Q1 2024 Capricor Therapeutics Inc Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to the Capricor Therapeutics First Quarter 2024 Earnings Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to A.J. Bergmann. Please go ahead.
Good afternoon, ladies and gentlemen, and welcome Kathy core Therapeutics first quarter 2024 earnings call.
All lines are in a listen only mode.
I think the presentation, we will conduct a question and answer session.
Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference. Please press star zero for operator assistance at any time I would now like to turn the conference over to EG Brickman. Please go ahead.
Anthony J. Bergmann: Thank you, and good afternoon, everyone. 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 research and development 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 involving our product candidates, revenue and reimbursement estimates, manufacturing capabilities, potential milestone payments, our financial position, and our possible uses of existing cash and investment resources.
EG Brickman: Thank you and good afternoon, everyone 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 research and development plans, including our anticipated Conde.
EG Brickman: And timing of preclinical and clinical studies, our enrolment of patients in our clinical studies are planned to present to report additional data our plans regarding regulatory filings potential regulatory developments involving our product candidates revenue and reimbursement estimates manufacturing capabilities potential milestone payments, our financial position and our possible uses of existing.
EG Brickman: Cash and investment resources. These.
Anthony J. Bergmann: 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. There are cautions not to place undue reliance on these forward-looking statements. We disclaim any obligation to update such statements. With that, I'll turn the call over to Linda Marbn, CEO. Thanks, AJ.
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.
EG Brickman: 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 and we disclaim any obligation to update such statements with that I will turn the call over to Linda Mcmahon CEO. Thanks, Hey, Jay Good afternoon, and thank you for joining today's first quarter conference call.
Linda Marbn: Thanks, AJ. Good afternoon, and thank you for joining today's first order conference call. 2024 has started off with a tremendous amount of progress for Capricor, and I am delighted to provide updates on our Duchenne Muscular Dystrophy Program, as well as an update on our Exosome Platform technology. As I articulated on our last call, we are focused as a company on four main areas as we work to bring our lead asset, CAP-1002, a cardiac cell therapy, to market for the treatment of DMD as expedi These core areas are clinical and manufacturing.
Linda Mcmahon: <unk> 24 has started off with a tremendous amount of progress for <unk> and I am delighted to provide updates on our just shed muscular dystrophy program as well as providing update on our <unk> platform technology.
Linda Mcmahon: As I articulated on our last call. We are focused as a company are four main areas as we work to bring our lead asset cap tenant to a cardiac cell therapy to market for the treatment of DMD as expeditiously as possible.
Linda Mcmahon: These core areas are clinical.
Linda Mcmahon: Manufacturing.
Linda Mcmahon: L a readiness and commercial preparations.
Linda Marbn: BLA Readiness and Commercial Preparation. I will provide an overview of each today, as well as provide some important context on some areas that we have not been able to expound upon until now. First, I would like to provide an update on our HOPE III Phase III pivotal trial treating late-stage ambulance and non-ambulance boys and young men with DMD across the United States. Responding to the recommendation of the FDA last year, we designed HOPE3 with two independent cohorts, known as Cohort A and Cohort B, evaluating the safety and efficacy of CAP1002 in subjects with DMD and impaired skeletal muscle function.
Linda Mcmahon: I will provide an overview of each today as well as provide some important context on some areas that we have not been able to expound upon and shall now.
Linda Mcmahon: First I would like to provide an update on our hope three phase III pivotal trial treating late stage <unk> and non ambulant boys and young men with DMD across the United States.
Linda Marbn: Enrollment was completed in Cohort A late last year, in which 61 subjects were enrolled and randomized to receive either CAP-1002 or placebo in a one-to-one ratio. Patients in cohort A were 10 years of age or older with impaired upper limb function, which translates into an entry score between 2 and 5 on the performance of the upper limb or pole scale, which means they have attenuated upper limb function but still have room for improvement.
Responding to the recommendation of the FDA last year, we designed hope three with two independent cohorts no at cohort a and cohort b.
<unk>, the safety and efficacy of <unk> in subjects with DMD and impaired skeletal muscle function.
Linda Mcmahon: Enrollment was completed in cohort a late last year in which 61 subjects were enrolled and randomized to receive either cap <unk> or placebo in a one to one ratio.
Linda Mcmahon: Patients in cohort eight or 10 years of age or older with impaired upper limb function, which translates into an entry score between two and five on the performance of the upper limb or pull scale, which means they have attenuated upper limb function, but still have room for improvement.
Linda Marbn: This cohort is intended to support a Biologics License Application submission or BLA. To remind you, performance of the upper limb is the primary efficacy endpoint of the HOPE-3 clinical trial. In December of 2023, we announced a positive pre-specified interim futility analysis on the dataset from Cohort A. This analysis was based on an assessment by the Data Safety Monitoring Board, or DSMB, of 30 subjects who reached a six-month time point and assessed their performance on the upper limb or pull scores in a blinded fashion.
Linda Mcmahon: This cohort is intended to support.
Linda Mcmahon: Biologics license application submission or BLA.
Linda Mcmahon: To remind you the performance of the upper limb as the primary efficacy endpoint of the hope three clinical trial.
Linda Mcmahon: In December of 2023, we announced a positive pre specified interim futility analysis on the data set from cohort eight.
Linda Mcmahon: This analysis was based on an assessment by the data safety monitoring board or D. SMB.
Linda Mcmahon: 30 subjects, who reached the six month time point and assess their performance of the upper limb or pull score in a blinded fashion.
Linda Marbn: This important milestone triggered our first milestone payment of $10 million from Nippon Shinyaku, our distribution partner, which we received in the first quarter of 2024. At this time, we expect top-line data to be available from cohort A in late 2024. Now, turning to the second cohort of our HOPE-3 trial, known as Cohort B, initially designed to enroll approximately 44 subjects randomized to receive either CAP-10-02 or placebo, again in a one-to-one ratio.
Linda Mcmahon: This important milestone triggered our first milestone payment of $10 million from Nippon <unk>, our distribution partner.
Linda Mcmahon: And which we received in the first quarter of 2024.
Linda Mcmahon: At this time, we expect topline data to be available from cohort eight.
Linda Mcmahon: In late 2024.
Linda Mcmahon: Now turning to the second cohort of our hoped three trial known as cohort B.
Linda Mcmahon: Initially designed to enroll approximately 44 subjects randomized to receive either <unk> or placebo again in a one to one ratio arrear.
Linda Marbn: Originally, the aim of Cohort B was to support the transition to our San Diego manufacturing site following initial product registration from our Los Angeles manufacturing facility. However, based on our latest CMC focus meeting with FDA, the FDA is no longer requiring the data from this cohort to support the transition to our San Diego facility, which was an extremely important win for us. Let me explain now how this outcome benefits Capricor.
Linda Mcmahon: Originally the aim of cohort B was to support the transition to our San Diego manufacturing site. Following initial product registration from our Los Angeles manufacturing facility.
Linda Mcmahon: However, based on our latest CMC focused meeting with FDA.
FDA is no longer requiring the data from this cohort to support the transition to our San Diego facility, which was an extremely important win for us.
Linda Mcmahon: Let me explain now how this outcome benefits Capricorn.
Linda Marbn: First, we can now transition to our San Diego manufacturing facility on potential product approval without the need to provide additional manufacturing site-specific clinical data to the FDA. This saves us a tremendous amount of time on our path to filing the BLA and preserves resources as we move through 2024. We are now looking at some options for Cohort B, as we believe this dataset may prove to be extremely valuable for us. But a second important achievement was our demonstration of non-clinical comparability using state-of-the-art, first-in-class potency assets, showing that CAP1002 manufactured at each of our two facilities is essentially the same.
Linda Mcmahon: First we now can transition to our San Diego manufacturing facility on potential product approval without the need to provide additional manufacturing site specific clinical data to the FDA.
Linda Mcmahon: This saves us a tremendous amount of time on our path to filing the BLA and preserves resources as we move through 2024.
Linda Mcmahon: We are now looking at some options for cohort B as we believe this data set may prove to be extremely valuable for us.
Linda Mcmahon: A second important achievement was our demonstration of non clinical comparability using state of the art first in class potency assays.
Linda Mcmahon: Knowing the cap tenants you manufactured at each of our two facilities is essentially the same.
Linda Marbn: We did this using two distinct potency assays, one using RNA sequencing to look at the fingerprint of the cells using the known potent loss from our HOPE-2 clinical trial as the blueprint on which the comparison was made. The other assay capitalizes on a known mechanism of CAP-1002, which is antifibrosis, and this assay analyzes the reduction of collagen, which is a major component of scar or fibrosis. Each of these assays, using sophisticated bioinformatics and statistical analysis, demonstrate the effectiveness of these methods in quantifying the potential efficacy of each lot of CAP-1002. No other cell therapy, to our knowledge, has shown this type of rigor in developing potency and identity criteria.
