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spk05: Greetings and welcome to the Longevron third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Moyer. Mike, please proceed.
spk01: Thank you, Operator. Good morning, everyone, and welcome to Longevron's third quarter 2023 results conference call. Today, we will discuss financial results for the quarter ended September 30th, 2023, and provide a business update. Earlier this morning, we issued a press release with these results, which can be found under the investor section of Longevron's website. I'm joined today by the following members of Longevron's management team. Mr. Wael Ashad, Chief Executive Officer. Natalia Agata-Fanova, Chief Medical Officer, and Lisa Locklear, Chief Financial Officer. Mr. Ashab will begin with a brief corporate overview, then Dr. Agata-Fanova will review Longeviron's recent progress in its clinical programs, and Ms. Locklear will review financial results for the third quarter. Following the company's prepared remarks, we will open the call to questions from covering analysts. 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 statements should be considered in conjunction with cautionary statements in our press releases and risk factors discussed in our filings with the SEC, including our quarterly report on Form 10-Q and annual report on Form 10-K, 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 Mr. Wael Ashad, Chief Executive Officer of Longeviron. Wael?
spk03: Thank you, Mike, and good morning, everyone. Welcome to the Longeviron Third Quarter 2023 Business Update and Financial Results Call. We are pleased to be speaking with you today and look forward to sharing our progress developing regenerative medicines for unmet medical needs. Our third quarter and recent weeks have been very productive, led by top-line results we announced from the ClearMind Alzheimer's Disease Trial, which affirmed the safety profile of Lomacil-B and provided a clear efficacy signal. We are also presenting extended survival data from LPS1 trial of Lomacil-B in hypoplastic left heart syndrome, also known as HLHS. at the scientific session of the American Heart Association and took steps to strengthen our balance sheet, securing $4 million gross proceeds before expenses from equity financing to support our continued advancement of these clinical programs. I will turn the call over to my colleagues, Dr. Akpanova and Lisa Locklear, in a moment to review the development in detail. But first, I'll begin with a brief overview of the Lomasol B. Our product candidate, Lomasol B, is a living cell product made from a specialized cell isolated from a bone marrow of young healthy adult donor age 18 to 45. These specialized cells are known in the literature as medicinal signaling cells or MSCs. and are essential to our endogenous or built-in biological repair mechanisms. MSCs have been shown to perform a number of complex functions in our body, including the formation of new tissues. They also have been shown to hone and respond to sites of injury or disease and to create bioactive factors that are immunomodulatory and regenerative. We believe that Lomacil-B has multiple potential mechanisms of action that may lead to anti-inflammatory, probascular regenerative response, and therefore may have a broader application of a range of rare and aging-related diseases. We have ongoing programs in hypoplastic left heart syndrome, or HLHS, Alzheimer's disease, and aging-related frailty. Our LPH2 trial in HLHS has exceeded its 50% enrollment threshold, and we have activated additional clinical sites to further expedite enrollment. This is our priority program and our focus on completing enrollment in this trial in 2024. As I mentioned, we also announced positive top-line results from our ClearMind Phase 2A trial for Lomacil-B treatment in Alzheimer's disease last month. and expect full data from this trial in the coming weeks. In aging-related priority, enrollment continues to progress in our Phase II study in Japan. The data we have generated in HLHS Alzheimer all supports a broader potential of Lomacil-B as a regenerative medicine therapy for a range of unmet needs, and we are excited about the progress we are making. With that, I will turn over the call to Dr. Natalia Akvanova to provide more detailed overview of our clinical program and recent progress. Natalia?
