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spk09: welcome to the lasada therapeutics full year 2023 financial results and business update conference call currently all participants are in a listen-only mode following management's prepared remarks we'll hold the q a session to ask a question at that time please press star 1 1 on your telephone you will then hear an automated message advising your hand is raised as a reminder this call is being recorded today february 29 2024. i will now turn the call over to john mendito Vice President of Investor Relations and Corporate Communications at La Sada. Please go ahead, sir.
spk06: Thank you, operator, and good afternoon, everyone. Welcome to La Sada's full year 2023 conference call to discuss our financial results and provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer, Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer, and James Nisko, Vice President of Finance and Treasury. Shortly before this call, we issued a press release announcing our full year 2023 financial results, which is available under the Investors and News section of the company website, along with the webcast replay of this call. If you have not received this news release, or if you'd like to be added to the company's email distribution list, please email me at jmendito at lasada.com. Before we begin, I remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of LISADA. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, its forms 10-Q, 8-K, and 10-K, which identify specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, Thursday, February 29th, 2024. La Sada Therapeutics undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I will now turn the call over to Dr. Mazzo. Dave?
spk05: Thank you, John, and good afternoon, everyone. Thank you for joining us today as we provide an overview of recent business highlights, discuss our full year 2023 financial results, and give an update on the progress of our various development programs. During 2023, our first full year as Lasada, we made notable progress advancing our clinical development programs, targeting several advanced solid tumors using ListaOne, our lead product candidate, in combination with multiple anti-cancer agents of differing modalities. As we have previously reported, we have both preclinical and early clinical data in humans that we believe demonstrates the potential of LISTA-1 to become an integral part of a revised standard of care treatment regimen for many difficult-to-treat cancers. Following the review of the financial results, Lasada's Chief Medical Officer, Dr. Kristen Buck, will provide an update on our ongoing and planned clinical programs. With that, I now will turn the call over to James Nisko, our Vice President of Finance and Treasury. James?
spk16: James C. Thanks, Steve. Good afternoon, all. I'm pleased to join you today to present a summary of our full year 2023 financial results, starting with operating expenses. For the year ended December 31st, 2023, operating expenses totaled $25.7 million compared to $57.6 million for the year ended December 31st, 2022. representing a decrease of $31.9 million or 55.4%. Excluding the in-process research and development expense of $30.4 million associated with the merger of SEND Therapeutics and our predecessor company, Caladrius Biosciences, forming Lasada Therapeutics, operating expenses decreased by $1.5 million or 5.5% compared to the year-ended December 31st 2022. Research and development expenses were approximately $12.7 million to the year ended December 31, 2023, compared to $13.1 million to the year ended December 31, 2022, representing a decrease of approximately $300,000 or 2.5%. This decrease was primarily due to lower costs associated with our List of One programs in the current year versus our legacy CD34 cell therapy technology programs in the prior year. Current year expenses were associated with study activities for LISTA-1, Phase 2A of concept, bolster trial, and various solid tumors in combination with the corresponding standards of care. Enrollment activities for the LISTA-1, Phase 2B, ascend study, chemistry manufacturing and control, or CMC, activities for LISTA-1, and study startup activities for the LISTA-1 Phase IIa study for the treatment of glioblastoma multiforme. General and administrative expenses were approximately $13 million for the year ended December 31, 2023, compared to $14.1 million for the year ended December 31, 2022. representing a decrease of approximately $1.2 million or 8.3 percent. This was primarily due to non-recurring costs associated with the aforementioned merger in the prior year, a decrease in equity expense due to prior year performance stock unit vesting, merger option assumption expense, and departing board member restricted stock unit vesting, lower annual stockholder meeting expenses, and a decrease in directors' and officers' insurance premiums, partially offset by severance costs associated with the elimination of the chief business officer position on May 1st, 2023. Overall, net losses were $20.8 million and $54.2 million for the years ended December 31st, 2023 and 2022, respectively. Turning now to our balance sheet and cash flow. As of December 31, 2023, Lissata had cash, cash equivalents, and marketable securities of approximately $50.5 million. Based on its current expected capital needs, the company believes that its projected capital will fund its current proposed operations into early 2026, encompassing data milestones from all its ongoing and planned clinical trials. This completes my financial overview, and I will now turn the call over to our chief medical officer, Dr. Kristen Buck, for the review of our clinical development pipeline. Kristen?
