Capricor Therapeutics, Inc.

and welcome to the Caprico Charity Tax Incorporated fourth quarter and full year 2021 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. AJ Bergman, Chief Financial Officer. Please go ahead, sir.

Thank you. 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 an intended utilization of our product candidates our future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates, potential milestone payments, and our possible uses of existing cash and investment resources. These forward-looking statements are based on the 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 as made with the SEC during 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 would like to turn the call over to Linda Marban, CEO.

Good afternoon, and thank you for joining Capricor Therapeutics' fourth quarter and full-year conference call. I am pleased to update you today on our accomplishments and progress as we enter 2022. I am delighted to say that with the Nippon Shinnyaku deal, the launching of HOPE III, and our growing Exosome platform technology, and our strong balance sheet, we are in the strongest position we have ever been as a company. Today, I will provide you updates on all of these programs. As you know, Capricor is developing two distinct platforms. First, our late-stage cell therapy program, CAPS 1002, is entering a Phase III pivotal clinical study for Duchenne muscular dystrophy and is also being investigated as a potential therapy in the fight against COVID-19. Second, we are developing an exosome platform where we are harnessing the power of exosomes, nature's delivery vehicle, and engineering them with different payloads for a potentially more efficient, targeted delivery of small molecules, RNAs, proteins, and other payloads. We are focused on advancing both of these platforms with the efficient use of capital, pursuing partnerships, as we have successfully done in DMD, to validate and expedite product development. We have assembled and continue to build a world-class team to deliver on both of these fronts. We are highly focused on achieving these objectives and I'm being capital efficient as well. We recently relocated the company's headquarters to San Diego, California to attract talent in one of the world's major biotechnology hubs, and this strategy has thus far paid off. We continue to enhance our management team as we build towards potential registration of CAP 1002. Recently, Ms. Yadmin Shad joined as Vice President of Quality and her experience is directly in line with our goals of building a commercial-ready CAP-1002 product. Her background is in building quality systems for cell therapy products, and to that end, she spent many years at the City of Hope, where she was in charge of management of both Phase I, II, and III biologics, GMP facilities, and oversight of all GXP activities. Then she was at Kite Pharma, where she was the quality head of Kite's clinical manufacturing sites for autologous and vector manufacturing. Recruiting Yasmeen is key to the development of commercial manufacturing capabilities for CAP-1002. We have also just announced the appointment of Dr. Daniel Paulson as Vice President of Clinical Development. Dan has approximately 20 years of experience in global drug development, and comes to us from Bayer and Sanofi after a career in clinical medicine. Dan will be responsible for the conduct of the HOPE III trial, as well as building out the clinical development plans for our Exosome platform technology. Our ability to recruit these high-performing executives is reflective of the exciting opportunities we now have at Capricor. As we have announced, we have entered into a commercialization and distribution agreement with Nippon Shinnyaku, a Japanese pharmaceutical company headquartered in Kyoto, Japan, with over 2,000 employees and a fully developed U.S. commercial team and an approved product for DMD already on the market in the United States. Nippon Shinnyaku has a 100-year history and has secured alliances throughout their past with companies such as Johnson & Johnson and Pfizer, to just name a few. This agreement will bring Capricor $30 million up front and potentially up to $705 million more in milestone payments plus potential meaningful revenue from product sales. These milestone payments are based on clinical, regulatory, and sales-based milestones, all of which would provide a healthy stream of capital to Capricor. as we push CAP 1002 towards commercialization. Importantly, this partnership is solely for the commercialization rights to DMD in the United States, and we continue to pursue additional partnering opportunities for territories outside of the United States, in Europe, Asia, and in other markets. To remind you, on approval, we qualify for a rare pediatric coupon voucher. for which Capricor maintains the rights. Now, let me shift your attention to our progress in our CAP 1002 program for DMD. First, from a regulatory standpoint, we are clear to proceed with our HOPE III Phase III clinical study. HOPE III is a randomized, double-blind, placebo-controlled clinical study designed to enroll approximately 70 patients across a planned 20 to 30 sites in the United States. We will be treating patients who are largely non-ambulant and in the later stages of the disease process, for whom very few therapeutic options currently exist. This patient population comprises over one half of the DMG market. At this time, we are well underway in terms of site selection and startup activities for this study. Our goal is to treat the first subject in the second quarter of 2022. We have also built in a pre-specified interim analysis for sample size re-estimation in order to assure the best chances of success for this