Q1 2024 BioRestorative Therapies Inc Earnings Call

Good afternoon, everyone and welcome to the buyer restorative therapies Q1 business update conference call.

Operator: Good afternoon, everyone, and welcome to the Biorestorative Therapies Q1 Business Update conference call. At this time, all participants are in a listen-only mode, and we will open the call for questions following the presentation. If anyone should require operator assistance during this conference, please press star zero on your phone. Please note this conference is being recorded. I will now turn the conference over to your host, Steve Kelmer, Investor Relations. Steve, the floor is yours

At this time all participants are in a listen only mode. How we will open for questions. Following the presentation. If anyone should require operator assistance. During this conference. Please press star zero on your phone keypad. Please note. This conference is being recorded I will now turn the conference over to your highest Steve Kilmer Investor.

Speaker Change: Relations, Steve the floor is yours.

Steve Kilmer: Thank you Jenny and good afternoon, everyone. Let me start by pointing out that this conference call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Steve Kelmer: Thank you, Jenny. Good afternoon, everyone.

Steve Kelmer: Let me start by pointing out that this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on BiORestorative's current beliefs, assumptions, and expectations, and such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. For details on factors, among others, that could affect expectations, see Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission.

Steve Kilmer: All forward looking statements are based on <unk> current beliefs assumptions and expectations and such statements involve known and unknown risks uncertainties and other factors that may cause actual results performance or achievements to be materially different from those implied by such statements.

Speaker Change: No forward looking statement can be guaranteed.

C: For details on factors among others that could affect expectations C. Part one item one a of our annual report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission.

Steve Kelmer: Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference. IORestorative undertakes no obligation to publicly update or revise any forward-looking statement. Whether as a result of new information, future events, or otherwise, other than as required by law. On the call representing the company are Lance Altstadt, BioRestorative's Chief Executive Officer, Francisco Silva, our Vice President of Research and Development, and Robert Crystal, the company's Chief Financial Officer. With that said, I'll now turn the call over to Lance.

C: Those are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this conference call.

C: IRA startup undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise other than as required by law.

Speaker Change: On the call representing the company are Lance I'll start borrowers startups, Chief Executive Officer Francisco Silva, Our Vice President of research and development and Robert Crystal The company's Chief Financial Officer.

Lance: With that said I'll now turn the call over to Lance.

Lance Armstrong: Thank you, Steve and good afternoon, everyone and welcome to our inaugural comp quarterly conference call.

Lance Altstadt: Thank you, Steve, and good afternoon, everyone, and welcome to our inaugural quarterly conference call. On behalf of the management team and everyone at Biorestorative, I'd like to thank you for your interest in our company. And for those of you who are shareholders and analysts, we appreciate your support. We've come a long way since our very beginnings, now with two active programs in development and a commercial line of business that is very well positioned for growth and on the verge of really making an impact on our operations. With that in mind, I'd like to ask Francisco Silva, VP of Research and Development, to provide an overview and an update on our business line.

Speaker Change: On behalf of the management team and everyone at bio restorative I'd like to thank you for your interest in our company and for those of you who are shareholders and analysts. We appreciate your support.

Management team: We as a company we've come a long way since our very beginnings now with two active programs in development in our commercial line of business that is very well positioned for growth and on the verge of really making an impact on our operations.

Management team: With that I'd like to ask Francisco Silva VP of research and development to provide an overview and an update on our business lines.

Francisco Silva: Thanks Lasse.

Francisco Silva: For the benefit of those who are new to the BIORestorative story, and since this is our first ever quarterly investor call, I would like to take the moment to briefly describe our clinical BRTX program and our preclinical thermostem as well as our pipeline program. Our lead cell therapy candidate, BRTX100, is a novel cell-based therapeutic that's engineered to target areas of the body that have little blood flow. The product is formulated from autologous, or a person's own cultured mesenchymal stem cells that are collected from the patient's bone marrow.

Francisco Silva: So the benefits of those who are new to the virus started story and since this is our first ever quarterly investment call Investor call.

Francisco Silva: Would like to take a moment to briefly describe our clinical byard checks.

Francisco Silva: Program and our preclinical so most of them as well as our pipeline programs.

Speaker Change: Our lead cell therapy candidate Eurochecks 100 is a novel cell based therapeutic that is engineered to target areas of the body to have little blood flow.

unknown: Product is formulated from autologous, so a person's own cultured mesenchymal stem cells that are collected from the patients bone marrow.

Francisco Silva: We intend that the product will be used for the non-surgical treatment of painful lower back pain, disc disorder, or as a complementary therapy to potentially surgical procedures. The safety and efficacy of DRTX100 in treating chronic lumbar disc disease, or CLDD, are being evaluated in an ongoing Phase II prospective randomized double-blinded and controlled study, wherein a total of 99 eligible patients or subjects will be enrolled at up to 16 clinical sites in the United States.