spk07: Thank you, James, and good afternoon, everyone. As we have previously emphasized, we have designed Lysada's rigorous clinical programs based on sound scientific rationale from a large body of published preclinical and early clinical data. Our platform technology is designed to address major impediments to the successful treatment of advanced solid tumors in an environment of increasing pharmacoeconomic pressures. Generating meaningful clinical data as efficiently as possible is critically important in this field, and I can assure you that our entire organization has this goal top of mind in everything we do. With that, I will now provide an overview of LISTA-1 for the treatment of advanced solid tumors in combination with other anti-cancer agents. Despite advances in cancer therapy today, many solid tumors remain difficult to treat effectively. Cancers such as pancreatic cancer, gastric cancers, and other solid tumors are surrounded by a dense fibrotic tissue known as the stroma, which limits access of most pharmacotherapies to the tumor. Many solid tumors also present a hostile tumor microenvironment, or TME, which suppresses a patient's immune system and makes it less effective in fighting cancer. The combination of a dense stroma and a hostile TME prevent many chemotherapies and immunotherapies from being optimally effective in treating these cancers. This, coupled with the fact that most anticancer therapies are not efficient in targeting only cancer tissue, defines the major challenge in maximizing effectiveness and safety in the treatment of solid tumors. To combat this, Lissata's approach is to exploit the C& rule to activate the SendR active transport system, a naturally occurring active transport system to selectively deliver anti-cancer drugs through the stroma and into the tumor. Lissata's lead product candidate, ListaOne, is the recipient of multiple orphan drug designations, including for pancreatic cancer in both the United States and Europe, as well as for malignant glioma in the United States. Lista-1 selectively actuates the SendR active transport mechanism on tumor stroma while also having the potential to modify the TMA, TME, and make it less immunosuppressive. Lista-1 targets tumor vascular endothelial cells and tumor cells based on its affinity for alpha-V, beta-3, and beta-5 integrins. that are selectively up-regulated on these cells in comparison to healthy tissue. Lista 1 is a 9-amino acid cyclic internalizing RGD peptide that, once bound to these integrins, is cleaved by proteases expressed in the TME to release a linear peptide fragment called a SendR fragment. The SendR fragment has high affinity 4 and then binds to an adjacent receptor called Neuropilin 1, also upregulated on tumor endothelium and tumor cells. This finding activates the C-end rule active transport pathway, which furries anti-cancer drugs more efficiently into solid tumors. Additionally, Lista-1 has been shown in a range of preclinical models to modify the tumor microenvironment, making it less hostile to immune cells, reducing tumor resistance to anti-cancer medications, and impeding and or preventing the metastatic cascade. These results come from LUSADA-sponsored studies and from collaborators and research groups around the world and have been the subject of more than 350 scientific publications relevant to LISTA-1's mechanism of action. Along with our collaborators, we have also amassed significant non-clinical data demonstrating enhanced delivery of a range of anti-cancer therapy modalities including immunotherapies and RNA-based therapeutics. To date, ListaOne has demonstrated favorable safety, tolerability, and activity to enhance delivery of standard of care chemotherapy for patients with metastatic pancreatic cancer. Our development programs are designed to exploit the potential of ListaOne to enhance a variety of anti-cancer treatments in a range of solid tumors. Currently, ListaOne is the subject of nearly a dozen planned or active clinical trials globally for the treatment of various solid tumors. Let me touch on a few of these individually. The ASCEND trial is a 158-patient, double-blind, randomized, placebo-controlled clinical trial evaluating Lista-1 in combination with gemcitabine and nabpaclitaxel in patients with metastatic pancreatic ductal adenocarcinoma, also known as MPDAC. This trial is being conducted at 25 sites in Australia and New Zealand, led by the Australasian Gastrointestinal Cancer Trials Group, or AGITG, in collaboration with the NHMRC Clinical Trial Center at the University of Sydney. The study consists of two cohorts. Cohort A of the study receives a single dose of 3.2 milligram per kilogram Lista-1, essentially simultaneously with standard of care therapy, while cohort B is identical to cohort A, but with a second dose of 3.2 milligram per kilogram of Lista-1 given four hours after the first. As previously reported, a positive outcome from the planned interim futility analysis was announced by the study's independent data safety monitoring committee, which recommended continuation of the study without modification. In addition, we are excited to report that full enrollment of ASCEND has been achieved, and we expect top-line data from the 98 patients assigned to Cohort A to be reported in the fourth quarter of 2024. followed by the complete data set of all 158 patients to be available by mid-2025. We plan to use the results of the ASCEND trial to explore possible conditional approvals in several jurisdictions and to design an optimized Phase III program in metastatic pancreatic ductal adenocarcinoma. The BOLSTER trial is our Phase IIa double-blind, placebo-controlled, multicenter, randomized basket trial with active and planned investigational sites in the United States, Europe, Canada, and Australia, evaluating Lista-1 in combination with standards of care in advanced solid tumors, including second-line head and neck squamous cell carcinoma and first-line cholangiocarcinoma. This trial will include both cytotoxic and immunotherapy standards of care, Bolster continues to make steady progress, and enrollment completion is expected by the end of 2024. Zendifox, the Phase 1b-2a open-label trial in the United States of Lista-1 in combination with neoadjuvant fulvirinox-based therapies in pancreatic, colon, and appendiceal cancers continues to make steady progress, with enrollment completion expected by the end of the second quarter of 2024. This trial will provide us with pre- and post-treatment biopsy immunoprofiling data, as well as long-term outcome data. Lista-1 is also currently being evaluated in combination with gemcitabine and nabpaclitaxel in a Phase 1b-2a open-label trial in China, led by our licensee in that territory, Qilu Pharmaceutical. During the 2023 ASCO Annual Meeting, Chilu Pharmaceutical presented an abstract sharing preliminary data from the study, which corroborated previously reported findings from the Phase 1b2a trial of Lista-1 plus gemcitabine and nabpaclitaxel conducted in Australia in patients with MPDAC. According to Chilu, final data are expected by the end of the second quarter of 2024, with the initiation of a Phase 2 trial in China shortly thereafter. A collaboration with our funding partner, WARP9, the I-Lista trial, is a Phase I B2A randomized single-blind, single-center safety and pharmacodynamic study in Australia, evaluating Lista-1 in combination with