Q4 2023 Capricor Therapeutics Inc Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to Capricor Therapeutics' fourth quarter 2023 earnings. At this time, all lines are in listen-only mode.
Good afternoon, ladies and gentlemen, and welcome to <unk> Therapeutics fourth quarter 2023 earnings call.
At this time all lines are in a listen only mode.
Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the option. This call is being recorded on Thursday, February 29, 2024. I would now like to turn the conference over to AJ Bergmann, CFO of Capricor. Please go ahead.
Following the presentation, we will conduct a question and answer session.
If at any time during this call you require immediate assistance. Please press star zero for the operator.
This call is being recorded on Thursday February 29 2024.
I would now like to turn the conference, albeit to AJ Bergmann CFO of <unk>.
Please go ahead.
Anthony J. Bergmann: Thank you. And thank you for joining us today. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentation. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our product candidates, our future R&D plans, including our anticipated conduct and timing of preclinical and clinical studies, our enrollment of patients in our clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports. New York cautions investors not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements.
Thank you and thank you for joining today before we start I would like to state that we will be making certain forward looking statements. During today's presentation. These statements may include statements regarding among other things the efficacy safety and intended utilization of our product candidates, our future R&D plans, including our anticipated conduct and timing of preclinical.
In clinical studies, our enrolment of patients in our 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, our financial position and our possible uses of existing cash and investment resources. These forward looking statements are.
Just on current information assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports and you are cautioned not to place undue reliance on these forward looking statements and we disclaim any obligation.
To update such statements with that I'll turn the call over to Linda Moore band CEO. Thanks, Hey, Jay Good afternoon, and thank you for joining today's call I'm encouraged with the progress we have made a cap recorded in 2023 and into 2024 and today I will outline our main priority for our lead captain owe to your program.
Linda Marban: With that, I'll turn the call over to Linda Marban, CEO. Thanks, AJ. Good afternoon, and thank you for joining today's call. I'm encouraged by the progress we have made at Capricor in 2023 and into 2024, and today I will outline our main priorities for our LEAD CAP 1002 program, as well as provide a brief update on our Exosome platform technology. 2023 was a big year for Capricor as we are now gearing up for biological license application and commercialization. To that end, Capricor has assembled a team primarily focused on executing in four main areas in order to be prepared to bring our lead product, CAP-1002, to market for the treatment of DMD as expeditiously as possible. These are clinical, manufacturing, DLA readiness, and commercial preparation. I will provide an overview of each area today.
Well ill provide a brief update on our <unk> platform technology.
2023 was a big year for <unk> as we are now gearing up for a biologics license application and commercial organization.
To that end Capricorn has assembled a team primarily focused on executing in four main areas in order to be prepared to bring our lead product <unk> to market for the treatment of DMD as expeditiously as possible.
As our clinical manufacturing.
L a readiness and commercial preparations.
I will provide an overview of each area today.
Linda Marban: First, let me provide a clinical update on our Phase 3, HOPE 3 pivotal trial enrolling late-stage ambulant and non-ambulant young men with DMD across the United States. Late last year, we announced completion of enrollment in our Phase 3 pivotal HOPE-3 clinical trial, where we enrolled 61 subjects, randomized one-to-one, to CAP-10-02 or placebo. In December, we conducted a pre-specified interim futility analysis, and we are very pleased to announce that the trial was successfully deemed to not be futile, with a positive recommendation to continue the trial. This analysis was based on an assessment by the Data Safety and Monitoring Board, otherwise known, of course, as the DSMB, of 30 subjects who reached the six-month time point and assessed their poll scores in a blinded fashion.
First let me provide a clinical update on our phase III <unk> III pivotal trial enrolling late stage ambulant and non ambulate young men with DMD across the United States.
Late last year, we announced completion of enrollment in our phase III pivotal hope three clinical trial, where we enrolled 61 subjects randomized one to one to cap <unk> or placebo.
In December we conducted a pre specified interim futility analysis, and we were very pleased to announce that the trial was successfully deemed to not be futile with a positive recommendation to continue the trial.
This analysis was based on an assessment by the data safety and monitoring board otherwise known of course is the DSM V up 30 subjects, who reached the six month time point and assessing their pull scores in a blinded fashion.
Linda Marban: This important positive outcome triggered our first milestone payment of $10 million from Nippon Shinyaku, further strengthening our balance sheet and extending our cash runway. Now, as you know, 2024 is a pivotal year for Capricor, as we will have data from Cohort A of our Phase 3, Hope 3 clinical study at the end of the year, as well as fully enroll Cohort B by the second quarter of this year. To remind you, Cohort B was designed at the request of FDA to demonstrate the comparable efficacy of CAP-1002 from our San Diego manufacturing facility to that produced in Los Angeles. This cohort, which is designed to enroll approximately 44 subjects, is enrolling very well. In fact, enrollment has proceeded even faster than predicted, partially based on the fact that there are no current therapeutics approved and very few in clinical trials for these later stage non-ambulant patients. The primary endpoint of HOPE-3 is the change from baseline in the performance of the upper limb, version 2.0, commonly known as the pull, at one year, as well as various secondary skeletal and cardiac endpoints, including left ventricular ejection.
This important positive outcome triggered our first milestone payment of $10 million from Nippon <unk> further strengthening our balance sheet and extending our cash runway.
Now as you know 2024 is a pivotal year for copper Corp. As you'll have data from cohort of our phase III Hope III clinical study at the end of the year.
As well as fully enroll cohort D by the second quarter of this year.
To remind you cohort b was designed at the request of FDA to demonstrate comparable efficacy of cap 10 O two from our San Diego manufacturing facility to that produced in Los Angeles.
This cohort, which is designed to enroll approximately 44 subjects is enrolling very well.
In fact enrollment has preceded even faster than predicted partially based on the fact that there are no current therapeutics approved and very few in clinical trials for these later stage non ambulant patients.
The primary endpoint of hope three is the change from baseline and the performance of the upper limb version two point, though of course, commonly known as the pool at one year as well as various secondary skeletal and cardiac endpoints, including left ventricular ejection fraction.