trial. Once we begin to treat patients, we will provide updates as HOPE III progresses. Today, I am also pleased to share with you that our phase two clinical trial, HOPE II, is slated for publication at a top-tiered peer-reviewed journal. We are under a strict embargo, so please stay tuned for more updates when it is published. We have been messaging that our goal was to publish the results of HOPE II in a top-tier journal because we believe that the strength of the data warranted stringent peer review and publication. We have now achieved that goal. It is important because the review process for a top-tier peer-reviewed paper is rigorous And acceptance only occurs when all of the data, data collection methods, clinical trial conduct and analyses have been carefully scrutinized and has been determined to be of the high quality that these journals require. Additionally, the journal reviewed the preclinical data and the proposed mechanism of action. And we believe the proteomic data showing the potential mechanism of action supported the clinical data and help drive acceptance of our publication. Taken together, this careful review supports the robust evidence that CAP-1002 is effective in delaying the skeletal muscle decline in DMD, and also, very importantly, showing an improvement in cardiac function as measured by ejection fraction in DMD, which to our knowledge has not been demonstrated in any therapeutic tested this far. Remind you, One of the primary causes of death in DMD is as a result of the cardiomyopathy affecting these patients. So CAP-1002 may not only improve the quality of life of patients with DMD, but may potentially impact the length of life in people living with DMD. We now begin HOPE III, our pivotal clinical trial, in the stellar position of having strong support from the DMD community who have seen the benefits of CAP-1002 and DMD, as well as with validation by a leading peer-reviewed journal. Of course, the most important aspect of this program in working towards successful treatments for DMD. So to that end, I want to continue to thank the patients, the families, and the investigators for their support as we work towards registration and commercialization of CAP-1002. I will now provide you with an update on INSPIRE, our clinical trial using a single dose of CAP-1002 to treat severe COVID-19 patients. This trial randomized 63 patients with severe but not yet critical COVID-19, which means that they are having difficulty breathing but are not yet requiring ventilation. We are in the final stages of database lock and analyses for this data set, and we remain on track to having data available by the end of the first quarter of 2022. The trial had a 90-day primary safety endpoint as mandated by FDA, and based on that timeline, we plan to receive the data over the next few weeks. While a lot of progress has been made in treating COVID, there are still very few options for this particular group of patients. And in the U.S., we still have approximately 1,000 deaths on average per day. Should CAST-1002 demonstrate effectiveness in this highly needy patient population, we will plan to meet with FDA to discuss next steps in clinical development. I would like to remind you that we retain all rights at this time with respect to this program. Please stay tuned for updates as this program evolves. Moving now to our Exosome platform technology. Over the course of 2021, we were able to significantly advance this platform, focusing on using Exosomes as delivery vehicles for multiple payloads such as mRNA, as well as fine-tuning the targeting of exosomes using external moieties, as well as scaling up manufacturing and quality assured production of exosome products. As previously discussed, exosomes have the ability to deliver different types of payloads, including mRNAs, siRNAs, and even proteins. To that end, we have been actively working on the development of a bivalent exosome-based mRNA vaccine for COVID-19, for which we have published positive preclinical data, as well as had pre-IND feedback from FDA outlining the roadmap to the clinic. However, at this point, we have decided to hold off on further development and the filing of an IND for our mRNA COVID vaccine, based on the fact that the current mRNA vaccines have saturated the markets, and although they have well-described limitations, they are effective at preventing major morbidity and mortality. Therefore, rather than investing substantial resources in bringing another COVID vaccine into the clinic at this time, we will invest our resources in the further development of our Exosome platform and build a pipeline of indications with significant market opportunities, including next-generation vaccines and therapeutics. As our platform develops, we will have more color on the specific clinical directions that we choose for our Exosome platform technologies. Our goal and our commitment is to develop a pipeline of indications that would be well-positioned for partnering or for Capricor to develop independently. The future for Capricor will be supported on two fronts, the commercial pursuit of CAP10M2 for Duchenne muscular dystrophy and other potential indications, and also the belief that exosomes present a unique opportunity for drug delivery. We strive to execute and deliver on our various programs and remain committed to helping patients across the world that suffer from these diseases. In closing, as we begin 2022, we have approximately $65 million in cash, which factors in our expected $30 million upfront payment from Nippon Shinnyaku. This cash position has extended our runway far into 2024. I will now turn the call over to A.J. Bergman, our CFO, for a more detailed update on the financials. Thank you.