the checkpoint inhibitor Dervalumab, plus standard-of-care chemotherapy NAB-paclitaxel and gemcitabine, versus standard-of-care alone in patients with locally advanced non-resectable pancreatic ductal adenocarcinoma. Enrollment completion for I-Lista is expected during the second half of 2024. I-GO-Lista, a phase 1B-2A proof of concept safety and early efficacy study evaluating Lista-1 in combination with nivolumab and fulferinox as a first-line treatment in locally advanced non-resectable gastroesophageal adenocarcinoma is pending initiation as a function of availability of funding by our partner, Warp 9. The inspiration for this study comes from the findings recently published in Oncology and Cancer Case Reports Journal, which details a patient with metastatic gastroesophageal adenocarcinoma who achieved a complete response when given Lista-1 in combination with standard of care for Firinox and Pembrolizumab. The subject initially underwent months of standard of care treatments and only achieved a partial response. Upon subsequent addition of Lista-1 to such standard of care therapeutic regimen, the subject achieved a complete response confirmed both radiographically and surgically. We hope to have further update on timing related to the execution of the study in the coming quarters. A study of Lista-1 in combination with temozolomide and glioblastoma multiforme, or GBM, has been initiated with patients already being treated. This study is designed as a phase 2A, double-blind, placebo-controlled, randomized, proof-of-concept study evaluating Lista-1 when added to standard-of-care temozolomide versus temozolomide and matching Lista-1 placebo in patients with newly diagnosed glioblastoma multiforme. It is being conducted across multiple sites in Estonia and Latvia and is targeted to enroll 30 patients with a randomization 2 to 1, Lista 1 plus standard of care versus placebo plus standard of care. Importantly, as recently announced, Lista 1 has been granted orphan drug designation by the U.S. Food and Drug Administration for malignant glioma. This action by the FDA not only highlights the unmet medical need, but also recognizes the potential of LISTA-1 to benefit patients in this indication. As a reminder, several of these studies are investigator-initiated trials. And although we have great confidence in our investigators running these studies, LISATA has limited control and thus timelines and expectations may be subject to change. That said, we are extremely grateful to our investigators and especially to those patients participating in ListaOne clinical trials around the world. For those who are interested, a more comprehensive description of each of our trials is available in the appendix section of the corporate presentation on our website. Additionally, in the body of the presentation, there are two milestone slides that depict the anticipated timing of key execution milestones and data readouts from our trials. As you will see, There are numerous execution and data milestones projected for our portfolio of clinical trials over the next year and beyond. With that, I will now turn the call back to Dave.
spk05: Thank you, Kristen. To summarize, 2023 was a year marked by the honing of our LISTA-1 development efforts in keeping with our strategic imperatives of advancing LISTA-1 rapidly toward registration in MPDAC, as well as demonstrating the broad application of LISTA-1 in combination with a variety of anti-cancer agents for the treatment of numerous solid tumor types. For 2024, more than ever, we are focused on efficient and timely study execution with the goal of getting to meaningful clinical data readouts as soon as possible. And with that overview, operator, we're now ready to take questions.
spk09: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please wait for your name to be announced. We ask that you please limit your questions to one at a time and return to the queue with any additional questions. One moment for our first question. And our first question comes from the line of Jo Penn-Guinness with HC Wainwright. Your line is now open.
spk13: Hi, good afternoon. This is Sarah on for Jo. Thanks for taking the question. I just wanted to gain some insight if you had any further detail on how the bolster trial is enrolling and if you're seeing across Europe, U.S., and Canada, any regions seeing maybe increased enrollment compared to others. Thank you.
spk05: Thanks, Sarah. I appreciate the question. And say hello to Joe for us as well. As it relates to bolster, bolster is actually on track to reach the enrollment goal of completion by the end of 2024, and we're quite pleased with that. As most people know, enrollment in clinical trials is not linear. It actually has more of the shape of a hockey stick, and we're finally on the upslope of that curve and moving things very, very nicely. As it relates to regional contributions, so far the U.S. has been the greatest contributor to enrollment, but that's mostly because many of our European sites will only really be coming on line in the month of March. And so we expect to see a significant contribution from the European Theater starting in the second quarter of this year.
spk09: Okay, that's helpful. Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Pete Enderlin with Moz Partners. The line is now open.
spk05: Hi, Pete. Go ahead. It's Dave.
spk00: Pete, you may be muted.
spk03: Yeah. Can you hear me now?
spk14: Yes.
spk03: Go ahead. Okay. Sorry. Thanks for taking the questions. The first one may be a little naive in a way. Did you get a milestone for enrolling the cohorts for the ASCEND trial? And if so, by whom? I don't know. I don't know who it would be.
spk05: No, that's a trial that's funded by us. Okay. So there are no milestones associated with that, no milestone payments associated with that.
spk03: And you mentioned Warp 9 as a source of funding for a couple of the programs. That's a three-year-old company or organization. Do you have any sense of what their financial resources would be? I know they get corporate funding, I think, but I'm not sure – how big a company it is, or how robust their financial resources are.
spk05: Well, Warp9 is a philanthropic foundation in Australia dedicated to the improvement and the rapid accessibility of patients to novel treatments for gastrointestinal cancers of all types. So far, I mean, we don't really monitor their finances per se. So far, they've met all their commitments to us, though, as it related to financing of the trials associated with LISTA-1.
spk03: Okay. Does AGITG typically take a financial interest in anything that they help you with, or the way some universities do here, or is that not the way they do it?
spk05: I don't know what they typically do, but as it relates to our associations with AGITG, for Ascend and any other work we may do, there is no financial interest from them. They're purely clinicians executing at the site level, so we don't give up any commercial rights to them, and they don't take any commercial or financial interest in the product.
spk03: Okay, fair enough. And then on the Ascend cohort B, I'm just curious from a naive perspective, what's the significance of a four-hour delay in the second dose versus, say, a 24-hour delay, which sort of seems like it would be more normal to go through a normal metabolic cycle for the patient. So what's four hours versus a longer period of time?
