Q3 2023 Capricor Therapeutics Inc Earnings Call
This call conference call is being recorded.
I'd now like to turn the conference call over to our host Mr. AJ Bergmann Capricorn Chief Financial Officer. Please go ahead.
Thank you good afternoon, everyone.
Before we start I would like to state that we will be making certain forward looking statements. During today's call and presentation. These statements may include statements regarding among other things the efficacy safety and intended utilization of our product candidates our future research and development plans included our anticipated conduct and timing of preclinical and clinical studies.
<unk> 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. 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.
Cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports you are cautioned not to place undue reliance on these forward looking statements I mean disclaim any obligation to update such statements with that turn the call over to Linda Mcmahon CEO.
Yeah.
Thanks, Hey, Jay Good afternoon, and thank you for joining us today I'm extremely pleased with the progress we are making towards the development of our lead asset <unk> for the treatment of Duchenne muscular dystrophy.
As I begin the call today I am delighted to inform you that we have reached our targeted enrollment goal for hope three phase III pivotal study, which is designed to enroll approximately 58 patients across the United States. Additionally.
Additionally, we are planning on announcing the outcome of our interim analysis from the study prior to the end of this year.
The purpose of this important milestone will be to determine if the trial is futile or should continue as planned.
The analysis is based on the six months results.
Reminder, our primary endpoint is based on one year.
It's blinded data will be presented to our D. S M B, which will evaluate safety and efficacy and give us their decision as to whether the trial should continue plant.
Should the trial be determined not to be futile. This will trigger our first milestone payment under our U S agreement with Nippon sheet out there.
There are also other potential milestone payments, leading up to an approval of a BLA that will continue to support our balance sheet should we achieve that.
As I have previously announced the.
The topline results from cohort a will be available in Q4, 2024, and a subsequent BLA would be based on the full dataset.
However, we are now planning to reinvigorate our discussion with FDA to determine if there is an opportunity to speed up the approval pathway for cap Cana Q now that our enrollment target for hope three cohort has been reached.
We owe it to the patients and the community to move cap cannot you towards approval as quickly as possible as everyone knows that time is muscle.
Once the poll pointed law cannot be recovered.
This brings me to an overview of our recent type B clinical meeting with the FDA, which was announced in late Q3 and why we believe the outcome was important for the program.
As you May recall earlier in 2023, FDA indicated that they wanted us to treat additional patients and the hope three study, but the product manufactured at our San Diego G. M. P facility they.
There were two main outcomes from this meeting number one the results of the hope three cohort a will support the filing of a BLA and number two FDA approved the design of an additional cohort of patients now referred to with cohort B.
Import the inclusion of our new San Diego facility for commercial manufacturing and enrollment is planned to begin imminently.
Very important to keep in mind that cohort b and the data that we generate problem. It will not be required for initial registration of cop 10 O Q4 D. M D.
Over the last several years <unk> has carefully and diligently invested resources in this program, bringing cap 10 are two to three successful clinical trial, starting to manufacturing facility securing arm at orphan drug and rare pediatric designation from FDA.
In addition to securing commercialization partnerships for the U S and Japan markets.
These strategic deals were carefully negotiated and potentially bring in over $700 million in additional cash to cap a core.
Fuel future product potential expansion of Pap tenor to and allow us to strategically invest in the further development of our axes on pipeline.
This is the vision that I have for Capricorn, which would transform our organization from a development stage therapeutic company into a world class commercial and R&D operations.
Realized much has to be done and accomplished before that time, but now that we have completed our target enrollment in the phase two we are moving closer to that vision.
To this point in our history, we have remained disciplined across the organization not only in the management of Paas and resources, but also with respect to our priorities as we have developed cap temperature.
The early decision to invest in the clinical development of Cop 10, or two while managing our manufacturing operations and a just in time manner.
Now that we have shown promising data in multiple clinical trials, we are focusing on scaling up and out our manufacturing capabilities.
