BioRestorative Therapies, Inc.

Good afternoon, everyone, and welcome to the Bio-Restorative Therapies 2024 Results Conference Call. At this time, all participants are in a listen-only mode, and 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 host, Stephen Kilmer, Investor Relations. Sir, the floor is yours.

Thank you, Jenny. 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. All forward-looking statements are based on biorestorative therapy'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 31st, 2024, which will be filed with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date of this conference call. BioRestorative 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 Allstatt, BioRestorative's chairman and chief executive officer, Francisco Silva, its vice president of research and development, and Rob Crystal, the company's chief financial officer. With that said, I'm now turning the call over to Lance.

Thank you, Steve, and good afternoon, everyone. Welcome. 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, we, of course, appreciate your support. As you can see from the press release we issued a short time ago, we continue to execute well across all areas of our business in 2024. And we have a lot of exciting things to look forward to as we move through 2025. With that said, I'd like to ask Rob, our Chief Financial Officer, to provide a brief overview of our 2024 financial results.

Thanks, Lance. Good afternoon, everyone. To streamline the presentation of the financial results, all the numbers I will refer to have been rounded, so they are approximate. For the 12-month period ending December 31, 2024, Bauer's startups revenue grew 175% year-over-year to $401,000. The company's loss from operations was $11.6 million, a 24% improvement from the $15.2 million loss for 2023. The company's 2024 net loss was $9 million. or $1.16 per share, a 14% improvement from a net loss of $10.4 million, or $2.47 per share, for 2023. Cash used in operating activities in 2024 was $8.2 million, and the company ended the year in a strong financial position with cash, cash equivalents, and marketable securities of $10.7 million, and no outstanding debt. With that, I'll turn the call over to Francisco.

Thanks Rob. For the benefit of those that are new to BiRestorative Story, let's take a moment to summarize our developmental programs. Our lead clinical stage candidate, BRTX100, is a novel cell-based therapeutic engineered to target areas of the body that have little blood flow. The product is formulated from autologous or your own cultured mesenchymal stem cells collected from the patient's bone marrow. The safety and efficacy of BRTX100 intriguing chronic lumbar disc disease, or CLVD, is being evaluated in our ongoing phase two prospective randomized double-blinded and sham-controlled study. A total of up to 99 eligible subjects will be enrolled at up to 16 clinical sites across the United States. Subjects included in the trial will be randomized two to one to receive either BRTX100 or placebo. At a presentation, I gave at the twenty twenty five orthopedic research society annual meeting last month. I reviewed twenty sixty to fifty two week blinded data from the first fifteen patients of the study enrolled in the trial. No serious adverse events were recorded. And there was no dose limiting toxicity at twenty six and fifty two weeks. Preliminary blinded visual analog scale or VAS or disability index or ODI data collected at week 26 and 52 post injection demonstrated an exceptionally positive trend compared to baseline. We were also really excited to see that the 52-week comparison of MRI images to baseline appears to demonstrate morphological changes that potentially demonstrate disc microenvironment remodeling. If these positive trends continue, we believe that the Phase II trial will meet its primary and secondary endpoints. Partly based on the preliminary data, we have achieved two important FDA milestones last month. One of those was the FDA-granted Fast-Track designation for a BRTX100 chronic lumbar disc disease program. The FDA's Fast-Track program is aimed to facilitate the development and expect the review of investigational treatments that are designed to treat serious conditions and have a potential to address significant unmet medical needs. Benefits of the program include early and frequent interactions with the FDA during the clinical development process, and stem cell product tags with fast-track designations may also be eligible for priority review and accelerated biologics license application approval and VLA approval. Achieving FAST-TRACK designation is an important milestone for virus storage, and we look forward to working more closely with the FDA as we continue to advance our BRTX100 clinical program. The FDA has also cleared our IND application for a Phase II clinical trial for BRTX100 targeting chronic cervical discogenic pain, or CCDD. As a result, BRTX100 is now the first and only stem cell product candidate in the world cleared by the FDA to be evaluated in the cervical degenerative disc disease setting. Through leveraging our data related to our lumbar trial, we can now avoid having to perform preclinical animal studies in a phase one before initiating our phase two cervical study. And it follows that being cleared by the FDA to go directly into a phase 2. we'll be in a position to evaluate both the safety and efficacy of this product in the cervical disc, saving potentially tens of millions of dollars and three to five years of animal studies and a phase one trial to get to this point. This also allows us to be the only company able to leverage our technology platform across both neck and lower back musculoskeletal indications. Moving to our clinical, our core preclinical metabolic program, Thermostim, We are developing cell-based therapy to target obesity and metabolic disorders using brown adipose or fat-derived stem cells, or BDACs, to generate brown adipose tissue, or BAT, as well as exosomes secreted by brown adipose-derived stem cells. BAT is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans and is involved in weight loss. Previously published peer-reviewed 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 patatin thermostem platform produced significant reductions in weight consistent with losses achieved by GLP-1 drugs and blood glucose levels in diet-induced obesity models in mice. It's 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 and metabolism, we have not seen nor do we expect some negative secondary effects of GLP-1 pharmaceuticals, such as a loss of muscle mass and negative cardiovascular events. As awareness of the promise that our thermostats brown apples derived stem cells hold for the treatment of obesity and related metabolic disorders continues to grow, it is important that this potentially game-changing opportunity is well protected, both for us and any current and our future potential licensing partners. To that end, we continue to methodically build a comprehensive portfolio of issued patents that cover both U.S. and international markets, and we are pleased to see that our already formidable IPS state expanded again in the fourth quarter. On a final note, our previously reported substantive discussions with an undisclosed commercial stage regenerative medicine company with regards to potential license agreements of our thermostat metabolic disease programs are continuing. While we cannot provide interim progress updates, nor provide any assurances that we will come to a mutually acceptable agreement, we are committed to closing the loop on this as soon as practical. With that, I will turn the call over back to Lance.