spk05: Well, I'll describe this sort of top line. If you want to have a more detailed conversation, you could always take that offline with Dr. Buck. But generally speaking, the choice of four hours is a combination of both knowledge of the pharmacokinetic and pharmacodynamics of Lista-1 in humans and also simply practicality for patients. So without getting too technical, Lista-1 has a half-life in humans of about 90 minutes. And so after one or two half-lives, you can expect that the concentration of Lista-1 would be significantly decreased in the bloodstream. What we are doing is reinitiating administration at four hours to bring that concentration back up to the earlier peaks in order to see if the concentrations of the co-administered chemotherapeutic agents, gemcitabine and napaxlitaxel, both of which have active components that have very long half-lives, might actually see another increase of activity due to that second dose. The reason, you know, it's four hours and not five, six or something else is that most patients do not want to spend an overnight in a hospital or do not want to have to return to the hospital or clinic for treatment second day after receiving chemotherapy. So four hours is a convenient time for patients who come in in the morning, receive their chemo, wait four hours at the center, receive their second dose, and then can go home. And so, as I said, it's a combination of scientific design and practicality for patients.
spk03: That's very interesting, and it makes a lot of sense. Thanks. And then one more, if I might, and this is sort of a premature question, which a lot of them typically are from people like me, but what would be the optimum business model, you know, once these drugs are approved and, you know, you have drugs different co-administrations of other modalities and so on. What would be the typical business model for that kind of a co-administered program in terms of who pays and how it divides the funding and all that?
spk05: Well, who pays is typically insurance companies and sometimes government entities. That's standards. How it's divided up is actually quite simple. Even though these products are co-administered, they're not sold as a bundled product necessarily. So, you know, we will sell or somebody will sell Lista One and they'll get paid for that. And somebody will sell gemcitabine and napaclitaxel and they'll get paid from that. Now, at some point, you know, there could be arrangements that allow for bundling. So you buy a single package for convenience or even, you know, some sort of combination product that could be ultimately developed, which would involve, you know, a new product and new regulatory pathways, et cetera. And all of those things are possible. I would suggest that, you know, if someone is looking for a metaphor, an analog here on something like this, I would suggest that you go back and look at the case. It's not an oncology, but the business case would be similar. Look at the business case for ezidimide, which was sharing plows cholesterol absorption inhibitor, which was approved as Zetia, and how that product was used in combination with almost all of the then approved statins. And then ultimately, a new product was developed, which is now called Vitorin, which is actually the combination of Simvastatin, Merck's second generation statin, plus in a single product sold as Vitorin and ultimately became one of the reasons why Merck purchased sharing plow. But you can see the model there of how a product that can be used in combination with a variety of other products can be marketed in a variety of different ways and can achieve great commercial success.
spk03: Thanks. That's very helpful. Thanks, Dave.
spk05: Take care, Pete.
spk09: Thank you. One moment for our next question, please. Our next question comes from the line of Kim Dolliver with Brookline Capital Markets. Your line is now open.
spk02: Thank you. Hi. Thanks, and good afternoon. I have two or three questions. Just to close the loop with Warp 9, how long do they have to raise the adequate amount of money to run the trials before you can just contractually walk away and find another entity?
spk05: There's really, there's nothing contractually in that about a timeline. So it's really something, again, we approach pragmatically. To the best of our knowledge, they are very close to having all the funding necessary to supply for ICOLIS, the And they've already, of course, fully funded iLista alone. So they're actually pretty efficient at getting to full funding. And it's because they tap a network of philanthropic organizations and individuals within their region of the world, mostly Australia and New Zealand, who are very interested in supporting the cause.
spk02: OK, that's helpful. Thank you. When do you expect you will get your rebates for your Australian activity for this year? It looks like you were paid about $2 million last year in the second quarter. Is that a good ballpark, number one? And then number two, are these R&D credits included in the runway guidance?
spk05: So the R&D credits are included in the runway guidance. James, if you're still available and your connection is working, could you just jump in, please?
spk16: Yep. So in September, we received $600,000 from the Australian Taxation Office. That was related to the 2022 tax year. And at the end of this year, we did have a million dollars recorded as an income tax receivable. So we typically file our returns in the June-July timeframe and then receive the refund around the September timeframe. And that'll be the expectation of about a million in 2024, based on the 2023 tax year. And yes, that is included in our projected capital runway.
spk02: That's great. Thank you. And then with regard to CHILU, It looks like you've had some recent communication with them because there was some verbiage added versus last quarter regarding the timing of them advancing the program once they have data. And so I think in the past you've said the next milestone from them would be in 2025. Is that still the case? And I think the estimate could be that it would be as much as $10 million.
spk05: So the estimate is correct. Actually, it's not an estimate. It's contractual. At the beginning of phase, when they dose the first patient in phase three or in a registration trial, which is typically a phase three trial, in the region, they are contractually obliged to pass a milestone of $10 million US dollars. To the best of our knowledge, they'll be starting phase two at the end of this quarter or early next quarter. And while we don't know the projection of a phase two timeline in China, but one could guesstimate that a typical phase two program takes between 18 and 24 months. So if we're starting now, roughly two years from now, one might expect that the milestone might become due. But it's all dependent on enrollment rate and progression of the development program by CHIRU in China.
spk02: OK, thank you. And I'll just press on this a little more in case you've indicated anything. But the CFDA has done a pretty good job of replicating many of the accelerated pathways of USDA, FDA. And so have you heard from Chilu whether or not CFDA has indicated some eligibility for an accelerated pathway if the data pulled up?
spk05: To our knowledge, they have had, that is, Chilu has had discussions with the Chinese regulatory authorities, and I believe that they're program is designed to take maximum advantage of the possibility of an accelerated approval pathway. But we have not been privy to any written, well, we don't read Chinese anyway, but any translated of the written communications between them that might actually codify that. But that's what we've been told, that they're developing with achieving accelerated approval in mind.
spk02: Right. Okay. That's reasonable. Thank you so much. Thanks, Kim.
spk09: Thank you. This concludes the Q&A portion. I will now turn the call back to Dr. Mazzo for closing remarks.
spk05: Thank you, Operator. And again, thank you all for participating in today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements and progress. We remain grateful for your continued interest and support. Stay well and have a good evening.
