Longeveron Inc. (NASDAQ:LGVN) This autumn 2022 Outcomes Convention Name March 10, 2023 8:30 AM ET
Firm Contributors
James Clavijo – CFO
Wa’el Hashad – CEO
Dr. Chris Min – Chief Medical Officer
Convention Name Contributors
Michael Okunewitch – Maxim Group
Operator
Good morning, and welcome to Longeveron’s name right now to debate the corporate’s 2022 Fourth Quarter and Full Yr Monetary Outcomes. [Operator Instructions]
I’d now like to show the decision over to James Clavijo, Longeveron’s Chief Monetary Officer. James, it’s possible you’ll proceed.
James Clavijo
Thanks, operator. Good morning, everybody, and welcome to Longeveron’s Fourth Quarter and Full Yr 2022 Name. Right now, we’ll present a enterprise replace and focus on monetary outcomes for the fourth quarter and full 12 months of 2022. Earlier this morning, we issued a press launch with these outcomes, which will be discovered underneath the Buyers part of our web site at www.longeveron.com. I’m joined on the decision right now by the next members of Longeveron’s administration staff: Mr. Wa’el Hashad, Chief Govt Officer; Dr. Chris Min, Chief Medical Officer; and Dr. Joshua Hare, Co-Founder, Chief Scientific Officer and Chairman. Mr. Hashad will start with a short company overview, Dr. Min will comply with by a assessment of updates from Longeveron’s medical packages and Hypoplastic Left Coronary heart Syndrome or HLHS, Alzheimer’s illness and aging-related frailty, after which I’ll assessment our 2022 fourth quarter and full 12 months monetary outcomes. Lastly, we’ll open the decision for Q&A.
As a reminder, throughout this name, we will probably be making forward-looking statements, that are topic to varied dangers and uncertainties that would trigger our precise outcomes to vary materially from these statements. Any such statements needs to be thought-about along with cautionary statements in our press releases and danger components discussions in our filings with the SEC, together with our annual report on Kind 10-Ok and cautionary statements made throughout this name. We assume no obligation to replace any of those forward-looking statements or data. Now I might like to show the decision over to Mr. Wa’el Hashad, Chief Govt Officer of Longeveron. Wa’el?
Wa’el Hashad
Thanks, James. Good morning, everybody. Welcome to Longeveron Fourth Quarter and full 2022 enterprise replace and monetary outcomes. Thanks for becoming a member of us right now. Longeveron is a medical stage biotechnology firm, creating regenerative drugs for unmet medical wants.
We had productive 2022 executing a number of key milestones and advancing our lead investigational product, Lomecel-B, throughout a number of indications. I’m honored to have just lately joined Longeveron because the Chief Govt Officer. I am excited by the broad therapeutic potential of Lomecel-B and the good progress that has been made already thus far.
I look ahead to working alongside the excellent Longeveron personal staff to construct on this progress for the remainder of 2023 and past. Our lead investigational product referred to as Lomecel-B, it’s a residing cell product constructed from a specialised cell remoted from bone marrow of younger wholesome grownup donors aged 18 to 45. These specialised cells are recognized within the literature as medicinal signaling cells or MSCs and are important to our endogenous restore mechanism.
MSCs are recognized to carry out plenty of complicated features, together with the flexibility to kind new tissue. Additionally they hone to websites of accidents or illness and secrete bioactive components which might be immunomodulatory and regenerative. We consider that Lomecel-B has a number of mechanisms of motion which will result in anti-inflammatory provascular regenerative responses and due to this fact, might have broad software for a spread of uncommon and aging-related illnesses.
Within the fourth quarter of 2022, we proceed to make progress in advancing Lomecel-B for our suite of uncommon illnesses and aging-related illnesses. Now we have ongoing Section II trial in Hypoplastic Left Coronary heart Syndrome, also called HLHS, Alzheimer’s illness and aging-related relate. In HLHS, we’re presently conducting our ELPIS II Section II randomized managed research to find out whether or not Lomecel-B improves the situations of infants with this life-threatening situation. As well as, in our aging-related frailty program, we’re conducting a Section II research in Japan and anticipate to randomize our first affected person on this research by the top of this quarter. I will now flip the decision over to Dr. Chris Min, Longeveron’s Chief Medical Officer, who will present extra updates on the progress we made in our medical program. Chris?
Dr. Chris Min
Thanks, Wa’el, and good morning, everybody. First, I will start with an replace on our HLHS program. As a reminder, HLHS is a uncommon congenital coronary heart defect that impacts roughly 1,000 infants per 12 months in america. Folks born with HLHS have an underdeveloped or absent left ventricle, impairing the center’s means to pump blood. Left untreated, this situation is all the time deadly.
