Lisata Therapeutics, Inc.
Q1 2021 Earnings Call Transcript

Published: 7 May 2021

[Operator:]

Welcome to the Caladrius Biosciences First Quarter 2021 Financial Results and Business Update Conference Call. As a reminder, this call is being recorded today, Thursday, May 6, 2021. I will now turn the call over to John Menditto, Vice President of Investor Relations and Corporate Communications at Caladrius. Please go ahead, sir.

[John Menditto:]

Thank you, operator and good afternoon everyone. Welcome to Caladrius’ first quarter 2021 conference call to discuss our financial results and provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer and James Nisco, Vice President, Finance and Treasury.

[David Mazzo:]

Thank you, John. Good afternoon, everyone. And thank you for joining us on today’s call today to discuss our first quarter 2021 financial results and recent business highlights. During the first quarter of 2021, we continue to advance our clinical development programs and strengthen our financial position, giving us the confidence and means to fund operations for the next several years based on our current development plans, while also allowing us to explore additional pipeline expansion opportunities. Over the last several months, we delivered on a number of strategic priorities in support of our robust autologous CD34 positive cell technology-based clinical pipeline on which I will further expand in a few moments, following the prepared remarks covering the financial results. With that, I will now turn the call over to James Nisco, our Vice President of Finance and Treasury, who will review and provide commentary on our quarterly financial results, James?

[James Nisco:]

Thanks, Dave. And good afternoon, everyone. I'm pleased to join you today and provide a review of our first quarter financial results. Starting with our operating expenses.

[David Mazzo:]

Sorry, I was on mute everyone apologize for the delay. Thank you, James. As I do on all of our results calls, I’ll begin by providing a high level summary of what we are doing a Caladrius and why we believe our development programs remain a relevant and attractive investment opportunity today. Caladrius is focused on the development of autologous cellular therapies designed to reverse disease. We have late stage clinical programs underway based on a large database of human clinical data. To date, our therapies have shown strong signs of effectiveness and durability with a pristine safety profile unlike many allergenic therapies and present the possibility of substantial pharmaco economic benefit. Most importantly, we remain focused on the development of personalized curative cell therapy products that will restore human health and improve quality of life with a single administration of the therapy rather than one that requires frequent re administration. Our CD34 positive cell therapy technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia, a condition in which the supply of oxygenated blood to healthy tissue is restricted. Previously published preclinical and human clinical studies have demonstrated that the administration of CD34 positive cells induces angiogenesis of the microvasculature that is that these cells prompt the development of new blood capillary, thereby contributing to the prevention of tissue death by facilitating blood flow to the area of ischemic insult. We believe that several chronic conditions caused by underlining - underlying ischemic injury can be improved through the application of our CD34 positive cell technology, including but not limited to coronary microvascular dysfunction or CMD, critical limb ischemia or CSLI, Buerger disease, diabetic kidney disease, DKD and no option refractory disabling angina or NORDA. I will now speak to the specifics of each of our development programs, kicking off with CLB16, our promising CD34 positive cell therapy product for the treatment of coronary microvascular dysfunction. Like all of our CD34 positive cell therapy product candidates, CLB16 uses a proprietary and patented formulation of CD34 positive cells specifically designed for an injection at or near the site of ischemic insult which in the case of CMD is an infusion into the coronary artery.

[Operator:]

Our first question is from Joe Pantginis with H.C. Wainwright.

[Unidentified Analyst:]

Hi. This is Sara Nick sarnat calling in for Joe. Thank you so much for taking my question. My question is really focused on how are your speaking to the COVID impact on the FREEDOM trial? I know you touched on this a little bit, but how are you viewing site reopenings on the impact of enrolling patients into FREEDOM currently, and maybe looking out to the rest of the year?

[David Mazzo:]

Well, thanks for the question. And let me be clear about a couple of things here. So far, we've had minimal impact on the FREEDOM trial, which is the Phase 2b for CLBS16 due to COVID. So we are - we have opened the number - we're about to say, we are on track according to projection with site openings and have a number of other sites in the process. And so identifying and opening sites does not seem to have been impacted by the pandemic. And early indications are that patient recruitment is not being impacted by the pandemic. So we will see as more sites get open and enrollment really begins to pick up. But for now, COVID-19 does not seem to be a major challenge for recruitment in the FREEDOM trial.

[Unidentified Analyst:]

Thank you…

[David Mazzo:]

Contrary, to that - okay, I'll just clarify for HONEDRA in Japan COVID-19 is a major impact on enrollment. And we have been stalled, enrolling patients for the better part of 2020, an early 2021 due to the state of emergencies that have been declared in Japan due to the pandemic. We're still hopeful, though, that with only a few patients left to enroll that once things are back to normal there, we'll be able to complete the trial in due course.

[Unidentified Analyst:]

All right. Thank you. Thank you for the clarification.

[David Mazzo:]

Sure.

[Operator:]

Your next question is from with Brookline.

[Unidentified Analyst:]

Hi, I'm on behalf of Kumar from Brookline. Appreciate it. I just had question in terms of patient recruitment for the Phase 2b FREEDOM trial for CLBS16. I mean, since we know that gender and age impacts CMD and other cardiac outcomes, I was wondering if you're accounting for that doing patient enrollment?