spk09: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day. you Thank you. Welcome to the Losada Therapeutics full year 2023 financial results and business update conference call. Currently, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a Q&A session. To ask a question at that time, please press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. As a reminder, this call is being recorded today, February 29, 2024. I will now turn the call over to John Mendito, Vice President of Investor Relations and Corporate Communications at Lasada. Please go ahead, sir.
spk06: Thank you, Operator, and good afternoon, everyone. Welcome to Lasada's full year 2023 conference call to discuss our financial results and provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer, Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer, and James Nisko, Vice President of Finance and Treasury. Shortly before this call, we issued a press release announcing our full year 2023 financial results, which is available under the Investors and News section of the company website, along with the webcast replay of this call. If you have not received this news release or if you'd like to be added to the company's email distribution list, please email me at jmendito at lasada.com. Before we begin, I remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of LISADA. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, its forms 10-Q, 8-K, and 10-K, which identify specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, Thursday, February 29th, 2024. La Sada Therapeutics undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I will now turn the call over to Dr. Mazzo. Dave?
spk05: Thank you, John, and good afternoon, everyone. Thank you for joining us today as we provide an overview of recent business highlights, discuss our full year 2023 financial results, and give an update on the progress of our various development programs. During 2023, our first full year as Lasada, we made notable progress advancing our clinical development programs, targeting several advanced solid tumors using ListaOne, our lead product candidate, in combination with multiple anti-cancer agents of differing modalities. As we have previously reported, we have both preclinical and early clinical data in humans that we believe demonstrates the potential of LISTA-1 to become an integral part of a revised standard of care treatment regimen for many difficult-to-treat cancers. Following the review of the financial results, La Sada's Chief Medical Officer, Dr. Kristen Buck, will provide an update on our ongoing and planned clinical programs. With that, I now will turn the call over to James Nisko, our Vice President of Finance and Treasury. James?
spk16: James C. Thanks, Steve. Good afternoon, all. I'm pleased to join you today to present a summary of our full year 2023 financial results, starting with operating expenses. For the year ended December 31st, 2023, operating expenses totaled $25.7 million compared to $57.6 million for the year ended December 31st, 2022. representing a decrease of $31.9 million or 55.4%. Excluding the in-process research and development expense of $30.4 million associated with the merger of Senn Therapeutics and our predecessor company, Caladrius Biosciences, forming Lasada Therapeutics, operating expenses decreased by $1.5 million or 5.5% compared to the year-ended December 31st 2022. Research and development expenses were approximately $12.7 million to the year ended December 31, 2023, compared to $13.1 million to the year ended December 31, 2022, representing a decrease of approximately $300,000 or 2.5%. This decrease was primarily due to lower costs associated with our List of One programs in the current year versus our legacy CD34 cell therapy technology programs in the prior year. Current year expenses were associated with study activities for LISTA-1 Phase II-B of concept bolster trial in various solid tumors in combination with the corresponding standards of care. Enrollment activities for the LISTA-1 Phase II-B Ascend study chemistry manufacturing and control, or CMC, activities for LISTA-1, and study startup activities for the LISTA-1 Phase IIa study for the treatment of glioblastoma multiforme. General and administrative expenses were approximately $13 million for the year ended December 31, 2023, compared to $14.1 million for the year ended December 31, 2022. representing a decrease of approximately $1.2 million or 8.3 percent. This was primarily due to non-recurring costs associated with the aforementioned merger in the prior year, a decrease in equity expense due to prior year performance stock unit vesting, merger option assumption expense, and departing board member restricted stock unit vesting, lower annual stockholder meeting expenses, and a decrease in directors' and officers' insurance premiums, partially offset by severance costs associated with the elimination of the chief business officer position on May 1st, 2023. Overall, net losses were $20.8 million and $54.2 million for the years ended December 31st, 2023 and 2022, respectively. Turning now to our balance sheet and cash flow. As of December 31st, 2023, Lissata had cash equivalents and marketable securities of approximately $50.5 million. Based on its current expected capital needs, the company believes that its projected capital will fund its current proposed operations into early 2026, encompassing data milestones from all its ongoing and planned clinical trials. This completes my financial overview, and I will now turn the call over to our chief medical officer, Dr. Kristen Buck, for the review of our clinical development pipeline. Kristen?
