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spk00: Hello, and welcome to Longevron's call today to discuss the company's 2021 fourth quarter and year-end financial results. All participants are currently in a listen-only mode. Following the formal presentation, we will open the call up for a question and answer session. I would now like to turn the call over to Brendan Payne from Stern IR. Brendan, you may proceed.
spk03: Great. Thank you, Operator. Good morning, everyone, and welcome to Longevron's call today. to provide a business update and to discuss financial results for the fourth quarter 2021 and year end that were also contained in a press release we issued early this morning. You can access the press release by going to the investor section of our website at www.Longeviron.com. I'm joined on the call today with the following members of Longeviron's management team. Mr. Jeff Green, Chief Executive Officer, Dr. Joshua M. Hare, Co-Founder, Chief Science Officer and Chairman and James Clavijo, Chief Financial Officer. We'll begin with a brief general update and summary of recent events, followed by a recap of our 2021 fourth quarter and full year financial results, and then conclude with a Q&A period. As a reminder, during this call, we will be making forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statement should be considered in conjunction with cautionary statements in our press releases and risk factors discussions in our filings with the FCC, including our most recent annual report on Form 10-K, which is being filed later today, and cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Now I'd like to turn the call over to Jeff Green, Chief Executive Officer at Longeviron.
spk01: Jeff? Thank you, Brendan. Good morning, everyone, and thank you for attending Longeviron's fourth quarter 2021 business update and financial results call. For background, Longeviron is a leading clinical stage biotechnology company developing living cell therapies for chronic aging-related diseases and other specific life-threatening conditions. 2021 was a tremendous year for us, and I'm extremely proud of the progress the Longeviron team made during the period. During 2021, we announced clinical data in three different studies, and this data has provided additional meaningful insight into our lead product, Lomacil-B's potential mechanisms of action, contributed important safety and tolerability information, and provided the foundation for advancement into later stage trials. In the second half of 2021 and into the early part of 2022, we successfully advanced Lomacil-B into phase two trials in two indications, Alzheimer's disease and hypoplastic left heart syndrome. And this now places Lomacil-B squarely in phase two for three different indications. In addition, we achieved substantial regulatory milestones, having been granted both orphan drug designation and rare pediatric disease designation from the FDA in support of our HLHS program. Also from a regulatory standpoint, we have been given permission to proceed with our Japanese aging frailty phase two trial, from both the Japanese PMDA and the local IRB of the National Center for Geriatrics and Gerontology in Nagoya, with Jintendo University Hospital in Tokyo's IRB approval pending. Financially, we increased our year-end cash position to $35 million as a result of a private placement in December 2021, significantly strengthening the balance sheet and giving the company a cash runway into 2024 based on current estimates. We anticipate a very active 2022 and are financially and operationally poised to execute our plan. We expect to achieve several important milestones this year, which I will detail for you during this call. Just as a refresher, our lead investigational product called LomaCellB is a living cell product made from the specialized cells isolated from the bone marrow of young, healthy adult donors age 18 to 45. These specialized multipotent cells that we call medicinal signaling cells, or MSCs, reside in different concentrations within various tissues in our body and are our endogenous or built-in repair mechanisms. MSCs are known to perform a number of complex functions, including the ability to form new tissue and home in on sites of injury or disease and secrete bioactive factors that are immunomodulatory and regenerative. Unfortunately, in both animals and in humans, there's a clear age-related decline in both the number and the potency of these cells, And this is believed to be one of the primary reasons for age-associated increase in chronic disease. It is our goal to increase health span and reverse or prevent chronic disease and other life-threatening conditions by harnessing the regenerative potential of MSCs. I'd like now to provide some updates specific to our various LOM cell B clinical programs, beginning with Alzheimer's disease. It is believed that a significant contributing factor to the pathology of Alzheimer's is early and substantial brain inflammation. leading to neurodegeneration and neuronal cell death, which then manifests in the hallmark symptoms of progressive dementia, among others, and in many cases, eventual death. In published studies of MSCs and Alzheimer's disease animal models, MSCs have been shown to cross the blood-brain barrier, decrease cytokines associated with harmful inflammation, and increase anti-inflammatory cytokines, leading to new neuron growth and improved vascular function. We are evaluating the potential anti-inflammatory, pro-regenerative, and pro-vascular effects of Lomacil-B for the purpose of learning whether the product may prevent, slow, or even reverse the progression of Alzheimer's disease. To that end, as we announced earlier this quarter, we have initiated a phase 2A trial in Alzheimer's, and I am very pleased to report that the first patient was treated on Friday, February 24th. The trial is a double-blind, randomized, placebo-controlled design investigating safety and tolerability as well as multiple secondary endpoints that include cognitive function and biomarkers, following single or multiple infusions of LOMA cell B compared to placebo in individuals with mild Alzheimer's disease. We will also be looking at changes in brain anatomy using MRI, as well as assessments of inflammatory and vascular systems function. The study consists of four treatment arms, 12 patients each, for a total target enrollment of 48 patients. Currently, we intend to activate up to 12 clinical sites for enrollment, including