or to obtain market approval, we firmly believe that our ability to manufacture in-house will greatly increase our margins and support the early launch of this product.
Speaker 4: watercolor potential capabilities and protection and capacity for this site.
Speaker 4: Next, I would like to provide a clinical update on HOPE 3. Our Phase 3 clinical trial continues to enroll well. As of today, we have 13 active sites and remain on track to enroll 68 patients by the second half of this year, which is a currently designed sample site.
Speaker 4: the second quarter, which we believe is both a testament to the high level of engagement by our clinical trial sites as well as our team's strategic execution.
Speaker 4: Our plans to conduct an interim analysis for sample size re-estimation and analysis of conditional power remain unchanged and we are on track to have these results available in the fourth quarter of this year. As I mentioned previously, we are working closely with the FDA.
Speaker 4: to optimize the HOPE 3 clinical trial design and will provide updates on any feedback once available should any changes be necessary. In parallel, we continue to treat patients in the open label extension for OLE portion of the HOPE 2 Phase 2 study.
Speaker 4: These patients are going to their fifth year of follow-up and going to a third year of OLE treatment. Further, while we continue to see efficacy in these patients as previously presented, the safety profile of Cap1002 and the OLE study continues to be consistent with our phase 2 results and is now supported by well over 100 IV infusions.
Speaker 4: We continue to see a statistically significant, as well as clinically relevant, flowing down of disease progression for patients treated with captenantune, including for these patients who are initially on placebo compared with the natural progression of the disease. The data presented at both the 12 and 18 months showed an average of 65 percent slowing of disease progression. And we plan to report the 24 month performance of the upper limb.
Speaker 4: We believe that combination therapies may be necessary for the long term to delay disease progression and DMT.
Speaker 4: Most likely, patients requiring a district and replacement therapy will also need additional therapies by penitenuating inflammation, promote hodlcy muscle growth, and preserve cardiac?? bekommt
Speaker 4: We believe that cap tentative can potentially be paired with any of the approved therapies and would likely be necessary to get the greatest benefit from the gene or ectonskipping therapies.
Speaker 4: We stand with all of the patients with DMD, whose only wish is that the disease does not get worse. Now, turning to our commercial partnership strategy, as announced in February , we entered into a second agreement with Nippon Shinyaku for the distribution rights to Cap102 for DMD in Japan.
Speaker 4: We received a $12 million off-pronc payment and will potentially receive additional milestone payments about to approximately $89 million and a meaningful double digit share of net product revenue.
Speaker 4: We are now focused on securing additional partners and other markets around the world with Europe being a Schlee priority. Overall we are delighted with the progress of our GMG program and we look forward to further sharing updates from our Interact with FDA, our progress with HOPE 3, and the development of potential additional partnerships in new territories. Now briefly turning to our ex-ozone platform technology, which leverages the natural cell signaling communication of the body, we are harnessing ex-ozones to serve as a novel joint delivery system with broad therapeutic applications.
Speaker 4: Our strong scientific foundation is supportive of further downstream efforts for innovative, therapeutic, payload loading methods and tissue-specific targeting.
Speaker 4: Our proprietary stealthex expression platform is at the core of our XZO program and is focused on the development of two broad modalities.
Speaker 4: Our proprietary stealth X expression platform is at the core of our XZO program and is focused on the development of two broad modalities. Vaccinology and precision therapeutics.
Speaker 4: We recently published in microbiology spectrum a peer-reviewed journal of the American Society of Microbiology on SELF X, which in preclinical studies generated two potential vaccine candidates that independently and in combination induce a strong immune response against two SARS-CoV-2 in approach to the greater Driveacer
Speaker 4: like Nucleopapsal. Using the stealth x platform, we have successfully developed a targeting strategy which will allow us to potentially expand our X's on program with your precision-based therapeutics. While we are exploring many different therapeutic applications, we are currently working on targets in neuro-muscular disease.
Speaker 4: which is an area of core strength for Capricorn. With our small team of experts working on exosomes, our current plans are to explore business development and partnering strategies, as well as non-dilutive grant funding. We look forward to leveraging our exosome platform to support the advancement of next-generation vaccines and innovative targeted therapeutics.
Speaker 4: and will provide updates on this program as they become available. In closing, we are pleased with the advances across our GMD program and the growing body of data within our Ex-Zone platform technology. We look forward to executing on our upcoming milestones.
Speaker 4: With that, I will turn the call over to Chief Financial Officer, AJ Bergman, to run through our financial results. Paige.
Speaker 3: Thank you, Linda. This afternoon's press release provided a summary of our first quarter 2023 financials on a gap basis. You may also refer to our quarterly report on Form 10Q, which we expect to become available shortly, and will be accessible on the SEC website as well as the financial section of the company website.
Speaker 3: As of March 31, 2023, the company's cash, cash equivalents, and marketable securities totaled approximately $45.2 million compared to approximately $41.4 million on December 31, 2022. Based on our current operating plan, the company's cash position is expected to be sufficient to support operations into the fourth quarter of 2024.
Speaker 3: I would also like to note that this expectation excludes any potential milestone payments under exclusive commercialization and distribution agreements with Nipanchanyaku that may become 30 more
Speaker 3: Again, excluding stock-based compensation, our general and administrative expenses were approximately $1.8 million in Q1 2023 and approximately $1.9 million in Q1 2022. Net loss for both the first quarter of 2023 and 2022 was approximately $7.8 million. And with that, we will now open the line up for questions. Thank you. Thank you, Ajay. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys.