spk07: Thank you, James, and good afternoon, everyone. As we have previously emphasized, we have designed Lissata's rigorous clinical programs based on sound scientific rationale from a large body of published preclinical and early clinical data. Our platform technology is designed to address major impediments to the successful treatment of advanced solid tumors in an environment of increasing pharmacoeconomic pressures. Generating meaningful clinical data as efficiently as possible is critically important in this field, and I can assure you that our entire organization has this goal top of mind in everything we do. With that, I will now provide an overview of LISTA-1 for the treatment of advanced solid tumors in combination with other anti-cancer agents. Despite advances in cancer therapy today, many solid tumors remain difficult to treat effectively. Cancers such as pancreatic cancer, gastric cancers, and other solid tumors are surrounded by a dense fibrotic tissue known as the stroma, which limits access of most pharmacotherapies to the tumor. Many solid tumors also present a hostile tumor microenvironment, or TME, which suppresses a patient's immune system and makes it less effective in fighting cancer. The combination of a dense stroma and a hostile TME prevent many chemotherapies and immunotherapies from being optimally effective in treating these cancers. This, coupled with the fact that most anti-cancer therapies are not efficient in targeting only cancer tissue, defines the major challenge in maximizing effectiveness and safety in the treatment of solid tumors. To combat this, Lissata's approach is to exploit the C& rule to activate the SendR active transport system, a naturally occurring active transport system to selectively deliver anti-cancer drugs through the stroma and into the tumor. Lissata's lead product candidate, ListaOne, is the recipient of multiple orphan drug designations, including for pancreatic cancer in both the United States and Europe, as well as for malignant glioma in the United States. Lista-1 selectively actuates the SendR active transport mechanism on tumor stroma while also having the potential to modify the TMA, TME, and make it less immunosuppressive. Lista-1 targets tumor vascular endothelial cells and tumor cells based on its affinity for alpha-V, beta-3, and beta-5 integrins. that are selectively up-regulated on these cells in comparison to healthy tissue. Lista 1 is a 9-amino acid cyclic internalizing RGD peptide that, once bound to these integrins, is cleaved by proteases expressed in the TME to release a linear peptide fragment called a SendR fragment. The SendR fragment has high affinity 4 and then binds to an adjacent receptor called Neuropilin 1, also upregulated on tumor endothelium and tumor cells. This binding activates the CN rule active transport pathway, which furries anti-cancer drugs more efficiently into solid tumors. Additionally, Lista-1 has been shown in a range of preclinical models to modify the tumor microenvironment, making it less hostile to immune cells, reducing tumor resistance to anti-cancer medications, and impeding and or preventing the metastatic cascade. These results come from LUSADA-sponsored studies and from collaborators and research groups around the world and have been the subject of more than 350 scientific publications relevant to LISTA-1's mechanism of action. Along with our collaborators, we have also amassed significant non-clinical data demonstrating enhanced delivery of a range of anti-cancer therapy modalities including immunotherapies and RNA-based therapeutics. To date, ListaOne has demonstrated favorable safety, tolerability, and activity to enhance delivery of standard of care chemotherapy for patients with metastatic pancreatic cancer. Our development programs are designed to exploit the potential of ListaOne to enhance a variety of anti-cancer treatments in a range of solid tumors. Currently, ListaOne is the subject of nearly a dozen planned or active clinical trials globally for the treatment of various solid tumors. Let me touch on a few of these individually. The ASCEND trial is a 158-patient, double-blind, randomized, placebo-controlled clinical trial evaluating Lista-1 in combination with gemcitabine and nabpaclitaxel in patients with metastatic pancreatic ductal adenocarcinoma, also known as MPDAC. This trial is being conducted at 25 sites in Australia and New Zealand, led by the Australasian Gastrointestinal Cancer Trials Group, or AGITG, in collaboration with the NHMRC Clinical Trial Center at the University of Sydney. The study consists of two cohorts. Cohort A of the study receives a single dose of 3.2 milligram per kilogram Lista-1 essentially simultaneously with standard of care therapy, while cohort B is identical to cohort A, but with a second dose of 3.2 milligram per kilogram of Lista-1 given four hours after the first. As previously reported, a positive outcome from the planned interim futility analysis was announced by the study's independent data safety monitoring committee, which recommended continuation of the study without modification. In addition, we are excited to report that full enrollment of ASCEND has been achieved, and we expect top-line data from the 98 patients assigned to Cohort A to be reported in the fourth quarter of 2024. followed by the complete data set of all 158 patients to be available by mid-2025. We plan to use the results of the ASCEND trial to explore possible conditional approvals in several jurisdictions and to design an optimized Phase III program in metastatic pancreatic ductal adenocarcinoma. The BOLSTER trial is our Phase IIa double-blind, placebo-controlled, multicenter, randomized basket trial with active and planned investigational sites in the United States, Europe, Canada, and Australia, evaluating Lista-1 in combination with standards of care in advanced solid tumors, including second-line head and neck squamous cell carcinoma and first-line cholangiocarcinoma. This trial will include both cytotoxic and immunotherapy standards of care. Bolster continues to make steady progress, and enrollment completion is expected by the end of 2024. Zendifox, the Phase 1b-2a open-label trial in the United States of Lista-1 in combination with neoadjuvant fulvirinox-based therapies in pancreatic, colon, and appendiceal cancers continues to make steady progress, with enrollment completion expected by the end of the second quarter of 2024. This trial will provide us with pre- and post-treatment biopsy immunoprofiling data, as well as long-term outcome data. Lista-1 is also currently being evaluated in combination with gemcitabine and nabpaclitaxel in a Phase 1b-2a open-label trial in China, led by our licensee in that territory, Qilu Pharmaceutical. During the 2023 ASCO Annual Meeting, Chilu Pharmaceutical presented an abstract sharing preliminary data from the study, which corroborated previously reported findings from the Phase 1b2a trial of Lista-1 plus gemcitabine and nabpaclitaxel conducted in Australia in patients with MPDAC. According to Chilu, final data are expected by the end of the second quarter of 2024, with the initiation of a Phase 2 trial in China shortly thereafter. A collaboration with our funding partner, WARP9, the I-Lista trial, is a Phase I B2A randomized single-blind, single-center safety and pharmacodynamic study in Australia, evaluating Lista-1 in combination with the checkpoint inhibitor Dervalumab, plus standard-of-care chemotherapy NAB-paclitaxel and gemcitabine, versus standard-of-care alone in patients with locally advanced non-resectable pancreatic ductal adenocarcinoma. Enrollment completion for I-Lista is expected during the second half of 2024. I-GO-Lista, a phase 1b, 2a proof of concept safety and early efficacy study evaluating Lista-1 in combination with nivolumab and fulferinox as a first-line treatment in locally advanced non-resectable gastroesophageal adenocarcinoma is pending initiation as a function of availability of funding by our partner, Warp 9. The inspiration for this study comes from the findings recently published in Oncology and Cancer Case Reports Journal, which details a patient with metastatic gastroesophageal adenocarcinoma who achieved a complete response when given Lista-1 in combination with standard of care for Firinox and Pembrolizumab. The subject initially underwent months of standard of care treatments and only achieved a partial response. Upon subsequent addition of Lista-1 to such standard of care therapeutic regimen, the subject achieved a complete response confirmed both radiographically and surgically. We hope to have further update on timing related to the execution of the study in the coming quarters. A study of Lista-1 in combination with temozolomide and glioblastoma multiforme, or GBM, has been initiated with patients already being treated. This study is designed as a Phase IIa, double-blind, placebo-controlled, randomized, proof-of-concept study evaluating Lista-1 when added to standard-of-care temozolomide versus temozolomide and matching Lista-1 placebo in patients with newly diagnosed glioblastoma multiforme. It is being conducted across multiple sites in Estonia and Latvia and is targeted to enroll 30 patients with a randomization two-to-one ListaOne plus standard of care versus placebo plus standard of care. Importantly, as recently announced, ListaOne has been granted orphan drug designation by the U.S. Food and Drug Administration for malignant glioma. This action by the FDA not only highlights the unmet medical need, but also recognizes the potential of LISTA-1 to benefit patients in this indication. As a reminder, several of these studies are investigator-initiated trials. And although we have great confidence in our investigators running these studies, LISATA has limited control and thus timelines and expectations may be subject to change. That said, we are extremely grateful to our investigators and especially to those patients participating in ListaOne clinical trials around the world. For those who are interested, a more comprehensive description of each of our trials is available in the appendix section of the corporate presentation on our website. Additionally, in the body of the presentation, there are two milestone slides that depict the anticipated timing of key execution milestones and data readouts from our trials. As you will see, There are numerous execution and data milestones projected for our portfolio of clinical trials over the next year and beyond. With that, I will now turn the call back to Dave.