Speaker Change: We intend that the product will be used for the nonsurgical treatment of painful a lower back pain this disorder, whereas a complementary therapeutic to potentially surgical procedures.

Speaker Change: The safety and efficacy of D. R. T X 100 in treating chronic lumbar disc disease or C. L. D. D is being evaluated in an ongoing phase two prospective randomized double blinded uncontrolled study wearing a total of 99 eligible patients or subjects will be enrolled at up to 16 clinical sites in the United States.

Speaker Change: Subjects included in the trial will be randomized two to one to receive either be our T X 100, or placebo, which is a sham injection.

Francisco Silva: Subjects included in the trial will be randomized two-to-one to receive either BRTX100 or placebo, which is a sham injection. In our core preclinical metabolic program, ThermoSTEM, we are developing a cell-based therapy candidate to target obesity and metabolic disorders using brown adipose tissue or fat. These fat-derived stem cells, or BADCs, generate brown adipose tissue, or BAD, as well as exosomes secreted from the BAD.

Francisco Silva: That is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans and are involved in weight. Previous published peer-reviewed data, and preclinical data from a study conducted in collaboration with the University of Utah School of Medicine demonstrated that functional brown adipose-derived stem cells, formulated using our pattern and thermostat platform, produce significant reductions in weight consistent with losses observed and achieved by GLP-1 drugs and decreased blood glucose levels in diet-induced obesity models in mice.

Dermis: In our core preclinical metabolic program Dermis, then we are developing a cell based therapy candidate to target obesity and metabolic disorders, using brown adipose tissue or fat.

Francisco Silva: It is also important to note that although further work is needed to fully understand the mechanisms of action of ThermoSTEM and its impact on weight loss, we have not seen, nor do we expect, the same negative secondary effects of GLP-1 pharmaceuticals, such as a loss of muscle mass and negative cardiovascular effects. We have achieved significant milestones in both of these core development programs over the past few weeks.

Dermis: These factors drive stem cells or bad V. A S E T generally brown adipose tissue or bad as well as exosomes secreted from the badass.

unknown: That is intended to mimic naturally occurring brown adipose depots that are regulated metabolic homeostasis in humans and is involved in weight loss.

Speaker Change: Previously published peer reviewed data preclinical data from a study conducted in collaboration with the University of Utah School of Medicine demonstrated that functional brown adipose derived stem cells formulated using her pattern in derma skill platform produced significant reductions in weight consistent with losses observed.

Speaker Change: Achieved by G. L P. One drugs.

Speaker Change: And decreased blood glucose levels in diet induced obese models in mice.

Speaker Change: It is also important to note that although further work is needed to fully understand the mechanism of action of thermostats and its impact on weight loss, we have not seen nor do we expect the same negative secondary effects of G. O P. One pharmaceuticals, such as the loss of muscle mass and negative cardiovascular.

Speaker Change: Thanks.

Speaker Change: We have achieved significant milestones in both of these core development programs over the past few weeks.

Francisco Silva: With respect to BRTX100, the first of those was a presentation describing preliminary 26- and 52-week blinded data from an ongoing Phase II clinical trial at the Orthopedic Research Society Annual Meeting this past February. Again, although the data is blinded, we have observed a very positive trend in patients who have already completed 52 weeks of treatment and have not experienced adverse or severe events, adverse events that significantly impact our dosing or overall study design. In addition, at 52 weeks post-treatment, we have observed subjects who have already met the threshold of 30% improvement in function and a 30% reduction in pain. This is quite exciting and positive.

Speaker Change: With respect to be on T. X 100, the first of those was the presentation, describing preliminary 26, and 52 week blinded data from our ongoing phase II clinical trial.

Speaker Change: At the Orthopedic Research Society annual meeting this past February.

Speaker Change: Again, although the data is blinded we have observed a very positive trend wound patients who have already completed 52 weeks post treatment had not experienced adverse or severe events adverse events that significantly impact our dosing or overall study design. In addition at 52 weeks.

Speaker Change: Post treatment, we have observed subjects, who have already met the threshold of 30% improvement in function and a 30% reduction in pain. This is quite exciting and positive. We're confident thing addition to meeting our primary safety endpoints. We will also meet our secondary efficacy targets.

Francisco Silva: We are confident that in addition to meeting our primary safety endpoints, we will also meet our secondary efficacy targets. More recently, in April, the FDA cleared an important amendment to our Phase 2 study protocol, which removes saline injections in the control arm of the study and replaces them with a sham injection. Control patients will now have a needle placed in close proximity to the target disc, but the disc will not be pierced, nor will any staining be injected into it.

FDA: More recently in April the FDA cleared the important amendment to our phase two study protocol, which remove saline injection in the control arm of this study and replaces it with a sham injection control.

