Q3 2019 Earnings Call Transcript

Published: 8 Nov 2019

[Operator:]

Welcome to Capricor Therapeutics Third Quarter 2019 Financial Results and Corporate Update Conference Call. My name is Charlie and I’ll be your operator for today’s call. At this time all participants are in a listen-only mode. Note that this conference is being recorded. I will now turn the call over to Capricor’s CFO, AJ Bergmann. Please go ahead.

[AJ Bergmann:]

Thank you, and good afternoon everyone. Before we start, I would like to state that we will be making certain forward-looking statements during today’s presentation. These statements may include statements regarding among other things the efficacy, safety and intended utilization of our product candidates, our future research and development plans including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates and our possible uses of existing cash and investment resources.

[Linda Marbán:]

Good afternoon, and thank you for joining us for our third quarter update call. This has been a busy time for us, as we continue to move CAP-1002 towards the path to potential registration for DMD. We now have data from two clinical trials showing the same basic results, improvements in skeletal muscle function as well as improvements in cardiac structure and function. As many of you know, we started working on DMD about seven years ago. First with studies in the mdx mouse and culminating now in two clinical trials. We and our colleagues have published over 60 peer reviewed papers on CDCs, our self therapy for the foundation of CAP-1002, and four directly on Duchenne muscular dystrophy itself. We believe that we have now elucidated the mechanism of action of the cells showing that not only do we believe the exosomes, which the cells that create to be meeting the – mediating the immunomodulatory and muscle repair pathways, but we have also drill deeper to find the microRNAs, which we believe are responsible for the biological effects we are seeing in the clinic. We have carefully and strategically built a program around CAP-1002 to be used as a potential therapeutic for those most impacted by Duchenne, those who are struggling to retain their independence and privacy. These are the boys and young men who are no longer ambulatory, but have the same desire to lead a functioning life as their peers do. Pat Furlong, the leader of Parent Project Muscular Dystrophy, the largest advocacy organization in DMD reminds us that as challenging as things become when one is no longer able to walk. The ability to retain the use of one’s arms and hands is of even greater importance. We eat, use our phones and computers with our hands and arms. We brush our teeth and comb our hair with our hands. We can only hug if we have the use of our arm. The bottom line is that few treatment options are available for those in the later stages of the disease because they are not currently eligible for the gene therapies and furthermore it may be too late in terms of salvaging muscle for these later stage patients.

[AJ Bergmann:]

Thank you, Linda. This afternoon’s press release provided a summary of our third quarter 2019 financials on a GAAP basis. You may also refer to our quarterly report on form 10-Q, which we expect to become available in the next few days will be accessible on the SEC website as well as the financial section of the company website. As of September 30, 2019, the company’s cash, cash equivalents and marketable securities totaled approximately $6.8 million compared to approximately $7.3 million on December 31, 2018. Based on our current plans and projections, Capricor expects that its cash, cash equivalent will fund its research and development programs and other operations through at least the second quarter of 2020. In the first nine months of 2019, our net cash used in operating activities was approximately $5 million excluding stock-based compensation, our research and development expense was approximately $800,000 in Q3 2019 compared to approximately $3 million in Q3 2018. Again, excluding stock-based compensation, our general and administrative expense was approximately $750,000 in Q3 2019 compared to approximately $1 million in Q3 2018. We continue to manage our expenses and direct our focus on our DMD and exosome programs. With that, I’ll turn it back over to Linda and then we’ll open the line up for questions.

[Linda Marbán:]

Thank you. Thank you, AJ, thank you for joining the call today. We will now open up the line for Q&A.

[Q - Joanne Lee:]

Hi, this is Joanne Lee on the call for Jason McCarthy. Thanks for taking the question and congratulations on the progress this quarter. So regarding the potential Phase III trial, could you provide a bit more clarity on the trial design? Would you have any positive data from HOPE-2 could you potentially accelerate your enrollment for Phase III?

[Linda Marbán:]

Yes. So at this point we’re not ready to talk about the design of the trial. We’re still finalizing the protocol. The preliminary draft that we presented to the FDA showed a potential patient enrollment of about 70 patients that’s based on calculations from the HOPE-2 data as you suggested. We are also continuing conversations with the FDA. We’ll be taking data from HOPE-2 to them as it becomes available and continue the conversation we’re not ruling out the possibility of accelerated approval based on that.

[Joanne Lee:]

Okay. Thank you for that. And I understand that you won’t be able to disclose too much information, but could you give us some sense of if there are ongoing discussions for potential partnerships or perhaps like other opportunities for non-dilutive funding such as CIRM funding or are you waiting to release more data?

[Linda Marbán:]

Yes. So of course, we’re an active conversations with partners at this time. As you can imagine, the data from HOPE-2 is very exciting, as I mentioned and have been speaking about for a while. This is a therapeutic that’s targeting acute unmet need in a orphan disease. So there’s a lot of interest in this therapeutic and we are very busily sharing that information with those to help us drive it forward more quickly and more efficiently.

[Joanne Lee:]

Okay. Thank you. And lastly, just briefly, do you mind giving us a bit more color on the next steps for CAP-2003, when can we potentially start to see some early stage data?

[Linda Marbán:]

Yes. So, we’ve been working on the exosomes for awhile. We really have been focusing all of our efforts lately on CAP-1002 as we are driving it towards registration and Duchenne. But that does not – that does not reduce our interest or confidence in the exosomes CAP-2003 to be the pipeline product is a platform therapy that has implications for many diseases of inflammation and fibrosis. We recent public – recently published a paper and nature of biomedical engineering, using our exosomes to treat DMD and showing that they are very efficacious and so it’s likely that that would be a frontline program, and we’ll be providing more color as we define our programs the exosomes in the next few months.

[Joanne Lee:]

Okay. Thank you very much again, and congrats again.

[Linda Marbán:]

Thank you.

[Operator:]

We have no further question at this time. I will now turn the call over back to Linda Marbán, our CEO for closing remarks.

[Linda Marbán:]

Thank you for joining us today, and thank you for your time. We look forward to providing updates on the HOPE-2 data as it becomes available and further plans on CAP-1002 on the exosome program. Thank you for your time today.

[Operator:]

Ladies and gentlemen, this concludes today’s conference. Thank you for participation. You may disconnect.