Q2 2023 Longeveron Inc Earnings Call
Greetings and welcome to the longevity on second quarter 2023 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now my pleasure to introduce kudos to Mike Moore.
That's your relations. Thank you Sir you may begin.
Thank you operator.
Good morning, everyone and welcome to <unk> second quarter 2023 results conference call today, we will provide a business update and discuss financial results for the quarter ended June 32023 earlier. This morning, we issued a press release with these results which can be found under.
An investor.
<unk> of our website.
Im joined on the call today by the following members of <unk> management team, Mr. Weil, as Sean Chief Executive Officer, and Italia I got for now.
All of our Chief Medical Officer, and Lisa Lochner, Chief Financial Officer, Mr. Sha will begin with a brief corporate overview.
Dr. <unk> will review on do you ever on its recent progress.
Its clinical programs.
And Miss Locker will review financial results for the 2023 second quarter. Following the company's prepared remarks, we will open the call to questions recovering.
As a reminder.
During this call we will be making forward looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements any such statements should be considered in conjunction with cautionary statements in our press releases and risk factors discussed in our filings with the SEC, including our quarterly report on Form 10-Q, and annual report on Form 10-K.
And cautionary statements made during this call we assume no obligation to update any of these forward looking statements or information now I'd like to turn the call over to Mr. Weil Szot, Chief Executive Officer, a bunch Debra Oh Wow.
Thank you Mike.
And good morning, everyone welcome to the logic around second quarter of 2023 business update and financial results call.
We are pleased to be speaking with you today and look forward to sharing our progress with developing regenerative medicines for unmet medical needs.
Our second quarter had been productive in terms of executing on our goals.
By progress in our clinical programs for our lead investigational product called wellness they'll be.
Enhancements to our leadership team our board of directors and the initiation of our rights offering to raise capital.
Before beginning our review of the quarter I would like to introduce my new colleagues and New Board members.
First I would like to introduce Mr. Coetzer Duluth, who recently joined our board of directors.
Over 36 years of experience across global geography.
The biopharmaceutical industry. He has served as an IND.
Dependent thereafter for multiple biopharmaceutical publically traded companies.
Mr Duluth.
Chief Executive Officer, and a board member for cosmetics.
And publicly traded pharmaceutical company in the U S. He is very well known and recognized in our industry.
Second I would like to introduce Mr. Jeffrey Pepper, who recently joined our board of director. He is the Thomas D to professor of organizational behavior at the graduate school of business, Stanford University, where he has thought to 1979.
The author and co author of 16 books. Mr. Becker currently serves on the advisory and nonprofit boards for multiple organizations.
I'm also joined today by our two new executives Dr.
Actually no Brown, our chief Medical Officer, she joins us from let's soak up pharmaceutical where she served as the clinical development lead and the product development chair.
She is experienced pharma and biotech industry clinical development leader and we are pleased to have her lead our cellular therapy development program.
I'm also welcome Lisa Leclair, our executive Vice President and Chief Financial Officer, She's joined US from Abbott Pharmaceuticals, a subsidiary of Otsuka, where she served as the senior Vice President and Chief Financial Officer.
He says that accomplish neither with global business experience and is a respected finance profession.
Professional throughout the biopharmaceutical industry.
I'll be turning the call to overturn the Italian lease in a moment, but on behalf of everyone at launch it let me say how pleased I am that they have made the decision to join our London team.
Work on them, so our leadership team.
We look forward to their guidance as we advanced kilometer there'll be in critical areas of unmet need.
As a reminder, monitor would be it's a living cell of products made from the specialized cells isolated from the bone marrow of young healthy donor.
Aged 18 to 45.
The specialized cells are known in the literature as well.
So no signaling so or M. S seats and are essential to our endogenous or built in biological repair mechanism.
Do you.
Have been shown to perform a number of complex function in the body.
Including the formation of new tissues.
They also have been shown to hone and respond to the types of injuries or diseases and degree bioactive factor that are immuno mobile that sorry, Andrew It's Eric.
We believe that Lam is there'll be has multiple potential mechanisms of action.
That may lead to anti inflammatory pro vascular regenerative responses and therefore, maybe a broad has a broad application of ranges are rare and aging related diseases.
We have ongoing trials.
Hypoplastic left park central knowing also.
Yes.
Our primary disease aging related Greg L. P.
Earlier today, we were pleased to announce that our outreach to try out and actually I'll, let Chad has exceeded its 50% enrollment threshold.
We expect to complete enrollment in the trial sometime in 'twenty to 'twenty four.