Speaker Change: Control patients will now have a needle placed in close proximity to the target this but the disk will not be peers, nor will have any ceiling injected into it. We believe this change brings additional safety to our subject participants and helps preclude the possibility of transient clinical outcomes in the control groups, which can impair.

Francisco Silva: We believe this change brings additional safety to our subject participants and helps preclude the possibility of transient clinical outcomes in the control groups, which can impact the end-of-study readouts in trials like this. It is well established that saline can rehydrate the disc and create a change in the disc microenvironment.

Dr. Smith: At the end of study Readouts in trials like this it is well established that sale can read heidrick, the disc and create a change in the disc microenvironment. This change although changes may result in short term pain relief.

Francisco Silva: This change, although transient, may result in short-term pain relief. We are very pleased that the FDA has agreed to this amendment, as when we release the final trial results of our Phase II trial, the data will be a true comparison of patients who have received BRTX100 and those who have not. Clinical trials are very complex, and study design is critical, and traditional pharmaceutical models for drug approval are well-established and integrated well within the capital market timeline. However, this isn't always true for cell-based therapies. With that in mind, we have been carefully gauging our risk-reward and have diligently taken steps to ensure timely enrollment without compromising data that impacts our product approval.

FDA: We are very pleased that the FDA has agreed to this amendment as well we released final trial results of our phase two trial. The data will be a true comparison of patients who have received B R. T X 100, and those who have not.

FDA: Clinical trials are very complex and study design is critical and traditional pharmaceutical models for drug approval are well established and well integrated well within the capital market timelines.

Speaker Change: However, this isn't always true for cell based therapies with that in mind, we have been carefully gauging our risk reward and have diligently taken steps to ensure timely enrollment without compromising data that impacts our product approval.

Speaker Change: We have kols across the United States participating in the trial and along with our patient recruitment group part of our social media outreach. We are confident we will be able to fully enroll before the end of 2024 without compromising our study design and the results.

Francisco Silva: We have KOLs across the United States participating in our trial, and along with our patient recruitment group targeting social media outreach, we are confident we will be able to fully enroll before the end of 2024 without compromising our study design and results. Shifting now to our patent-tense thermostem platform, we are pleased to announce just a week of development of a novel exosome-based biologic program targeting obesity. Exosomes are small exocellular vesicles created by various cells, including stem cells.

Speaker Change: Shifting out to our patent tense thermos stem platform. We're pleased to announce just a week the development of our novel extra selling days in biologic program targeting obesity.

unknown: Extra songs are small extra serve ethical C created by various cells, including stem cells.

Francisco Silva: They are understood to be important mediators of intracellular communication and have been found to play a role in adipose metabolism by transporting cargo, such as non-coding RNAs, proteins, and other factors that may impact weight loss. This new therapeutic candidate has potential to serve as an adjuvant to existing weight loss drugs, potentially allowing for lower doses as well as the prevention or minimization of possible loss of muscle mass and negative cardiovascular effects.

unknown: They are understood to be importing mediators of interest cellular communication and then been found to play a role in adipose metabolism by transporting cargo. So just non coding RNA proteins and other factors that may impact of weight loss.

Speaker Change: This new therapeutic cabinet has potential to serve as an adjuvant to existing weight loss drugs potentially allowing for lower dosing as well as the prevention or minimization of parcel a possible loss of muscle mass and negative cardiovascular effects.

Speaker Change: Importantly, our thermal stem platform has a comprehensive portfolio of issued patents that cover both U S and international markets. We believe that broad intellectual property portfolio can be leveraged across drugs that are currently approved and marketed for weight loss potentially opening the door to future big pharma partnerships.

Francisco Silva: Importantly, our Thermostem platform has a comprehensive portfolio of issued patents that cover both U.S. and international markets. We believe this broad intellectual property portfolio can be leveraged across drugs that are currently approved and marketed for weight loss, potentially opening the door to future big pharma partnerships for the company. We currently anticipate initiating a formal FDA process for this thermostat-based therapeutic candidate by filing a drug master file in the third quarter of 2024, and we currently aim to initiate first in human clinical studies before the end of the year.

Speaker Change: For the company.

Speaker Change: We currently anticipate initiating a formal FDA process for the thermostat based therapeutic candidate by filing a drug master file in the third quarter of 2024.

Speaker Change: And we currently aim to initiate first in human clinical studies before the end of the year.

Francisco Silva: Our DMF plan is strategic in that it gives us a basis for others interested in leveraging our platform technology to initiate human clinical studies or pursue straight-to-market opportunities. There are a number of countries in which cell-based therapies have been approved and are currently in the commercial phase. We have begun initial conversations for partnership and license activities, which may accelerate the commercialization of our technology pipeline. To summarize, we are committed to and diligently pursuing our Phase 2 trial for BRTX100, our lead clinical candidate, targeting chronic lumbar disc disease.