spk06: Thank you, Wael. I will begin with a brief review of our Alzheimer's disease program and the top-line results we recently presented from our ClearMind study. Based on the growing body of preclinical and clinical data from various sources, we believe LOMI cell B may prevent the clinical progression of Alzheimer's disease by reducing disease-related brain inflammation. Neuronal cell death caused by early and substantial neuroinflammation is a significant contributor to the pathogenesis of Alzheimer's disease. In preclinical models of Alzheimer's disease, MSCs with characteristics similar to LOMI cell B have been shown to cross the blood-brain barrier, potentially with anti-inflammatory effect, improving endothelial function and promoting neurogenesis, the process of neuron formation in the brain. Our Phase IIa trial of LOMI cell B for mild Alzheimer's disease, called the CLEARMIND trial, Completed enrollment in November of 2022. ClearMind is a 48-patient forearm parallel design randomized clinical trial of Lomis LB designed to evaluate the safety of single and multiple infusions of two different dose levels of Lomis LB compared to placebo in patients with mild Alzheimer's disease. The primary endpoint is safety, as measured by the occurrence of serious adverse events within the first 30 days after administration of long cell B. Secondary and exploratory endpoints include measures of cognitive function, fluid and radiological biomarkers relevant to inflammation, and the salient vascular systems. In a previously completed phase one study, we demonstrated a preliminary safety of LOMIS-LB patients with mild to moderate Alzheimer's disease. Results from ClearMind showed that the primary endpoint of safety was met based on statistical and medical assessment. There was one serious adverse event reported on each LOMIS-LB treatment group and none on placebo. Each SAE was reviewed and assessed by the Data and Safety Monitoring Board with no safety issues raised. The study safety data were consistent with established safety profile with no incidence of hypersensitivities, no cases of Alzheimer-related imaging abnormalities, no clinically asymptomatic abnormalities, microhemorrhages as revealed by the magnetic MRI, and notable changes in laboratory evaluations and electrocardiogram. In the secondary endpoint of change from baseline to VIX39 in cuts, which is the composite Alzheimer's disease score, Positive results were demonstrated at the pre-specified statistical level of P less than 0.1, two-tailed. Statistically significant improvement in week 39 in cubs was observed for Lomicel-B at dose level of 25 million with statistical significant 0.091 versus placebo. And the pool lomicel group consists of 25 million dose 1s, 25 million dose 4s, 100 million cells 4 doses with statistical significance 0.099. In terms of specific components of the CART score composite endpoint evaluated at P-level of 0.052 tails, Lonicel-B dose 25 million once demonstrated statistical significant slowing of disease progression in left hippocampal volume with statistical significance 0.15 relative to placebo. ADCS-ADL score, which stands for Alzheimer's disease cooperative study activity of daily living and left hypochromal volume at week 39 were statistically significant for full LOMI-CLB treatment group relative to placebo with p-value 0.047 and 0.038 respectively. Other doses demonstrated numerical slowing and prevention of disease worsening relative to placebo in composite score, ADAS cognitive score, cognition and function scale, and activity daily living scale measured by the caregiver and left hypocampal volume at week 39. We believe these results provide important validation of both the safety and therapeutic potential of LOMIS-LB in the treatment of Alzheimer's disease and provide a robust support for additional clinical trials and other indications. As Yael mentioned, we expect the full data set from this trial in the coming weeks. Now for an update on our HLHS program. For those who might not know, HLHS is a rare congenital and devastating birth defect in which the left ventricle of the heart is either severely underdeveloped or missing. The condition affects approximately 1,000 babies per year in the United States. Babies born with this condition have severely diminished systemic blood flow which requires children to undergo a complex three-stage heart reconstruction surgery process over the course of the first five years of their life. While these children can now live into adulthood with surgical intervention, only 50 to 60% of affected individuals survive to adolescence due to right ventricle failure. which is often unable to handle the increased load required to support systemic circulation. Furthermore, even those children with successful surgical intervention are at an elevated risk of short-term mortality, delayed development, and long-term complications, including organ failure. As such, there is an important unmet medical need to improve right ventricle function in these patients to improve both short-term and long-term patient outcome. As Yael mentioned, we are presenting the latest long-term survival from our LPS-1 study, a phase one study of LOMIS-LB in children with HLHS at the scientific session of the American Heart Association, which begins tomorrow. Ten patients participated in LPS1 trials during which Lomisil-B was injected, concurrent with stage 2 surgery, also known as a GLEN procedure. In the data set we are presenting, ten patients have been monitored for up to five years after treatment. Earlier long-term follow-up data from this trial was announced previously. showing that 100% of the 10 patients who participated in LP1 trials survived and remained heart transplant-free for up to five years of age. As compared with the historical clinical trial results, showing that children with HLHS who undergo the GLEN procedure typically have had 15% to 20% mortality. by five years of age. The LPS-1 data are highly encouraging and reinforce our enthusiasm for LOMIS-LB as a potential treatment to transform care for patients with HLHS. Our LPS-2 trial is designed to assess the potential