We are also on track and anticipate to report top line results from the clear mine Phase Iia trial of Lubbock there'll be in treatment.
By October 2023.
H M related cranky enrolment continues in our phase two study in Japan.
We are excited about the progress, we're making and about the broader potential walnuts there'll be a regenerative medicine therapy or range of unmet needs.
And with that I will turn over the call to a doctor Ackman okra.
My view more detailed overview of our clinical programs and recent progress.
How are you.
Thank you very much right now I'm pleased to join the LNG guarantee them and to provide the base update on our clinical progress.
I won't begin to get enough data now HLA chess program.
For those who might not know H L. A chess.
He is a rare conveying it though and devastating birth defect English the left ventricle Oh, the heart, it's either severely under developed one mission.
The condition affects approximately thousand babies per year in the United States.
Babies born with this condition have severely diminish sustainment block slow which requires children to undergo a complex can you stage hardship construction still Jerry protest over the course of the first five years of their lives.
Well. These children now I can now leave into adulthood, the surgical intervention.
She's hit the 60% of effective thing Judy Joe survived adolescence do it the right ventricle Fayetteville niches, often unable to handle the increased load required to support systemic circulation.
Furthermore, even those children get successful surgical interventions are at an elevated she's got short term mythology delayed development and long term complication, Nickelodeon, Oregon trailing O S.
As such there is an important unmet medical need to improve right cheek all a function in these patients.
Oh Boy short term and long term patient outcome.
Our <unk> trial is designed to assess the potential of flowing it's L. B, So impulse right Glen Chick Fil a function and long term outcomes. The trial is a 38 patient controlled phase two clinical trial evaluating the safety and efficacy of Columbus they'll be isn't it.
Jacques therapeutic the standard of care H O H S. So journey.
The primary outcome measure is the change in writing Cheekily ejection fraction from baseline to 12 months.
The trial is funded by a grant from the National Institute of Health National Heart lung and Blood Institute.
If you do not recently, our Lp's two trial has exceeded his enrollment thresholds.
So.
We also know the activation of our eight clinical site location one more than the seven originally planned.
As Michael mentioned earlier, the achievement of this milestone and activation of additional trial sites well actually on the track to complete enrollment in this trial around the middle of 'twenty to 'twenty four.
This study builds on the earlier Elk is once they do it.
A phase one study of felonious there'll be in children is H O Hs.
Patients participate at in stage, one it'll be one trial youre in vitro Michelle B was injected concurrently the stage two surgery obstacles as Glen procedure.
All 10 patients have been mining ore for at least three in the half years after treatment.
Additional long term follow up data from this trial was announced earlier this year showing that hundreds of percent of the 10 patients who participated in Lp's. One trial survived and remain heart transplant free for up to five years of age as compared to the historic.
Clinical trials results showing the children's gets H L. A chest, who undergo the Glen procedure typically have Steve Kim took 20% metallic by five years of age.
The preliminary L. P. One data are highly encouraging and reinforced our enthusiasm following yourself as a potential treatment to transform care for patients with HLA chess.
The further highlight the potential we believe as long as they'll be might happen in this indication.
Next to be acquisitive, if he ever show up maybe in the Ark to discuss the unmet medical need and.
Current standard of care for patients suffering from HLA chats, they shouldn't have to be a little future Doctor Cushal feel from Lora Children's Hospital and Doctor I'm Kumar So bromine young of the University of Southern California, Keck School of Medicine.
It went to also teach a doctor Josh Harris, Chairman and cofounder of <unk> Jaeger on and found in Iraq over the inter disciplinary stem cell Institute in the University of Miami Miller School of Medicine.
At least they were empty there'll be an informative discussion about the potential of felonious they'll be in the in HLA chess and the limitation of the current standards of care and we encourage all interested parties to join US next week next Wednesday August 16 at 10 a M eastern.
On time.
History shows details available on the website.
Now I'd like to move on to all I ran their disease program.
Based on a growing body of preclinical and clinical data from various sources, we believe long as Shelby may prevent slow and reverse the clinical progression of Einstein their disease by reducing disease related brain inflammation.
Also deaths caused by earlier and substantial near inflammation is a significant contributor to the pathogenesis of Zeiner disease.
In preclinical models of Einstein their disease and.
M. A c's this car T V. It's similar to what Michel B has been showed to cross the blood blood brain barrier, but then surely didn't enter into my math or in fact improve endothelial function and promoting neuro gymnasiast. The purchase open your own formation in the brain.