the Miami VA, which we expect to activate imminently. As more clinical sites open for screening, we plan to provide guidance on enrollment rates and trial completion for this study. The results of our phase one study have been submitted to a peer-reviewed journal, and we anticipate acceptance and publication in the first half of 2022. Transitioning now to our hypoplastic left heart syndrome, or HLHS program. As a reminder, HLHS is a congenital heart defect that affects approximately 1,000 babies per year in the United States. Babies born with HLHS have an underdeveloped or absent left ventricle, impairing the heart's ability to pump blood. The current standard of care for HLHS typically consists of three reconstructive operations before the child is five years old. However, despite this, there still remains a roughly 30% mortality rate at three years. Last year we announced results of our phase one open label safety study with LomasLB in HLHS patients. That trial in which 10 infants received LomasLB during stage two surgery met its primary endpoint demonstrating that intraventricular injection of LomasLB was well tolerated with no major adverse cardiac events nor any infections considered related to the product. In addition, we observed that all 10 infants were alive and transplant free between two to three and a half years post Stage 2 surgery, a transplant-free survival rate exceeding that which had been previously reported in a published study. The results of our Phase 1 study have been submitted to a peer-reviewed journal, and we anticipate acceptance and publication in 2022. The Phase 2 HLHS trial, referred to as ELPAS-2, was open for enrollment in July of 2021 and now has all seven clinical sites open for enrollment. ELPAS 2 has a target enrollment of 38 infants with one year of safety and efficacy follow-up per protocol. ELPAS 2 is being funded in part by a grant from the National Heart, Lung, and Blood Institute and is projected to complete enrollment in 2023. Now that all pre-identified sites are open for enrollment, we intend to provide more specific enrollment rates and trial completion guidance as that trial progresses. In the fourth quarter of 2021, we were granted both rare pediatric disease and orphan drug designations from the US FDA for LomasLB. Both designations confer specific potential benefits, which may include market exclusivity upon approval for this indication and eligibility to receive a priority review voucher. These benefits are available only if all statutory and regulatory requirements and conditions are met. Moving on now to our aging frailty research program. Aging frailty is an age-associated decline in reserve and function across multiple physiologic systems, leading to an inability to cope with stressors. This is a common geriatric condition that affects up to 15% of the population over the age of 65, depending on the definition used, and manifests clinically, typically, as a combination with several signs and symptoms that may include sarcopenia or involuntary loss of muscle, associated weakness, fatigue, weight loss, slowness, and low activity levels. Older frail individuals are more vulnerable to poor clinical outcomes such as infection, falls, fractures, hospitalizations, and death. So the planned Japanese phase two aging frailty trial is currently on track to initiate in the first half of 2022. This is an investigator-initiated, randomized, placebo-controlled, double-blind, single-infusion study being conducted by our clinical partners at the National Center for Geriatrics and Gerontology and the Gintendo University Hospital. Results from the Phase I-II HERA aging frailty trial are expected to be announced in the first half of 2022. The HERA trial is a multicenter, randomized, placebo-controlled study intended to evaluate safety and to explore the effect LomaCellB may have on biomarkers and immune system function in aging frailty subjects receiving the influenza vaccine, as well as other signs and symptoms of aging frailty. In the fall of 2021, we announced results of the Phase IIb Multi-Center Randomized Placebo-Controlled Aging Frailty Trial. That trial demonstrated that at six months post-infusion, Patients in the three highest loma cell B dosing groups could, on average, walk statistically significantly further than they could at baseline. And by nine months, two of the four loma cell B dose groups showed statistically significant increases in walking distance compared to both baseline and the placebo group, which we believe may suggest a durable, sustained improvement in exercise tolerance and endurance. On January 12th, 2022 Longevron announced publication of the LOMAS-LB Phase 2B Aging Frailty Trial Design in the Journal of Aging Frailty. In addition to this publication, we anticipate submitting a manuscript of the Phase 2B trial results to a peer-reviewed journal that we anticipate acceptance and publication in 2022. We plan to evaluate the results of the Phase I-II Harris study independently as well as in the context of the results from the Phase IIb trial as we plan the next steps in the U.S. Frailty Research Program. And then rounding out our clinical program with LomaSelb, our Phase I trial on subjects experiencing acute respiratory distress syndrome due to COVID-19 infection continues to screen subjects at three participating centers in the U.S., and we expect enrollment to continue to run through 2022. Transitioning now over to the leadership front, we made several key additions to the Longevron team in 2021, including the appointment of four new directors, as well as Dan Gensler, the Senior Vice President for Strategic Collaborations and Scientific Affairs. Our most recent addition to our board of directors, announced last month, is seasoned biotech executive Todd Girolamo. Todd brings to Longevron an extensive body of experience in SEC and FDA compliance, corporate finance, M&A, and licensing activities, as well as intellectual property litigation and drug development. Todd is currently Chief Legal Officer, Senior Vice President of Corporate Development, and Corporate Secretary of Caladrius Biosciences, and also spent 12 years on Wall Street where he specialized in therapeutic healthcare equity securities, and served as an analyst and a portfolio manager for biopharma and med tech equities. And with that, now I'd like to turn the call over to James Clavio, CFO, to discuss our financial results for the fourth quarter of 2021 and full year 2021. James?