Linda Mcmahon: We did this using two distinct potency assay, one using RNA sequencing to look at the fingerprint of the cells using the known potent loss from our hope to clinical trial as the blueprint on which the comparison was made.
Linda Mcmahon: The other assay capitalizes on a known mechanism of cap tenant you, which is anti fibrosis and this assay analyzes the reduction of collagen, which is a major component of scar or fibrosis.
Linda Mcmahon: Each of these asset using sophisticated bioinformatics a statistical analysis demonstrates the effectiveness of these methods and quantified the potential efficacy of each lot of cap tenancy.
Linda Mcmahon: No other cell therapy to our knowledge has shown this type of rigor and developing potency and identity criteria.
Linda Marbn: For a more detailed overview, our Chief Scientific Officer, Dr. Christy Elliott, provided an update on these methods during a call we hosted on April 29th, which is available on our website. Now turning to Cohort B more specifically and our plans moving forward for this cohort. Following our last meeting with FTA, we have spent the last several weeks discussing the best path forward.
Linda Mcmahon: For a more detailed overview, our chief Scientific officer, Dr. Kristi Elliot provided an update on these methods on our call. We hosted on April 'twenty night, which is available on our website.
Linda Mcmahon: Now turning to come or be more specifically and our plans moving forward for this cohort.
Linda Mcmahon: Following our last meeting with FDA, we have spent the last several weeks discussing the best path forward and.
Linda Marbn: Enrollment has proceeded quite rapidly from its initiation in December of 2023 until today, where currently, we are on track to enroll the 44 patients by the end of the second quarter. However, at this time, we're evaluating various options, with one of such options being to expand cohort B to include European patients. As we have been anticipating expansion into Europe for a while, either with a partner or independently, we have engaged with external advisors as to the most expeditious path forward in Europe.
Linda Mcmahon: Enrollment has proceeded quite rapidly from its initiation in December of 2023 until today.
Linda Mcmahon: Currently we are on track to enroll the 44 patients by the end of the second quarter.
Linda Mcmahon: However at this time, we are evaluating various options with one of such options to expand cohort being to include European patients.
Linda Mcmahon: As we have been anticipating expansion into Europe for a while either with a partner or independently. We are engaged with external advisors. After the most expeditious path forward in Europe.
Linda Marbn: The next steps would be to discuss with the European Medicines Agency, also known as EMA, the opportunity for a global trial to align on the path forward, given the change in requirements by the FDA. We are delighted with the speed at which Cohort B has enrolled, and we are going to continue to provide treatment to those subjects enrolled, including the opportunity to participate in an open-label extension. I will provide more color on this program as we move forward.
Linda Mcmahon: And the next steps would be to discuss with the European Medicines Agency also known as the opportunity for a global trial to lie on the path forward given the change in requirements by the FDA.
We are delighted with the speed at which cohort is enrolled and we're going to continue to provide treatment to those subjects enrolled including the opportunity to participate in an open label extension.
Linda Mcmahon: I'll provide more color on this program as we move forward.
Linda Marbn: Now, for a regulatory update, we have had multiple meetings, both formal and informal, with FDA in 2024, as we prepare for our VLA submission. The next one is a Type B meeting with FDA scheduled for late May, the purpose of which is to continue to align on our path to a BLA submission. This meeting will cover several important topics, including scheduling a pre-VLA meeting, requesting an initial consensus on a rolling VLA schedule, and approval of our plan for final commercial manufacturing.
Linda Mcmahon: Now for a regulatory update we have had multiple meetings, both formal and informal with FDA in 2021, as we prepare for our BLA submission.
Linda Mcmahon: The next one is a type b meeting with FDA scheduled for late May the purpose of which is to continue to align on our path to a BLA submission.
Linda Mcmahon: This meeting will cover several important topics, including scheduling a pre BLA meeting.
Linda Mcmahon: Request for an initial consensus on a rolling BLA schedule and approval of our plants our final commercial manufacturing.
Linda Marbn: As you may know, in order to file a biologics license application, you must have a pre-VLA meeting to align with FDA on the submission and the requirements necessary for potential approval. So we view this milestone as critical. Underlying that request is the formal request for a rolling BLA, which will allow us to submit certain modules of the BLA as they are completed to allow FCA to review and provide feedback on select areas of the BLA while other sections are still in progress.
Linda Mcmahon: As you May know in order to file a biologics license application you must have a pre BLA meeting to align with the FDA on our submission and the requirements necessary for potential approval. So.
So we view this milestone as critical.
Linda Mcmahon: Underlying that request is the formal request.
Linda Mcmahon: Rolling BLA, which will allow us to submit certain modules of the BLA as they are completed to allow FCA to review and provide feedback on select areas of the BLA.
Linda Mcmahon: Other sections are still in progress.
Linda Marbn: The rolling review would not only accelerate our timeline to approval but will also modularly de-risk the VLA pact. We will announce the outcome of this Type D meeting once we receive the final minutes from FDA, which we anticipate receiving in late Q2. As many of you know, FDA leadership has taken a great interest in helping move the field of treating DMD forward, and we are excited to continue working with FDA to move the CAP-1002 program towards potential approval in the most expeditious way possible.
Linda Mcmahon: The Rolling review will not only accelerate our timeline to approval, but we will also modular really derisked the BLA package.
Linda Mcmahon: Okay.
Linda Mcmahon: We will announce the outcome of this type B meeting once we receive the final minutes from FDA, which we anticipate receiving in late Q2.
Linda Mcmahon: As many of you know FDA leadership has taken a great interest in helping move the field of cheating DMG forward and we are excited to continue working with FDA to move the cap tentative program towards potential approval in the most expeditious way possible.
Linda Marbn: Now turning to another critical milestone for us, which is the three-year HOPE-II open label extension data, which we plan to share later this quarter. As we publicly stated, this data will be included in our proposal for a pre-BLA meeting and rolling BLA submission.
Linda Mcmahon: Now turning to another critical milestone for US, which is the three year hope to open label extension data, which we plan to share later this quarter.
Linda Mcmahon: As we publicly stated this data will be included in our proposal for a pre BLA meeting and rolling BLA submission.
Linda Marbn: We will continue to work with the FDA to discuss any opportunity for an accelerated BLA filing, and our current plan is to share this data publicly once it is fully available, and then again at a later conference. To remind you, the HOPE-2 Open Label Extension Study is already in its fourth year of continuous CAT-1002 treatment, and results will be shared on the three-year safety and efficacy data, which includes assessments of skeletal and cardiac health. We believe that the three-year results will continue to underscore the potential long-term benefits of CAP-1002 treatment in Duchenne musculature.
Linda Mcmahon: We will continue to work with the FDA to discuss any opportunity for an accelerated BLA filing and our current plan is to share. This data publicly once fully available and then again at a later conference.
Linda Mcmahon: To remind you the hope to open label extension study is already in its fourth year of continuous cap tentative treatment and results will be shared on the three year safety and efficacy data, which includes assessments of skeletal and cardiac function.
Linda Mcmahon: We believe that the three year results will continue to underscore the potential long term benefits of cap tenants, who treatment and duchenne muscular dystrophy.
Linda Marbn: Now for an update on manufacturing and CMC preparation. As I mentioned a few minutes ago, the latest outcome with FDA will allow us to produce commercial products out of our San Diego manufacturing facility, if approved. Currently, our San Diego manufacturing facility is fully operational, staffed, and producing doses for clinical use. Along with BLA readiness activities, we are also actively preparing for commercial runs.
Linda Mcmahon: Now for an update on manufacturing and CMC preparations.
Linda Mcmahon: As I mentioned, a few minutes ago, the latest outcome with FDA will allow us to produce commercial product out of our San Diego manufacturing facility if approved.
Linda Mcmahon: Currently our San Diego manufacturing facility fully operational stopped producing doses for clinical use.
Linda Mcmahon: Along with BLA readiness activities. We are also actively preparing for commercial runs.
Linda Marbn: Currently, our internal estimates project us to be able to produce enough drug in the San Diego facility to meet projected market demand in year one of commercial sales. As we expect a rapid adoption of CAP 1002 by the DMG community, if approved, we are also now developing plans to expand our San Diego facility to support additional demand, should that be necessary. But further expansion and any material investment would be something we would consider based on an assessment of market demand and resource availability. Our Los Angeles facility will continue to serve as a clinical facility for the time being, but it will no longer be needed to support commercial efforts, and we look to conserve resources with this plan.
Linda Mcmahon: Currently our internal estimates project is to be able to produce enough drug in the San Diego facility to meet projected market demand in year, one of commercial sales.