In November of 'twenty to 'twenty, two we completed the enrollment in our phase Iia trial of Florida, So before my assign their decisions there.
The phase Iia trial called clear mind trial.
Is it 48 patients full arm parallel design randomized clinical trial upload Michelle B designed to evaluate the safety of single and multiple infusion of two different dose level of felonious there'll be compared to placebo in patients with my.
Thursday in their disease.
Our primary endpoint is safety as measured by a pure in cell serious adverse events then.
First 30 days after administration of Columbus L. B.
Secondary and exploratory endpoints include measures of cognitive function for you with and radiological biomarkers relevant to inflammation and endothelial in basketball with systems.
In a previously completed phase one study that demonstrated the preliminary safety Oklahoma's there'll be patients with mild Alzheimer's.
Did you just.
Did the phase Iia trial, we hope to build on those results and further demonstrate the potential long as Shelby as a treatment for <unk> disease.
Data analysis from this trial is ongoing and we anticipate sharing top line results from clear mind trial around.
Around October means you're going to see.
Finally, I'd now like to cover updates are now aging related frailty program.
Aging related frailties in each associated decline across multiple physiological system.
Religion till the inability to cope with stress for us It is hurt or helped your eyes by my beliefs impairment weakness fatigue weight. Louis slowness in Lloyds T V and boots individuals at high risk for poor clinical outcome such as infections for.
Prof chairs hospitalization and even death.
It Glenn Junior on these being the volume the effect of Leumi she'll be me.
It may have on health and function of elderly frail patients, particularly on their physical and immune system function.
In early stage exploratory trial, we have been using biomarkers of inflammation and vascular endothelial function to measure effect.
Our clinical development Street strategy in age related Frailty is currently focused on Japan it come.
It's one of the oldest population in the world.
As of 2021 Japan's population comprised of 46.4 million individual aged 65 or older representing 29, 1% of the country at the overall prevalence of aging related frailty of months. They then will go.
Gotcha.
Estimated to be 7.9%.
Last quarter, we announced the dosing or the first patient in our phase two clinical trial evaluating <unk> she'll be impatient with agent related frailty in Japan. The phase two trial is a three arm parallel design randomized evenly split one to one to one.
Placebo as well as to a different level of floating is still be single infusion.
Enrollment is continuing and the trial is expected to enroll 45 patients.
The primary endpoint is to evaluate safety with an overarching goal of providing support for an eventual limited approval under the Japan Act of the safety of regenerative medicine or a S. R M, which recognizes the tremendous potential.
Potential or cell cell therapies.
With that I'd now like to turn the call over at least a look we're always here for to discuss our financial results for the second quarter of the ancient Thank you three and the six months period ended June 30th I mean, do you think it pretty well.
Lisa.
Thanks Italia and good morning, everyone likes to tell you I'm excited to be a part of one chevron has to speak with all of you today most of what I'll be covering this morning will be presented in more detail in our condensed financial statements and in our management's discussion and analysis of operations in our quarterly report on form 10.
10-Q, which will be filed today.
Revenues for each of the three months ended June 30th 'twenty, 'twenty, three and 2022 where approximately zero point $2 million and zero point $5 million respectively.
Grant revenue for the three months ended June 30th 'twenty, 'twenty, two and 'twenty 2023 and 2022 with zero and zero point $1 million, respectively. A decrease of zero point $1 million was primarily due primarily due to a reduction in grant funds available due in part to the completion of the grant funded Clint.
Trials.
Clinical trial revenue, which is derived from the Bahamas registry trial for the three months ended June 30th 'twenty, 'twenty, three and 2022 with zero point $2 million and zero point $3 million respectively.
Cynical trial revenue for the three months ended June 30th 2023 was approximately zero point $1 million or 36% lower when compared to the same period in 2022 as a result of a decrease in participant demand.
Related to cost of revenues was approximately zero point $1 million and zero point $3 million for the three months ended June 30th 'twenty, 'twenty, three and 2022 respectively.
Decrease of zero point $2 million or 59% was primarily related to the decrease in revenues earned from the Bahamas registry trial.
This resulted in a gross profit of approximately 0.1 million zero point $2 million for the three months ended June 30th 'twenty, 'twenty, three and 2022 respectively.
General and administrative expenses for the three months ended June 30th plenty twenty-three increased to approximately $3 $4 million compared to two quite $4 million for the same period in 2022.
The increase of approximately $1 million or 39% was primarily related to an increase of zero point $7 million in compensation and benefit expenses during the current year period and expenses related to professional fees.