Linda Marban: We have already seen efficacy in the Poll 2.0 and our Phase 2 Hope 2 studies, where the data showed a 1.8 point improvement relative to placebo and was statistically significant. Even more validating is that, as shown in our Lancet paper, multiple whole endpoints, whether specific regions or in combination, showed improvements with statistically significant changes in multiple domains. Importantly, CAP-102 treated patients saw improvements in left ventricular ejection fraction, which is the gold standard measure of cardiac function. We saw a 4% improvement in treated patients with a p-value of 0.002. In addition, there were significant improvements in left ventricular end systolic and left ventricular end diastolic volume, further suggesting structural improvements in the heart. However, there are no approved therapeutics that we are aware of that directly address the cardiomyopathy associated with DMD.
We have already seen efficacy in the pole two point, Joe and our phase III hope to study or.
The data showed a one eight point improvement relative to placebo and was statistically significant.
Even more validating is that as shown in our lancet paper multiple Paul endpoints, whether specific regions or in combination.
Joe and improvements with statistically significant changes in multiple domains.
Importantly, Catherine or two treated patients saw improvements in left ventricular ejection fraction, which is the gold standard measure of cardiac function. We saw a 4% improvement in treated patients with a P value of 0.00 too.
In addition, there were significant improvements in left ventricular end systolic and left ventricular end diastolic volume further suggesting structural improvements in the heart.
There are no approved therapeutics that we are aware of that directly address the cardiomyopathy associated with DMT.
Linda Marban: Therefore, the importance of CAP 1002 in this area of unmet medical need cannot be understated. We have long-term safety and efficacy data in this patient population, as we are continuing to follow the patients from the HOPE-2 study in an open-label extension study into their fourth year, and we will plan to have the three-year results available in the second quarter of 2024. The two-year results shared last year continue to show statistically significant differences in Pulse 2.0 in the Open Label Extension Treatment Group when compared to the original rate of decline of the placebo group from HOPE-2 after one year. Further, while the natural history of DMD cardiomyopathy suggests a steady decline in cardiac function as measured by ejection fraction in the hope to open label extension, we observed improvements in heart function in 66% of patients.
Therefore, the importance of captain or two in this area of unmet medical need cannot be understated.
We have long term safety and efficacy data in this patient population as we are continuing to follow the patients from the hope to study and an open label extension study into their fourth year, and we will plan to have the three year results available in the second quarter of 2024.
There were year results shared last year continued to show statistically significant differences in the pole two point, though.
The open label extension treatment group when compared to the original rate of decline of the placebo group from hope to after one year.
Further while the natural history of DMD cardiomyopathy suggest a steady decline in cardiac function as measured by ejection fraction and hope to open label extension, we observed improvements in heart function and 66% of patients.
Linda Marban: The two-year results underscore the potential long-term benefits of CAP-1002 treatment in DMD. As we anticipate CAP-1002 as a multi-year treatment, this data set will strengthen both our potential revenue modeling and payer discussions for long-term reimbursement. DMD has rapidly become an orphan disease that has garnered a lot of attention, not only because of the terrible nature of a disease that robs children of the ability to use their muscles more, but also because of the promise of disease modification by gene therapies and exon skipping technologies to potentially allow modification of the dystrophinopathy. Many have thought that, along with exon skipping technologies, if gene therapies are approved, there would no longer be a Nothing could be further from the truth.
The two year results underscore the potential long term benefits of cap tenor to treatment and TMT.
As we envisioned cap 10 O. Two is a multiyear treatment. This dataset will strengthen both our potential revenue modeling and payer discussions for long term reimbursement.
DMT has rapidly become an orphan disease that has garnered a lot of attention not only because of the terrible nature of a disease that robs children of the ability to use their muscles world, but also because of the promise of disease modification by gene therapies, and exon skipping technologies to potentially allow modification.
District Allopathy.
Many have thought that along with exon skipping technologies. If the gene therapies are approved there would no longer be a need for other treatments for DMD nothing.
Nothing could be further from the truth.
Linda Marban: The current gene therapy paradigm allows for a small, albeit potentially relevant, amount of microdistrophin protein to be made. Correct clinical data suggest there is an attenuation of disease progression from treatment with gene therapy. However, we believe that it will require a multi-drug paradigm to address all of the pathological consequences of DMD, primarily inflammation and fibrosis caused by the lack of discharge. CAP-1002 is perfectly positioned to be a partner therapy for DMD as its stated mechanism of action is immunomodulation and reduction in fibrosis. In fact, some of the current subjects at HOPE-3 are post-gene therapy but still qualify for CAP-1002 based on the study's inclusion and exclusion criteria. CAP-1002 has a strong safety profile and is a once-a-quarter infusion that has shown to be well tolerated.
The current gene therapy paradigm allows for a small, albeit potentially robert relevant amount of micro dystrophin protein to be made.
Correct clinical data suggests there is an attenuation of disease progression from treatment with gene therapy.
However, we believe that it will require a multi drug paradigm to address all of the pathological consequences of DMD, primarily inflammation and fibrosis caused by the lack of distribution.
<unk> is perfectly positioned to be a partner therapy for DMD as a stated mechanism of action is immuno modulation and reduction in fibrosis. In fact, some of the current subjects had hoped three are post gene therapy, but still qualify for pepto too based on the study's inclusion in <unk>.
Exclusion criteria cap.
<unk> has a strong safety profile.
And as a once a quarter infusion that has shown to be well tolerated.
Linda Marban: If CAP-1002 delays the disease progression, which years of data and multiple clinical trials have demonstrated, it is our hope that CAP-1002 would be a preferred treatment with gene or exon skipping therapy. Now, I would like to take a few minutes to update you on our recent FDA interactions and regulatory goals for the program over the next several quarters. As you may recall, we met with FTA last year and agreed on the design of our current Phase 3 program, with Cohort A being the primary data set for the filing of the BLA and data from Cohort B to be used to transition to our San Diego manufacturing facility. Now that Cohort A has been fully enrolled and Cohort B is heading towards full enrollment, we have continued to discuss with FDA any opportunity to expedite the filing of our BLA, keeping in To that end, we have successfully established a potency assay for CAP 1002 based on the mechanism of action of the product, which is acceptable to FDA for our QB marketed product and critical to the establishment of comparability between each of our manufacturing sites.