Produce larger quantities of captain or two to meet FDA requirements and market demand if approved our GMP manufacturing facility in San Diego has approximately $3 million to build and equip as is the case with all companies launching of complex biologics such as captain or.
Two requires us to expand operations to include expert and cell manufacturing.
Polity compliance and regulatory affairs, which is reflected in the current structure of the organization.
<unk> has raised approximately $145 million and equity capital in totality throughout our company's history.
With private and public over the past 15 years.
And with approximately $15 million in cash resources.
And our most recent financing in Q screen financial this gives us a runway into 2025.
The dollars invested and capture energy for DMD have strengthened many aspects of our programs most notably the ability to understand the mechanism of action of <unk> recognizing that one of the hindrances to the approval of cell therapies has been in an adequate potency assay we.
We are pleased that the FDA supports our policy program, which is an important step towards approval.
With the path paved by D. M. D. We are now planning product expansion into diseases with similar pathophysiology we.
We believe in cap tenants, who has potential to be a transformational treatment for patients with diseases of inflammation and fibrosis.
To that we are judiciously building, our exosomes platform technology to become a next generation drug delivery platform.
Now with that said, let's quickly turn to an update on our <unk> technology.
Our primary focus has been on advancing the development of cap 10-Q, we remain committed to our <unk> technology.
Next generation drug delivery platform.
Currently we are pursuing two avenues of opportunity.
One is our vaccine program using stealth ex our proprietary platform that is useful for engineering select proteins, either inside or on the surface of the extra though for our vaccine program. One of our aims is to secure either a partnership or non dilutive source of funding the speed clinical development.
Currently there is significant interest in the exome based vaccine platform and we are in active discussions with several parties, we remain focused on that mission.
The other aspect of our platform uses stealth acts to develop therapeutics by harnessing exosomes as a delivery vehicle. The program requires loading of specific cargos into accident with targeting moiety on the outside of the extra them essentially to tell them where to go.
Currently in collaboration with an undisclosed pharma company, we are investigating the therapeutic perspective of this platform.
The foundational work has the potential to set the stage for future therapeutic options with Exosomes.
Initial data from this ongoing study was presented recently at this year's World Muscle Society Conference.
Proof of concept results demonstrate that a muscle targeted margin can be engineered on the surface it back to them.
As demonstrated by the presence of <unk>.
Labeled a S O, which is anti sense oligonucleotide and Youre, just representative cargo and the lower limbs of mice post intravenous injection.
Repeated doses of the loaded extra dog so enhanced targeting.
Based on the initial PK study.
This suggests that repeat dosing using our engineered accident has the potential to effectively enhance delivery.
Further differentiating our therapeutic approach from lipid nanoparticle.
I look forward to providing more color on this important program as it becomes available.
Now finally on the corporate side, we raised approximately $23 million this quarter to support our balance sheet into 2025.
This strategic financing was anchored by new person you also further cementing our strong relationship and their commitment to Capricorn.
Part of the reason for the fund raised was we had to expand our team in order to prepare for the submission of our BLA.
The work required to prepare our late stage clinical asset is significant and we are fortunate to have found the team that have experience in driving programs for approval in the biologic space.
Finally in our effort to expand the cap of course team of experts. We are pleased to announce the appointment of Michael Kelleher to our board of Directors. Most recently, Michael served as group Vice President of M&A and business development at Horizon Therapeutics now part of Amgen.
He brings to copper core expertise in business and strategic development, we look forward to Mike's contributions to our team.
Overall I want to thank you for your support for our program and our company. We are very much looking forward to the next several months as we will be announcing the outcome from the interim analysis as well as continuing our interactions with FDA.
I will now turn the call over to a J to go through our financials. Thank you.
Thanks Linda.
This afternoon's press release provided a summary of our third quarter 2023 financials on a GAAP basis and you may also refer to our quarterly report on Form 10-Q, which we expect to become available shortly and will be accessible on the SEC website as well as the financial section of our website.
Turning to the financials, let me start with our cash position. We ended September 32023, with cash cash equivalents marketable securities.