spk05: Thank you, Kristen. To summarize, 2023 was a year marked by the honing of our LISTA-1 development efforts in keeping with our strategic imperatives of advancing LISTA-1 rapidly toward registration in MPDAC, as well as demonstrating the broad application of LISTA-1 in combination with a variety of anti-cancer agents for the treatment of numerous solid tumor types. For 2024, more than ever, we are focused on efficient and timely study execution with the goal of getting to meaningful clinical data readouts as soon as possible. And with that overview, operator, we're now ready to take questions.
spk09: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please wait for your name to be announced. We ask that you please limit your questions to one at a time and return to the queue with any additional questions. One moment for our first question. And our first question comes from the line of Jo Penn-Guinness with HC Wainwright. Your line is now open.
spk13: Hi, good afternoon. This is Sarah on for Jo. Thanks for taking the question. I just wanted to gain some insight if you had any further detail on how the bolster trial is enrolling and if you're seeing across Europe, U.S., and Canada, any regions seeing maybe increased enrollment compared to others. Thank you.
spk05: Thanks, Sarah. I appreciate the question. And say hello to Joe for us as well. As it relates to bolster, bolster is actually on track to reach the enrollment goal of completion by the end of 2024, and we're quite pleased with that. As most people know, enrollment in clinical trials is not linear. It actually has more of the shape of a hockey stick, and we're finally on the upslope of that curve and moving things very, very nicely. As it relates to regional contributions, so far the U.S. has been the greatest contributor to enrollment, but that's mostly because many of our European sites will only really be coming on line in the month of March. And so we expect to see a significant contribution from the European Theater starting in the second quarter of this year.
spk09: Okay, that's helpful. Thank you. Thank you. One moment for our next question, please. Our next question comes from the line of Pete Enderlin with Moz Partners. Your line is now open.
spk05: Hi, Pete. Go ahead. It's Dave.
spk00: Pete, you may be muted.
spk03: Yeah. Can you hear me now?
spk14: Yes. Go ahead.
spk03: Okay. Sorry. Thanks for taking the questions. The first one may be a little naive in a way. Did you get a milestone for enrolling the cohorts for the Ascent trial? And if so, by whom? I don't know. I don't know who it would be.
spk05: No, that's a trial that's funded by us, so there are no milestones associated with that, no milestone payments associated with that.
spk03: And you mentioned Warp 9 as a source of funding for a couple of the programs. That's a three-year-old company or organization. Do you have any sense of what their financial resources would be? I know they get corporate funding, I think, but I'm not sure. how big a company it is or how robust their financial resources are.
spk05: Well, Warp9 is a philanthropic foundation in Australia dedicated to the improvement and the rapid accessibility of patients to novel treatments for gastrointestinal cancers of all types. So far, I mean, we don't really monitor their finances per se. So far, they've met all their commitments to us, though, as it related to financing of the trials associated with LISTA-1.
spk03: Okay. Does AGITG typically take a financial interest in anything that they help you with, or the way some universities do here, or is that not the way they do it?
spk05: I don't know what they typically do, but as it relates to our associations with AGITG, for ASCEND and any other work we may do, there is no financial interest from them. They're purely clinicians executing at the site level, so we don't give up any commercial rights to them, and they don't take any commercial or financial interest in the product.
spk03: Okay, fair enough. And then on the ASCEND cohort B, I'm just curious from a naive perspective, what's the significance of a four-hour delay in the second dose versus, say, a 24-hour delay, which sort of seems like it would be more normal to go through a normal metabolic cycle for the patient. So what's four hours versus a longer period of time?