If cap tended to delay disease progression, which years of data and multiple clinical trials have demonstrated it is our hope that captured or two would be a preferred treatment with gene or exon skipping therapies.
Now I would like to take a few minutes to update you on our recent FDA interactions and regulatory goals for the program over the next several quarters.
As you May recall, we met with FDA last year and aligned on the design of our current phase III program with cohort eight being the primary dataset for the filing of the BLA and data from cohort b to be used to transition to our San Diego manufacturing facility now.
Now that cohort has been fully enrolled in cohort b is heading towards full enrollment we have continued to discuss with FDA and the opportunity to expedite the filing of our BLA keeping in mind that in order to successfully achieve BLA acceptance.
Critical aspect is to be at all CMC requirements as outlined by FDA.
To that end, we have successfully established a potency assay for captain or two based on the mechanism of action of the product, which is acceptable to FDA for our <unk> marketed products and critical to the establishment of comparability between each of our manufacturing sites.
Linda Marban: As many of you know, FDA leadership has taken a great interest in helping move the field of treating DMD forward, and we continue to believe that we can work with them on a strategy to move CAP 1002 towards approval. Importantly, our San Diego manufacturing facility is now fully operational, staffed, and producing doses for clinical use. Currently, we can produce enough CAP1002 in our San Diego facility to meet and exceed NSPharma's forecast for year one of product launch, if approved by FDA. We also have plans in place to expand our operations in San Diego to support a larger demand as may be necessary.
As many of you know <unk> leadership has taken a great interest in helping move the field of treating DMD forward and we continue to believe that we can work with them on a strategy to move captain or two towards approval.
Importantly, our San Diego manufacturing facility is now fully operational staffed and producing doses for clinical use currently we can produce enough cap 10 O two in our San Diego facility to meet and exceed as farmers forecast for year one of product launch.
Approved by FDA. We also have plans in place to expand our San Diego facilities operations to support a larger demand as may be necessary, but further expansion or investment would be something we will look forward to do following potential BLA acceptance.
Linda Marban: But further expansion or investment would be something we would look forward to doing following potential BLA acceptance. I would like to highlight that we have expended a relatively small amount of capital to build our commercial manufacturing plant. This has also allowed us to strengthen our IP portfolio with additional process and method-based patent filings and know-how. We are also able to control COGS effectively to drive margins as high as possible on revenue and or revenue shares.
I would like to highlight that we have expended a relatively small amount of capital to build our commercial manufacturing plant.
It has also allowed us to strengthen our IP portfolio with additional process and method based patent filings and Knowhow.
We also were able to control Cogs effectively to drive margins as high as possible on revenue and our revenue shares importantly, we can also potentially expand our cap 10 O two program to other indications, while replicating our manufacturing modules.
Linda Marban: Importantly, we can also potentially expand our CAP-1002 program to other indications while replicating our manufacturing modules. All of this taken together puts Capricor in a good position as we prepare for our potential initial commercial product in DMD. A majority of the investment in our facility operations and personnel has gone into preparations for this endeavor, and I feel confident that we can deliver according to the timelines we have set.
All of this taken together puts capricorn in a good position as we prepare for a potential initial commercial product and DMT.
A majority of the investment into our facility operations and personnel has gone into preparations for this endeavor and I feel confident that we can deliver according to the timelines we have set forth.
Linda Marban: Now for an update on our commercial partnership with NS Pharma, who are already actively preparing for the potential launch of CAP-1002, assuming the data is positive and we have an accepted DLA. We continue to work closely with them as we move closer to that goal. As we have stated, subjects are continuing to report slowing of disease progression on CAP-1002, which is supported by the PULL data. This positive data, combined with the strong safety profile, has led to nearly full partition and open-label extension studies. Therefore, by the time of potential BLA acceptance, we would expect to have approximately 120 patients already on CAP-1002 on an ongoing basis.
Now for an update on our commercial partnership with NSP pharma, who is already actively preparing for the potential launch of cap tenants you assuming the data is positive and we havent accepted BLA.
We continue to work closely with them as we move closer to that goal as we have stated subjects are continuing to report slowing of disease progression on cap tentative.
<unk> is supported by the pull data this positive data combined with the strong safety profile has led to nearly a full participant in open label extension studies. Therefore by the time of a potential BLA acceptance. We would expect to have approximately 120 patients already on cap tended to on an ongoing basis.
Linda Marban: These patients would likely become our first commercial patients. This potential revenue stream will be very supportive of a strong launch and will provide an initial commercial market for this product. Additionally, we are in the early stages of establishing a strong commercial team to support our partners at NS Pharma. Now, I'd like to briefly turn to provide an update on our exosome technology. Currently, we are pursuing two avenues of opportunity. One is our vaccine program using StealthX, our proprietary platform that is useful for engineering select proteins either inside or on the surface of the exosome.
Patients will likely become our first commercial patients. This potential revenue stream will be very supportive of a strong launch and will provide an initial commercial market for this product.
Additionally, we are in the early stages of establishing a strong commercial team to support our partners and as pharma.
Now I'd like to briefly turn to provide an update on our <unk> technology.
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 zone.
Linda Marban: And the other is using the same basic platform but for the development of therapeutics. One of our major achievements this year was being selected as part of the U.S. government's Project NextGen, which is slated to test vaccine candidates for potential use in preventing COVID-19, as well as prepare for future pandemics. The structure of the arrangement with NIAID, which is otherwise known as the National Institute of Allergy and Infectious Diseases, is that Capricor will provide them with manufactured vaccines, the campaign for which is underway now, and they will conduct and fully fund a phase one clinical trial. There will be three groups tested, a low-dose S, a high-dose S of the current strain of COVID-19, and then a bivalent candidate containing S&N, the nucleocapsid.