Of approximately $28 5 million this excludes the $23 million in gross proceeds from the registered direct offering we completed in October that bolstered our cash position based on our recent operating results and current projections. We now expect our cash runway to extend into 2025 and extension from our prior guidance.
In the third quarter of 2023, our commercialization revenue was approximately $6 2 million that compares to approximately $1 6 million for the third quarter of 2022.
Turning quickly to the expenses, excluding stock based compensation, our research and development expenses were approximately $9 5 million for the third quarter of 2023 compared to approximately $5 4 million for the third quarter of 2022. The increase in expenses of $4 1 million was primarily due to increased clinical and manufacturing costs associated.
With our phase III <unk> III trial.
Excluding stock based compensation, our general and administrative expenses were approximately $1 8 million for the third quarter of 2023 as compared to approximately $1 6 million for the third quarter of 2022. The increase of $200000 was primarily due to increased facility and personnel cost and our net loss was approximately $6.
$4 million for the third quarter of 2023, and 2022 and with that let me turn it back over to Linda actually open up the line for questions first before we do that go ahead operator.
Thank you ladies and gentlemen, we will now begin the question and answer session.
Do you have a question. Please press the star followed by the one on your Touchtone phone.
Here are three tone prompt acknowledging your request.
Questions will be taken in the order that they are received.
Should you wish to withdraw your question. Please press the star followed by the two.
If you are using a speaker phone please lift the handset before pressing the keys one moment. Please for your first question.
And your first question comes from Joe Pant Guinea from H H C. Wainwright. Please go ahead.
Hey, Linda and a J. Thanks for taking the question. Good afternoon. My first question I'm going to start at the back end of your comments.
Regarding exosomes. So just wanted to get a sense of what potential news flow in the preclinical data we might be getting over the next six to 12 months and secondly, I know you said there is ongoing discussions right now so there might be some confidentiality, but can you disclose what kind of vaccines you might be going.
After.
Yeah. So thanks, Joe Thanks for your questions and we are excited about the accident program you know its been perking along in the background we have.
Devoted most of our time and effort to cap 10 O. Two is as everybody knows but the data from the extra dawn has been very positive and very exciting.
<unk> the ability to target, which has not really been shown before and was presented recently as I mentioned at world muscle.
So in terms of milestones coming up in 2024, we do plan on continuing to advance this program and we've had a vaccine for Covid that's been in development for quite some time I.
I think the world has come to realize that there's a lot to be left to understand about all the vaccinology using mrna and so the concept of using a protein based vaccine that is easy to make easy to manufacturer can be manufactured in just several months of time using native proteins and.
I'm using a non toxic molecule such as the accident is indeed, something can be of great interest and certainly gives proof of concept for the program. So that's the type of vaccine will work downstream one just you.
You know looking for other opportunities for partnering Florida therapeutic options as well as for the vaccines the vaccine conversations.
Conversations are the farthest along at this point.
Got it that's helpful. Thank you and.
My main question has to do with the DMD program, obviously and I.
I guess, there's a few working parts here, but look following your type B meeting you had very very important.
Visibility about the path forward to be able to file in cohorts, a and cohort b. So I guess my question is maybe a little bit of a scenario analysis.
Your comment about still further potentially being able to accelerate the programs and I guess I would also focus my question around the upcoming.
<unk> analysis with your disclosure to the public revolve around sort of continue as planned or any potential data.
Any potential stopping rules, you might be able to share with us. Thanks.
Yeah. Thanks, So let me just start with the interim analysis census, the.
Recent upcoming milestone, which could be before the end of the year. It is a futility analysis. So the DSM B I guess, the data evaluate safety and efficacy and determine based on preset metrics, which are not been disclosed.
Whether or not the trial should continue as planned.
We are looking forward to the results of that interim analysis. We of course based on all of our previous clinical work expect the trial to be not futile and should be continuous planning and that's how we're building our story, but of course it will be a great day for celebration once we get that word from the D. S. M D.