spk02: Thank you, Jeff. Good morning, everyone. Most of what I'll be covering this morning will be presented in more detail in our consolidated financial statements and in our management's discussion and analysis of operations for the year ended December 31st, 2021 in our annual report on Form 10-K, which will be filed today. Fourth quarter ended December 31, 2021 and 2020. Revenue in the fourth quarter of 2021 was $0.2 million compared to $1.2 million the same period in 2020. The difference was due to a decrease in clinical trial revenue and grant revenue as follows. Clinical trial revenue, which derives from our Bahamas registry trial, was $0.2 million in the fourth quarter of 2021 compared to $0.5 million in the same period in 2020. A decrease of $0.3 million or 68%. Continued COVID-19-related travel concerns have negatively impacted registry trial revenue. Fourth quarter 2021 grant revenue was less than $0.1 million compared to $0.7 million in the same period in 2020, a decrease of $0.6 million or 93%. The decrease in grant revenue is due to the completion of several grant-funded clinical trials and associated exhaustion of grant revenue. Revenue for full year 2021 was $1.3 million compared to $5.6 million in 2020. Clinical trial revenue was $0.7 million in 2021 compared to $1.3 million in 2020, a decrease of $0.6 million or 46%. Revenue was $0.6 million in 2021 compared to $4.3 million in 2020, a decrease of $3.7 million or 86%. The decrease year over year was due to the same reasons outlined in the Research and development expenses in the fourth quarter of 2021 were $1.7 million compared to $1.2 million for the same period in 2020. The increase of $0.5 million or 51% was primarily due to an increase in research and development expenses that were not reimbursable by grants related to the completion of those clinical trials. R&D expenses for full year 2021 were $7.1 million compared to $2.7 million in 2020. The increase of 4.4 million or 165% was primarily due to an increase in research and development expenses in 2021 that were not reimbursable by grants related to the completion of clinical trials, including 2.2 million of equity-based compensation recorded for restricted stock units and stock options granted during 2021. General administrative expenses in the fourth quarter of 2021 were $2.3 million compared to $0.7 million for the same period in 2020. The increase of approximately $1.6 million, or 225%, was primarily related to an increase in compensation, insurance, and professional expenses incurred during the current period, including $0.4 million of equity-based compensation recorded for RSUs and stock options granted during the quarter. G&A expenses for the full year 2021 were $10.7 million compared to $2.7 million in 2020. The increase of $8 million, or 293%, was primarily due to an increase in compensation, insurance, and professional expenses incurred in 2021, including $4.6 million of equity-based compensation expenses recorded during the year, as well as $1.1 million in investor relation costs. Our net loss was $4.1 million in the fourth quarter of 2021 compared to $1.4 million for the same period in 2020. Net loss for full year 2021 was $17 million compared to $3.7 million in 2020. Net loss for share was $0.20 in the fourth quarter of 2021 compared to $0.08 for the same period in 2020. Net loss for share for the full year 2021 was $0.90 compared to $0.23 in 2020. Cash and short-term investments was $35 million compared to $0.8 million as of December 31, 2021 and 2020, respectively. The increase in cash period over period was a result of the completion of the company's initial public offering and private placement offering in February and December of 2021, respectively. Based on the company's current operating plan and financial resources, we believe that our existing cash and short-term investments will be sufficient to cover expenses and capital requirements into 2024. With that, thank you, and I will turn the call back to Jeff.
spk01: Thank you, James. Brendan, I believe this is we're transitioning to Q&A. That's correct.
spk03: Operator?
spk00: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, if you would like to ask a question, please press star followed by one. And as a reminder, if you are using your speakerphone, please remember to pick up your handset before asking your question. The first question today comes from Mac Scanlon from 4CAT. Mac, please go ahead. Your line is now open.
spk04: Thank you so much. It's been an incredible quarter for you guys, Jeff. It was spectacular to see Longevron do almost 2,000% at one point. And on that note, I'm just wondering the decision behind your private placement for $20.5 million. When your stock has done so many multiples of itself, it's an incredible addition to the cash flow. You said you're good for years. I'm wondering why that was the number. that was decided upon. Thank you very much.