Linda Mcmahon: As we expect a rapid adoption of <unk> by the DMD community. If approved we're also now developing plans to expand our San Diego facility to support additional demand should that be necessary.
Linda Mcmahon: But further expansion and any material investment would be something we will consider based on assessment of market demand and resource availability.
Linda Mcmahon: Our Los Angeles facility will continue to serve as a clinical facilities for the time being but it will no longer be needed to support commercial efforts and we look to conserve resources with this plan.
Linda Marbn: Now for a brief update on our commercial preparation. We have increased the frequency of our meetings with Nippon Shinyaku and its U.S. subsidiary, NS Pharma, in order to actively prepare for the potential commercialization of CAPTEN as well. One of the reasons we selected Nippon Shinyaku and NS Pharma as our commercial partners was their energy and enthusiasm for bringing CAP-1002 to market in the United States and Japan. However, with the aim of contributing to their potential success, we will continue to actively support NS in the plan for the launch and commercial expansion of CAP-1002 in our first market, the United States. To that end, we have engaged consultants to conduct a gap analysis of our needs for commercial preparation and an addition.
Linda Mcmahon: Now for a brief update on our commercial preparations we have increased the frequency of our meetings with new function Jaco and its U S subsidiary NSC pharma and <unk>.
Actively prepare for the potential commercialization of cap tenants.
Linda Mcmahon: One of the reasons, we selected new pumps, and Yaacov <unk> pharma as our commercial partner for their energy and enthusiasm for bringing <unk> to market in the United States and Japan.
Linda Mcmahon: However, with the aim of contributing to their potential success, we will continue to actively support NFS and the plan for launch and commercial expansion of cap 10, O two and our first market the United States.
Linda Mcmahon: To that end.
Linda Mcmahon: We have engaged consultants to conduct a GAAP analysis of our needs for commercial preparations and in addition.
Linda Marbn: We are in the process of identifying senior-level executives to lead Capricor's commercial efforts in conjunction with NS Pharma. Please look for future updates on our preparations for potential launch as they become available. We recognize the importance of these milestones and are actively advancing this program internally. We are focused on multiple areas as we prepare for potential launch. And now I will spend the next few minutes outlining some of these areas and the efforts we are focused on. First, revenue share.
Linda Mcmahon: We are in the process of identifying senior level executives to lead cap of course commercial efforts in conjunction with Venezuela.
Please look for future updates on our preparations for potential launch as they become available.
Linda Mcmahon: Recognize the importance of these milestones and are actively advancing this program internally. We are focused on multiple areas as we prepare for potential launch and now I will spend the next few minutes outlining some of these areas and the efforts we are focused on.
Linda Marbn: Under the terms of our U.S. distribution agreement with Nippon Shinyaku, we will receive a transfer price that will reimburse us for the cost of each dose sold through NS Pharma, as well as a meaningful mid-range double-digit share of product revenue. We understand that at this point, we haven't disclosed the specific percentage, but the mid-range falls between 30 and 50 percent, which will be offset by the amounts paid to us as the transfer price for the purchase of the product.
Linda Mcmahon: First is revenue share under the terms of our U S distribution agreement with Nippon Cheniere.
Linda Mcmahon: We will receive a transfer price, which will reimburse us for the cost of each dose sold through N S pharma as well as meaningful mid range double digit share of product revenue.
Linda Mcmahon: We understand that at this point, we haven't disclosed a specific percentage, but mid range falls between 30, and 50% where some will be offset by the amounts paid to us as the transfer price for the purchase of the product.
Linda Marbn: As we envision CAP 1002 as a long-term, perhaps lifetime treatment option, we believe this will provide a strong revenue model for reimbursement. As we stated on our April 29th call, our goal is for CAP-1002 to be priced at or above the price currently approved for exon skipping therapies in the United States. Our early interactions with payers give us confidence in the estimation of those ranges. The third consideration is potential label expansion.
As we envisioned cap tenants, who is a long term, perhaps lifetime treatment options. We believe this will provide a strong revenue model for reimbursement.
Linda Mcmahon: Second is reimbursement.
Linda Mcmahon: As we stated on our April 29th call. Our goal is for <unk> to be priced at or above the price currently approved for exon skipping therapies in the United States.
Linda Mcmahon: Our early interactions with payers give us confidence in the estimate of those ranges.
Linda Mcmahon: The third is potential label expansion.
Linda Marbn: Our current clinical studies include DMD patients 10 years of age and older with impaired upper limb function and are either late stage ambulance or non-ambulant. To remind you, over half of the population with DMD is non-ambulant.
Linda Mcmahon: Our current clinical phase include DMD patients 10 years of age and older with impaired upper limb function and are either late stage ambulant or non ambulant.
Linda Mcmahon: To remind you over half of the population with DMD as non ambulant.
Linda Marbn: So, as a first estimate, that gives us approximately 7,500 to 10,000 potential addressable DMD patients who would be eligible to receive CAP-1002 in the United States. We are in the process of discussing the potential label for CAP-1002 with the FDA, and the goal is to make the label as broad as possible, of course, based on the data. Fourth, are the initial commercial pain patients from our OLE study.
Linda Mcmahon: As a first estimate that gives us approximately 7500 to 10000 potential addressable GMT patients could be eligible to receive cap 10 or two in the United States.
Linda Mcmahon: We are in the process of discussing the potential label for <unk> with the FDA and the goal is to make the label as broad as possible of course based on the data.
Linda Mcmahon: Fourth are the initial commercial pain patients from our OLED studies.
Linda Marbn: We believe that by the time of a potential DLA acceptance, we would expect to have approximately 120 patients already on CAP-1002 on an ongoing basis through our open label extension study. We expect that 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 the product. These are opportunities for global growth expansion.
Linda Mcmahon: I believe that by the time of a potential DLA acceptance, we would expect to have approximately 120 patients already on <unk> on an ongoing basis through our open label extension space.
Linda Mcmahon: We expect that these patients would likely become our first commercial patients.
Linda Mcmahon: Potential revenue stream will be very supportive of a strong launch and will provide an initial commercial market for the product.
Linda Mcmahon: Fifth our opportunities for global growth expansion.
Linda Marbn: On the partnering front, we remain in active discussions with several parties looking at the European rights for CAP 1002-4-DMD. We continue to believe that CAP1002 would be a highly valuable asset in this market, as well as other regions around the world. Additionally, as we have discussed before, the product expansion opportunity for COP 1002 is very tangible. Our KOLs and thought leaders are working with us now on possible other indications, such as Becker Muscular Dystrophy.
Linda Mcmahon: On the partnering front, we remain in active discussions with several parties looking at the European rights for cap tethered to 40 Mg.
Linda Mcmahon: We continue to believe that cap tenant you would be a highly valuable asset in this market as well as other regions around the world.
Linda Mcmahon: Additionally, as we have discussed before the product expansion opportunity for cap tonnage you is very tangible.
Linda Mcmahon: Our kols and thought leaders are working with US now on possible other indications such as Becker muscular dystrophy.
Linda Marbn: Importantly, a critical facet of this expansion is the ability to replicate our manufacturing processes and modules for the expansion to other potential indications by leveraging our already internally developed processes, facilities, and CMC. Please stay tuned for further updates on this front. And finally, CAP-1002 may provide a backbone therapy opportunity for DMD patients. We believe CAP-1002 is well positioned as a complementary therapy for DMD, as its stated mechanism of action is immunomodulatory and antifibrotic. CAP-1002 has a strong safety profile and is a once-a-quarter infusion that has been shown to be well tolerated to date.
Linda Mcmahon: Importantly, our critical facets of this expansion is the ability to replicate our manufacturing processes and modules for the expansion to other potential indications by leveraging our already internally developed processes facilities and CMC.
Linda Mcmahon: Please stay tuned for further updates on this front.
Linda Mcmahon: And finally, <unk> may provide a backbone therapy opportunity for DMD patients, we believe catching it too as well positioned as a complementary therapy for DMD as a stated mechanism of action its immuno modular Tory and anti fibrotic cap.
Linda Mcmahon: <unk> tended to have a strong safety profile.
Linda Mcmahon: And as a once a quarter infusion that has been shown to be well tolerated to date.
Linda Marbn: If CAP-1002 delays disease progression, which multiple clinical trials have demonstrated to date, it is our hope that CAP-1002 will be the preferred treatment partner either on its own or with gene modifying or exon skipping therapy. Before I move to an update on our exosome program, I want to reiterate our commitment to bringing this therapy to market as expeditiously as possible. The majority of the investment into our team, operations, and facilities has gone into preparations for this endeavor.
Linda Mcmahon: If cap tenant you delay disease progression, which multiple clinical trials have demonstrated to date. It is our hope that capital to be the preferred treatment partner either on its own or with gene modify or exon skipping therapies.
