Longeveron Inc.
Q4 2020 Earnings Call Transcript

Published: 30 Mar 2021

[Operator:]

Ladies and gentlemen, welcome to the Longeveron Inc. 2020 Year-End Earnings Call. My name is Abby, and I’ll be coordinating your call today. I will now hand over to our host, Natalya Rudman from Crescendo Communication. Please go ahead, Natalya.

[Natalya Rudman:]

Good morning and thank you for joining today’s conference call to discuss Longeveron’s corporate developments and financial results for 2020 fiscal year ended December 31, 2020. With us today are Geoff Green, the company’s CEO; Dr. Joshua Hare, Co-Founder and Chief Executive Scientific Officer and Chairman; as well as James Clavijo, the company’s Chief Financial Officer. Today Longeveron released financial results for the fiscal year ended December 31, 2020. If you have not received Longeveron’s earnings release, please visit the company’s website at longeveron.com. During this call, we will be making forward-looking statements regarding future events and the performance of Longeveron. Forward-looking statements are subject to risks and uncertainties that could cause actual events and results to differ materially from the forward-looking statements. These risks are described in further detail in the company’s press releases and reports filed with the SEC. These forward-looking statements represent the company’s judgment as of today, Tuesday, March 30, 2021, and we assume no obligation to update any of these forward-looking statements, unless we are required to do so by applicable law or by securities regulatory authority.

[Geoff Green:]

Thanks, Natalya. Good morning, everyone, and welcome to Longeveron’s year-end 2020 business update call. This will be our first as a publicly traded company. We’re excited to describe and share the tremendous progress we’ve made throughout 2020 and into 2021, and to layout the near-term milestones we are targeting in our various development programs. Since some of you may be new to the company, since our IPO have just occurred in February of this year, I will give you a very brief history of Longeveron to provide some context as to how we arrived at, where we are today and where we’re headed. Longeveron was founded in 2014 by Dr. Joshua Hare, a cardiologist at the University of Miami, Miller School of Medicine and a Co-Founder of the Interdisciplinary Stem Cell Institute, also at the University of Miami; and Don Soffer, a wealthy, retired real estate developer and philanthropists. I’m sorry, can someone mute their phone, please? The company was founded on the premise with the very cells within our bodies whose primary function is to repair, restore and regenerate damaged tissue and organs maybe developed with safe and effective off-the-shelf cell therapy to treat chronic aging related diseases and other life-threatening conditions, to improve health span and substantially extent longevity. Specialized cells called medicinal signaling cells or MSCs reside within various tissues in our bodies and are considered to be the body’s endogenous or built-in repair mechanism. When we’re young, we have an adequate supply of these cells and they function as intended. Unfortunately, in both humans and in animals, there is a clear age-related decline in both the number and potency of these cells. And this is believed to be one of the primary reasons for age associated increase in chronic disease. Longeveron’s lead therapeutic investigational product called Lomecel-B is produced from these specialized cells, which are sourced from the bone marrow of young healthy adult donors aged 18 to 45. These cells are the starting raw material used to produce Lomecel-B, which is being tested in multiple clinical trials for several indications. Because the cells are donated from another individual, Lomecel-B is referred to as an allogeneic product. These cells have special characteristics that allow them to be transplanted from a donor to a host without triggering a harmful immune response in a recipient. So far, we have tested Lomecel-B infusion or injection in over 260 subjects to date in our various clinical research programs. So we have assembled a fairly extensive body of evidence, documenting safety and tolerability. To produce Lomecel-B, we operate a cGMP compliance, cell processing and product development facility, co-located with our corporate headquarters in Miami, Florida.

[James Clavijo:]