Trial is not futile and we can continue in terms of the actual metrics that we have not disclosed those but we can say that as a standard of futility analysis. So that gives us good confidence that the trial should proceed as planned.
And that's where we go with that in terms of the FTA you know it's funny as you were asking your question. It was sort of thinking about how to respond and I.
I guess, it's not unfair to say that dealing with FDA. These days not for <unk>, but for everybody is sort of like dealing with the wild Wild West right never really know, what's coming and what the opportunities are what they are going to see is appropriate for making something available for approval or registration versus what theyre going to hold back on so.
What I can tell you and what FDA does is we have three positive clinical trials, all showing improvement in the performance of the upper limb and young men with later stage Duchenne muscular dystrophy.
Our families that are clamoring to receive a cat penalty because anecdotally. They say that there are signs of healing in functioning better we have a fully enrolled phase III trial, which FDA has been absolutely.
Strong and the fact that they want to see the fully enrolled confirmatory trial before they would ever consider accelerated approval. So we consider that we check that box now.
We also have the ear of F D a with our our Mac designation and also with.
The families from the community really speaking up to FDA. So you know the conversation gets much more.
Involved as you get to the point in development, it's been a long time coming for us. So I am delighted there many opportunities and touch points and so at each of those touch points with FCA. We will continue to broached. The idea that there may be a path to approval, but really at this point with a fully enrolled cohort a topline data in just one.
Year, we feel that we are poised for every level of success should the trial be positive.
I appreciate the color thanks Linda.
Thanks, Joe.
Thank you.
Ladies and gentlemen, as a reminder, did you have a question. Please press the star followed by the one.
And your next question comes from Eden has enough from Ladenburg. Please go ahead.
Good afternoon, Linda a J congratulations with good progress this quarter and congratulations with completed enrollment in cohort.
A couple of questions.
So first I want to start from from milestone potential milestone payments from any question Jaco.
Total potential sort of receivable.
From Nippon.
The next several years.
Truck gets approved is $705 million. So can you give us a sense how much from that total amount Nippon maintained by the end of the year if the D SMB.
Decision will be positive is it 10, 20% already doing can you give us overall just to just a sense of it.
Hey, Jay Yeah. Thanks, Thanks, David right now, we're not at Liberty to state the exact dollar figure a fix to that interim futility.
Utility analysis of course as it hopefully is achieved we will put more granular details out so.
So stay tuned for that.
And so that's kind of where we're at now in terms of the building milestones as we move forward towards approval.
We haven't disclosed up to this point, but we're now at Liberty to say is that up to and including the time of approval.
Inc is a $100 million in potential milestones to copper Corp. So we do we're going to look to that just fuel obviously the expansion of cap <unk> in duchenne as well as other efforts in terms of product expansion. So that will those milestones hopefully come due will total $100 million hopefully.
It's helpful.
Oh, Yes. This is super helpful. Appreciate that Ajay just the copper is $100 million, including approval milestone so congrats.
Congrats on that to get approval okay.
Exactly and.
Look for our 10-Q to become available shortly which would which will articulate. This basically the same way I'm, saying, it but that that should be put out there shortly.
Okay I appreciate that alright.
Question is on the cohorts so cohort a completed enrollment 58 patients it seems like youre going to be starting cohort b enrollment for 10 weeks from now I think you mentioned by the end of the year.
Given the holidays. So we think it is still realistic to sort of enroll actually enrolled patients in cohort three by the end of the year between now and January one.
So eight and where you want my team call yesterday, because this is what I asked my clinical team and they said that enrollment is going to be pretty robust job before the end of the year you know there's nothing else.
Clinical trial right now for these later stage, our boys and young men with DMD nothing with recent failures in the space and some of the other companies pulling back and so there's.
There's a line out the door to get into cohort b in and well be delighted to welcome them and treat them, even with the holidays coming up.
Oh, Hey, this is great to hear I mean.
So given there's not nothing no other trials.