Linda Mcmahon: Before I move to an update on our <unk> program I want to reiterate our commitment to bringing this therapy to market as expeditiously as possible. The majority of the investment into our team operations at facilities has gone into preparations for this endeavor and I feel confident that we can deliver according to the plans we have set forth.
Linda Marbn: And I feel confident that we can deliver according to the plans we have set. Now, turning to an update on our Exodome platform technology. While the development of our exosome platform has taken a backseat to our lead asset CAP-1002 in D&D, we have made remarkable progress over the last year with the invention of our StealthX engineered exosome delivery platform, as well as building out a scalable manufacturing paradigm. These accomplishments have kept us on target for having an exosome-based product in the clinic by the end of 2024.
Linda Mcmahon: Now turning to an update on our exited on platform technology, while the development of our <unk> platform has taken a backseat to our lead asset cap tenants you and TMT.
Linda Mcmahon: We have made remarkable progress over the last year with the invention of our stealth ex engineered exosomes delivery platform as well as building out a scalable manufacturing paradigm. These.
Linda Mcmahon: These accomplishments have kept us on target for having an extra dollar based product in the clinic by the end of 2024.
Linda Marbn: I remind you that our approach is to use exosomes as intended by nature as a delivery gift. We use a standard exosome isolated from HEK293 cells, and then we build them to do the work by targeting on the outside and storing payload on the inside. Our approach to building exosomes as drug delivery vehicles has been strategic and step-wide. First, we wanted to de-risk the concept that an exosome could deliver a high-fidelity payload, which we have done pre-clinically with our Stealth-X vaccine.
Linda Mcmahon: I remind you that our approach is to use the exosomes as intended by nature.
Linda Mcmahon: Delivery vehicles.
Linda Mcmahon: We use a standard exosomes isolated from HEK 293 cells and then we build them to do the work by targeting on the outside and storing payload on the inside.
Linda Mcmahon: Our approach in building the Exosomes as drug delivery vehicles has been strategic and step wise.
Linda Mcmahon: First we wanted to Derisk the concept, but an extra zone could deliver a high fidelity payload, which we have done pre clinically with our self ex vaccine.
Linda Marbn: Details of this program will follow. Then, to further pressure test the technology, we advanced the program to preclinical evaluation of enzyme replacement, which in addition to the requirement of transition of a payload, it also requires bioactivity that is physiologically relevant.
Linda Mcmahon: Details of this program will follow.
Then to further pressure test the technology, we advance the program to preclinical evaluation of enzyme replacement, which in addition to the requirement of transition of a payload. It also requires bio activity that it's physiologically relevant.
Linda Marbn: This work has been exemplified by our ARD1 work, the subject of a talk presented last week at the American Society for Cell and Gene Therapy in Baltimore, Maryland. The next frontier is targeting on the outside, similar to the vaccine, with payload on the inside, similar to ARJ-1. These studies are underway pre-clinically as well. We will provide more color on that program as it becomes available, but our current strategy is to utilize our knowledge and understanding of the DMD space to move our Stealth-X platform forward.
Linda Mcmahon: This work has been exemplified by our Orange one work the subject by the talk presented last week at the American Society for cell and gene therapy in Baltimore, Maryland.
Linda Mcmahon: The next frontier is both targeting on the outside similar to the vaccine with payload on the inside similar to ours.
Linda Mcmahon: These studies are underway pre clinically as well.
Linda Mcmahon: We will provide more color on that program as it becomes available, but our current strategy is to utilize our knowledge and understanding of the DMD space to move our stealth X platform forward.
Linda Marbn: Now, for a few details on the vaccine side, we are underway with a collaboration with the United States government's Project NextGen, which is slated to develop vaccine candidates for potential use in preventing COVID-19, as well as prepare for future pandemics. The structure of the collaboration with NIAID, the National Institutes of Allergy and Infectious Diseases, is that Capricor will provide manufactured doses of our vaccine, the campaign for which is well underway now and aiming to meet the NIAID timelines for the end of 2024 for planned trial initiation. NIAID will conduct and fully fund the Phase 1 clinical trial.
Linda Mcmahon: Now for a few details on the vaccine side, we are underway with the collaboration with the United States Government's project Nexgen, which is slated to Tex text vaccine candidates for potential use in preventing COVID-19, as well as prepare for future Pandemics.
Linda Mcmahon: The structure of the collaboration with <unk>, the National Institute of allergy and infectious disease is.
Linda Mcmahon: Is it copper court will provide manufactured doses of our vaccine the campaign for which is well underway now and Amy to meet the <unk> timelines for the end of 'twenty 'twenty four for planned trial initiation.
Linda Mcmahon: <unk> will conduct and fully fund the phase one clinical trial.
Linda Marbn: 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. I will provide more specific guidance on this program as it moves forward. To our knowledge, this will be the only multivalent candidate tested, and we have high hopes for its success in terms of potential safety and efficacy. If NIAID finds that our vaccine meets its criteria for safety and efficacy, they may consider it for a fully funded phase two. This opportunity is very important for us.
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.
Linda Mcmahon: I will provide more specific guidance on this program as it moves forward.
Linda Mcmahon: To our knowledge this will be the only multi balan candidate tested and we have high hopes for success in terms of potential safety and efficacy.
Linda Mcmahon: If not I find that our vaccine meet this criteria for safety and efficacy. They may consider it for a fully funded phase II.
Linda Mcmahon: This opportunity is very important for us and while we are not aiming to become a vaccine focused company. This roadmap should support us for further partnering opportunities across the pharma industry. As we will have completed major achievements in the development of a biological platform, including regulatory approval and <unk>.
Linda Marbn: And while we are not aiming to become a vaccine focused company, this roadmap should support us for further partnering opportunities across the pharma industry, as we would have completed major achievements in the development of a biological platform, including regulatory, IMD approval and CMC scale effects. Turning to the therapeutic side of the exosome platform, as I mentioned a few moments ago, we recently presented the data at the American Society of Cell and Gene Therapy held last week in Baltimore, where we were selected for an oral presentation sharing free clinical data, of an exosome-based approach for the potential treatment of Arginase 1 deficiency, otherwise known as ARG1D, a rare genetic metabolic disease characterized by complete or partial lack of the enzyme arginase and the liver and red blood cells.
Linda Mcmahon: Yeah.
Linda Mcmahon: Turning to the therapeutic side of the Exosomes platform as I mentioned, a few moments ago. We recently presented the data at the American Society of cell and gene therapy held last week in Baltimore, where we were selected for an oral presentation showing preclinical data.
Linda Mcmahon: Of an excess AUM based approach for the potential treatment of arginase, one deficiency, otherwise known as <unk>, a rare genetic metabolic disease characterized by complete or partial lack of the enzyme arginase in the liver and red blood cells.
Linda Marbn: In this study, exosomes were engineered to express human R1 enzyme inside of the exosome and were evaluated for their in vitro functionality. Results show that the arginine exosomes are enzymatically active and are able to convert arginine into urea in vitro.
Linda Mcmahon: In this study actually those are engineered to express human Orange, one enzyme inside of the extra though our evaluated for their in vitro functionality.
Linda Mcmahon: Results showed that the orange one accident enzymatically active and are able to convert arginine into urea in vitro.
Linda Marbn: In addition, ARG1 exosomes were capable of delivering the ARG1 protein to 293F and hep G2 cells in a time and dose-dependent manner, contrary to human recombinant ARG1 protein alone when tested at the same or higher dose. This data strengthens our continued platform development, as we believe there are tremendous opportunities with potentially broad applications, and our data continues to support that. Additionally, we are in development of an exosome-based antisense oligonucleotide or ASO program that could be impactful in the treatment of DMT, and we continue to work in connection with an undisclosed pharma partner on this approach. We look forward to sharing more details on this program as it becomes available.
Linda Mcmahon: In addition, the Orange one accidents were capable of delivering the orange one protein into 293 F and G to sell in a time and dose dependent manner, contrary to human recombinant Artois protein alone when tested at the same or higher dose.
Linda Mcmahon: This data strengthens our continued platform development as we believe there are tremendous opportunities with potentially broad applications on our data continues to support that.
Linda Mcmahon: Additionally, we are in development of an <unk> based antisense oligonucleotide or ASO program that could be impactful in the treatment of DMG and we continue to work in connection with an undisclosed pharma partner on this approach we look forward to sharing more color on this program as it becomes available.
Linda Mcmahon: Level.