The present customary of care comprised of three reconstructive operations earlier than the age of 5, a unprecedented remedy burden for these younger pediatric sufferers. Additional, even with these surgical interventions, youngsters with HLHS are at elevated danger of short-term mortality, delay improvement and long-term problems, together with organ failure, with solely someplace between 50% to 60% surviving to adolescents.
There exists an amazing unmet want for added interventions past the present customary of care, and we consider that Lomecel-B with its proregenerative, provascular and anti inflammatory properties when administered concurrently with surgical intervention can fill that hole by enhancing cardiac efficiency in sufferers with HLHS. We’re presently conducting a randomized managed research wherein Lomecel-B is run to infants throughout Stage II surgical procedure. Our cell product is run in an roughly 5-minute intraoperative process, with injections straight into the [indiscernible]. The first endpoint of this research is with [indiscernible] ejection fraction, take into account the perfect practical endpoint for this situation. Primarily based on the earlier Section I research in 10 sufferers with HLHS, the FDA has granted Lomecel-B uncommon pediatric illness, orphan drug and quick observe designations for the remedy of HLHS.
Subsequent, I will transfer on to our aging-related frailty program. Ageing-related frailty is an age related decline and reversal in operate throughout a number of physiologic techniques that results in an lack of ability to deal with stressors. That is frequent among the many aged, affecting hundreds of thousands of people in america, as much as 15% of the inhabitants over the age of 65. Ageing-related frailty manifests sometimes as a mixture of a number of sizes and techniques which will embrace sarcopenia or involuntary loss on muscle, the related weak spot, fatigue, weight reduction, slowness and low exercise. Sadly, aged frail people are extra susceptible to poor medical outcomes related to aging-related frailty akin to an infection, [falls, factors,] hospitalizations and even loss of life.
At Longeveron, we’ve got been evaluating the impact of Lomecel-B that it might have on the well being and performance of those aged frail sufferers, notably on their bodily immune system operate. In early stage exploratory trials, we’ve got been utilizing biomarkers of irritation and vascular and endothelial operate to measure this impact. Our medical improvement technique in aging-related frailty is presently targeted on Japan, which has one of many oldest populations on this planet. This quarter, we proceed screening sufferers for our Section II research evaluating Lomecel-B in sufferers with aging-related frailty in Japan in partnership with the Nationwide Middle for Geriatrics and Gerontology and Nagoya and Juntendo College Hospital in Tokyo.
The Section II medical trial is a 3-arm parallel design randomized, placebo-controlled, double-blind, single infusion research of two completely different dose ranges of Lomecel-B. The first goal of the research is to guage the security of Lomecel-B as a remedy for aging-related frailty, with an overarching objective of offering help for an eventual restricted approval underneath the Act on the Security of Regenerative Medication, or ASRM, which acknowledges the great therapeutic potential of cell therapies.
A possible ASRM approval may allow us to enter the Japanese market primarily based on demonstrated security in Japanese sufferers with an expectation of efficacy which will be established by way of the conduct of a small, well-controlled trial in Japanese sufferers mixed with our earlier knowledge in aging-related frailty. Such an approval would enable us to manage Lomecel-B as a remedy for aging-related frailty at choose medical websites, addressing an important unmet want amongst the Japanese inhabitants and we anticipate to randomize our first affected person on this Section II trial this quarter.
Lastly, I might prefer to cowl updates on our Alzheimer’s illness program. In November, we have been happy to announce the completion of enrollment of our Section IIa trial. As a reminder, this trial referred to as the CLEAR MIND trial, is a 48-patient 4-arm parallel design, randomized and placebo-controlled trial of Lomecel-B designed to guage the security of single and a number of infusions of two completely different dose ranges of Lomecel-B in comparison with placebo in sufferers with delicate Alzheimer’s illness. Our major endpoint is security, as measured by the incidence of great opposed occasions throughout the first 30 days after the administration of Lomecel-B. Secondary and exploratory endpoints embrace mind quantity actuary by magnetic resonance imaging, biomarkers related to irritation and endothelin vascular techniques and, after all, measures of cognitive operate.
Every affected person is adopted within the research for a length of 9 months. Primarily based on a sturdy research of preclinical and medical knowledge, we consider Lomecel-B might forestall, gradual and even reverse the medical development of Alzheimer’s illness by decreasing disease-related mind data. Neuronal cell loss of life brought on by early and substantial neuroinflammation is a major contributor to the pathogenesis of Alzheimer’s illness. In preclinical fashions of Alzheimer’s illness MSCs like Lomecel-B have been proven to cross the blood mind barrier probably with an anti-inflammatory impact, enhancing endothelin operate and selling neurogenesis, the method of recent neuron formation within the mind. In our beforehand accomplished Section Ib within the research — Section Ib research in alzheimer’s sufferers, we demonstrated the preliminary security of Lomecel-B in sufferers with wild-to-moderate Alzheimer’s illness.
