Longeveron Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 10, 2023

There are 6 speakers on the call.

Operator

Greetings, and welcome to the Longevren 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Moyer.

Operator

Mike, please proceed.

Speaker 1

Thank you, operator. Good morning, everyone, and welcome to Longevron's Q3 2023 results conference call. Today, we will discuss financial results for the quarter ended September 30, 2023 and provide a business update. Earlier this morning, we issued a press release with these results, which can be found under the Investors section of Longeverone's website. I'm joined today by the following members of Longeverone's management team: Mr.

Speaker 1

Waela Shatt, Chief Executive Officer Natalia Agafinova, Chief Medical Officer and Lisa Locklear, Chief Financial Officer. Mr. Ashad will begin with a brief corporate overview, then Doctor. Agafinova will review Longeverone's recent progress in its clinical programs and Ms. Locklear will review financial results for the Q3.

Speaker 1

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 ks 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.

Speaker 1

Wael Ashad, Chief Executive Officer of Longeverone. Wael?

Speaker 2

Thank you, Mike, and good morning, everyone. Welcome to the Longeverone Q3 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 Q3 and recent weeks have been very productive, led by top line results we announced from the CLEAR MIND Alzheimer's disease trial, which affirmed the safety profile of LomaCell B and provided a clear efficacy signal. We are also presenting extended survival data from ELPHIS-one 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 $4,000,000 gross proceeds before expenses from equity financing to support our continued advancement of these clinical programs.

Speaker 2

I will turn the call over to my colleagues, Doctor. Akpanova and Lisa Loughler, in a moment to review these developments in detail. But first, I'll begin with a brief overview of the LomaSorb B. Our product candidate LomaSorb B is a living cell product made from a specialized cell isolated from a bone marrow of young healthy adult donor aged 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 mechanism.

Speaker 2

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 type of injury or disease and decrease bioactive factors that are immunomodulatory and degenerative. We believe that Lomacil B has multiple potential mechanisms of action that may lead to anti inflammatory, provascular regenerative response and therefore may have a broader application of a range of rare and aging related diseases. We have ongoing program in hypoplastic left heart syndrome or HLHS, Alzheimer disease and aging related frailty. Our ELPHISH II trial in HLHS has exceeded its 50% enrollment threshold and we have activated additional clinical sites to further expedite enrollment.

Speaker 2

This is our priority program and are focused on completing enrollment in this trial in 2024. As I mentioned, we also announced positive top line results from our CLEAR MIND Phase IIa trial for lomatopb treatment in Alzheimer's disease last month and expect full data from this trial in the coming weeks. In aging related frailty, enrollment continue to progress in our Phase 2 study in Japan. The data we have generated in HLHS of HIMR 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 Doctor.

Speaker 2

Natalia Afanova to provide more detailed overview of our clinical program and recent progress. Natalia?

Speaker 3

Thank you, Wael. I will begin with a brief review of our Alzheimer disease program and the top line results we recently presented from our CLEAR MIND study. Based on the growing body of preclinical and clinical data from various sources, we believe Lonicel B may prevent the clinical progression of Alzheimer disease by reducing disease related brain inflammation. Neuronal cell death caused by earlier and substantial neuro inflammation is a significant contributor to the pathogenesis of Alzheimer disease. In preclinical models of Alzheimer disease, MICs with characteristics similar to LomiCell B has 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.

Speaker 3

Our Phase IIa trial of Lonicel B for mild Alzheimer disease called the CLEAR MIND trial completed enrollment in November of 2022. CLEAR MIND is a 48 patient, 4 arm parallel design, randomized clinical trial of LomiCell B designed to evaluate the safety of single and multiple infusions of 2 different dose levels of Lomicel B compared to placebo in patients with mild Alzheimer disease. The primary endpoint is safety, as measured by the occurrence of serious adverse events within the 1st 30 days after administration of LUNYSL B. Secondary and exploratory endpoints include measures of cognitive function, fluid and radiological biomarkers relevant to inflammation and the cellular vascular systems. In a previously completed Phase 1 study, we demonstrated a preliminary safety of lomicel B patients with mild to moderate Alzheimer disease.