of LOMIS-LB to improve right ventricular function and long-term outcome. The trial is a study eight patients control phase two clinical trial, evaluating the safety and efficacy of Lomisil-B as an adjunct therapeutic to standard of care HLHS surgery. The primary outcome measure is the change in the right ventricular ejection fraction from baseline to 12 months. The trial is funded by a grant from the National Institute of Healthcare National Heart, Lung, and Blood Institute. As we announced this week, our LPS2 trial has exceeded its enrollment threshold of 50%. We also announced the activation of our eighth clinical site location, one more than the seven originally planned. Completion of LPS2 is our priority program, and our focus is on completing enrollment in this trial in 2024. I will conclude with a brief update of our aging-related frailty program. Aging-related frailty is an age-associated decline across multiple physiological systems leading to the inability to cope with stressors. It is characterized by mobility impairment, weakness, fatigue, weight loss, slowness, and low activity, and puts individual at high risk for poor clinical outcome, such as infections, falls, fractures, hospitalization, and even death. At Longeviron, we've been evaluating the effect Lonicil-B may have on health and function of elderly frail patients, particularly patients on their physical and immune system function with clinical development strategy in aging-related frailty in focus on Japan, a country with one of the oldest population in the world. Our phase two clinical trial evaluating LAMY-CLB in patients with aging-related frailty in Japan. The phase two trial is a three-armed, parallel design, randomized, evenly split, one-to-one-to-one of placebo, as well as two different LomiCell B single infusions. Enrollment is continued, and the trial is expected to enroll 45 patients by the end of 2024. The primary endpoint is to evaluate safety with an overarching goal of providing support for an eventual limited approval under the Japan Act of the Safety and Regenerative Medicine, or ASRM, which recognizes the tremendous therapeutic potential of self-therapy. With that, I'd now like to turn the call over to Lisa LeClaire, our CFO, to discuss our financial results for the third quarter of 2023. Lisa?
spk00: Thanks, Natalia, and good morning, everyone. What I'm covering this morning will be presented in more detail in our condensed financial statements and in our management's discussion and analysis of operations in our quarterly report on Form 10Q, which we filed yesterday. Revenues for each of the three months ended September 30th, 2023 and 2022 were approximately 0.2 million and 0.3 million respectively. Grant revenue for the three months ended September 30th, 2023 and 2022 was zero and 0.1 million respectively. The decrease was primarily due to a reduction in grant funds available due to the completion of the grant funded clinical trials. Clinical trial revenue, which is derived from the Bahamas registry trial for the three-month periods ended September 30, 2023 and 2022, was $0.2 million. Clinical trial revenue for the three months ended September 30, 2023 decreased by less than $0.1 million compared to the same period in 2022 as a result of a decrease in participant demand. Related cost of revenues was approximately $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively. The decrease of $0.1 million or 45% was primarily due to the decrease in revenues earned from the Bahamas registry trial. This resulted in a gross profit of approximately $0.1 million for both of the three-month periods ended September 30, 2023 and 2022. General and administrative expenses for the three months ended September 30th, 2023 increased to approximately 3.1 million compared to 2.1 million for the same period in 2022. The increase of approximately 1 million was primarily related to increases of 0.3 million in compensation and benefit expenses, 0.4 million of expenses related to legal and professional fees and $0.4 million of expenses related to the subscription rights offering. These increases were partially offset by a decrease of $0.1 million in stock-based compensation expense. Research and development expenses for the three months ended September 30, 2023 decreased to approximately $1.8 million from approximately $3 million for the same period in 2022. The decrease of $1.1 million was primarily due to a decrease of $1 million in research and development expenses driven by lower spend on clinical trials and supplies. Selling and marketing expenses for the three months ended September 30, 2023 and 2022 were approximately $0.3 million and $0.2 million, respectively. Selling and marketing expenses consist primarily of investor and public relations expenses. Other income for the three months ended September 30th, 2023 was $0.1 million, which consisted of interest income. Other expense for the three months ended September 30th, 2022 with less than $0.1 million. Our net loss was approximately $5.1 million and $5.2 million for the three-month periods ended September 30th, 2023 and 2022, respectively. As of September 30th, 2023, the company had cash and cash equivalents of $2 million, marketable securities of $2 million, and working capital of approximately $1.7 million. As of December 31, 2022, cash and cash equivalents was 10.5 million, marketable securities were 9.2 million, and working capital was approximately 15.4 million. Subsequent to the end of the quarter, On October 13, 2023, the company closed a registered direct equity offering priced at the market under NASDAQ rules and a concurrent private placement with gross proceeds of approximately $4 million before deducting the placement agent's fees and other offering expenses payable by Longevron. Longevron currently intends to use the net proceeds from the offering to fund the ongoing clinical and regulatory development of LomaCell B and for capital expenditures, working capital, and general corporate purposes. 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 the first quarter of 2024. With that, thank you, and I will turn the call over to Waya. Waya?
