Longeveron Inc.
Q1 2021 Earnings Call Transcript

Published: 14 May 2021

[Operator:]

Good morning and welcome to Longeveron’s 2021 First Quarter End Earnings and Business Update Conference Call. At this time, all participants are in a listen-only mode. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for payback purposes. A replay of the call will be available approximately one hour after the end of the call through till May 21, 2021. I would now like to turn the conference over to Brendan Payne with Stern Investor Relations, the company's Investor Relations firm. Please go ahead, sir.

[Brendan Payne:]

Thank you, Bethany. Good morning, everyone and thank you for joining today’s conference call to discuss Longeveron’s corporate developments and financial results for 2021 first quarter ended March 31, 2021. With us today are Geoff Green, the company’s CEO; Dr. Joshua Hare, Co-Founder, Chief Scientific Officer and Chairman; as well as James Clavijo, the company’s Chief Financial Officer.

[Geoff Green:]

Thank you, Brendan, and thank you, Bethany. Good morning, everyone. And welcome to Longeveron’s first quarter 2021 business update and earnings call. We're very excited to describe and share the tremendous progress we have made so far this year and to lay out near-term catalysts, we are targeting in our various clinical development programs. As a high level summary, however, our Lomecel-B cell therapy program has three data readouts in three trials over the next two quarters. And we expect to initiate three new Phase 2 trials in the second half of 2021. So needless to say, we are executing on our clinical plan as outlined in our IPO, and it will be an exciting and very active half year for the company. Longeveron is a leading clinical stage biotechnology company developing cell therapies for chronic aging-related diseases and other life-threatening conditions, for which there are no approved treatments. Aging is the number one risk factor for chronic disease. Stem cell exhaustion, cellular senescence, and chronic inflammation, together referred to as inflammaging, compromise our ability to repair and regenerate damaged tissues and organs. Inflammaging is linked to the rise of progressive chronic diseases such as Alzheimer’s disease and Aging Frailty. Our focus since day one has been to develop safe and effective allogeneic cell therapy solutions for the treatment and prevention of these diseases. Longeveron’s lead therapeutic investigational product called Lomecel-B is a living cell biologic made from the specialized cells isolated from the bone marrow of young, healthy adult donors aged 18 to 45. These specialized cells called medicinal signaling cells or MSCs reside within various tissues in our body and are considered to be the body's endogenous or built-in repair mechanism that promotes regeneration of damaged tissues and organs. When we're young, we have an adequate supply of these cells and they function as needed as intended. Unfortunately, in both humans and in animals, there is a clear age-related decline in both number and potency of these cells. And this is believed to be one of the primary reasons for age associated increase in chronic disease.

[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 and discussion analysis of operations for the three months ended March 31, 2021 and 2020, which has been filed or will be filed today. First quarter ended March 31, 2021 and 2020. Revenues for the three months ended March 31, 2021 and 2020 were approximately $0.4 million and $1.7 million respectively. Revenues for the three months ended March 31, 2021 were approximately $1.3 million or 78% lower when compared to the same period in 2020, primarily due to a decrease in clinical trial revenue year-over-year and grant revenue compared to that recorded in 2020. Grant revenue for the three months ended March 31, 2021 and 2020 was $0.2 million and $0.9 million respectively. Grant revenue for the three months ended March 31, 2021 was approximately $0.7 million or 78% lower when compared to the same period in 2020. This resulted from less research grant funds being available as various company clinical trial programs concluded in the quarter. Clinical trial revenue, which comes from the company's Bahamas Registry Trial for the three months ended March 31, 2021 and 2020 was approximately $0.6 million or 78% lower when compared to the same period in 2020. During the first quarter of 2021, clinical trial revenue which has comprised of the Bahamas Registry Trial was negatively impacted by the COVID-19 travel restrictions as participants continue to have concerns with respect to for international travel. Research and development expenses for the three months ended March 31, 2021 increased to approximately $1.4 million from approximately $0.3 million for the same period in 2020. This increase of $1.1 million or 367% was primarily due to an increase in research and development expenses that were not reimbursable by grants, including also a $0.4 million charge for equity-based compensation recorded from RSUs granted.

[Geoff Green:]

Thank you, James. At this time, I think we will open the conference call for questions, and turn it back over to Bethany.

[Operator:]

We don't appear to be having any questions coming through on the telephone. So I will hand it back to Brendan.

[Brendan Payne:]

Perfect. Well, thank you everyone for joining us today. We did have one question submitted online for management with show many events to look forward to in this coming year, which of the milestones upcoming do you think will be most significant from an investor’s standpoint in terms of value inflection?

[Geoff Green:]

Super, thank you for the question. The value driving events for all companies in this space for biotech companies that are conducting clinical research has always – the ability to generate both compelling data and data that allows you to transition into later stage trials. So the company is deep into Phase 1 and Phase2 trials. And having the ability to go from Phase 1 into Phase 2 and launch a larger trial in such a difficult disease, such as Alzheimer's, for us, it is a very significant event. And I think you'll see that in the industry when companies are able to advance programs to the next stage towards commercialization in that disease. There is a lot of enthusiasm around that, so I think that's a major step for the company. The fact that there isn't a single drug approved or a therapeutic approved anywhere in the world for the indication of Aging Frailty, those two trials are events that we really look forward to, we've been working on aging frailty research for almost four years, now we have partners in the national institutes on aging. We have a program that's ready to roll in Japan, which is a super aged society. So I think everybody out there should be looking forward to the data and looking forward to see if there is a potential treatment on the horizon that can prevent or reverse these sort of progressive degenerative and devastating syndromes like aging related frailties. So it's the release of data and the transition to these new phases of development that for us are really the catalyst that we're looking forward to. I would ask our Chief Science Officer, Joshua Hare to maybe add to that.

[Joshua Hare:]

Thanks, Geoff. Yes, I would completely agree that we face a very exciting upcoming two quarters, where we'll be releasing a substantial amounts of new clinical information and disseminating that information at important venues, such as the Alzheimer's association, national meeting in July and the international society for Sarcopenia and frailty research. So the timing is very fortunate in that we have a large amount of data being released in a short amount of time, that together will catalyze the future directions of the company, and allow us to optimize the development strategies that we'll be using to take this product from where it is now through to approval in major venues like the United States and/or Japan.

[Brendan Payne:]

Excellent. Thank you.

[Operator:]

This concludes today's conference call. Ladies and gentlemen, thank you for joining us; and you may now disconnect your lines.