And the other is using the same basic platform for the development of Therapeutics one of our major achievements. This year was being selected as part of the U S. Government's project Nexgen, which is slated to text vaccine candidates for potential use in preventing COVID-19, as well as prepare for future Pandemics.
The structure of the arrangement was NIAD, which is otherwise known as the National Institute of allergy and infectious diseases is.
As the Capricorn will provide them with manufactured vaccine the campaign for which is underway now and they will conduct and fully fund a phase one clinical trial.
There will be three groups tested a low dose S. A high dose of the current strain of COVID-19, and then a bi valent candidate containing S. A N. The nucleocapsid.
Linda Marban: I am pleased to inform you that we have submitted an IND to the FDA for our CELF-X vaccine, which is currently under review, and we anticipate that once the IND is approved, NIAID will initiate the clinical trial in late 2024. I will provide more specific timelines on this program as we progress through the year. This will be the only multivalent candidate tested as far as we know, and we have high hopes for success in terms of potential safety and efficacy.
Im pleased to inform you that we have submitted an IV iron to.
To the FDA for our self ex vaccine, which is currently under review and we anticipate that once the IND is approved denial and initiate the clinical trial in late 2024.
I will provide more specific timelines on this program as we progressed through the year.
This will be the only multi valent candidate tested as far as we know and we have high hopes for a success in terms of potential safety and efficacy at night is that the vaccine meets the criteria for safety and.
Linda Marban: If NIA finds that the vaccine meets its criteria for safety and efficacy, they may consider our program for a fully funded phase two. This opportunity is very important for Capricor because it supports our exosome-based vaccine. And while we don't have the intention to become a vaccine-focused company, it sets up the program nicely for partnering and other business development opportunities. As a reminder, the power of this technology is that it combines the speed of an mRNA vaccine with the potential efficacy of a recombinant protein-based vaccine. Should it work in humans as well as in preclinical animal studies, it could be a very important improvement in vaccinology. Also, on the exosome front, we are in discussions with several potential partners to develop the therapeutic arm of our engineered exosome technology. The strategy involves taking the same StealthX platform and using it to target a specific tissue and then appropriately deliver a payload.
Efficacy they may consider our program for a fully funded phase to.
This opportunity is very important for <unk> because it supports our <unk> based vaccine and while we don't have intention to become a vaccine focused company. It sets up the program nicely for partnering and other business development opportunities.
As a reminder, the power of this technology is that it combines the speed of an mrna vaccine with the potential efficacy upper a competent protein based vaccine.
Should it work in humans as well as in preclinical animal studies it could be a very important improvement in vaccinology.
Also on the exited upfront we are in discussions with several potential partners to develop the therapeutic arm of our engineered <unk> technology. The strategy involves taking the same <unk> platform and using it to target a specific tissue and then appropriately deliver a payload.
Linda Marban: Early preclinical data suggests the strategy works, and we are looking forward to sharing more color on this important program as data becomes available. And finally, on the corporate side, we raised approximately 23 million dollars late last year in an equity offering to support our balance sheet into 2025. This strategic financing was anchored by Nippon Shinyaku, further cementing our strong relationship and their commitment to capital.
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Early preclinical data suggest the strategy works and we are looking forward to sharing more color on this important program as data becomes available.
And finally on the corporate side, we raised approximately $23 million late last year, and an equity offering to support our balance sheet into 2025.
This strategic financing.
With anchored by Nippon <unk> Jaco further cementing our strong relationship and their commitment to capital Corp. As.
Linda Marban: As we think about moving through 2024 and into 2025, I want to remind you that our U.S. agreement with Nif-Yam Shin-Yaku comes with it an additional $90 million in potential milestone payments up to the time of approval, which are triggered upon certain regulatory-based achievements. Following potential approval, there is an additional $605 million in potential milestone payments, which will be payable to Capricor based on various sales-based targets being met. Furthermore, if we receive FDA approval for CAP-1002 for the treatment of DMD, we would be eligible to receive a Priority Review Voucher, or the PRV, based on our previous receipt of a rare pediatric disease designation, which we retain full rights to, and would look to sell to support our balance. Lastly, we are in active discussions with several parties related to the European rights of CAP 1002 for DMD.
As we think about moving through 2024 and into 2025 I want to remind you that our U S agreement with new function Yahoo comes with it an additional $90 million of potential milestone payments up to the time of approval, which are triggered a certain regulatory based achievements.
Following potential approval, there was an additional $605 million and potential.
Milestone payments, which will be payable to capricorn based on various sales based targets being met.
Furthermore, if we receive FDA approval for <unk> for the treatment of DMD, we would be eligible to receive a priority review voucher or the peer view based on our previous receipt of a rare pediatric disease designation, which we retained full rights to and will look to sell to support our balance sheet.
Lastly, we are in active discussions with several parties related to the European rights of Pep penalty for DMD. Our main goal is to continue to support our balance sheet, leveraging non dilutive partnerships to fuel capture energy towards potential approval and support the <unk> program.
Linda Marban: Our main goal is to continue to support our balance sheet, leveraging non-dilutive partnerships to fuel CAP 1002 towards potential approval and support the Ex-Zone program. Overall, I want to thank you for your support. We continue to diligently manage our resources and focus our efforts on bringing Capgemini 2 towards potential commercialization in the most expeditious way possible. We are very much looking forward to the next several months as we will be continuing our interactions with FDA, announcing our three-year open label extension data, completing enrollment for Cohort B, and presenting at various medical, scientific, and investor-related conferences. I will now turn the call over to AJ to run through our financials. AJ
Overall I want to thank you for your support we continue to diligently manage our resources.
Our efforts are bringing capstone to towards potential commercialization in the most expeditious way possible. We are very much looking forward to the next several months as we will be continuing our interactions with FDA announcing our three year open label extension data completing enrollment for cohort b and presenting at various medical scientific and investor related.
I will now turn the call over to a J to run through our financials.