Speaker Change: Our planned DMF is strategic and that it gives us a basis for others interested in leveraging our platform technology to initiate human clinical studies or pursue straight to market opportunities.

Speaker Change: There are a number of countries in which cell based therapies have been approved and are currently in commercial phase.

Speaker Change: We have begun initial conversations for partnership and licensing activities, which may accelerate the commercialization of our.

Speaker Change: Technology pipeline.

Speaker Change: To summarize we are committed to and diligent prosecuting our phase II trial for <unk> T X 100, our lead clinical candidate targeting chronic lumbar disc disease.

Francisco Silva: We have added a new therapeutic candidate targeting obesity via our ThermoSTEM platform, and we have commercialized our technology with an agreement with our partner, Corteza, in the biocosmeceutical market. We expect that our next phase will be to explore the commercialization of our pipeline in the international market. Now, I will turn the call over to Lance.

Speaker Change: We have added a new therapeutic candidate targeting obesity via a thermostat platform and we have commercialized our technology with an agreement with our partner Cortez in the bio Kosmos suitable markets.

Lance Altstadt: Thank you so much, Francisco. Nice job.

Speaker Change: We expect that our next phase will be to explore the commercialization of our pipeline.

National markets: National markets now.

National markets: Now I will turn the call over to Lance.

Lance Armstrong: Thank you so much Francisco nice job as we as we can see from what Francisco just reviewed we have an exciting and productive start to the year and we have multiple potential value enhancing inflection points ahead of us I often describe this as a period or a rich fundamentals.

Lance Altstadt: As we can see from what Francisco just reviewed, we have had an exciting and productive start to the year, and we have multiple potential value-enhancing inflection points ahead of us. I often describe this as a period or a rich fundamental catalyst environment for the company. Not the least of that positive momentum should come from our entering into a transformative commercial agreement with Cartessa, a well-recognized and respected leader in the medical aesthetics technology space.

Francisco Silva: <unk> environment for the company not the least of that positive momentum should come from our entering into a transformative commercial agreement with car tests, Oh, well recognized and respected leader in the medical aesthetics technology space.

Lance Altstadt: This is an enormous and rapidly growing sector of the market in which we're developing a significant presence through this partnership. The goal is to combine our deep cell-based biologics experience and formulation and clinical manufacturing expertise with CARTESA's extensive professional aesthetics, market reach, and marketing and distribution capabilities. As part of the exclusive five-year agreement, we have agreed to supply significant preset minimum quantities of finished vials of our current cell-based biologic commercial product to CARTESA annually under CARTESA's Kronos ExoCR trademark.

unknown: This isn't an enormous and rapidly growing sector of the market in which we're developing a significant presence through the partnership with <unk>.

car tests: <unk> is to combine our deep cell based biologics experience and formulation in clinical and manufacturing expertise with car test has extensive professional aesthetics market reach and marketing and distribution capabilities as part of the exclusive five year agreement, we have agreed to supply significant preset minimum quantities.

Francisco Silva: The finished vials of our current cell based biologic commercial product to car test that annually as private label under car test as Kronos XO see our trademark this product formulated and manufactured by us using our G. M. P. ISO seven certified clean room is compromised.

Lance Altstadt: This product, formulated and manufactured by us using our GMP ISO 7 certified clean room, is comprised of a cell-based secretome containing exosomes, proteins, and growth factors. Francisco's team has done an amazing job engineering this proprietary biologic serum to reduce the appearance of fine lines and wrinkles as well as to bring forth other areas of cosmetic effectiveness. We won't get into the details of the financial impact of the partnership at this stage.

Francisco Silva: Cell based secret home containing exosomes proteins and growth factors Francisco. The team has done an amazing job and engineered with proprietary biologic CRM to reduce the appearance of fine lines and wrinkles as well as to bring forth other areas of cosmetic effectiveness, we won't get into the details of the <unk>.

Francisco Silva: <unk> impact of the partnership at this stage. However, we can say that the revenues are expected to be very significant and that the margin profile is consistent with a drug which will combine to produce meaningful cash flow for operations.

Lance Altstadt: However, we can say that the revenues are expected to be very significant and that the margin profile is consistent with a drug, which will combine to produce meaningful cash flow for the operation. So, really, to summarize, the preliminary clinical data from our ongoing Phase 2 clinical trial of BRTX100 in CLDD showed very meaningful signals in patients enrolled in the study, and importantly, no notable safety signals. The FDA recently cleared an important amendment to the study protocol replacing saline injection with a sham injection in the control arm.

Speaker Change: So really to summarize the preliminary clinical data from our ongoing phase III clinical trial of <unk> T X 100, and C. L. D. D showed very meaningful signals in patients enrolled in the study and importantly, no notable safety signals.