spk03: Thank you, Lisa. As everyone has heard today with the announcement of positive trial results from our ClearMind study, and the full data expected in the coming weeks, results from ELPAS-1 trial and HLHS being presented at the American Heart Association, and ELPAS-2 continuing its enrollment, and our Phase II program in aging-related frailty progressing in Japan as well, we are looking forward to meaningful milestones in the near term. We are making steady progress in advancing Lomacil-B across these three indications, and fully realizing the therapeutic potential of Lomacil-B. I would now like to open the call for questions. Operator, please open the lines to our covering analyst.
spk05: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
spk04: One moment, please, while we pull for questions. Our first question comes from Michael Okunich. Please proceed.
spk02: Michael Okunich Hey, Lyle. Thank you for taking the question today. I guess to kick things off, I just want to ask something about your strategy regarding HLHS, given that you have this strong data from ELPAS 1. What sort of community outreach and awareness building are you doing? Or given the rare nature of the disease and the unmet need, is there not really a need to do all that much more than presenting data at conferences and strategically selecting sites for the ELPAS 2 study?
spk03: Hi, Michael. Good morning. Thank you for the question. I think it's a great question, and I will pass it on to Natalia, who have been, since she came, she started reaching out to advocacy groups and other communities within the hypoplastic left heart syndrome. As you know, HLHS is a rare, ultra rare, actually, for that matter. ultra rare disease. So there are not too many communities, but there are some communities, and I will have Natalia give you a little bit of some of the examples that we are working on. Natalia?
spk06: Thank you so much, Rayel, and thank you so much, Michael, for your question. And you're absolutely right. Because it's a rare disease, you know, my first probably action when I came to the company was, so how do we increase awareness. And there are a few steps we are currently doing. The largest advocacy group existing for this particular indication even, not just for rare disease, but even for HLHS, it's called Sister by Heart. We reach out, Sister by Heart, we are collaborating right now to engage with parents, engage with physicians who are treating this disease just to increase awareness and that our trial exists and do everything possible for patients, for parents, for community to be aware. In addition, besides that, of course, we are very actively engaged with our sites. We are visiting them. We understand more about this patient's care, about the disease, And we're reaching more other potential programs which exist as a network for parents to be aware about HLHS. And this is in progress.
spk03: Yes. And, of course, Michael, you know, we did also one key opinion leader event that is – It was hosted by three top key opinion leaders to educate everyone on the hypoplastic left heart syndrome. It was conducted by Dr. Sanjay Kashal, Dr. Ram Subramanian, and Dr. Josh Hare. And it's available also as an enduring material on both our website and LifeSci, our investor relation portal as well.
spk02: All right. Yeah, thank you for that. Do one more for me, and I'll hop back into the queue. I just want to see, you know, with the full ClearMind data coming up in the next few weeks, are there any particular additional analyses that you think we should be keeping our eye out for?
spk03: Yes, of course. This will be a complete study report, so it will include the data that we disclosed. But as Natalia has mentioned, we are going to also announce additional analysis from additional scales that we have not presented, cognitive scales such as MMSE, MOCA. We're also going to be presenting more detailed MRI data. And, of course, all the biomarker data, which is a large data set, That's why it's taking a lot of time to do the analysis. So there will be a lot of additional analysis is coming. But those are the three, the cognitive scales, the MRI data, and the biomarker data are the three things that people have not seen before. And I think they all will be interesting. All right.
spk04: Thank you. We're looking forward to it. Thank you.
spk05: Once again, if you would like to ask a question, please press star 1 on your telephone keypad. If you're having trouble, please press star 0 for operator assistance.
spk04: This concludes our question and answer session.
spk05: I would like to turn the floor back over to Wael Hashan for closing comments.
spk03: All right. Thank you, operator. All right. Well, thanks, everyone, for attending the call today. On behalf of Longevaron, I would like to thank you for your continued interest and support and wish you a good day today.
spk02: Thank you.
spk04: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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