Anthony J. Bergmann: Thank you, Linda. This afternoon's press release provided a summary of our fourth quarter and full year 2023 financials on a gap basis. And you may also refer to our annual report on Form 10-K, which we expect to become available shortly and will be accessible on the SEC website, as well as on our website. Turning to the financials, let me start with our cash position. We ended December 31st, 2023 with cash, cash equivalents, and marketable securities of approximately $39.5 million.
Hey.
Thank you Linda it's afternoon press release provided a summary of our fourth quarter and full year 2023 financials on a GAAP basis and you may also refer to our annual report on Form 10-K, which we expect to become available shortly will be accessible on the SEC website as well as our web site.
Turning to the financials, let me start with our cash position. We ended December 31, 2023, with cash cash equivalents marketable securities and approximately $39 5 million. This excludes the $10 million milestone payment. We received in January of 'twenty, four from Nippon sheet, Jaco under our distribution and commercialization agreements.
Anthony J. Bergmann: This excludes the $10 million milestone payment we received in January of 2024 from Nippon Shinyaku under our distribution and commercialization agreement. Based on our recent operating results and projections, we expect our cash runway to extend into the first quarter of 2025. But this expectation excludes any additional potential milestone payments under our exclusive commercialization and distribution agreements with Nippon Shinya. In the fourth quarter of 23, our revenue was approximately $12.1 million compared to approximately $1 million for the fourth quarter of 2022, which was primarily attributable to the ratable recognition of the $40 million, which includes the upfront and milestone payment we have received in accordance with our U.S. commercialization and distribution agreement with Nippon Shin Excluding stock-based compensation, our research and development expenses were approximately $9.4 million for the fourth quarter of 2023 compared to approximately $6 million for the fourth quarter of 2022.
Based on our recent operating results and projections, we expect our cash runway to extend into the first quarter of 2025, but this expectation excludes any additional potential milestone payments under our exclusive commercialization and distribution agreements with a bunch of jaco.
In the fourth quarter of 'twenty three our revenue was approximately $12 1 million compared to approximately $1 million for the fourth quarter of 2022, which was primarily attributable to the ratable recognition of the $40 million, which includes the upfront and milestone payment. We have received in accordance with our U S commercialization and distribution agreement with Nippon.
<unk>, excluding stock based compensation, our research and development expenses were approximately $9 4 million for the fourth quarter of 2023 compared to approximately $6 million for the fourth quarter of 2022. The increase in expenses of $3 4 million was primarily due to increased clinical and manufacturing costs associated with our phase III hoped.
Anthony J. Bergmann: The increase in expenses of $3.4 million was primarily due to increased clinical and manufacturing costs associated with our Phase III HOPE III trial. Excluding stock-based compensation, our general and administrative expenses were approximately $1.9 million for both the fourth quarter of 2023 and 2022. The net loss for the fourth quarter of 2023 was approximately $800,000, compared to a net loss of $7.7 million for the fourth quarter of 2022. And the net loss for the full year of 2023 was approximately $22.3 million, compared to a net loss of approximately $29 million for the full year of 2022.
Three trials.
Excluding stock based compensation, our general and administrative expenses were approximately $1 9 million for both the fourth quarter of 23 and 2022.
Net loss for the fourth quarter of 'twenty, three was approximately $800000 compared to a net loss of $7 7 million for the fourth quarter of 2022 and net loss for the full year 'twenty three was approximately $22 3 million compared to a net loss of approximately $29 million for the full year 2022, and with that we will.
Operator: And with that, we will now open the line up for questions. Operator, go ahead. Thank you, ladies and gentlemen. We will now conduct the question and answer session. If you have a question, please press star one on your touch phone. If you wish to cancel your request, please press start. Your first question comes from Joe Pantginis from HC Wainwright. Your line is now open.
Now open the lineup for questions Operator go ahead.
Thank you, ladies and gentlemen, we will now conduct the question and answer session. If you have a question. Please press star one on your touch phone.
If you wish to cancel your request please press star two.
Your first question comes from.
Japan goodness from H C. Wainwright your line is now open.
Joe Pantginis: Hi Linda and AJ, thanks for taking the questions. Good afternoon. First off, I wanted to talk about your regulatory discussion. So, you know, last year you said, Thank you.
Hi, Linda and a J thanks for taking the questions good afternoon.
First off so wanted to talk about your regulatory discussions so last year, you had some pretty clear frame.
Unknown Speaker: Thank you. Thank you. And I'm delighted to be here.
Frameworks that you shared with US again today about the need for cohort, a and giving some manufacturing comparability from cohort b out of the San Diego facility.
Unknown Speaker: Thank you. Thank you, talking about. So I wanted to explore that a little bit. Any other roads that are running right?
Keep talking about ways to potentially expedite so I wanted to explore that a little bit. So the first question is.
Unknown Speaker: Well, Robert, great job. Good work for setting up your cars again. Have a good Wednesday and have a successful week. Thanks. Have a great day.
I mean, when you look at this you do have the <unk> status as one of the potentials here rolling BLA, because you'll be able to start submitting data.
Unknown Speaker: Thanks. Thank you. Thanks, Patty. I mean, when you look at quicker as part of the filing and other options.
Recur as part of the filing.
Linda Marban: So, always a pleasure. Thanks for the question. So, you know, I'm going to start answering by saying I've been working on this therapy for 19 years, and where we are right now is just so staggeringly exciting to me. It's sometimes hard to express, but what has been the best part of the last few months has been the careful attention that FDA has been paying to Capricor and to CAP-1002. They recognize the positive safety and efficacy data. They've looked at the open-label extension data, the HOPE-2 data, and they're working very closely with us. So, yes, all options are on the table right now in terms of how to get this across the line as fast as possible.
And other options you might be considering.
So always a pleasure thanks for the question so.
I'm going to start answering by saying I've been working on this therapeutic for 19 years and where we are right. Now is just so staggeringly exciting to me.