Speaker 3

Results from ClearMind show that the primary endpoint of safety was met based on statistical and medical assessment. There was 1 serious adverse event reported on each lomicel B treatment group and none on placebo. Each assay 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 micro hemorrhages as relevant by revealed by the magnetic MRI and notable changes in laboratory evaluations and electrocardiogram. In the secondary endpoint of change from baseline to week 39 in cuts, which is the composite Alzheimer disease score, positive results were demonstrated at the prespecified statistical level of p less than 0.1, two tailed.

Speaker 3

Statistically significant improvement in VIX39 in COGS was observed for lomicel B at dose level of 25,000,000 with statistical significant 0.091 versus placebo. And the pool lonesome group consists of 25,000,000 dose 1s, 25,000,000 dose 4, 100,000,000 cells 4 doses with statistical significance 0.099. In terms of specific components of the cut score composite endpoint evaluated at P level of 0.052 tails, lomicel B dose 25,000,001 demonstrated statistical significant slowing of disease progression in left hippocampal volume with statistical significance, 15, related to placebo. ADCS ADL score, which stands for Alzheimer disease cooperative study activity of daily living and left hippocampal volume at week 39 were statistically significant for full loynocellb treatment group relative to placebo with p value 0.047 and 0.38, 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 hippocampal volume at week 39.

Speaker 3

We believe these results provide important validation of both the safety and therapeutic potential of Lonicil B in the treatment of Alzheimer disease and provide a robust support for additional clinical trials and other indications. As Wael 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.

Speaker 3

Babies born with this condition have severely diminished systemic blood flow, which requires children to undergo a complex 3 stage heart reconstruction surgery process over the course of the first 5 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 Wael mentioned, we are presenting the latest long term survival from our LPs 1 study, a Phase 1 study of glomercial B in children with HLHS at the scientific session of the American Heart Association, which begins tomorrow.

Speaker 3

10 patients participated in LPISS-one trial during which LUNY Cell B was injected concurrently Stage 2 surgery, also known as a GLAM procedure. In the data set we are presenting, 10 patients have been monitored for up to 5 years after treatment. Earlier long term follow-up data from this trial was announced previously, showing that 100 percent of the 10 patients who participated in LPS I trial survived and remain heart transplant free for up to 5 years of age, as compared with the historical clinical trial results showing that children with HLHS who undergo the Glenn procedure typically have had 15% to 20% mortality by 5 years of age. The LPS I data are highly encouraging and reinforce our enthusiasm for lomicel B as a potential treatment to transform care for patients with HLHS. Our LPS II trial is designed to assess the potential of Lumicel B to improve right ventricular function and long term outcomes.

Speaker 3

The trial is a 38 patient controlled Phase II clinical trial evaluating the safety and efficacy of lomicel B as an adjunct therapeutic to standard of care HLRHS 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 Health, National Heart, Lung and Blood Institute. As we announced this week, our LPISS II trial has exceeded its enrollment threshold of 50%. We also announced the activation of our 8 clinical site location, 1 more than the 7 originally planned.

Speaker 3

Completion of LPS II 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 accretive 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 Langeveron, we've been evaluating the effect LonyCell B may have on health and function of elderly frail patients, particularly on their physical and immune system function.

Speaker 3

With clinical development strategy in aging related priority and focus on Japan, a country with one of the oldest population in the world. Our Phase II clinical trial evaluating Lamicel B in patients with aging related frailty in Japan. The Phase II trial is a 3 arm parallel design, randomized, evenly split 1 to 1 to 1 of placebo as well as 2 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 potential therapeutic potential of cell therapy.

Speaker 3

With that, I'd now like to turn the call over to Lisa LaClair, our CFO, to discuss our financial results for the Q3 of 2023. Lisa?

Speaker 4

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 10 Q, which we filed yesterday. Revenues for each of the 3 months ended September 30, 2023, 2022 were approximately $200,000 $300,000 respectively. Grant revenue for the 3 months ended September 30, 2023, 2022 was $100,000 respectively. The decrease was primarily due to a reduction in grant funds available due to the completion of the grant funded clinical trials.