With this Section IIa trial, we hope to construct on this physique of proof. We anticipate to share the highest line leads to early 2024. With that, I might now like to show the decision over to James Clavijo, our Chief Monetary Officer, to debate our monetary outcomes for the fourth quarter and full 12 months of 2022. James?
James Clavijo
Thanks, Chris. Most of what I will be protecting this morning will probably be offered in additional element in our condensed monetary statements and our administration’s dialogue and evaluation of operations for the 12 months ended December 31, 2022. The fourth quarter and full 12 months ended December 31, 2022, income. Income within the fourth quarter 2022 was $0.1 million in comparison with $0.2 million in the identical interval of ’21. The distinction was primarily resulting from a lower in medical trial income throughout the fourth quarter 2022.
Throughout this quarter, fewer members selected having the remedy as in comparison with ’21. Income for the total 12 months ’22 was $1.2 million in comparison with $1.3 million in 2021. Scientific trial income was $0.9 million for ’22 in comparison with $0.7 million for 2021, a rise of $0.2 million or 29%. Participations elevated in 2022 as in comparison with 2021 as the consequences of journey restrictions resulting from COVID-19 decreased. Income was $0.3 million for ’22 in comparison with $0.6 million for ’21, a lower of $0.3 million or 53%, which was primarily resulting from a discount in grant funds obtainable due partly to the completion of a few of our grant-funded medical trials.
Normal and administrative bills within the fourth quarter of ’22 have been $1.6 million in comparison with $2.1 million for a similar interval in ’21. The lower of roughly $0.5 million or 24% was primarily associated to a lower in equity-based compensation bills {and professional} charges. Normal and administrative bills for full 12 months ’22 have been $8.1 million in comparison with $9.7 million for ’21, the lower of roughly $1.6 million or 16% was primarily associated to a lower of $3 million in equity-based compensation bills allotted to G&A bills. Nonetheless, worker profit bills did enhance by $0.5 million, which included a $0.4 million enhance in bills associated to worker recruitment, and insurance coverage {and professional} charges elevated by [$0.2 million]. Analysis and improvement bills within the fourth quarter of 2022 have been $3.2 million in comparison with $1.7 million for a similar interval in 2021.
The rise of $1.5 million or 88% was primarily resulting from a rise in analysis and improvement bills associated to the completion of medical trials that weren’t reimbursable by grants. R&D bills for full 12 months 2022 have been $9.4 million in comparison with $7.1 million for 2021. The rise of $2.3 million or 32% was primarily resulting from a rise in analysis and improvement bills associated to the completion of medical trials that weren’t reimbursable by grants. The rise was offset by a lower in equity-based compensation allotted to analysis and improvement bills, which decreased from $2.2 million in 2021 to $1.1 million in 2022. Promoting and advertising and marketing bills within the fourth quarter of 2022 and 2021 have been $0.3 million.
Promoting and advertising and marketing bills for the total 12 months 2022 have been $1 million in comparison with $1.2 million for 2021. The lower of $0.2 million or 17% was primarily resulting from a lower in digital advertising and marketing bills. Promoting and advertising and marketing bills consist primarily of investor and public relations bills. Additional, and as disclosed in Word 13 reclassification of prior 12 months shows on the Kind 10-Ok throughout 2021, $0.9 million in bills associated to investor and public relations that have been recorded as normal and administrative bills and have been reclassified as promoting and advertising and marketing bills as they have been in 2022. Our internet loss was $4.5 million within the fourth quarter of 2022 in comparison with $4.1 million for a similar interval in 2021.
Web loss for the total 12 months was $18.8 million in comparison with $17 million in 2021. Our money and short-term investments was $19.6 million in comparison with $35 million as of December 31 in 2022 and 2021, respectively. The lower in money period-over-period was a results of use of funds for operations. As a reminder, throughout 2021, we obtained gross proceeds from our preliminary public providing in February 2021 and our subsequent personal placement providing in December 2021 of over $49.6 million. Primarily based on the corporate’s present working plan and monetary sources, we consider that our present money and short-term investments will probably be adequate to cowl bills and capital necessities nicely into the primary quarter of 2024.
With that, thanks, and I’ll flip the decision again to Wa’el.