Times are chat to express, but what has been the best part of the last few months has been the careful attention that FDA has been paying to <unk> and to cap tenets you. They recognize the positive safety and efficacy data they've looked at the open label extension data the <unk> data and Theyre working very closely with that.
So yes.
All options are on the table right now in terms of how to get this across the line as fast as possible.
Linda Marban: As I mentioned, leadership within CBER is aware of our program and really working very closely with us. We have RMAT, we have rare pediatric disease designation, and orphan disease designation. So we have a lot of the bells and whistles that will carry our program as quickly as possible into the arms of the DMD patients.
As I mentioned leadership within Seeber is aware of our program and really working very closely with US we have our Matt we have rare pediatric disease designation orphan disease designation.
So we have a lot of the bells and whistles that will carry our program as quickly as possible into the arms of the gmg patients.
Got it and then just curiosity for cohort B.
Linda Marban: So, you know, we built and suspended the program by building in a full one-to-one randomized clinical trial with safety and efficacy built in. So, it basically is a mirror image of Cohort A. We're working with FDA on what they're going to actually ask us for. What we know and what we can guarantee is that they're willing to accept the license application in Cohort A. What we're going to need from Cohort B is still what we're working with them on, but it really is almost something that we've not only been prepared for, but something that comes along very naturally. So, the trial Cohort B, let me reemphasize, will be fully enrolled by the second quarter of this year, and then we're going to be able to potentially position that as a post-marketing commitment for the program My last question. Absolutely. We've been talking about. So, I guess, how would you portray the role of the cardiovascular... Unknown Executive, Linda Marbn, Aydin Huseynowitz, Anthony Bergmann, Aydin Huseynowitz, Brian, you and beyond. Unknown Speaker.
Are you strictly needing to show manufacturing comparability or do these patients need to be follow up for a certain time frame.
So we felt since <unk> suspended the program by building in a full one to one randomized clinical trial with safety and efficacy belt and so it basically is a mirror image of cohort.
We're working with FDA on what Theyre going to actually ask us for what we know and what we can guarantee on is that they are willing to accept a license application on cohort <unk>.
What we're going to need from cohort B is still what we're working with them on but it really is.
Almost.
Something that we've not only been prepared for but something that comes along very naturally. So thus trial cohort B, let me reemphasize will be fully enrolled by second quarter of this year.
And then we're going to be able to set potentially position that as a post marketing commitment for the program.
Got it and then my last question, if you don't mind and thanks for bearing with me.
Absolutely we've been talking about this for several years because we've been excited about the data. So I guess, how would you portray the role of the cardiovascular data you've been.
Cumulated through hope two and beyond.
Evolution of your regulatory discussions and how much that may or may not be coming into play to date.
Linda Marban: Yeah, so it's obviously one of the most important cornerstones of our regulatory strategy, but also because of the eagerness of the community to get approval for CAP 1002. To remind you, and I stated this, we saw 4% improvement in ejection fraction, the gold standard of cardiac function, in HOPE-2. In HOPE-2 open-label extension, we didn't start measuring cardiac function until two years in.
Yeah. So it's obviously one of the most important cornerstones of our regulatory strategy, but also in the <unk>.
Eagerness of the community to get approval for cap had you to remind you and I stated. This we saw a 4% improvement in ejection fraction the gold standard of cardiac function and hope to and hope to open label extension Didnt start measuring cardiac function until two years in we will have three year data in the second quarter of this year, so stay tuned for that on cardiac.
Unknown Speaker: We'll have three years of data in the second quarter of this year, so stay tuned for that on cardiac function. But we're pretty convinced that it's going to be one of the major parts of what we're going to look for on our label, and it's the primary and secondary endpoints that have been built into HOPE-3, both cohort A and cohort B. Got it.
Function, but we're pretty convinced that it's going to be one of the major parts of what we're going to look for R&R label and its the primary secondary endpoints that has been built in to hopefully both cohort a and cohort b.
Joe Pantginis: Thanks for the edit. Absolutely, Joe, always a pleasure. Your next question comes from Kristen Tosca from Cantor Fitzgerald. Your line is now open.
Got it thanks for the added details Linda.
Absolutely Joe always a pleasure.
Your next question comes from Kristen <unk> from Cantor Fitzgerald. Your line is now open.
Kristen Tosca: Hi, everyone. Good afternoon. Thanks so much for taking my question. Hi Kristen, how are you?
Hi, everyone. Good afternoon. Thanks, so much for taking my.
Thanks.
Unknown Speaker: I'm well. How are you doing? vkontakte So, thinking about the potential for combinations, I completely understand the need for this. But can you comment on what your expectations would be in terms of pay or support? And then, you know, gene therapy typically requires a lot more upfront timing to do the different testing, manufacturing, etc. What would be your expectation, Captain, for therapy essentially given in this cascade? And would that be, you know, an advantage in case there is some pay or pushback?
Hi, Kristen how are you.
How are you doing.
Sure Scott.
So thinking about the potential for combinations.
We understand the need for that.
What your expectations would be in Europe.
Sure.
And then gene therapy, typically requires a lot more Brian timing.
Manufacturing et cetera.
Our expectation that would be.
Let's first therapy essentially given in this cascade would that be an advantage in case there is some payer pushback.
Linda Marban: So, you know, we've had really positive feedback from payers, not just at Capricor, but also NS Pharma has done, you know, significant work in preparing for, you know, market launch. And the way that we're understanding it is that there will be therapy that would be necessary for sort of management of the distrophonopathies, right? So the exon skippers and the gene therapies. And, you know, because there's not an approved gene therapy, theoretically, yet, we don't really know how they're going to approach choosing those or both or whatever. But what we do know is that there needs to be some kind of therapy that would manage, and I've talked about this a lot, the immunomodulation or the inflammatory response caused by the constant breakdown of protein in the body due to the mutation, as well as manage the fibrosis and help to support, perhaps, the framework laid down by a gene therapy or an exon skipper, which would be a healthier protein.
So we've had really positive feedback from payers not just at <unk>, but also Nf pharma has done significant work in preparing for <unk>.