Speaker Change: The FDA has recently cleared an important amendment to the study protocol, replacing saline injection with a sham injection in the control arm patient recruitment in the study is going very well and we expect to complete enrollment before the end of 'twenty 'twenty four we will present more data from this trial with a larger piece.

Lance Altstadt: Patient recruitment in the study is going very well, and we expect to complete enrollment before the end of 2024. We will present more data from this trial with a larger patient population throughout the year, so we should expect that. And we are very optimistic that this data will be consistent with the previous trend. Off the heels of very strong data from our preclinical animal study in obesity, we have enhanced our preclinical metabolic program with a novel exosome-based therapeutic candidate targeting obesity with plans to initiate a first in human study later this year.

Speaker Change: <unk> population throughout the year. So we should expect that and we are very optimistic that this data will be consistent with the previous trends.

Car Tessa: Off the heels of a very strong data from our preclinical animal study and obesity, we have enhanced our preclinical metabolic program with a novel excess film based therapeutic candidate targeting obesity with plans to initiate a first in human study later this year, our strategic agreement with car Tessa.

Lance Altstadt: Our strategic agreement with CARTESA serves to validate our biocosmeceutical platform and represents a transformative step towards building a strong commercial engine capable of supporting profitable growth while also helping fund the continued advancement of BRTX-100 and Thermostem for obesity. We ended this quarter in a very strong financial position with cash, cash equivalents, and marketable securities of $16.4 million as of March 31st, 2024. And we look forward to what these programs will yield going forward. So, thank you. And with that, concluding our introductory remarks, we're happy to take any questions you may have, Operator.

Dr. T: Serves to validate our buyout kosmos suitable platform and represents a transformative step towards our building a strong commercial engine capable of supporting profitable growth. While also helping fund the continued advancement of Dr. T X 100, and thermo stem for obesity. We ended this quarter are in a very.

Car Tessa: Strong financial position with cash cash equivalents in marketable securities of $16 4 million as of March 31 2024.

Car Tessa: And we look forward to to what these programs will yield going forward. So thank you and with that concluding our introductory remarks, we're happy to take any questions you may have.

Car Tessa: Operator.

Operator: Thank you very much. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. If you are using any speaker equipment, it might be necessary to pick up your handset before you press the keys.

Operator: Thank you very much at this time, we will be conducting a question answer session. If you would like to ask a question. Please press star one on your phone keypad now how come.

Operator: Formation time will indicate that your line is Nicky you May press star two if you would like to remove your question from Nicky. If you are using speaker equipment, he might be necessary to pick up your handset before you buy stickies. Please wait a moment off the poll for questions.

Michael <unk>: Thank you. Your first question is coming from Michael <unk>, who knew which of the Max isn't great. Michael Your line is live.

Operator: Please wait a moment while we poll for questions. Thank you. Your first question is coming from Michael Akunovic of The Maxim Group. Michael, your line is live. Hey guys.

Michael Akunovic: Hey guys, thank you so much for taking my question and congrats on some really great progress this quarter. Thanks Michael. So, I guess to kick things off, I'd like to see if you could discuss some of the advantages in a bit more detail of using an exosome-based product for the obesity program as compared to implantable brown adipose tissue stem cells.

Michael <unk>: Hey, guys. Thank you so much for taking my question and congrats on some real great progress this quarter.

Michael <unk>: Thanks, Michael.

Michael <unk>: So I guess to kick things off but I'd like to see if you could discuss some of the advantages in a bit more detail of using an excess AUM base product for the obesity program as compared to the implantable ran adipose tissue stem cells.

Michael <unk>: Yes.

Francisco Silva: That's a good question, Michael. So, again, we still have to do further animal work to test the comparability of one and the other, but there's a significant advantage to potentially using exosomes over cell-based therapy, not just in terms of cost and being able to implant them. If you recall, there's a company, BioSite, when they were doing their studies for type 1 diabetes. When using embryonic-derived pancreatic islets, they had to encapsulate them, put them into the encapsulation device, and then implant that, which resulted in foreign body responses, immune responses that targeted the area, and really caused a systemic inflammatory response in the host.

Michael <unk>: That's a good question Michael So I mean again, we still have to do further animal work to test the comparability.

Michael <unk>: Of one or the other but.

Michael <unk>: But there's a significant advantage to potentially using your exit films over the cell based or.

Michael: Not just in terms of cost.

Speaker Change: And being able to implant it.

Speaker Change: If you recall.

Speaker Change: There's.

Speaker Change: Company via site when they were doing there.

Speaker Change: Our studies for type one diabetes.

Speaker Change: When using embryonic derived pancreatic islet.

Speaker Change: They had to encapsulate them put them into the encapsulation device and then an implant that which resulted in foreign body responses immune responses that targeted the area and.

Speaker Change: Really caused the systemic inflammatory response into the host.