Linda Marbn: On the corporate side, we continue to engage the buy and sell side in order to continue to bring visibility to our story, which we believe is under-recognized. In terms of capitalization, as we move through 2024 and into 2025, I want to remind you that our U.S. agreement with Nippon Shinyaku comes with an additional $90 million in potential milestone payments up to the time of approval, which are triggered upon certain regulatory-based, Further, if we receive approval for CAP-1002 for the treatment of DMD, we would be eligible to receive a priority review voucher, otherwise known as a PRV, based on our previous receipt of a rare pediatric disease designation, which we retain full rights to at this time.
Linda Mcmahon: On the corporate side, we continue to engage the buy and sell side in order to continue to bring visibility to our story, which we believe is under recognized.
Linda Mcmahon: In terms of capitalization as we move through 2024 and into 2025 I want to remind you that our U S agreement with Nippon sheet Yaacov comes with it an additional $90 million and potential milestone payments up to the time of approval, which are triggered upon certain regulatory based achievements.
Linda Mcmahon: Further if we receive approval for cap to answer for the treatment of DMD, we would be eligible to receive a priority review voucher otherwise known as a P. RV based on our previous receipt of a rare pediatric disease designation, which we retained full rights to at this time.
Linda Marbn: And finally, we are actively evaluating several non-dilutive capital opportunities to fund aspects of our exosomes platform outside of the NIAID collaboration. Our main goal is to continue to support our balance sheet, leveraging non-dilutive opportunities in order to fuel CAP 1002 towards potential approval and also to support the Ex-Zone program. In conclusion, I want to thank the patients, their families, and our investors for your continued support. We continue to focus our efforts on bringing CAP 1002 towards potential commercialization, and we are investing judiciously across the organization in prayer for that endeavor.
Linda Mcmahon: And finally, we are actively evaluating several non dilutive capital opportunities to fund aspect of our exosomes platforms outside of the NAIAD collaboration. Our main goal is to continue to support our balance sheet, leveraging non dilutive opportunities in order to fuel <unk> towards potential approval and also.
Linda Mcmahon: To support the <unk> program.
Speaker Change: In conclusion I want to take the thank the patients their families. Our investors for your continued support we continue to focus our efforts on bringing cap 10 of the two towards potential commercialization and we are investing judiciously across the organization to prepare for that endeavor.
Linda Marbn: Later this quarter, we plan to announce our three-year open-label extension data to announce the outcome of our type B meeting with FDA, as well as to provide further updates on options for cohort B, who will also be presenting at various medical, scientific, and investor-related conferences throughout the next several months. I will now turn the call over to A.J. to run through the financials. A.J. Thanks, Linda.
Speaker Change: Later this quarter, we plan to announce our three year open label extension data to announce the outcome of our type B meeting with FDA as well as to provide further updates on options for cohort b.
Speaker Change: We will also be presenting at various medical scientific and investor related conferences throughout the next several months.
Speaker Change: I'll now turn the call over to a J to run through the financials.
Anthony J. Bergmann: Linda, this afternoon's press release provided a summary of our first quarter 2024 financials on a gap basis. And you may also refer to our quarterly report on Forum 10Q, which we expect to become available shortly, won't be accessible on the SEC website, as well as the financial section of our website. Let me start with our cash position.
J: Thanks, Linda this afternoon's press release provided a summary of our first quarter 2024 financials on a GAAP basis, and we May also refer to our quarterly report on Form 10-Q, which we expect to become available shortly will be accessible on the SEC website as well as the financial section of our website, let me start with our cash position.
Anthony J. Bergmann: As of March 31st, 2024, the company's cash, cash equivalents, and marketable securities total approximately $39.9 million, compared to approximately $39.5 million on December 31st, 2023. In the first quarter, we received a $10 million milestone payment from Nippon Shinyaku under our exclusive distribution and commercialization agreement with them. Additionally, in the first quarter and through today, we raised approximately $3.5 million in gross proceeds under our at the market program, an average price of $5.75 per share.
As of March 31, 2024 of the company's cash cash equivalents in marketable securities totaling approximately $39 $9 million compared to approximately $39 5 million on December 31, 2023 in the first quarter, we received a $10 million milestone payment from Nippon <unk> Jaco.
J: They're our exclusive distribution and commercialization agreement with them.
J: Additionally, in the first quarter and through today, we raised approximately $3 5 million in gross proceeds under our at the market program at an average price of $5 75 per share we continue to be disciplined in our ATM use raising a majority of the funds in the second quarter at over $6 75 per share based on our current operate.
Anthony J. Bergmann: We continue to be disciplined in our ATM use, raising the majority of the funds in the second quarter at over $6.75 per share. Based on our current operating plan and projection, we expect our cash runway to extend to the first quarter of 2025. But this expectation excludes any additional potential milestone payments under our exclusive commercialization and distribution agreements with Nippon Shinyaku. Turning briefly to the financials for the first quarter of 2024, excluding stock-based compensation, our research and development expense was approximately $10.1 million, compared to approximately $7.2 million in Q1 2023.
J: Plan 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 the bunch and jaco.
J: Turning briefly to the financials for the first quarter of 2024, excluding stock based compensation, our research and development expense was approximately $10 1 million compared to approximately $7 2 million in Q1 2023. The increase in expenses of $2 9 million was primarily due to an increased clinical and manufacturing costs.
J: With our phase III <unk> III clinical trial.
J: Excluding stock based compensation, our general and administrative expense was approximately one 8 million for both the first quarter of <unk> 24, and 2023 net loss for the first quarter of 2024 was approximately $9 8 million compared to a net loss of approximately $7 8 million for the first quarter of 2023.
Anthony J. Bergmann: The increase in expenses of $2.9 million was primarily due to increased clinical and manufacturing costs associated with our Phase III, HOPE III clinical trial. Excluding stock-based compensation, our general and administrative expenses were approximately $1.8 million for both the first quarter of 2024 and 2023. The net loss for the first quarter of 2024 was approximately $9.8 million compared to a net loss of approximately $7.8 million for the first quarter of 2023. We will now open the line up for questions.
Speaker Change: We will now open the line up for questions.
Speaker Change: Okay.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press the star followed by the. If you are using a speakerphone, please lift the handset before pressing any key. Once again, that is all I want you to wish to ask a question. Your first question is from Kristen Kluska from Cantor Fitzgerald. Please ask your question.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on you touched on phone you will hear a three pronged acknowledging northwest questions will be taken in the order received should you wish to cancel your request. Please.
Speaker Change: This stellar followed by the <unk>.
Speaker Change: If youre using a speakerphone please lift the handset before pressing any case.
Speaker Change: Once again that is star one should you wish to ask a question.
Speaker Change: Your first question is from Kristen <unk> from Cantor Fitzgerald. Please ask your question.
Kristen Brianne Kluska: Hi everyone, good afternoon. Thanks for taking the questions and congratulations on all the progress that you've had on the trial as well as your regulatory interaction. So first, thanks for helping us with the Neat Lunch and Yahoo! economics. Very helpful to break out. [inaudible]
Kristen: Hi, everyone. Good afternoon. Thanks for taking the question and congrats on all the progress things that on the <unk>.
Kristen: Trial as well as your regulatory interactions.
Speaker Change: So first thanks for helping us with the launch of Yahoo, economics very helpful to break out.
Speaker Change: Well appreciate it higher.
Kristen: Royalties than what you typically see in a deal is it fair to say you've noted $90 million in regulatory related milestones for potential approval is it fair to say that there is.
Kristen: A trigger that could occur if you have positive data in the fourth quarter.
Linda Marbn: Hey, good to hear from you. Thank you for your kind words. We're not at liberty to announce yet the sort of tenor of the milestone payments, but suffice it to say that we plan on them being able to strengthen our balance sheet as we move from approval through BLA.
Speaker Change: Hey, good to hear from you. Thank you for your kind words.
Speaker Change: Not at Liberty to announce yet sort of the tenor of the milestone payments, but suffice it to say that we plan on them being able to strengthen our balance sheet as we move from approval through BLA.
Kristen Brianne Kluska: Okay, fair enough. And then can you remind us of what the latest interaction has been with any regulatory agency outside the US? You've clearly been aligning very well with them. They're very much sounding committed to working with you, but I'm wondering what the tone has been for any of the other agencies.
Speaker Change: Okay Fair enough and then can you remind us what the latest interaction has been with any regulatory agency ex U S. You've clearly been aligning very well with them, they're very much sound and committed to working with you, but I am wondering what the tone has been for any of the other agencies.
Linda Marbn: Yeah, so we've had, you know, some initial reach outs, mostly through our consultants in terms of strategizing how to approach both the EMA and then the Japanese regulatory authorities, the PMDA. We have a strategy that we've been building as we've been thinking of the idea of a partnership. We're still trying to figure out how to move as rapidly as possible worldwide. This opportunity with Cohort B has really been wonderful for us and a given opportunity to now take the therapy worldwide. So we're evaluating those opportunities. What we can say is that, you know, Europe has significantly fewer therapeutics approved for Duchenne muscular dystrophy than the United States, as I believe the difference is number eight.