Research and development expenses for the three months ended June 30th 2023 increased to approximately $2 3 million from approximately $1 7 million for the same period in 2022. This increase of zero point $6 million or 33% was primarily due to an increase of zero point $5 million.
In research and development expenses that were not reimbursable by grants.
Non operating loss at expense for the six months for the three months ended June 30th 2023 and 2022 was zero and approximately $1.4 million respectively.
Net loss was approximately $5 $6 million for the three months period ended June 30th 'twenty, 'twenty, three and 2022.
For the six months period ended June 30th 'twenty, 'twenty, three and 2022 results were as follows.
Revenues for each of the six months ended June 30th 'twenty, 'twenty, three and 2022 where approximately zero point $5 million and zero point $8 million respectively.
Revenues for this period were approximately 0.3 million or 41% lower when compared to the same period in 2022.
Grant revenue for the six months ended June 30th 'twenty, 'twenty, three and 2022 was less than zero point $1 million and zero point $2 million respectively.
Grant revenue for this period was approximately 0.1 million or 78% lower when compared to the same period in 2022 primarily due to a reduction in grant funds available due in part to the completion of the grant funded clinical trials.
Clinical trial revenue, which is derived from the Bahamas registry trial for the six months ended June 30th 'twenty, 'twenty, three and 2022.
Zero point $5 million and zero point $6 million respectively.
Clinical trial revenue for this period was approximately zero point $1 million or 30% lower when compared to the same period in 2022 during.
During the six months ended June 30th 2023 clinical trial revenue decreased as a result of a decrease in purchase with demand.
Related cost of revenues was approximately 0.3 million zero point $4 million for the six months ended June 30th 'twenty 'twenty through 2022 respectively.
Cost of revenues for this period was 0.1 million or 13% less when compared to the same period in 2022, primarily due to the corresponding decrease in the revenues earned from the Bahamas Registry trial.
This resulted in a gross profit of approximately zero point $2 million and zero point $5 million for the six months ended June 30th 'twenty, 'twenty, three and 2022 respectively.
General and administrative expenses for the six months ended June 30th 2023 increased to approximately $5 $2 million compared to $4 4 million for the same period in 2022.
The increase of approximately.
Eight zero point $8 million or 19% was primarily related to an increase of zero point $8 million in compensation and benefit expenses.
Research and development expenses for the six months ended June 30th 2023 increased to approximately $5 $1 million from approximately $3 1 million for the same period in 2022.
The increase of $1 $9 million or 61% was primarily due to an increase of $1 4 million.
In research and development expenses that were not reimbursable by grants, an increase of zero point $3 million and supplies to manufacture alone so be it.
The increase in equity based compensation allocated to research and development expenses of zero point $2 million.
Nonoperating loss expense for the six months ended June 30th 'twenty, 'twenty, three and 2022 was zero and approximately one $4 million respectively.
Our net loss increased to approximately $10 $3 million for the six months ended June 30th 2023.
Loss of $9 $1 million for the same period in 2022.
As of June 30th 2023, the company had cash and cash equivalents of $2 $7 million.
<unk> securities of $5 $9 million and working capital of approximately $6 $2 million.
As of December 31st 2022, cash and cash equivalents were $10 $5 million marketable securities were $9 2 million and working capital was approximately $15 4 million.
Based on the company's current operating plan and financial resources, we believe that our existing cash and short term investments will be sufficient to cover expenses and capital requirements into the first quarter of 2024.
Before turning over to while I want to remind everyone that on June 27th 2023, The company filed a registration statement with the SEC to conduct a tradable subscription rights offering for up to $30 million of shares of class a common stock to its shareholders and holders of warrants to purchase.
Common stock as a feature record date to be determined the company expects to undertake and closed the offering as outlined in the registration statement.
We believe the rights offering allows us to balance the need to raise capital while remaining cognizant not to dilute existing shareholders. We believe this is an opportunity to participate for all shareholders and to raise needed capital.
With that thank you and I'll turn the call over to lay out.
Thank you Lisa.
Do you have here today, we're making steady progress.
Ramping lots will be across three indications.
We are looking forward to highlighting the potential of these assets.
And the edge so much at.
Our key opinion leader program.
Webinar next week.
That's all he has mentioned it's August 16.
Wednesday.
I would like to open the call now for questions. Operator, Please open the line for our covering analysts.
At this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate that your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star one.
One moment, please while we poll for question.
Our first question comes from Michael Ocwen Etch with Maxim Group. Please proceed with your question.
Hey, guys. Thank you for taking my question here.