Speaker 2: to withdraw your question, please press star then two. We will pause for a moment as colors join the queue. We will pause for a moment as colors join the queue.
Speaker 2: The first question is from Joe Pangenis from H.C. Wayne Wright. Let's go ahead.
Speaker 5: Good afternoon everyone. This is actually Matt on the for Joe. Thanks for taking our questions and just a couple for months. The first one I have was I had of or I guess follow your conversations with the FDA regarding CAPTUN on two commercialization. Are there any additional rate living steps that you guys heard or came up with that we should be aware of moving forward? Perseverance?
Speaker 4: Great limiting steps in terms of light, in terms of commercialization.
Speaker 4: Yeah, correct. Yeah. None that we're aware of at this time. We're working closely with FDA both on the CMC front and also on the clinical development front. And at this point, we feel very encouraged by the attention being paid to cap 10 and 2 by the agency. They recognize the value of cap 10 and 2, potentially two patients with CMD.
Speaker 4: Now, we're working internally on building that platform therapy. We haven't publicly announced specifically what we're working on, but what I can tell you is that the day is very encouraging in terms of its ability to target, to specific cell types, as well as the vaccine platform that we recently published in my microbiology spectrum. We're exploring, as I mentioned, and micro-pair remarks.
Speaker 4: both partnerships and also non-dilutive funding opportunities. What I can tell you is that we believe that this technology will ultimately support the exosome as nature's drug delivery system and its ability to drive biology without toxic consequences.
Speaker 5: Okay, great. Thanks again for taking my questions. I'll go back to the queue.
Speaker 2: Thank you. As a reminder, it is Star 1 to ask a question.
Speaker 6: The next question is from Aiden Hussinov from Latinburg. Please go ahead. Hi, good afternoon, everyone. Linda, AJ, thank you very much for providing updates on the quarter. A couple of questions. Further wanting to start from sort of industry-wide question.
Speaker 6: I think very soon, probably tomorrow there will be surreptives at committing about the MDMDG therapy. So my question is do you think there will be any redacrote and spillover effects regarding how we should think about
Speaker 6: the FD record to the path for DMD therapists in general and how this may affect the CAST 102.
Speaker 4: Yeah, I think the entire biotechnology industry is going to be impacted by the results of the outcome. There's a lot of really interesting opportunity there, both for sort of the concept of, does it work versus potential patient benefit and then sort of anecdotal evidence versus potential patient benefit of potential health
Speaker 4: We believe that ultimately the cocktail that will be right for DMD until it can be fixed in uterine will be something to address the dystrophin mutation, but also to the ideal of the consequences of inflammation and muscle turnover or the degeneration of the muscle from utilization due to the dystrophin mutation itself. So,
Speaker 4: CAPS-702 is being positioned really perfectly as a combination therapy with any gene therapy or exotic skipping technology because we're going to need that technology to help take care of both the skeletal muscle as well as the cardiac muscle implications.
Speaker 4: Let me elaborate on that for one more minute. Our data, which we published in the Lancet of the Hope II clinical trials, showed important benefits and ejection fraction, which is how the heart meets the needs of the body. What has become clear in a lot of the gene therapy studies is that the heart is not being impacted in a positive way by the gene therapy. So there's going to be a dis...
Speaker 6: Thank you, Linda. I appreciate your thoughts. Very, very helpful.
Speaker 6: And thank you regarding the. Yes, regarding the breakdown, so I know that you enroll both ambulatory and non ambulatory patients. Could you provide updates? How many do you enroll so far as of today? If you could share that and is there any way to understand on what's the ratio ambulatory versus non ambulatory patient?
Speaker 4: really great opportunity to talk recently with to a patient with Duchenne Muscular Dystrophy. His name is Elijah Stacy and he's published a book called A Small If, if anybody is interested in his story, but he speaks extremely eloquently about the importance of maintenance of upper limb function and how many people including Elijah and his brother.
Speaker 4: are both off their feet, but still value their independence to want to maintain upper limb function. So we are laser focused on our patients. In terms of enrollment, while we're not disclosing numbers, what I can tell you is enrollment is going very well. We understand from the community and from our sites that families are very interested in CAPS-10 or 2, and it makes sense it's a once a quarter infusion that today has shown.
Speaker 6: clinical endpoints that eventually what is going to matter rather than micro-distrobing production. Maybe if you could share, is there any updates on European partnerships and does Nippon Shinnyaku have any appetite to market Captain O2 in Europe ?
So our relationship with Nefen-Shinyaku is very strong. AJ and I had an opportunity to go visit their headquarters earlier this year, and we were very impressed by their attention to and interest in CAP 102, both from the U.S. perspective and also from a Japanese perspective.
We're entertaining all kinds of conversations on the European rights that we certainly think that they're valuable and we will select the right partner at the right time, which could possibly be Nifon Shinyako, but not exclusively looking at them at this time.
Okay, all right. And the last for me, you know, I'm trying to...
Understand, so are you planning to have any product or indication that you would commercialize on your own without partners? So, if yes, so what would that be, product or indication?
for CAP 1002 and DMD has all the infrastructure in place to move it very quickly to hopefully a profit generating center. Okay, thanks so much for taking my questions. Thank you. Thanks, stay well. Thanks, Ade. Once again, if you have a question, please press star then 1. This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks. Thank you, operator, and thank you for all who joined us this afternoon and also those who listen later on or read the chat.
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