Speaker Change: Yeah. So we've had some initial reach out mostly through our consultants in terms of strategizing how to approach both.
Speaker Change: And then the Japan regulatory authorities the P M D a.
Speaker Change: We have a strategy.
Speaker Change: Then.
Speaker Change: Thinking of the idea of a partnership we're still trying to figure out.
Speaker Change: How to move as rapidly as possible worldwide. This opportunity with cohort B has really.
Speaker Change: Been wonderful for us on a given opportunity to now take the therapeutic global so we're evaluating those opportunities what we can say is that you know.
Speaker Change: Europe has significantly less therapeutics approved in Duchenne muscular dystrophy.
Then the United States as I believe the differences number eight I heard at a conference last week and so they're highly motivated to get something across the line with our strong efficacy in our strong CMC package I have good faith that we will be able to work closely with EMA and get this across the line as well as with <unk> and as I mentioned in my prepared remarks.
Linda Marbn: I heard them at a conference last week, and so they're highly motivated to get something across the line. With our strong efficacy and our strong CMC package, I have good faith that we'll be able to work closely with EMA and get this across the line, as well as with PMDA. And, as I mentioned in my prepared remarks, stay tuned as we provide some further details on how we're going to develop this great opportunity to go worldwide.
Speaker Change: Tuned as we provide some further color on how we're going to develop this great opportunity to go worldwide.
Kristen Brianne Kluska: Okay, thanks. And maybe if I could just ask one more big picture question. I think when considering the valuation here, cash in a PRV voucher alone could essentially support the current market cap. So what do you think it is that the investment community is missing out on considering it's a late stage asset with some data already in place?
Speaker Change: Okay, Thanks, and maybe if I could just ask one more big picture question I think when considering the valuation here cash PRD voucher alone.
Essentially support the current market cap. So what do you think it is that the investment community is missing out considering it as a late stage asset with some data already in please. Thank you so much again.
Linda Marbn: Thank you. So this, you know, is the big conundrum that I, as CEO, our management team, and our board, spend a lot of time thinking about. You know, we have a late-phase asset. We have really lovely clinical data that's been supported by publication in the highest-ranked journals. You know, for instance, the Lancet with our Phase II data.
Linda Marbn: Thank you so much again. Thank you. So this, you know, is the
Speaker Change: Thank you. So this is the big conundrum that I as CEO, our management team and our board I spend a lot of time thinking about you know we have a late stage asset we have a really lovely clinical data that's been supported by publication in the highest ranked journals for instance, the lancet with our phase II data we'd have long.
Linda Marbn: We have long-term safety and efficacy data with the HOPE II and the HOPE II Open Label Extension data. We have a fully enrolled Phase III. We have adoption by the community. We have a fleshed-out and fairly de-risked CMC. We have a manufacturing plan and a commercial plan for getting this product to market. So it's a little bit elusive why we haven't caught fire
Speaker Change: Term safety and efficacy with the hope to and hope to open label extension data.
Speaker Change: Have a fully enrolled phase III, we have adoption by the community.
Speaker Change: Have flushed out in fairly Derisked CMC, we have a manufacturing plant in a commercial plan for getting this product to market. So it's a little bit elusive are why we havent caught fire.
Linda Marbn: The only thing I can say is that, ultimately, I believe it will happen. And at Capricor, heads down HOPE III, we're just continuing to do our work, deliver on our milestones, and we're hoping the market will catch up with us. Thank you. Thank you. Thank you. Your next question is from Ted Tana from Piper Sandler. Please ask your
Speaker Change: Honestly I can say that ultimately I believe it will happen at a capricorn heads.
Speaker Change: Heads down hope three we're just continuing to do our work deliver on our milestones and we're hoping the market will catch up with us.
Speaker Change: Thank you.
Speaker Change: Thank you.
Ted Tana: Thank you. Your next question is from Ted Tana from Piper Sandler. Please ask your question. All right, thank you very much for taking the question. Really exciting, all the broad
Speaker Change: Thank you. Our next question is from Ted Tunnel.
Ted Tunnel: Sandler Please ask your question.
Ted Tunnel: Great. Thank you very much for taking the question really exciting on all the progress you guys are making.
Ted Tunnel: A question on kind of clock whereby.
Ted Tunnel: So long as the Thanksgiving thank for what it might cost for me, Chris or what.
Ted Tunnel: Cost of goods sold could ultimately be assuming premium pricing in this orphan disease.
Linda Marbn: Yeah, thanks, Ted. Great to hear from you.
Speaker Change: Yeah, Thanks, Hi, great to hear from you. So in terms of Cogs, our still sort of firing away here manufacturing and trying to come up with some final numbers, we've been a little bit quiet on that because building a new manufacturing plant that is much more efficient takes advantage of higher scale.
Linda Marbn: So, you know, in terms of COGS, we're still sort of firing away here in manufacturing and trying to come up with some final numbers. We've been a little bit quiet on that because building a new manufacturing plant that is much more efficient, takes advantage of higher-scale manufacturing methods and ways to significantly reduce costs, that's helping with the COGS. Although we don't have final numbers yet, we believe that the cost will be relatively minimal compared to what we're going to be able to get in reimbursement for this product.
Speaker Change: Manufacturing methods and ways to significantly reduce cost is helping with the Cogs, we don't have final numbers yet.
Speaker Change: We believe that the cost will be relatively minimal compared to what we're going to be able to get reimbursement for this product and so of course every dollar counts that were working to reduce Cogs stay tuned for more updates on that as they become available but for right now our focusing more on getting across the line and then getting as high of a reimbursement prices.
Linda Marbn: And so, of course, every dollar counts. So we're working to reduce COGS. Stay tuned for more updates on that as they become available. But for right now, we're focusing more on getting across the line and then getting as high of a reimbursement price as we believe the therapy requires.
Speaker Change: We believe the therapeutic for buyers.
Speaker Change: Great that makes a lot of sense. Thanks.
Speaker Change: Thanks Ted.
Joseph Pantginis: Thank you. Your next question is from Joe Pantginis from H.C. Wainwright. Please ask your question.
Speaker Change: Thank you. Your next question is from Joe <unk> from H C. Wainwright. Please ask your question.
Linda Marbn: Linda and AJ, good afternoon. Thanks for taking the questions. So, first, obviously, you've alluded to your ongoing discussions with regard to the EU for partnering and potentially beyond. Should we be looking for the same type of proximate deal structure as NS, or are we looking at various options?
Joe: Hey, good afternoon, thanks for taking the questions.
Joe: So two questions. Please so first obviously you've alluded to your ongoing discussions with regard to the EU for partnering and potentially beyond.
Joe: Should we be looking for that same type of approximate deal structure as an S or are you looking at various options.
Linda Marbn: So NS, thanks Joe, great to hear from you. Always really excited we've been building this therapy alongside you for a long time, so we appreciate your continued support. You know, NS took a risk with us with an asset that was not nearly as de-risked as it is today. They came in post Phase 2, prior to Phase 3.
Speaker Change: Thanks, Joe Great to hear from you always really excited we've been building. This therapy alongside you for a long time. So we appreciate your continued support.
Speaker Change: No.
Speaker Change: <unk> took a risk with us with an asset that was not nearly as directors. It has today. They came in post phase III prior to phase III data looks good but certainly nothing like the advancements that we've made to this point with a long term open label extension data the Derisked CMC.
Linda Marbn: The data looked good, but certainly nothing like the advancements that we've made to this point with the long-term open label extension data, the de-risked CMC, and a fully enrolled Phase 3 that will be reading out by the end of the year. Plus, you know, the wonderful opportunity that we have had to work closely with FDA to get this across the line. So I can't reveal the types of deals that we are pursuing right now, nor the analyses that we're doing internally as to whether we would take this forward independently.
Speaker Change: Our fully enrolled phase III, that's reading out by the end of the year plus.
Speaker Change: The wonderful opportunity that we have had to work closely with FDA to get this across the line. So.
Speaker Change: I can't.
Speaker Change: Reveal the types of deals that we are pursuing right now nor the analyses that we're doing internally as to whether we would take this forward independently, but I can say is that we have great confidence in cap center two in its ability to be a worldwide asset for the treatment of DMD or going to take the strongest deal possible out of <unk>.
Linda Marbn: What I can say is that we have great confidence in CAP 1002 and its ability to be a worldwide asset for the treatment of DMD, and we're going to make the strongest deal possible on a highly de-risked asset.
Speaker Change: <unk> de risked asset.
Joseph Pantginis: Oh, that's helpful. Thank you.