Physical that they will in the world Okay understood.
So and.
So given the D. M D landscape is changing obviously with different treatments.
Different approvals.
So do you think the cohort b will be somehow different from cohort a.
Given that these are this will be different patient. So do you think any variability between two cohorts in the future.
Yeah, it's a really interesting and provocative question again, one we've debated a lot internally and I think the short answer is no. You know we have the same inclusion exclusion criteria the same requirements in terms of their.
Meds and all of that the only potential differences with the approval.
Of the new the Plaza Corte. We're also open up to taking patient time on that so our regimen because many of them are switching due to a better safety profile and so that's really the only difference. We don't think that's going to mediate any difference in sort of the the potential efficacy we've talked at length to our kols.
You know sort of a steroid as a steroid as steroid in terms of you know what it does physiologically. So we're very hopeful that.
Now that the enrollment criteria will be virtually the same and in cohort b will very rapidly allow us to transition.
From.
You can sort of clinical scale manufacturing cost to.
To commercial scale manufacturing.
I appreciate that this is very helpful.
So another question I have is about expansion of potential label of cappuccino too. So other DMD companies may have sort of limitations to expand into other stages of DMD or other district fees or other.
Types of DMD patients. So we have a nice slide on your corporate presentation, describing potential expansion into early stage DMD patients undo and then into Becker muscular dystrophy or BMD.
So could you help us understand how the potential endpoints with early stage patients may look like with cap 10 O. Two so this likely won't be.
Pool, because these patients are more active and more mobile so just give us a little bit of idea. How these endpoints may look like.
Yeah. So you know it's interesting.
All of these per patient patient reported outcome measures are.
Have their strengths and have their weaknesses I think everybody really believe very strongly in the N. S. A a very reasonably with the selected data theres been a little question around the veracity of that measure there's time to rise which is an interesting. One we haven't designed that trial, yet frankly, we're going to talk to FDA about label.
<unk> potentially without more clinical work.
And then evaluate from there and use the advice of our key opinion leaders who are used to working with these younger boys to help find the one that's most effective in demonstrating the efficacy of <unk> in these younger kids.
Understood understood. Thank you Linda and the last question is regarding better dystrophy. So for Becker dystrophy cardiomyopathy is obviously one of the major causes of death.
And.
It would make sense sort of starting from the late stage patients. So could you share with us how or why cap Capricorn is more advantageous is a more advantageous position compared to other DMD comp other dystrophy companies when it comes to the Baker District.
In terms of Becker dystrophy, you know one of the major manifestations of Becker muscular dystrophy is are the cardiac the implications and of course as you know one of our major advantages over almost any other therapeutic that's.
An investigation of our proof of D. M. D is that we have cardiac benefit. So we are highly enthused.
Enthusiastic because you can if you can sort of use that terminology when you're talking about treating a dread disease about the opportunity for cat <unk> and Becker muscular dystrophy and cardiac implications.
Understood understood. Thanks, so much Linda and AJ, congratulations again to the progress.
Thank you so much.
Thank you.
Ladies and gentlemen, this does another minder if you do have a question. Please press the star followed by the one.
Yes.
There are no further questions at this time.
I will be turning the call back over to copper coins management for final remarks. Please go ahead. Thank you. So much. Thank you so much and thank you a J before we conclude today's call I want to extend my sincere appreciation to the clinicians patients and their families who are working with us to bring <unk> closer to <unk>.
Potential approval I also just wanted to take a minute to thank our clinical operations team for doing an extraordinary job for getting this trial fully enrolled and hopefully one you.
We continue to follow these patients and get the data we'll be able to have it approved therapeutics for these later stage duchenne patients and I know that will be a day of celebration for the community as well as for US. We look forward to seeing you at upcoming meetings and hopefully you'll have a happy and healthy holiday season. Thank you so much.
Yeah.
Ladies and gentlemen, this concludes your conference call for today, we thank you very much for participating and ask you. Please disconnect your lines have a great day.