Market launch and the way that we're understanding it is that theres going to be therapy that would be necessary for sort of management of the dystrophin apathy right. So the exon skippers and the gene therapies.
There is not an approved gene therapy theoretically, yes, we don't really know how theyre going to approach choosing those are both or whatever but what we do know is that there needs to be adjunctive therapy that would manage and I've talked about this a lot.
<unk> immuno modulation or the inflammatory response caused by the constant breakdown of protein in the body due to the mutation as well as manage the fibrosis and helped to support perhaps a framework laid down by a gene therapy or an exon skipper, which would be a healthier protein. So we are very.
Linda Marban: So we are very confident that payers would find it beneficial to cover both the distrophonopathy management strategy as well as CAP-1002 for the management of the inflammation and the fibrosis. Now, in terms of the order in which the therapeutics are given, we would sort of have to talk to some of the KOLs. We're already starting to do some of that market research, obviously, because we're going for our initial label for some of the later stage patients, at least based on the hope through data. We reserve the right to ask FDA to go as young as possible.
Confident that payers would find it beneficial to cover both the dystrophin apathy management strategy as well as captain or too for the management of the inflammation in the fibrosis now in terms of the order in which the therapeutics are given that we would sort of have to talk to some of the kols were already starting to do some of that market research all the.
<unk> because were going for our initial label for some of the later stage patients.
At least based on the hope through data we reserve the right to ask FDA to go as young as possible colloquially we always say time is muscle.
Linda Marban: You know, colloquially, we always say time is muscle, and the data has shown that once people get on CAP-1002, disease progression is significantly attenuated almost immediately. So, in terms of the timing of how that's done, that remains to be seen, but we're very confident that it'll be part of the overall treatment paradigm for Duchenne. Thank you for that. And then, you know, we have seen quite a bullet, the four to five-year-olds on the therapy, which I think underscores the unmet need here. So I wanted to ask what your thoughts are about the cadence you might see in terms of patients wanting therapy, especially because you are going after that non-ambulatory population, and then you know what capacity you would be able to help with given this is you know half of the patients with DMT. Thanks again.
And the data has shown that once people get on cap energy to disease progression is significantly attenuated almost immediately so in terms of the timing of how that's done but that remains to be seen but we're very confident that it will be part of.
The overall treatment paradigm of Duchenne.
Thank you for that and then we have seen.
Right.
Four to five year old throughout the therapy, which I think underscore the unmet need here. So I wanted to ask what your thoughts are about the cadence you might see in terms of patients wanting therapy, especially because you are going after that non.
Ambulatory population at net.
Would you be able to.
Help with given this half.
Patients with DMD. Thanks again.
Linda Marban: Yeah, so thank you. So, you know, we plan on swinging the door wide open in terms of what we ask FDA for. The benefit here, unlike many therapeutics, is that we're going to come into BLA with four or five years' worth of safety data tracking children from, you know, theoretically age 10 and beyond. So we're going to open the door and see what the opportunity is. Obviously, if I had a child with DMG, I'd want to get my child on CAP-1002 as soon as possible.
Yeah. So thank you. So we plan on spending in the door wide open in terms of what we ask SDA for the benefit here. Unlike many therapeutics, we're going to come in two BLA with four or five years worth of safety data tracking children from you know theoretically age 10 and beyond so we're going to open the doors and see what the.
<unk>, obviously, if I had a child with DMG I'd want to get my child on cap 10 O two as young as possible there is really no downside.
Linda Marban: There's really no downside and potentially could even have an impact on who knows things like steroid dosing and things that may have ultimate impacts and side effects in terms of what we're looking for. I think that was your second question. We're looking for utilization of CAP-1002 as soon as it becomes available to the community. We're right there with it.
And potentially could even have impact on who knows things like steroid dosing and things that may have ultimate impacts and side effects in terms of what we're looking for I think that was your second question. We're looking for utilization of captain or two as early as as it becomes.
Available to the community, where we're right there with it.
Linda Marban: Thank you. Thank you. Thank you for your time. Your next question comes from Aydin Huseynov from Leydenburg. Your line is now open.
Thank you.
Thank you. Thank you for your time.
Okay.
Your next question comes from.
I didn't <unk> from Ladenburg. Your line is now open.
Aydin Huseynov: Good afternoon, everyone. Good afternoon, Linda, and AJ. Congratulations on the progress this quarter and staying on track with the guidance, with the top line in Q4-24. I have a couple of questions. First, I wanted to ask you about the potential expansion of the indication. You mentioned something in your remarks. The most natural expansion, you know, I think we talked about it was the Becker dystrophy that, you know, we see tremendous increases in value in other Becker companies. And given your cardiomyopathy focus and focus on improving skeletal, cardiac muscle function, could you expand a little bit on your, any potential efforts that you're making regarding that expansion? Yeah, thanks, Aydin, and it's always good to talk with you.
Good afternoon, everyone. Good afternoon Linda.
Congratulations with.
The progress this quarter and staying on track with the guidance with the top line in the fourth quarter 'twenty four.
Couple of questions.
I wanted to ask you about.
Potential expansion of indications I think Hugh you mentioned something.
On your in your remarks.
And.
This the most natural expansion.
I think we talked about it this was the Becker dystrophy that we see tremendous increase in value another Becker.
Companies.
And given your caused tomorrow.
Focus and focus on improving skeletal and cardiac muscle.
Function could you.
Expand a little bit on your any potential efforts that you are making regarding expansion.
Yes, Thanks, David I know is that good to talk with you. So you know we've been talking about this for a while obviously there's tremendous opportunities for expansion as I mentioned the manufacturing paradigm. It's that we have a potency assay. That's been accepted by FDA, we understand the mechanism of action and how to make the cells and we certainly are poised to expand our effort.
Linda Marban: So, you know, we've been talking about this for a while. Obviously, there are tremendous opportunities for expansion. As I mentioned, the manufacturing paradigm is set. We have a potency assay that's been accepted by FDA. We understand the mechanism of action and how to make the cells.