Thanks, Francisco. And as you can see from what Francisco and Rob just reviewed, we've had a very exciting and extremely productive 2024, and we're energized by the many potential value-enhancing inflection points we see ahead. Our financial results demonstrate that we're starting to make progress on our path to sustainable profitability, and we're continuing to focus on carefully managing our resources as we advance our two clinical development programs, BRTX100 and ThermoSTEM. So, to summarize, we're making great progress with our phase two trial for BRTX100 to treat chronic lumbar degenerative disc disease, and while the data is still blinded, the initial trends are very encouraging. Reflecting the positive preliminary phase two trial data seen to date, the FDA has now granted the FAST-TRACK designation to the program, and as Francisco said, we will have the opportunity to sit in front of the FDA on a number of occasions and really plan out what the balance of the trial and potentially what the phase three could potentially look like. We intend to present more data from this trial with a larger patient population, and we're optimistic that this data will will be very consistent with the previous trends. We've now also expanded our advanced clinical pipeline to BRTX100 to include the treatment of both chronic lower back and neck pain via the FDA clearance of our IND for a Phase II trial in the cervical space. We are continuing to proactively expand the already formidable thermostem intellectual property estate to help ensure long-term market exclusivity. And finally, we ended 2024 in a very strong financial position with cash, cash equivalents, marketable securities of over $10 million as of 12-31-2024. We'll continue to efficiently manage our cash reserves while executing upon all of our strategic goals. Our steadily improving financial performance and our projected growth plans provides us with confidence around our financial flexibility and may put us on a pathway to become much less dependent upon the capital markets.

That concludes our prepared remarks.

Jenny?

Yep, no problem. We will now be opening the floor for questions. If you would like to ask a question, you can do so by pressing 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. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Your first question is coming from Michael Okunowicz of the Maxim Group. Michael, your line is live.

Hey, guys. Thank you so much for taking my questions today. Congrats on all the great progress.

Thanks, Michael. Appreciate it.

So I guess to start off, just relating to the resolution of annular tears and the decreased protrusion size that you saw in the imaging, is this something that you would expect to happen spontaneously or do patients with degenerative discs not typically improve like this on their own?

Yeah, definitely not. It's not something that happens spontaneous, especially with annular tears. In terms of like bulging, there's the possibility that can happen if it's like early degeneration and Muscle changes are a factor that are affecting that indication or that bulge. But in our cases, it's degenerative disc disease where it's not muscle related. It's actually the disc is degenerating. And that's on the bulge. But the anterior tear, if there's a tear, you do not expect to see that. So it's very encouraging that we're starting to see some resolutions here. on some of these indications with these subjects.

And I would also add that what's encouraging is not only that there are annular tears that are resolved or resolution of other anatomical related issues, but the way in which they're being resolved, you're starting to see sort of a more uniform line in the imaging to demonstrate that there's been some actual regeneration. So again, we're blinded, so I don't know which, whether or not that patient received the product or not, but there appears to be in the study and in the imaging a very uniform resolution of the tear in a format that would suggest that some outside product could have potentially been the rationale.

All right. Thank you for that. And then thinking about the cervical program, right? So you're moving from lower back, looking at cervical. Do you view this more as something of a one-off expansion that's opportunistic? Or is there a broader strategy we should be thinking about to expand BRTX100 over time to these other musculoskeletal indications where the hypostatic environment may be less favorable to other cells?

Yeah, I think that's the goal. You know, we want to, we strategically chosen the cervical space because it just makes sense. If it's working for lumbar, it should work for cervical. There are some adjustments that we have to, you know, contemplate in terms of the volume of the disc that we've already addressed, and that's why we have the IND approved. But I think, you know, looking at the big picture, if we could, you know, get through the process and get BRTX100 approved, you know, we're looking outside of the spine. So just as you mentioned, anything that has a hypoxic nature to it, this cell is amenable to having a good therapeutic value to, you know, to that particular treatment.