Thank you, Geoff. Good morning everyone and thank you for joining us. Most of what I’ll be covering this morning has been presented in more detail in our consolidated financial statements and in our management discussion and analysis, operations for the year ended December 31, 2020 and 2019, which has been filed today. For the quarter ended December 31, 2020 and 2019, total revenue consisting of revenue from grants and clinical trials from our Bahamas Registry Trial was $1.2 million for the fourth quarter of 2020, compared to revenue of $1.8 million for the fourth quarter of 2019. This decrease was a result of a decrease in grant revenue of $0.8 million for 2020 as compared to the same period in 2019, which was expected and a function of the pre-planned timing of release of funds according to the terms of the various grants. Revenue from our Bahamas Registry Trial increased by $0.3 million or 119% for 2020 as compared to the same period in 2019; despite international travel being severely negatively impacted by COVID-19. Research and development expenses were $1.2 million for the fourth quarter of 2020, compared to $0.3 million for the fourth quarter of 2019. The increase was primarily due to an increase in research and development expenses that were not reimbursable by grants. General and administrative expenses were $0.7 million for the fourth quarter of 2020 and 2019, respectively. Our net loss was $1.4 million for the fourth quarter of 2020, compared to $0.5 million for the fourth quarter of 2019. For the year ended December 31, 2020 and 2019, our total revenue, consisting of revenues from grants and clinical trials and contract manufacturing was $5.6 million for the years, both years ended 2020, and 2019 respectively. Grant revenue was $4.3 million for the year ended December 31, 2020, compared to $4.1 million for the year ended December 31, 2019. Revenue from the Bahamas Registry Trial was $1.3 million for the year ended December 31, 2020, compared to $1.2 million for the year ended December 31, 2019. And contract manufacturing revenue was $0.1 million for the year ended December 31, 2020, compared to $0.3 million for the year ended December 31, 2019. This decrease was primarily due to COVID-19 related decrease in travel, which restricted the business development and marketing of these services. Research and development expenses were $2.7 million for the year ended December 31, 2020, compared to $1.8 million for the year ended December 31, 2019. The increase was primarily due to an increase in research and development expenses that were not reimbursable by grants. We expect that our research and development expenses will increase in the future as we increase our headcount to support increased research and development activities relating to our clinical programs, as well as incur additional expenses related to our clinical trials. General and administrative expenses were $2.7 million for the year ended December 31, 2020, compared to $2.8 million for the year ended December 31, 2019. Expenses remained relatively consistent for 2020 compared to 2019. General and administrative expenses consisted primarily of rent, professional fees, insurance, and paid and accrued compensation costs. We expect that our general and administrative expenses will increase in the future as we increase our headcount to support increased administrative activities relating to our becoming a public company. We also expect to incur additional expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements; director and officer insurance costs; and investor and public relations costs. Our net loss for December 31, 2020 was $3.7 million, compared to $3.0 million for the year ended December 31, 2019. And finally our cash of December 31, 2020 was $0.8 million, compared to $1.9 million as of December 31, 2019. Our financial outlook. Our cash in 2021 was increased by the funds received from our IPO, with gross $29.1 million from our IPO. As of March 30, 2021, our cash was $24.5 million. We believe that based on our current operating plan and financial resources that our cash will be sufficient to cover expenses and capital requirements through at least the fourth quarter of 2022. With that, I will turn the call back to Geoff.

[Geoff Green:]

Thank you, James. We’ll now take the time to open the conference call for questions. Operator?

[Operator:]

So we have a question come through here from, let me just check, sorry, Nicole Kaufmann from Black Ridge Capital . Nicole, your line is now open, please go ahead.

[Unidentified Analyst:]

Hi, good morning. Congratulations on your recent IPO. Do you mind expanding a bit on the impact of COVID and the expectations for the Bahamas Registry Trial after the pandemic?

[Geoff Green:]

Hey, good morning, Nicole. Thanks for joining the call, this is Geoff Green. So the impact was primarily a restriction of international visitors and it’s restricted to a five month period, primarily in the beginning of 2020, after the spring it was locked down for the most part, the remainder of the year. I believe it opened towards the end of the year under certain rules and restrictions. And so, the company was building momentum throughout the beginning part of the year in 2020. And now that travel is open to the Bahamas, we’re not seeing an increase necessarily yet of back to normal levels, but we’re hoping that we see normal levels of travel and we hope that, that will be a positive impact on the participation in the Bahamas Registry in the future.

[Unidentified Analyst:]

All right, great. I have a follow-up question. This is regarding the Alzheimer’s trial program that you have. And can you let me know how many other approaches to Alzheimer’s have not been successful and why you guys are confident in the outlook for your program?

[Geoff Green:]

I could not guess at the number of attempts at Alzheimer’s, I know it’s a very large number of investigational agents have been tried in clinical trials in the United States and throughout the world, it’s a very difficult disease to treat. And to-date the approved products, I believe are – you are approved to treat the symptoms associated with the disease. And so Longeveron is taking an approach where the Mesenchymal Stem Cells or medicinal signaling cells that we make, we need to have very potent anti-inflammatory properties and the goal would be to use a systemic peripheral IV infusion, where the cells would travel systemically throughout the body and impact not only the body but the brain, primarily as through the anti-inflammatory pathways that we believe are core to the mechanisms of action of these cells. And so the preclinical evidence is supporting the approach, we’re one of the few companies in the clinic that are attempting this and we’ve just gotten over the first significant hurdle, which is to establish a safety profile in a Phase 1 program. And so, now the program is transitioning to Phase 2, where it will be designed to look more carefully at efficacy. And we’re excited about the preliminary efficacy from the Phase 1 study, and we’ll expand the trial to make it larger and larger sample size, so that we can focus more on the efficacy endpoints.

[Unidentified Analyst:]

Well, thank you very much and thanks for taking my questions. Congratulations so far and looking forward to your success. If I have more questions, I’ll jump in the queue. Thanks again.

[Geoff Green:]

Thank you.

[Operator:]

So I can assume we don’t have any further questions on the line at this moment. So I hand back over to the management team for any closing remarks.

[Geoff Green:]

This is Geoff Green; Dr. Hare is there, did you want to do any follow-up on the question about Alzheimer’s with Nicole? I think he is on mute. Okay, well no further remarks. Thank you for taking the time for everyone to listening in our conference call and for your continued support and interest in Longeveron and we look forward to updating you again when we discuss the first quarter 2021 results.

[Operator:]

Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.