Francisco Silva: So, exosomes would potentially avoid that because there is no encapsulation needed. The exosomes are basically delivering the messages that the cell would make in order to communicate with other brown tissue or white adipose tissue or to other organs that are involved in metabolic homeostasis. So, essentially, the exosome kind of takes out the cell component of it. There are no known immune responses that can potentially occur by using the exosomes versus the cells. From a cost perspective, it's probably cheaper to make. There's less manufacturing, and less downstream engineering. So there are significant advantages, and so we're pretty excited about the program that we have.

Speaker Change: Extra songs would potentially avoid that because there is no encapsulation need it.

unknown: Yet the Exosomes are basically delivering the message is that the cell would make in order to communicate with other brown tissue or white adipose tissue.

unknown: One or two other organs.

Speaker Change: We're involved in and metabolic homeostasis.

Speaker Change: So essentially the exit so I'm kind of takes out the cell component to it there's no.

Speaker Change: Known immune response shares that Canada potentially occur by using the exosomes versus versus the cells.

Speaker Change: From a cost perspective, it's it's probably cheaper to make.

Speaker Change: There's less less manufacturing less downstream engineering.

Speaker Change: So there's a significant advantages and so we're pretty excited about the program that we have.

Lance Altstadt: I would also chime in that from a regulatory pathway, it may be less convoluted just given that there isn't a third-party piece of equipment or scaffold, if you will, or device that would encapsulate the cells here. It would be the exosomes that would be, you know, directly implanted either through a variety of different mechanisms. So from a regulatory perspective, it could be, you know, a more-clean protocol, so to speak.

Speaker Change: I would also chime in that from a regulatory pathway may be less convoluted just given that there isn't a third party a piece of equipment or scaffold, if you will or or or.

Speaker Change: Device that would encapsulate the cells here it would be the extra films that would be you know directly implanted.

Speaker Change: Either through.

Speaker Change: Through a variety of different mechanism. So from a from a regulatory perspective. It could be you know a more cleaner protocol so to speak.

Speaker Change: Yeah.

Francisco Silva: Can you talk a little bit about some of the mechanistic differences between a brown adipose-derived platform and the existing therapies we have out there in obesity? Specifically, what would position it to be effective as an adjuvant to those treatments?

Speaker Change: Could you talk a little bit about some of the mechanistic differences between a brown adipose derived.

Speaker Change: <unk> platform and the existing therapies, we have out there in obesity are specifically what would position it to be effective as an adjuvant to those treatments.

Speaker Change: So.

Francisco Silva: So, GLP-1 pharmaceuticals also interact with brown fat, and that's part of what's involved in the mechanism of action of losing weight and increasing your metabolism. So, it does interact with actual brown fat tissue that's native to humans. What we could potentially do by working as an adjuvant is that it's been demonstrated that when you activate brown fat, secondary effects are increased, positive outcomes in terms of your cardiac function, cardiovascular function, or pulmonary function.

Speaker Change: <unk> Oh one.

Speaker Change: Suitable they also interact with the Brown fat and that's part of what's involved in the in the mechanism of action of losing weight and increasingly on the tablet. So they it does interact with actual brown fat tissue that is native to humans.

Speaker Change: What we can potentially do by working as an adjuvant is that its been demonstrated that when you activate brown fat secondary effects or increase.

Speaker Change: Positive outcomes in terms of like your cardiac function or cardiovascular function or pulmonary function.

Francisco Silva: And this has been shown in significant studies in animal models, where they've been documenting activation of brown fat and results in positive cardiovascular outcomes. So, the idea here would be to potentially lower the dosage of GLP-1 in the patient and combine it with our ThermoSTEM platform, thereby decreasing the potentially secondary negative effects that are seen at current dosages, which are loss of muscle mass and negative cardiovascular effects.

Speaker Change: And this has been shown in significant studies in animal models, where they they've been documenting the activation of brown fat and results in a positive cardiovascular output.

Speaker Change: So the idea here would be to potentially lower the dosage put tens of G. L. P. One.

Speaker Change: And taken the patient combine it with.

unknown: Our thermal stent platform.

Speaker Change: Thereby decreasing the potentially secondary negative effects that are seeing a current dosages, which are lots of muscle mass and negative cardiovascular effects.

Speaker Change: Alright. Thank you and then just one more on the ongoing phase II could be our T X 100.

Michael Akunovic: All right. Thank you.

Speaker Change: But do you have any thoughts on how long patients would need to be in the study for to make sense for you to do a larger I would assume blinded read.

Lance Altstadt: And then just one more on the ongoing Phase 2 for BRTX100. Do you have any thoughts on how long patients would need to be in the study for it to make sense for you to do a larger, I assume, blinded read? Would you anticipate that you would be only showing patients after they've been on treatment for six months or longer, or would a shorter duration still make sense?