And also leveraging all the data that we see from lumbar, I think, puts us in a position to get further along the regulatory pathway with cervical. So being able to eliminate, you know, a lot of time and costs associated with getting into that particular label, if you will.

Yeah. I mean, just to add to that is the, you know, we went directly to phase two with our lumbar, which was a huge accomplishment for the company. in the field, actually, because it had not been done before in that format. And now we've leveraged our lumbar data, which included both safety and efficacy, to the FDA, and we got a Phase II approved for cervical. So, you know, it's definitely moving in the right direction in terms of potential treatments and furthering applying it to other musculoskeletal indications.

And continuing down that line, right, you do plan to go straight into phase two. You have mentioned you expect this to be somewhat of a smaller study. So is there an intent here to potentially design this as a registration-enabling study similar to your plans in lumbar disc disease?

Yeah, absolutely. And that's building upon the strategy. So just, you know, we need to get a history with the FDA on the clinical path. We've received fast-track designation. And, you know, anatomically, although the cervical is different than the spine, the lower back is still the spine. So I think we're going to be able to leverage a lot of the regulatory hurdles while jumping through the lumbar trial with the spine, and we could get, you know, faster regulatory approvals for both programs.

All right. Thank you very much for taking my questions today, guys. And once again, congrats on all the progress.

Thanks a lot, Michael. Thanks. Thanks, Michael.

Thank you very much. Just a reminder there, if anyone has any remaining questions in the audience, you can do so by pressing star 1 on your phone keypad now. Thank you. Your next question is coming from Elema Piros of Rodman and Renshaw. Elema, your line is live.

Thank you. Thank you, Lance. I am sorry I joined a little bit late, and you may have provided an enrollment update in the Lombard trial, if you wouldn't mind repeating that. And what would your estimation be for completing the first 100 patients that you're planning to enroll? And the follow-up would be whether you're estimating the cash burn in 2025 to be similar to 2024.

Sure, so I think I'll take the cash burn question first. I think it will be similar as we'll be, you know, continuing to enroll patients, possibly even a little bit less. I think 2026 will certainly be less because we won't be enrolling at least as it relates to BRTX100 lumbar. We haven't given out numbers on enrollment, but I will tell you that we are considering giving out some numbers shortly. enrollment is going very well. The reason why we're not giving out numbers is because we don't want to give an indication as to how far we are from or how far or how short we are from completion in that we are exploring some regulatory opportunities and strategies that dovetail with our with our fast-track designation with the FDA to explore the potential to shorten the trial, limit the number of patients, and seek an accelerated regulatory path. So I'd like to have the benefit of having that meeting, speaking with the FDA, getting more clarity on what that looks like before reporting back.

I understand. Thank you very much, Matt.

Thanks, Amir.

Thank you very much. Just to check there, if there's any other questions from the audience, you can do so by pressing star 1 on your phone keypad now. And we do have another question in from Michael of the Maxim Group. Michael, your line is live.

Hey, guys. Thank you for taking another one from me. Couldn't get enough of us. I always love talking to you guys. Yes, when we think about the Cartessa revenues going forward, right, I know it was previously expected somewhere in the range of the low single-digit millions. So is this something that we should expect to be kind of lumpy going forward or more consistent?

Yeah, I mean, I think this was just, look, this is our first foray into a commercial relationship with a company that's not a biologics company, rather a laser distributor who has, you know, now enhanced their biologics sales force, learning about the product, learning what the right call point is, really figuring out the strategy on selling. So I would expect that going forward it would be a little bit more consistent to some of the numbers that we gave. But again, I don't want to get ahead of myself here. This hasn't even been a year since we signed the agreement. So like all things, it just takes time to build that. We're very encouraged by their commitment to us. We have the flexibility and opportunity to drive this product, albeit with a slightly different formulation, through other distributors as well. We will most likely be talking about or having an announcement related to some commercial opportunities shortly related to this product category. So I'm really excited. I don't want to put the cart before the horse here. But in terms of human resources and senior level personnel, we've been talking to some very experienced people that can help drive this opportunity for us. And there's more to come on that. So I wouldn't focus exclusively on Cartessa. I think they will continue to be a good partner for us. But I think that the opportunity for the bio-cosmeceuticals platform goes well beyond that relationship.

All right. Thank you very much.

Okay. We appear to have reached the end of our question and answer session. I will now hand back over to the management team for any closing remarks.

Thanks again for everyone for your interest in your participation in the call and to the equity research analyst that asked excellent questions. We appreciate that as well. Please continue to follow us. Once again, this is a very catalyst rich environment for the company. So keep us on your screen and please look out for recent developments that are coming soon. Thank you very much.

Thank you, everybody. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful rest of the day. Thanks for your participation.