spk05: Well, I'll describe this sort of top line. If you want to have a more detailed conversation, you could always take that offline with Dr. Buck. But generally speaking, the choice of four hours is a combination of both knowledge of the pharmacokinetic and pharmacodynamics of Lista-1 in humans and also simply practicality for patients. So without getting too technical, Lista-1 has a half-life in humans of about 90 minutes. And so after one or two half-lives, you can expect that the concentration of Lista-1 would be significantly decreased in the bloodstream. What we are doing is reinitiating administration at four hours to bring that concentration back up to the earlier peaks in order to see if the concentrations of the co-administered chemotherapeutic agents, gemcitabine and napaxlitaxel, both of which have active components that have very long half-lives, might actually see another increase of activity due to that second dose. The reason it's four hours and not five, six, or something else is that most patients do not want to spend an overnight in a hospital or do not want to have to return to the hospital or clinic for treatment a second day after receiving chemotherapy. So four hours is a convenient time for patients who come in in the morning, receive their chemo, wait four hours at the center, receive their second dose, and then can go home. And so, as I said, it's a combination of scientific design and practicality for patients.
spk03: That's very interesting, and it makes a lot of sense. Thanks. And then one more, if I might, and this is sort of a premature question, which a lot of them typically are from people like me, but what would be the optimum business model, you know, once these drugs are approved and, you know, you have different co-administrations of other modalities and so on. What would be the typical business model for that kind of a co-administered program in terms of who pays and how it divides the funding and all that?
spk05: Well, who pays is typically insurance companies and sometimes government entities. That's standards. How it's divided up is actually quite simple. Even though these products are co-administered, they're not sold as a bundled product necessarily. So we will sell or somebody will sell ListaOne and they'll get paid for that. And somebody will sell Gemcitabine and Napaclitaxel and they'll get paid from that. Now, at some point, there could be arrangements that allow for bundling. So you buy a single package for convenience or even some sort of combination product that could be ultimately developed, which would involve, you know, a new product and new regulatory pathways, et cetera. And all of those things are possible. I would suggest that, you know, if someone is looking for a metaphor, an analog here on something like this, I would suggest that you go back and look at the case. It's not an oncology, but the business case would be similar. Look at the business case for ezidimide, which was sharing plows cholesterol absorption inhibitor, which was approved as Zetia, and how that product was used in combination with almost all of the then approved statins. And then ultimately, a new product was developed, which is now called Vitorin, which is actually the combination of Simvastatin, Merck's second generation statin, plus in a single product sold as Vitorin and ultimately became one of the reasons why Merck purchased sharing plow. But you can see the model there of how a product that can be used in combination with a variety of other products can be marketed in a variety of different ways and can achieve great commercial success.
spk03: Thanks. That's very helpful. Thanks, Dave.
spk05: Take care, Pete.
spk09: Thank you. One moment for our next question, please. Our next question comes from the line of Kim Dolliver with Brookline Capital Markets. Your line is now open.
spk02: Thank you. Hi. Thanks, and good afternoon. I have two or three questions. Just to close the loop with Warp 9, how long do they have to raise the adequate amount of money to run the trials before you can just contractually walk away and find another entity?
spk05: There's really nothing contractually in that about a timeline, so it's really something, again, we approach pragmatically. To the best of our knowledge, they are very close to having all the funding necessary to supply for iGO-Lista, and they've already, of course, fully funded iLista alone. we we they're actually pretty efficient at getting to full funding and it's because they tap a network of you know philanthropic organizations and individuals within their region of the world mostly australia new zealand who are very interested in supporting the cause okay that's helpful thank you um and when do you expect you will get your uh
spk02: rebates for your Australian activity for this year? It looks like you were paid about $2 million last year in the second quarter. Is that a good ballpark, number one? And then number two, are these R&D credits included in the runway guidance?
spk05: So the R&D credits are included in the runway guidance. James, if you're still available and you're connection is working. Could you just jump in, please?
spk16: Yep. So in September, we received six hundred thousand from the Australian Tax Taxation Office. That was related to the twenty twenty two tax year. And at the end of this year, we did have a million dollars recorded as an income tax receivable. So we typically file our returns in the June, July timeframe and then receive the refund around the September timeframe. And that'll be the expectation of about a million in 2024 based on the 2023 tax year. And yes, that is included in our projected capital runway.
spk02: That's great. Thank you. And then with regard to Shilu, you know, it looks like you've had some recent communication with them because there was some verbiage added versus last quarter regarding the timing of them advancing the program once they have data. And so I think in the past you've said the next milestone from them would be in 2025. Is that still the case? And I think the estimate could be that it would be as much as $10 million.
spk05: So the estimate is correct. Actually, it's It's not an estimate, it's contractual. At the beginning of phase, when they dose the first patient in phase three or in a registration trial, which is typically a phase three trial, in the region, they are contractually obliged to pass a milestone of 10 million US dollars. To the best of our knowledge, they'll be starting phase two at the end of this quarter or early next quarter. And while we don't know the projection of a phase two timeline in China, but one could guesstimate that a typical phase two program takes between 18 and 24 months. So if we're starting now, roughly two years from now, one might expect that the milestone might become due. But it's all dependent on enrollment rate and progression of the development program. by Qi in China.
spk02: Okay, thank you. And I'll just press on this a little more in case they've indicated anything, but the CFDA has done a pretty good job of replicating many of the accelerated pathways of USDA, FDA. Have you heard from Chilu whether or not the CFDA has indicated some eligibility for an accelerated pathway if the data pulled up?
spk05: To our knowledge, they have had, that is, Chilu has had discussions with the Chinese regulatory authorities, and I believe that their program is designed to take maximum advantage of the possibility of an accelerated approval pathway. But we have not been privy to any written, well, we don't read Chinese anyway, but any translated of the written communications between them that might actually codify that. But that's what we've been told, that they're developing with achieving accelerated approval in mind.
spk02: Right. Okay. That's reasonable. Thank you so much. Thanks, Kim.
spk09: Thank you. This concludes the Q&A portion. I will now turn the call back to Dr. Mazzo for closing remarks.
spk05: Thank you, Operator, and again, thank you all for participating in today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements and progress. We remain grateful for your continued interest and support. Stay well and have a good evening.
spk09: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
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