spk01: Sure. Thanks, Max. I think at the time the Board of Directors and management of the company looked at the potential range of financing options given the volume appreciation in the stock price during that period. We had just completed our IPO nine months prior, so we still had a reasonably strong balance sheet, but you can't predict how things are going to go in the future. We certainly are seeing that today. The financing environment is fairly challenging for biotech companies right now. I think for Longevron, we chose to bring in an amount that we felt was appropriate to give us several years of cash runway and not yet in a position of, you know, having to do a financing in uncertain conditions in 2022. So, you know, we arrived at that number of about $20.5 million. Thanks for the question.
spk00: Yeah, it makes a lot of sense.
spk04: Yeah, and I'd say you're better off than, like, 80% of other biotech stocks right now.
spk03: So it's definitely paying dividends.
spk01: Like we said, it's just very challenging to predict. And, of course, you know, for those that are out there right now looking to raise capital, they're facing more challenging headwinds than they did in 2021. Yeah, absolutely. So we're pleased that we were able to head out at the time.
spk00: Yeah, thank you, Jeff. Thank you. I would now like to pass over to Brendan Payne for questions asked independently. Brendan, please go ahead.
spk03: Great. Thank you, Operator. These questions were submitted independently before the call. The first is, what specifically are some of the advantages of the orphan drug and rare pediatric disease designations received from the FDA?
spk01: Sure. This relates to the LOMAS-LB for HLHS, hypoplastic left heart syndrome program that the company is pursuing. Just a reminder, orphan drug designation program is basically an incentive for sponsors to develop therapeutic options for rare diseases that affect less than 200,000 people. You get early engagement with the FDA for discussions. and during the drug development process. So it can be beneficial to the sponsor. And some of the list of potential benefits I think are seven years of marketing exclusivity for an approved orphan product and federal tax credits. There's a waiver of the PDUFA fee for orphan drugs which is several million dollars. Do we qualify to compete for certain research grants? And again, eligibility to receive regulatory assistance and guidance from the FDA, you know, sort of in the design of the overall drug development plan. All of this assumes that, you know, certain regulatory conditions are satisfied. For the rare pediatric disease designation, one of the primary potential benefits is the eligibility to receive a priority review voucher or PRV. And so the priority review voucher is issued upon approval of a qualifying rare disease product, rare pediatric disease product. So it doesn't have an effect on the timing of the review of the original product because we would already potentially qualify for priority review. It does entitle the holder to designate a single subsequent drug application to receive prior review. And so since these priority review vouchers are transferable to another sponsor, they can be sold and they can be potentially a source of revenue to the company in the future. In some cases, it could be substantial revenue.
spk03: Perfect. Thank you. Moving on to the next question. Do you anticipate your current post-financing cash reserves to be sufficient to see through top line data from both ongoing phase two trials?
spk01: Good question. So Max kind of alluded to the cash position in his question. And so, you know, because of that private placement in December, you know, we have a stronger balance sheet and therefore we're not in any immediate need to raise cash. So the answer to that question lies in part on how quickly we can enroll our ongoing clinical studies as well as our own, you know, our cash management. But I can say that the objective of management is to achieve several milestones in 2022 and 2023, and thereby ideally putting ourselves in a stronger position at the time in which we may need to raise additional capital. So, you know, as I indicated, stated earlier, the Phase 2A Alzheimer's trial initiated just this quarter. We treated our first patient, and several more patients are in screening. We're planning on activating currently 12 total sites. So right now we have two sites up and running. We've got 10 more sites, including the Miami VA, which should be very soon. We partnered with the Miami VA on multiple projects in the past. They are a very good partner. We are very passionate about developing safe and effective therapeutics to treat some of the diseases and chronic indications that you know, the veterans face. And the VA is always typically a large source of patients for our clinical trials. So, you know, we're very enthusiastic about getting that site up and running and kind of getting moving on rapid enrollment. But really, you know, we certainly hope to enroll the Phase 2A trial fully this year, which would allow us to, have a data readout next year, but really it's just premature right now to be more specific than that until we see what the enrollment rates are like when we have all our centers up and running.
spk03: That's perfect, because the final question was, when do you anticipate timing from the Phase 2A enrollment for the Alzheimer's? So I think you've answered that question. Yeah, there you go. Yeah, that concludes the question submitted independently. With that, I'll turn it back over to the operator.
spk00: Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. There are currently no additional questions waiting at this time, so I'd like to pass the conference back over to Jeff Green for closing remarks. Jeff, please go ahead.
spk01: Yeah, thank you. Just want to say on behalf of the company, we'd like to thank everyone for their continued interest and support in Longevron, and we look forward to updating you again as we discuss our first quarter 2022 results. Thank you.
spk00: Thank you. That concludes today's conference call. You may now disconnect your lines.
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