Wa’el Hashad
Thanks, James. As you might be right here right now, we’ve got made sturdy progress in 2022, and we look ahead to constructing on this momentum and sharing extra updates in 2023. I would love now to open the decision for questions. So operator?
Query-and-Reply Session
Operator
[Operator Instructions] The primary query right now comes from the road of Michael Okunewitch from Maxim Group.
Michael Okunewitch
Wa’el, congratulations on coming aboard. I assume — so I assume, first off, there was just lately some exercise on this area. We just lately noticed that the FDA accepted the BLA for Mesoblast for remestemcel-L in GVHD. So I might prefer to see if there are any takeaways from the brand new inclusions of their refiled BLA which you can or have already got utilized to your packages to make sure a extra streamlined regulatory workflow.
Wa’el Hashad
So Michael, I’ll take a stab in answering this, and — however I’ll ask additionally Chris so as to add any extra feedback associated to this. At the start, we undoubtedly are inspired by the truth that the FDA have accepted the appliance from Mesoblast. And we consider that for — particularly for situations of uncommon illnesses that undoubtedly the trail to regulatory approval is way sooner than typical different indications. We’re doing right here in — at Longeveron, we’re doing all the fitting setup for our trial to hopefully meet the standards if we’re in a position to obtain the outcomes that we hope to realize to probably have it filed with the FDA and probably get a sign as soon as the trial is being concluded. However I’ll let Chris so as to add any particular feedback on — from his aspect.
Dr. Chris Min
Sure. Thanks, Wa’el. So Michael, to be frank, we’ve not definitely made any adjustments or changes instantly. We’re undoubtedly setting their software carefully. I’d level out that our indication is an ultra-rare indication and a cardiac indication. Now we have our personal technique that we’re forming and — however we will certainly preserve an in depth eye on Mesoblast’s actions and attempt to leverage something that we are able to glean from their strategy.
Michael Okunewitch
All proper. After which simply on the HLHS program, I might prefer to see in case you may present a bit extra shade on the enrollment and the way you view that regulatory pathway given your present interactions with FDA, as you talked about, it is an extremely rarepediatric illness. So do you suppose you would wish a further research or would assist us to probably help accelerated and even full approval given how important the unmet want is right here?
Dr. Chris Min
Wa’el, would you enable me to deal with that query?
Wa’el Hashad
Completely. Go forward, Chris.
Dr. Chris Min
Okay. So Michael these are good factors. And I definitely wouldn’t give a definitive reply about these questions. Nonetheless, I’d acknowledge, as you identified that provided that that is an ultra-rare indication, that there are potential — there’s a potential that our present Section II trial, if it has a optimistic consequence may serve probably as a pivotal research, we might be planning relying on the result of the research to ask these questions of the company and even previous to submission. As a result of we do have these avenues of communication with the orphan illness, uncommon illness and quick observe designations, we intend to make the most of our entry to the company to ask questions even earlier than the completion of the research relating to points of that future finish of Section II/dialogue of what the research may signify. And so our — we do not presume that it’ll function a pivotal research, however we will certainly ask the company about the potential for consideration for these designations akin to a pivotal research, akin to accelerated approval and so forth.
Michael Okunewitch
All proper. After which simply 1 final for me, and I will hop again within the queue. I needed to ask on the alzheimer research. Which endpoints are you most targeted on for the analysis of efficacy? Clearly, operate is essential, however it’s a smaller research. So I might prefer to get your tackle the way you have a look at the significance of the completely different biomarkers and anatomical measures that you simply’re evaluating.
Dr. Chris Min
So in that trial, as you identified, we definitely would not mission that we might definitively decide efficacy of just about in such a small trial with 12 sufferers per arm. To be able to attempt to improve the flexibility to glean an efficacy sign, we’re taking a mixed endpoint strategy the place we’re combining a number of of the cognitive endpoints. After which when it comes to the biomarker for efficacy, the important thing endpoint we’re combining into that world evaluation is the volumetric hippocampal quantity, which is being decided by a central blinded learn that’s trying, and we’re additionally acquiring high-field magnet, excessive [Tesla MRIs] to get the perfect anatomical decision we are able to. And so we will mix that imaging measure mixed with these cognitive measures to attempt to glean an efficacy sign.
Operator
[Operator Instructions] There aren’t any extra questions ready at the moment. So I might prefer to go the convention again over to Mr. Wa’el Hashad for any closing remarks.
Wa’el Hashad
Thanks. On behalf of the corporate, I wish to thank everybody for his or her continued curiosity and help for Longeveron and have an awesome day, everybody. And undoubtedly, we’ll be reaching out to any extra questions after the decision. Thanks.
Operator
This concludes right now’s convention name. Thanks all on your participation. You might now disconnect your traces.