Linda Marban: And, you know, we certainly are poised to expand our efforts. Becker is certainly one that's of great interest, especially since the primary manifestation later in life is cardiomyopathy, which, as we've talked about, is one of the main targets that CAP-1002 seems to ameliorate. Having said that, we are right now focusing almost all of our efforts on getting CAP-1002 across the line for DMD. We're working on the BLA. We're working on a launch strategy, and commercialization strategy. And so indication expansion, you know, will come behind that. And we'll provide more color to you and to the market as those opportunities become available. Okay, understood.
Becker is certainly one that's of great interest, especially since the primary manifestation later in life as the cardiomyopathy, which as we've talked about it as one of the main targets the captain or two seems to ameliorate having said that we are right now focusing almost all of our efforts on getting cap tenants, who are cross block.
<unk> four D. M D. We're working on the BLA, we're working on our launch strategy commercialization strategy and so indication expansion will come behind that and I will provide more color to you and to the market is as those opportunities become available.
Okay understood.
Another question I have is.
Linda Marban: Another question I have is regarding the HOPE-2 Open Level Extension trial results in the second quarter. So what are your expectations regarding these data? Well, we have three-year data coming out in the second quarter of this year. As I said, the two-year data was extraordinary. We presented that most recently at PPMD, and then we'll be sharing some more data at the Muscular Dystrophy Association meetings next week in Orlando. We have every expectation, based on the anecdotes that we hear from the subjects and their families, that this trend of stabilization of disease and attenuation of disease progression will continue. We're really looking forward to seeing the MRI data, because that will be two years of sequential cardiac function data.
The.
Hope to open an extension.
<unk> extension trial.
<unk> in the second quarter. So what are your expectations regarding <unk>.
Yes.
Well, we have three year data coming out in the second quarter of this year as I said the two year data was extraordinary we presented that.
Most recently at P. P M D.
Sharing some more data at the muscular Dystrophy Association meetings next week in Orlando.
We have every expectation based on the anecdotes that we hear from the subjects on their families that this trend of stabilization of disease and.
Penetration of disease progression will continue we're really looking forward to seeing the MRI data because that will be two years of sequential cardiac function data and we have every reason to believe that we should be able to stabilize heart function as well so.
Linda Marban: And we have every reason to believe that we should be able to stabilize heart function as well. So, we also have so many families that call us and tell us that their sons are able to do what they weren't able to do before, or they can't wait for their next infusion. Can we please get it in sooner? Because we feel it wearing off after three months.
We also have.
So many families that call us.
<unk> tell us that their sons are able to do what they werent able to do before or they can't wait for their next infusion can we please get in sooner because we feel it wearing off after three months so.
Linda Marban: So, I'm very much looking forward to seeing that data and then ultimately sharing it with all of you. And the last question concerns the European discussions, discussions with potential European parties. In your discussions with them, first of all, if you could give us a little bit of insight, are these established players, are these new players, and what are the typical questions that they ask? What is the part of Capitano II value they are most interested in, if you could expand a little bit. Yeah, so, you know, I think the European community is as interested in getting therapies across the line for DMDS as the U.S. authorities. However, they have a little bit different strategy in Europe.
I'm very much looking forward to seeing that data and then ultimately sharing it with all of you.
Understood. Thank you for that and the last question is regarding to the.
European discussions discussions with potential European partners. So.
In your discussions with them first of all if you could give us a little about a little bit of insider. These established players or new players and what are the typical questions that he has or what is the which part of.
Capped Arnold Tollgatherer. They are most interested in if you could.
To expand a little bit on this.
Yeah. So I think the European community is as interested in.
Getting therapies across the line for DMD.
The U S authorities, they are a little bit different strategy in Europe. As you probably are aware there is a little bit different way of going about it the parties that we're talking to are some new and some established.
Linda Marban: As you probably are aware, there's a little bit different way of going about it. The parties that we're talking to are some new and some established. I think we've been on the radar for several larger companies for a long time now, and with the data coming around the corner, they are paying more attention. Perhaps one of the best things is that our San Diego manufacturing facility can be EMA-qualified. So we can make doses here and ship them to Europe, which is an added benefit. And in terms of the questions that we get, I think they would be the typical ones, which are regulatory strategy, getting CAP-2 across the line, and what clinical trial work will be needed. From our standpoint, it's probably going to be fairly straightforward, and we definitely look forward to making CAP-2 available worldwide.
Think we've been on the radar for several larger companies for a long time now and with the data coming around the corner. They are paying more attention, perhaps one of the best things is that our San Diego manufacturing facility can be EMA qualify. So we can make doses here and ship them to Europe, which is an added benefit and.
And in terms of the questions that we get I think would be the typical ones, which is regulatory strategy getting cap two across the line what clinical trial work will be needed.
From our from our standpoint is probably going to be fairly straightforward and we definitely look forward to making cap tenants to available worldwide.
Linda Marban: Okay, thank you so much, and congratulations on the progress. Thanks, Aydin. Take care. Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the number one. There are no further questions at this time. I'm turning it over to the management for closing remarks. Before we conclude today's call, I want to extend my sincere gratitude to the patients, their families, the clinicians, and our partners at Nippon Shinyaku and NF Pharma, and, of course, at FDA, who continue to work with us to bring CAP-1002 closer to potential approval. Again, thank you to everyone who joined us this afternoon, and I look forward to seeing you at meetings in the future. Ladies and gentlemen, this concludes today's conference. Thank you for joining us. You may now disconnect.
Okay. Thank you so much and congratulations on the progress this quarter.
Thanks and take care.
Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by the number one.
There are no further questions at this time.
Turning it over to the management for closing remarks.
Before we conclude today's call I want to extend my sincere gratitude to the patients their families. The clinicians and our partners at the pumps and Jaco and Nf pharma and of course at FDA, who continue to work with us to bring cap tenor to closer to potential approval again. Thank you to everyone who joined US This afternoon and I look forward to.
Seeing you at meetings in the future.
Okay.
Ladies and gentlemen. This concludes today's conference. Thank you for joining you may now disconnect.