Speaker Change: No. That's helpful. Thank you and then off of your recent.
Speaker Change: FDA update call.
Speaker Change: We started the discussions about the potential of cardiovascular and I wanted to dive into that just a little bit more about its potential role not necessarily in the label, but potentially in the label, but also for patient benefit so with that said.
Speaker Change: Can you at least take some <unk>.
Speaker Change: High level shots at the metrics and the benchmarking that the FDA will really be looking at.
Joseph Pantginis: And then, on your recent FDA update call, you know, we started the discussions about the potential for cardiovascular, and I wanted to dive into that just a little bit more about its potential role, not necessarily in the label, but you know, potentially in the label, but also for patient benefit. So with that said, can you at least take some, you know, high-level shots at the metrics and the benchmarking that the FDA will really be looking at and potentially get excited about with regard to label inclusion?
Speaker Change: And potentially get excited about with regard to label inclusions.
Linda Marbn: Yeah, so you hit my sweet spot. I just, I'm back late last week. The PPMD, the Parent Project for Muscular Dystrophy, posted a meeting that's become annual on the topic of the cardiomyopathy associated with Duchenne muscular dystrophy. And to kind of give you a flavor of the room, there are about 60 to 80 people in there, the world leaders in terms of physicians treating cardiomyopathy, and it's really a strategy session. And I walked out of that meeting with a great sense of hope and enthusiasm for CAP 1002, treating cardiomyopathy associated with DMD across the age course. We know, and the KOL say, it is the number one reason for death in these boys and young men. It is a unique and highly intractable cardiomyopathy, starting with the beginning of the disease.
Speaker Change: Yeah. So you hit my sweet spot.
Speaker Change: I guess I'm back late last week, the ppm D parent project muscular dystrophy hosted a meeting that's become annual on.
Speaker Change: The cop the topic of the cardiomyopathy associated with Duchenne muscular dystrophy and <unk>.
Speaker Change: To give you a flavor of the room Theres about 60 to 80 people in there the world leaders in terms of the physicians treating the cardiomyopathy and it's really a strategy session and I walked out of that meeting with a great sense of hope and enthusiasm for cap tenor to treating the cardiomyopathy associated with DMG across the.
Linda Marbn: Many of these boys and young men develop very severe cardiac disease early on in life, and it's anachronistic in the sense that it does not seem to match the skeletal muscle myopathy. So that leaves the door open for treating it earlier. And most importantly, and what has become very relevant, is we know that the earlier we treat these guys, the better off they are. So all of the KOL say, and we've actually seen this with our clinical data, that, you know, the greater percentage of preserved cardiac muscle, so with ejection fractions, let's call it greater than 45%, you have a much higher chance of preserving and saving their hearts rather than, you know, trying There is no Lazarus effect.
<unk> horse we know.
Speaker Change: And the Kols say it is the number one reason for deaths and these boys and young men. It is a unique and highly intractable cardiomyopathy, starting with the beginning of the disease.
Linda Marbn: You're not bringing back a heart that is, you know, really permeated with fibrofatty accumulation. So we can tell you that the KOLs are really anxious to work with us. They're anxious to work with the FDA. There's a lot of communication going on as the FDA becomes aware of the fact that a MACE, major adverse cardiac event, or mortality endpoint, may not be the answer. In fact, is not, may not, or is not the answer to treating the cardiomyopathy associated with Duchenne.
Linda Marbn: And then finally, to complete the point, as we know with the gene therapies, they are not having great benefit in terms of cardiac function. And so if any of those get approved, and these kids are on their feet longer, they're going to need to be able to recruit more heart muscle to support that healthier skeletal muscle. So we are really in a wonderful position. We are going to take advantage of that by working closely with the FDA and all of the thought leaders as we begin to imagine the label for CAP1002 and DMT.
Speaker Change: Many of these boys and young men develop very severe cardiac disease early on in life and it's an acronym stick in the sense that that does not seem to match the skeletal muscle myopathy. So that leaves the door open for treating earlier and most importantly, and what has become very relevant as we know that the earlier, we treat these guys the better off they are.
Speaker Change: All of the Kols say, if we've actually seen this with our clinical data that.
Speaker Change: The greater percentage of preserved cardiac muscle so with ejection fractions, let's call it greater than 45% you have a much higher chance of preserving and saving their hearts rather than trying to get these guys are in late stage heart failure Theres, no Lazarus effect, youre, not bringing back a heartbeat or really permeated with fiber fatty.
Speaker Change: Accumulation and so.
Speaker Change: We can tell you that the kols are really anxious to work with us they're anxious to work with the FDA. There's a lot of communication going on as the FDA becomes aware of the fact that a mace major adverse cardiac event or mortality endpoint may not be the answer in fact is not not mean is not the answer in treating the cardiomyopathy associated with Duchenne.
Speaker Change: And then finally to complete the point as we know what the gene therapies are not having great benefit in terms of cardiac function and so have any of those get approved and these kids are on their feet longer they're going to need to be able to recruit more heart muscle to support that healthier skeletal muscle.
Speaker Change: We are really in a wonderful position, we are going to take advantage of that by working closely with the FDA and all of the thought leaders.
Speaker Change: As we begin to envision the label for <unk> in DMD.
Joseph Pantginis: No, I really appreciate that. And just to dive in slightly further, and thanks for your patience, just to say, you know, if mortality is not the answer for an endpoint, what would be the endpoint, and it's the sort of underlying benchmark that we in the investment community should look for?
Speaker Change: No I really appreciate that and just to dive in slightly further and thanks for your patience just to say.
Speaker Change: What would be then if mortality is not the answer.
Speaker Change: Or for an endpoint what would be the endpoint and it's sort of underlying benchmark that we in the investment community should look for.
Linda Marbn: You know, Joe, it's really an interesting question. I'm gonna go out on a limb here and say, you know, looking like some of the traditional secondary cardiac endpoints that adult heart disease has been looking at for a long time, ejection fraction and volumes. John Sotlo published a beautiful paper in Cirque Research Heart Failure last year, 2023. I just recently read it myself. The talks about DMD cardiomyopathy and guides the regulators towards these very important endpoints. I think it's going to be a dialogue with FDA, but I think it's going to be a winner, and we're hoping to be at the front of that line.
Speaker Change: Okay.
Speaker Change: Joe.
Joe: Really an interesting question and I'm going to go out on a limb here and say you know looking like some of the traditional secondary cardiac endpoints that adult heart diseases, but looking at for a long time ejection fraction and volumes John Zaslow published a beautiful paper and surface search heart failure last year 2023, I just recently read it myself the talks about the <unk>.
Joe: Cardiomyopathy and guide the regulators towards these very important endpoints I think it's going to be a dialogue with FDA, but I think it's going to be a winner and we're hoping to be at the front of that line.
Linda Marbn: Linda, thank you very much. Thank you, Joe.
Joe: Linda Thank you very much.
Joseph Pantginis: Thank you, Joe. It's great talking to you.
Linda: Thank you Joe Great talking to you.
Aydin Huseynov: Thank you once again, ladies and gentlemen. Please press star 1 should you wish to ask a question. Your next question is from Aydin Huseynov from Leidenberg-Talman & Co. Please ask your question.
Speaker Change: Thank you once again, ladies and gentleman. Please press star one should you wish to ask a question.
Speaker Change: Your next question is from Eden <unk> from Ladenburg Thalmann <unk> co. Please ask your question.
Aydin Huseynov: Good afternoon, Linda, and AJ. Congratulations on the progress this quarter. A couple of questions from me. So first, I want to ask you about Cohort B enrollment. It seems to be pretty fast.
Eden: Good afternoon, Linda a J congratulations with the progress this quarter.
Eden: Couple of questions from me.
Eden: First of all want to ask you about the cohort b enrollment and so it seems to be pretty fast.
Aydin Huseynov: I think it mentioned you're going to wrap it up by next month, 44 patients. So could you share with us any feedback related to this apparent enthusiasm of physicians and patients? And also clarify how many, if any, of those patients had prior therapies such as exoskeletal?
Eden: Sure.
Eden: We're going to wrap it up by next month 44 patients. So could you share with us any feedback related to this apparently enthusiasm from physicians and patients and also clarify on.
Eden: How many.
Eden: Any of those patients had.
Eden: Prior therapies such as <unk>.
Linda Marbn: Yeah, so I think the rapid enrollment speaks for itself. Let me just remind you that our patients that we're treating in Cohort A and Cohort B are late-stage ambulance and non-ambulant patients with attenuated upper limb function, as I've mentioned many times. There is nothing for these guys, literally nothing.
Speaker Change: Yeah, So I think the the rapid enrollment.
Speaker Change: Speaks for itself, let me just remind you that our patients that we're treating and cohort <unk> our late stage ambulance.