Speaker Change: What do you anticipate that you would be only showing.

Speaker Change: Patients after they've been on treatment for <unk>.

Speaker Change: Six months or longer or shorter duration still makes sense.

Speaker Change: I mean I think.

Lance Altstadt: I mean, I think there's no, if you'd like, yeah, I was going to say there's no, there's no hard and fast rule. But if you're asking if 6 months too soon, I would say it is.

Speaker Change: There is no.

Speaker Change: If you'd like.

Speaker Change: Yeah, I was going to say, there's no there's no hard and fast rule, but if you're if you're asking is six months too soon I would say it is and and and our feeling is by the time, we enroll all 99 patients you know we're gonna have a significant bolus of patients that have already been treated for a year. So we want to really understand.

Lance Altstadt: And our feeling is, by the time we enroll 99 patients, we're going to have a significant bolus of patients that have already been treated for a year. So, we want to really understand how many of those patients are somewhere between six months and a year and see if it's worth exploring the possibility of sacrificing some alpha for, you know, an earlier reveal of the data and presenting it to the FDA.

Speaker Change: And how many of those patients are somewhere between six months to a year and see if its worth exploring the possibility of sacrificing some alpha for you know an earlier reveal of the data and presenting to the FDA. So it's it really is it's a couple of different fab.

Lance Altstadt: So, really, it's a couple of different factors that are driving an ultimate decision. It's somewhere between, you know, what's the time frame of how many patients are between six months and a year. And, you know, what obviously those results look like. But, I think anything less than six months is-could potentially be a bit askew, but now that we have the sham injection, you know, I think what we're talking about is a shorter period of time that could take a hold in terms of getting to a, you know, cleaner result from a results perspective.

Speaker Change: Actors that are driving an ultimate decision. It's it's somewhere you know whats the timeframe of how many patients are you know between six months and a year and and you know what obviously do those results look like but I think anything less than six months is could potential.

unknown: It would be a bit of SKU, but now that we have the sham injection you know I think what we're talking about is a shorter period of time could take could take a hold.

Speaker Change: In terms of getting to a you know a cleaner result from from a results perspective.

Speaker Change: Alright, Thank you very much for taking my questions today.

Michael Akunovic: All right, thank you very much for taking my questions today.

Michael: Thanks, Michael.

Jonathan Ashoff: Thanks, Michael. Thank you very much. Your next question is coming from Jonathan Ashoff of Roth MKM. Jonathan, your line is live.

Michael: Thanks, Michael Thank you very much your.

Michael: Your next question is coming from Jonathan Aschoff of Ralph M can Jonathan your line is life.

Jonathan Ashoff: Thank you very much. Hi there.

Jonathan Aschoff: Hey, John much.

Speaker Change: Hi, there I know that you don't want to talk about.

Jonathan Aschoff: Revenue from the Kosmos theoretical area, but I do have a question you know do you think that the purchase minimums with the clients you know could give you enough cash to fund the company to the final top line phase two data.

Lance Altstadt: I know that you don't want to talk about revenue from the cosmeceutical area, but I do have a question. Do you think that the purchase minimums with the clients could give you enough cash to fund the company for the final top line phase in two days?

Speaker Change: You know we were we're not I'm talking about where that gets too because the margin is obviously something that we would need to reveal but I would say that you know this is a significant revenue line.

Lance Altstadt: You know, we're not talking about where that gets to because the margin is obviously something that we would need to reveal. But I would say that, you know, this is a significant revenue line in the millions of dollars we're talking about without being specific. And we're looking at a margin profile that's consistent with pharma drugs from a gross margin perspective. So, you know, we think that's a significant offset relative to where we are today and the dependence that we've been required to access the capital markets. So we think this is going to provide us with a really good amount of financial flexibility.

Speaker Change: You know in the millions of dollars, we're talking about without being specific and we're looking at a margin profile, that's consistent with pharma pharma drugs.

Speaker Change: From a gross margin perspective. So you know, we we think that that's a significant offset relative to you know where we are today and the dependence that we've been required to access the capital markets. So we think this is going to provide us with.

Speaker Change: A a really good amount of financial flexibility.

Lance Altstadt: Okay, and I know that you have said before that Northwell could be an enormous, if not the entirety of, you know, Phase II enrollment just based on their capacity. You know, have they started enrolling and treating patients?

Speaker Change: Okay, and I know that you have said before that north well you know it could be a enormous if not the entirety of phase III enrollment just based on their capacity.

Speaker Change: Have they started enrolling and treating patients.

Lance Altstadt: They have and we're very pleased with the results coming from them in terms of the quality of patients and how well they know their patients.

Lance Altstadt: They have, and we're very pleased with the results coming from them in terms of the quality of patients and how well they know their patients. You've got to be careful also not to depend on one particular facility, because we do want this, you know, sample of sites across the country. But we're very pleased with their output, and we're working very closely with them. We think that's a relationship that goes well beyond the clinical work that we're doing, and we'll hopefully be in a position to talk about that down the road.