Speaker 4

Clinical trial revenue, which is derived from the Bahamas registry trial for the 3 month periods ended September 30, 2023, 2022 was 200,000 dollars Clinical trial revenue for the 3 months ended September 30, 2023 decreased by less than $100,000 compared to the same period in 2022 as a result of a decrease in participant demand. Related cost of revenues was approximately $100,000 $200,000 for the 3 months ended September 30, 2023, 2022, respectively. The decrease of $100,000 or 45 percent was primarily due to the decrease in revenues earned from the Bahamas registry trial. This resulted in a gross profit of approximately $100,000 for both of the 3 month periods ended September 30, 2023, 2022. General and administrative expenses for the 3 months ended September 30, 2023 increased to approximately $3,100,000 compared to $2,100,000 for the same period in 2022.

Speaker 4

The increase of approximately $1,000,000 was primarily related to increase of the $300,000 in compensation and benefit expenses, dollars 400,000 of expenses related to legal and professional fees, and expenses related to the subscription rights offering. These increases were partially offset by a decrease of $100,000 in stock based compensation expense. Research and development expenses for the 3 months ended September 30, 2023 decreased to approximately $1,800,000 from approximately $3,000,000 for the same period in 2022. The decrease of $1,100,000 was primarily due to a decrease of $1,000,000 in research and development expenses driven by lower spend on clinical trials and supplies. Selling and marketing expenses for the 3 months ended September 30, 2023, 2022 were approximately $300,000 $200,000 respectively.

Speaker 4

Selling and marketing expenses consist primarily of investor and public relations expenses. Other income for the 3 months ended September 30, 2023 was $100,000 which consisted of interest income. Other expense for the 3 months ended September 30, 2022 was less than $100,000 dollars Our net loss was approximately $5,100,000 $5,200,000 for the 3 month periods ended September 30, 2023, and 2022, respectively. As 22, respectively. As of September 30, 2023, the company had cash and cash equivalents of $2,000,000 marketable securities of $2,000,000 and working capital of approximately $1,700,000 As of December 31, 2022, cash and cash equivalents was $10,500,000 marketable securities were $9,200,000 and working capital was approximately $15,400,000 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 $4,000,000 before deducting the placement agent's fees and other offering expenses payable by Longevron.

Speaker 4

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 Q1 of 2024. With that, thank you. And I will turn the call over to Wayo. Wayo?

Speaker 2

Thank you, Lisa. And as everyone have here today with the announcement of of positive trial results from the clear from our CLEAR MIND study and the full data expected in the coming weeks, results from ELPIS-one trial and HLHS being presented at the American Heart Association and ELPHIS-two continuing its enrollment and our Phase 2 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 LAMATIL B across these three indications and fully realizing the therapeutic potential of LAMATIL B. I would now like to open the call for questions. Operator, please open the lines to our covering analysts.

Operator

Our Our first question comes from Michael Okunich. Please proceed.

Speaker 5

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 ALVUS-one. 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 ELPHIS-two study?

Speaker 2

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, ultrarare disease.

Speaker 2

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?

Speaker 3

Thank you so much, Wael, and thank you so much, Michael, for your question. And you're absolutely right, because it's a rare disease, 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.

Speaker 3

We are collaborating right now to engage with parents, engage with physicians who are treating this disease just to increase awareness 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.

Speaker 3

And this is in progress.

Speaker 2

Yes. And of course, Michael, we did also 1 key opinion leader event that is was hosted by 3 top key opinion leaders to educate everyone on the, hypoplastic left heart syndrome. It was conducted by Doctor. Sanjay Kashal, Doctor. Ram Subramanian and Doctor.

Speaker 2

Josh Hare. And it's available also as an enduring material among both our website and LifeSci, our Investor Relations portal as well.

Speaker 5

All right. Yes, thank you for that.

Speaker 2

Then one more for me and I'll hop back into the queue. I just want to

Speaker 5

see 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 up for?

Speaker 2

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.

Speaker 2

So there will be a lot of additional analysis is coming, but those are the 3, the cognitive scales, the MRI data and the biomarker data are the 3 things that people have not seen before. And I think they all will be interesting.

Speaker 5

All right. Thank you. We're looking forward to it.

Speaker 3

Thank

Operator

This concludes our question and answer session. I would like to turn the floor back over to Wael Hassane for closing comments.

Speaker 2

All right. Thank you, operator. All right. Well, thanks everyone for attending the call today. On behalf of Langevarone, I would like to thank you for your continued interest and support and wish you a good day today.

Speaker 2

Thank you.

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Earnings Conference Call
Longeveron Q3 2023
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