Capricor Therapeutics, Inc.

Good day, ladies and gentlemen, and welcome to the Capricorn Therapeutics, Inc. First Quarter 2022 Financial Earnings Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Mr. Bergman, Capricorn Therapeutics' Chief Financial Officer. Please go ahead, sir.

Thank you. Thank you for joining today's call. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentations. 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 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 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 caution not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. And with that, I'll turn the call over to Linda Marban, CEO.

Good afternoon, and thank you for joining us for our first quarter 2022 conference call. Today, I will provide updates on our lead product, CAP-1002, as well as our Exosomes platform technology. We have made significant progress this quarter, highlighted first and foremost by securing a commercial partnership with Nippon Shinnyaku for our Duchenne muscular dystrophy program, bringing in $30 million in upfront cash to fund our Phase III program. Further, we saw the publication of our Phase II HOPE II results in The Lancet, one of the most prestigious medical journals in the world. If you haven't read this publication, I encourage you to please do so, as it will strengthen your understanding of the positive results demonstrated in the Phase II HOPE II trial of CAP-1002. The paper speaks to both the scientific and clinical rationale for our Phase 3, Hope 3 clinical trial that I shall discuss in greater detail in a few minutes. We continue to prudently invest in the future of Capricorn. The pillar of our near-term value is the CAP 1002 program for the treatment of older boys with Duchenne muscular dystrophy. We have in Nippon Shin-Yaku and its U.S. subsidiary, NS Pharma, an experienced, well-resourced commercial partner in the United States. We remain active in seeking further partnerships for our key markets around the world. Our goal is to partner with commercially talented companies to prepare us for global expansion of the DMD program. The second pillar of value is our bioengineered exosome program. We will have more detailed updates on this program in the future, but suffice it to say that we are extremely pleased by the progress being made in this platform technology program. We have assembled a world-class team in research, quality, manufacturing, and clinical operations, yet we continue to maintain a lean organization in order to remain capital efficient. We are fortunate to have a strong balance sheet in these very turbulent equity markets and are also fortunate to have no near-term need to conduct an equity financing. Our summary financials announced prior to this call report over $58 million in cash, providing at least two years of runway to execute on our strategies. Turning to our DMD Phase III program, I would like to provide an update on the status of our HOPE III Phase 3 clinical trial. HOPE-3 is a randomized, double-blind, placebo-controlled clinical study designed to enroll approximately 70 patients in the United States. We will be treating patients who are largely non-ambulant and in the later stage of the disease process, for whom very few therapeutic options exist. All of our patients are required to be on best medical therapy, which includes corticosteroids. This patient population comprises over one-half of the DMD market, or about 10,000 boys and young men per year in the USA. We are actively onboarding sites for HOPE III and are now actively screening patients at our first sites. It is our objective to bring on more than 20 sites in the next several months. Based on the strength of the HOPE II data, the publication in the Lancet, and anecdotal reports of the patients, The enthusiasm for HOPE III runs strong in the patient community. As you know, Capricor's agreement with Nippon Shinnyaku comes with potentially up to $705 million more in milestone payments, some of which, if achieved, will be paid during the course of HOPE III. We also, upon FDA approval, will qualify for a rare pediatric coupon voucher, for which Capricor retains the rights. In the past, these coupons have, in and of themselves, become very valuable assets for these companies that have had their products approved. If Cap 1002 is approved for the older boys, we believe that there will be a substantial opportunity to expand the indication to even younger patients with Duchenne muscular dystrophy. This population similarly has a material unmet need. The existing exon skipping drugs have well-described limitations, and the gene therapy space is moving much more slowly than many have hoped. There is nothing inconsistent with the concept of combining CAP-1002 and any of the multiple therapeutic options currently available or in clinical development. Lastly, I would like to reiterate that as additional clinical data becomes available, Our goal is to continue to discuss our path to registration with the FDA. Finally, I would like to give you an update on our exosome platform technology. We continue to advance this platform on multiple fronts. Let me remind you that exosomes are nature's communication devices. They are capable of delivering cargo directly into the cytoplasm, and we believe that they should have a safety and efficacy profile far better than a manufactured lipid nanoparticle. The most important aspect of the exosome is that they can be targeted using extravesicular receptors to which a targeting molecule can be attached. Our team is hard at work expanding the payload and targeting capabilities of our platform. These include but are not limited to loading mRNAs, siRNAs, or small inhibitory RNAs, small molecules and proteins within or on the surface of the exosomes, along with developing high affinity targeting capability and moving towards a scalable and cost-effective manufacturing paradigm. The options for both vaccine platforms and therapeutics based on our bioengineered exosome platform are extensive, and I will be providing more color on the development of the ExaZone platform at future meetings and in publications. As always, a partnering strategy is central to our business model with the objective of finding excellent commercial and development partners as well as additional non-equity capital. In conclusion, stay tuned for further updates on our Phase 3 DMG program and the continued advancement of our ExaZone platform technology. I want to reinforce that over the last year, we have delivered on our goals. These include a partnership for DMD, the publication of our Phase II results in a highly respected medical journal, an enhancement of our management team and manufacturing capabilities, as well as the advancement of the Exosome platform technology. While we currently are focused externally on DMD and HOPE III, we also recognize the value and importance of the Exosome platform. So with careful management of capital, partnerships, and strong clinical data, we approach the second quarter with tremendous energy and optimism. Over the next few months, we plan to present at various banking, scientific, and advocacy conferences, including several high-profile RNA and non-viral delivery symposiums in Boston, focus on our exosomes program. We will also be providing an update on our DMD program at the annual Parent Project for Muscular Dystrophy meetings in Scottsdale in June of this year. I will now be turning the call over to A.J. Bergman, our CFO, for more detailed updates on the financials.