Speaker Change: You got to be careful also not to depend on one particular facility because we do want this sample of sites across the country.

Speaker Change: But we're very pleased with their output and we're working very closely with them. We think that's a relationship that goes well beyond the typical the clinical work that we're doing.

Speaker Change: And and will hopefully be in a position to talk about that down the road, but but for now we're very pleased with their output and we have as such dedicated resources from a recruitment and marketing standpoint to those sites in order to give them the assistance that they need.

Lance Altstadt: But for now, we're very pleased with their output, and we have, as such, dedicated resources from a recruitment and marketing standpoint to those sites in order to give them the assistance that they need to be a big component of the recruitment process.

Speaker Change: Need to to be a big component of the recruitment process.

Lance Altstadt: And can you remind us what fraction of the total sites these sites at Northwell represent?

Lance Altstadt: And can you remind us what fraction of the total sites the sites at North will represent.

Lance Altstadt: Uh... well, they're one.

Operator: Well they are one of 2016.

Lance Altstadt: Hum.

Lance Altstadt: And lastly, you know, what was your... But within Northwell, Jonathan, just to be clear, within Northwell, they have, you know, a variety of different offices that all bubble up with their patients, their musculoskeletal and orthopedic patients, that they access across the platform that we're talking about, but they still count as one site.

Jonathan Ashoff: And lastly, you know what question, but within but within but within north well, Jonathan just to be clear within north well. They have you know a variety of different offices that that all bubble up with their patient, they're they're they're they're they're muscular skeletal and orthopedic patients that are there.

Lance Altstadt: It still counts as one site, even though there are multiple offices.

Lance Altstadt: <unk> access across the across the platform.

Jonathan Ashoff: So we're talking about is one site.

Lance Altstadt: Silicon, there's one side, even though there are multiple offices.

Lance Altstadt: Okay, so I was curious about the Galen partnership. You know, what was your expected enrollment pace, you know, with versus without?

Lance Altstadt: Okay. So I was just curious about the data in.

Jonathan Ashoff: A partnership you know what was your current expected enrollment pace now with verses without them.

Lance Altstadt: Well, you know, once we cleared DSMB and it became open, our hope would be just to accelerate because, you know, the sooner the better. Every month that goes by is obviously, you know, we want to maximize relative to our capacity in the lab. So with being able to now triple the output in the formulation and manufacturing within our lab, we wanted to match that with recruitment. So, you know, we proactively reached out to Galen to help us with certain sites, not all sites, because we want to really kind of target who we think are some of the better sites in terms of the better clients who have a lower failure rate from a screening perspective and really focus on bringing those patients in, and so far, Without giving you specific numbers, I think that, you know, that was a very good decision in order to get them involved and to help that recruitment process.

Jonathan Ashoff: Well you know I think once we cleared the SMB and it became open our hope would be just to accelerate because you know the sooner the better. We every month that goes by is obviously you know we want to maximize relative.

Galen: <unk> two our capacity in the lab, so with our with being able to now triple the output in the formulation remanufacturing within our lab, we wanted to match that with the with the recruitment.

Galen: Input so we proactively reached out to Galen to help us.

Galen: With certain sorry, it's not all sites because we wanted to really kind of target who we think are some of the better sites in terms of the better clients, who have who have a lower face.

Galen: Failure rate from a screening perspective, and really focus on bringing those patients in and so far so good so.

Lance Altstadt: Without giving you specific numbers I think that you know that was.

Lance Altstadt: A very good decision in order to get them involved in to help that recruitment process.

Jonathan Ashoff: Okay, that was it. Thank you, guys.

Lance Altstadt: Okay that was it thank you guys.

Jonathan Ashoff: Thank you very much well that appears to be the end of our question answer session I will now hand back over to the management team for any closing remarks.

Operator: Thank you very much. Well, that appears to be the end of our question and answer session. I will now hand over to the management team for any closing remarks.

Speaker Change: Sure no. Thank you very much of course. This is our first we will we will be doing this on a quarterly basis going forward and providing you with more insight in terms of our programs. So thank you very much for participating and asking good questions and we look forward to.

Lance Altstadt: Sure. No, thank you very much.

Lance Altstadt: Of course, this is our first. We will be doing this on a quarterly basis going forward and providing you with more insight in terms of our programs. So, thank you very much for participating and asking good questions. And we look forward to sharing more as we get into the next quarter. Thank you.

Speaker Change: Sharing more as a as we get into next quarter. Thank you.

Speaker Change: Thank you very much everyone. This does conclude today's conference you may disconnect. Your lines at this time and have a wonderful day. Thank you feel participation.

Operator: Thank you very much, everyone. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.