So I guess first off I'd like to just get your take on the Fda's decision for me they'll blast BLA. Obviously this was a disappointment for the space, but given that you're both in rare pediatric disease does this do anything to inform your future development for low myself be NHL Hs.
Does it give you additional confidence in the design of belt as to either placebo controlled study.
So Michael I'll take the first stab in answering that question and then I wouldn't have Natalia and any additional comments or also I have Josh on the line. He can also add any additional comments.
But I would say that from the beginning we are trying to conduct our HL. The jazz program as a pivotal trial, we are doing everything.
Make sure that this problem meet the FDA requirements, and hopefully provide the necessary balance between benefit risk ratio.
Accepted for filing having said that there is definitely no guarantee that this is going to happen as you know, it's always a matter of a preview.
And M D typically way and the significant unmet medical need of the disease itself as well as the body of evidence of the D that are not just in the study that was conducted for that disease, but also for the overall body of evidence.
So well we were really hoping that music last get their.
Approval on their product.
You know I cannot draw 100 per cent parallel to the edge of let jazz due to one we are conducting or trial, maybe in a different way and secondly, it's a different disease states.
So with that I will, but natalia and or Josh to add any further comment to my comments.
Think of the Walmart right Okay.
Sorry, Josh.
Yes, I wanted to make a comment and then I'll turn it over to you and Italian. Thank you I think one of the critical aspects that needs to be recognized about our ongoing HL Hs trial is that it is a controlled trial. So that there is a active and.
Conventional care arm, which is conducted in a rigorous blinded fashion and I think that's one of the critical aspects that the F. D. A has commented on that is that is crucial for this field. So we are.
I do want to emphasize that.
The Opus two trial has that key control group.
Thank you Natalia please please.
Please take it from here.
I think if semi Josh and its always good practice to use price didn't send out they tend to play it as a why you indicated that's a completely different indication, but and Oregon from a communication between navigating near the block.
Thank you.
Alright. Thank you yeah. Thank you very much for the additional clarity and then.
I just wanted to see if you have any additional insight here on what kind of a result that you would need to demonstrate.
Or help us to to serve as a pivotal study.
So.
So Michael our primary endpoint is the right ventricular ejection fraction.
Again, we believe that this small at 5% a improvement to remember at the end of the day, it's all about benefit risk ratio. So it's it's not really one.
One specific measure if we had been a home run, but I think it's just the overall body serves.
Labor rates could be also an added benefit which we were encourage fans.
Note that we have seen from the follow up on this one.
So those are the right ventricular ejection fraction and survival rates. In addition of course to the safety profile of the product will be important a concentration for the agency to weigh in on that indication, but again I'll leave it up to and that's how you have to add any comments.
Okay.
Thank you I have no comment.
Well, maybe I'll make a quick comment hmm.
Sure Josh.
<unk>.
One of the key things to understand about Hyperplastic left heart.
That's unique from an adult forms of of heart failure disease is that there's a very very clear.
Association between right ventricular function and clinical outcome.
Well shown in studies over going back over 25 years now so the dike.
Decline in the.
Ejection fraction after the stage two.
Surgery is very closely correlated with a clinical outcome and therefore poses a very valuable surrogates.
Our trial is designed to look to see whether Loomis L b incur.
Increases ejection fraction relative to placebo.
And not placebo per se, but that's conventional therapy.
Patient groups, receiving surgery, and so we think that the finding could be a bit.
Of great clinical value in interpreting.
The efficacy of Louis L. B in this condition.
Alright. Thank you very much one more for me and I'll hop back into the queue I'd just like to see it for ALP is to.
If you could remind us of the expected timelines between completion of enrollment and data Asbury as we're approaching that enrollment completion sometime in 2024.
Yeah.
Oh My God, it's Michael.
Yes.
Yeah Michael.
Michael the we as we announced this we expected the two finished the enrollment we're targeting hopefully mid next year of course with the startup of new sites are there is a lot of plans to try to expedite our enrollment in the program, but as you know with rare disease.
It's hard to predict exactly when once we finish the enrollment it will take one year after that.
To measure the endpoints and then close the trial and provide better results from it this should happen within.
A couple of months after the trial finish enrollment one year after they finish enrollment.
Alright, Thank you very much and I'm looking forward to that cable all of it.
Thank you.
There are no further questions at this time I would now like to turn the floor back over to awhile for closing comments.
Alright, Thank you alright, well thanks, everyone for attending our today's call on behalf of the company on the launch of around team I would like to thank you for all of your continued interest and support and wish you a good day today, ladies and gentlemen.
Thank you so much.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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