Speaker Change: And non ambulant patients with the attenuated upper limb function as I've mentioned many times. There is nothing for these guys literally nothing theres not clinical trials and there is no approved therapeutics beyond stair.
Linda Marbn: There are no clinical trials, and there are no approved therapeutics beyond steroids and potentially the exon skippers. So they are very anxious for something to preserve upper limb function. And what I can tell you, and look for me to be talking more and more about this, is that the physician leaders know that what is most important to these boys and young men is the preservation of upper limb function. As I've stated in other scenarios, once they go off their feet, they're pretty tired.
Steroids on potentially the exon skippers so.
Speaker Change: They are very anxious for something to preserve upper limb function and what I can tell you.
Speaker Change: For me to be talking more and more about this is that the.
Speaker Change: The physician leaders know that what is most important to these boys and young men is the preservation of upper limb function as Ive stated in other scenarios once they go off their feet, they're pretty tired they've fallen they've broken bones, there legs are tired, but they do not want to lose the independence of being able to use their smartphones and remote move their wheel.
Linda Marbn: They've fallen, they've broken bones, their legs are tired, but they do not want to lose the independence of being able to use their smartphones or remote controls, move their wheelchairs, transfer themselves to perform bathroom activities and those kinds of things. So really important, and I think that drives the energy.
Speaker Change: Chairs transfer themselves to perform bathroom activities and those kinds of things so really important and I think that drives the energy. In addition to the strong safety profile as it once a quarter infusion. So it is not disruptive to life and the safety profile is great in terms of side effects or implications. So there is a.
Linda Marbn: In addition to the strong safety profile, it's a once-a-quarter infusion, so it's not disruptive to life, and the safety profile is great in terms of side effects or implications. So there is a lot of energy, and we believe that there will be rapid adoption of CAP-1002 by the community once it's approved. The other part of your question was whether we have patients on other therapies in our clinical trials, and the answer to that is absolutely yes.
Speaker Change: A lot of energy and we believe that there will be rapid adoption of <unk> by the community. Once it's approved the other part of your question.
Speaker Change: Was whether we have Ah patients and on other therapies in our clinical trials and the answer to that is absolutely anything that is approved they are allowed to beyond we look for them to be stable on their medications. So that we don't have any opportunity for big big swings in that can be anything from growth hormones.
Linda Marbn: Anything that is approved, they are allowed to be on. We look for them to be stable on their medications so that we don't have any opportunity for big swings, and that can be anything from growth hormones to massive changes in their steroid dose that may not be weight-based, as well as exon skipping. We even have some in our programs that are post-gene therapy, where despite the fact that they received the gene therapy, they still meet our inclusion criteria multiple years later.
Speaker Change: Massive changes in their steroid dose that may not be weight based as well as exon skipping and we even have some in our programs that are posting therapy wear.
Speaker Change: Despite.
Speaker Change: The fact that they've got the gene therapy, they still meet our inclusion criteria multiple years later, so I continue to say and I continue to believe and the payers have supported and some of the initial documents that I've seen the concept that cat <unk> will go along well with any of these other therapeutics with a combined mechanism of action of reduction in inflammation.
Linda Marbn: So I continue to say and I continue to believe, and payers have supported in some of the initial documents that I've seen, the concept that CAP-1002 will go along well with any of these other therapeutics with a combined mechanism of action of reduction in inflammation and reduction in fibrosis.
Speaker Change: Patient and reduction in fibrosis.
Aydin Huseynov: So in other words, FDA would not require additional combination studies if you move it sort of further to the front lines or early ages. The FDA, do you think, would not specifically require combination studies with gene therapy or exome skippers with CAP-10-OTO? No.
Speaker Change: Understood. This yourself so in other words, if Dave would not require additional combination side as GPU, if you move to sort of further.
Speaker Change: Frontlines are early ages.
Speaker Change: Do you think it would not require specifically like a combination study with gene therapies are exon skippers with cap Toyota.
Linda Marbn: No, we're positioning it as an independent or adjunctive therapy, and we've gotten really good feedback on that. I don't think anybody's thinking about it sort of as, you know, do we need to test them both at the same time? It can only help.
Speaker Change: We're positioning it as an independent or adjunctive therapy, and we've got really good feedback on that I don't think anybody is thinking about it sort of is do we need to test them. Both at the same time it can only help.
Aydin Huseynov: Okay. Another question I want to ask you is, could you give us any updates on possible preclinical or preparation work you do as it relates to Baker muscle dystrophy? And also, if you happen to develop CAP1002 in Baker dystrophy, how does it affect your financial relationships with Nikon Shinyaku? I just want to hear your general thoughts.
Speaker Change: Understood. Thank you alright, and last question I want to have.
Speaker Change: Is that.
Speaker Change: Could you give us any update on possible preclinical or preparation work you do as it relates to Becker muscular dystrophy.
Speaker Change: And also if you happen to develop capital too in Becker dystrophy.
Speaker Change: How does it affect your financial relationships with new collection Yahoo.
Speaker Change: Just wanted to hear your general thoughts on this.
Linda Marbn: Yeah, so we're looking at Becker dystrophy as well as other types of neurodegenerative diseases that are characterized by inflammation and fibrosis. As I mentioned in my prepared remarks, we are in a very sweet spot because we have strong efficacy, we have potency assays that reflect our mechanism of action, and we have a manufacturing paradigm that is plug and play and can be expanded to suit. So we are ripe and ready to take this therapy to other people that could need or benefit from it, Becker dystrophy being one of them.
Speaker Change: Yes, so we're looking at Becker dystrophy, as well as other types of neuro degenerative diseases that are characterized by inflammation and fibrosis as I mentioned in my prepared remarks, we are in a very sweet spot because we have strong efficacy we have potency assays that reflect our mechanism of action and we have the manufacturing paradigm that is.
Speaker Change: And play and can be expanded to suit. So we are ripe and ready to take this therapeutic to other people that could need or benefit from it above backer dystrophy being one of them. Obviously the advantage of Becker muscular dystrophy is it's very similar disease progression to Duchenne just significantly slowed and once we get.
Linda Marbn: Obviously, the advantage of Becker muscular dystrophy is it's very similar disease progression to Duchenne, just significantly slowed. And once we get across the line and potential indication expansion for CAP Center 2 and Duchenne muscular dystrophy, that becomes a very tangible opportunity as well. In addition, you know, Nipunshin Yakuman has rights to Duchenne muscular dystrophy marketing and distribution. No other indications have been presumed or mentioned in that deal.
Speaker Change: <unk> line and a potential indication expansion for captain or two in Duchenne muscular dystrophy that becomes a very tangible opportunity as well in addition.
Speaker Change: Nick mentioned Yaacov IAF has rights to Duchenne muscular dystrophy marketing and distribution.
Speaker Change: No other indications have been presumptive or mentioned in that deal. So we have freedom to operate and plan to do so as we expand cap 10 or two just to highlight I spent 19 years developing this therapeutic and so we know it and we know it very well and we want to see it and as many people that can benefit from it as possible.
Linda Marbn: So we have freedom to operate and plan to do so as we expand CAP Center 2. Just to, you know, highlight, I've spent 19 years developing this therapy, and so we know it, and we know it very well. And we want to see it in as many people that can benefit from it as possible. Thank you.
Aydin Huseynov: Thank you. Thank you. I appreciate the updates and congratulations for the quarter.
Speaker Change: Thank you. Thank you I appreciate the updates and congratulations for the quarter.
Speaker Change: Thanks.
Speaker Change: Yes.
Operator: Thank you. There are no further questions at this time. I will now hand the call back to Capricor's management team for the closing remarks.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I wonder how to call back to the cap of course management team for the closing remarks.
Linda Marbn: I just want to thank everyone who joined us this afternoon. We appreciate your continued support. I also want to congratulate Pat Furlong of the Parent Project of Muscular Dystrophy, who last week was awarded the Sonia Scarlatus Award for the American by the American Society of Cell and Gene Therapy for public service. It goes without saying that without these advocates that bring rare diseases to our attention, there is very little that is done to move them forward. So congratulations to Pat, and we look forward to seeing you out and about at the meetings. Have a wonderful day!
Speaker Change: I just want to thank everyone, who joined US this afternoon.
Speaker Change: Appreciate your continued support I also want to congratulate Pat furlong up the parent project muscular dystrophy last week was awarded the Sonya Scarlata Award for the American by the American Society of cell and gene therapy for public service. It goes without saying that without these advocates that bring rare disease to our attention there.
Speaker Change: A little of that is done to move them forward. So congrats to Pat and we look forward to seeing you out and about at the meeting have a wonderful day.
Speaker Change: Okay.
Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining us. You may all disconnect.
Speaker Change: Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.