[David Mazzo:]

Yes, we are. Just to be clear, the typical CMD population is characterized by patients who tend to be younger than 65, majority of which are female, generally, somewhere between a half to two thirds are female. Most of those females are pregnant And they seem to, you know, have a not any particular history of heart disease. So they are scattered around the country and based upon the available data we've calculated there somewhere between a half million and one and a half million patients who would be eligible to be treated by CLBS16 because of underlying coronary microvascular dysfunction, and we've taken that into account in terms of the recruitment and site projections.

[Unidentified Analyst:]

Thank you. Sounds great. Thanks for taking my question.

[David Mazzo:]

Certainly.

[Operator:]

Your next question is from Pete Enderlin with MAZ Partners.

[Pete Enderlin:]

Hi, thank you. Hi, Dave, James, and John. First question, I'll try to sort of combine two questions into one, to abide by your protocol, is $112 million and the statement is, it's enough for several years. Now, you know, I remember from English class, it's several typically means three or more. And so, you know, you burned $8 million in the last quarter, quarter just reported. And if you annualize that, that would be basically about three years worth. Now, so excluding all ago, so is that the way you see the burn rate going? And how would you see it progressing over the next two years let's say, I know, it will be somewhat volatile, depending on when things start and the pace of enrollment and all that, but are we looking at, you know, roughly $8 million a quarter on average going forward?

[David Mazzo:]

I think, well, first of all, thanks for your question, Pete. And you know, and the reason that we used a, you know, a qualitative term like several rather than being specific is because, all we can do is accurately predict the cost associated with the things that we are currently doing. And, of course, the results of those things will dictate whether there is a following step and what that following step might be. So right now, if we take the total - the total assumed costs of the FREEDOM trial, of completing the HONEDRA trial in Japan, and of initiating completing the CLBS201 proofs of concept trial, we would then you know, at that point, we can't predict any further clinical. So those costs alone, take us through the end of next year. And we have quite a bit of capital leftover. And you know, if there were no studies going on that capital would last us a lot more than several years. But of course, we're development company and the goal is to develop products. And so though that capital will be spent, we just say, can't say what the rate of spending will be right now, because we don't know what the next studies look like. But given what we have right now, we clearly have three plus years worth of burn, and it will not be linearly spent. So we will probably continue at or around $8 million a quarter for the next few quarters as we are ramping up and completing enrollment in FREEDOM. And then in the sequential fashion, ramping up and completing enrollment in the FREEDOM - in the 201 proof of concept trial.

[Pete Enderlin:]

Okay, that helps a lot. And related to that in the press release, and before you've said, you know, you have capital for additional pipeline expansion opportunities. So, can you just - any way you possibly can elaborate on that? I mean, are we talking about things basically close to your ischemic technology, CD34 plus, or would it be a little further afield in that? And how far afield do you think you can go with your technology base?

[David Mazzo:]

Well, there's a bunch of questions. But, but I'll do my best to answer Pete. The fact is that we're fortunate that, you know, my personal background, as well as the background of most of the people on my team is such that we have experience and expertise working across multiple therapeutic areas. Of course, we've been focused on cardiovascular disease, but we are venturing now into renal disease as well with 201 because, you know, that's where the angiogenic properties of CD34 seem to be, most obviously, initially placed. But we could, at least from a company perspective, easily manage programs in almost any other therapeutic category, and also with almost any other modality of therapy that is small molecules, therapeutic proteins, antibodies, et cetera. Because we all have that kind of experience. So right now, our pipeline expansion explorations are, I would say, opportunistic, we are looking at everything that would meet the criteria of being, of course affordable, have a high probability of clinical success. And we treat a highly unmet medical need in a competitive way. And that could be, you know, of course, we give preference to those things that are closer to the therapeutic area in which we're currently working. But that doesn't mean that we'll discount other technologies because we can manage them from the perspective of capacity and expertise.

[Pete Enderlin:]

Thanks, I'll get back in the queue.

[David Mazzo:]

Thank you, Pete.

[Operator:]

We do have an additional question from Joe Pantginis with H.C. Wainwright.

[Unidentified Analyst:]

Hi, again. Its Sara on for Joe. I just had one more follow up question. I know you had also touched upon your discussions with the FDA regarding to NORDA. Would - are there any other key outstanding discussion points aside from the patient population size for enrollment, that you guys have yet to agree on, in regard to advancement to a pivotal study?

[David Mazzo:]

No, I mean, Sara, that's the frustrating - the frustrating situation. So we have, I would say tacit agreement with FDA, and certainly, you know, a strong database that indicates that NORDA is a - is orphan in size. Alright, it doesn't have an orphan designation, but there's somewhere between 30,000 and 100,000 available patients in the United States. And so for something of that size, you know, doing a 400 patient clinical trial is enormous. And then when you make that study design, essentially give the patient or the subject a 50% chance of being randomized to a non-treatment arm. These are patients who are having seven plus angina episodes a day. And with - as the name implies, no option, nothing's working, everything's refractory, they're not going to tolerate being randomized the standard of care, which is nothing or to placebo, they'll drop out. So you know, there's no point in us initiating a trial, which, as suggested by FDA, by our best guests would cost over $70 million, but have a very, very low probability of ever being able to be completely enrolled. So we're working with them at CEBER to see if we could come to an agreement on a study size that's much smaller, and with a design that is more attractive to get people to join the trial. And if we can't get there, for whatever reason, then we simply it would be bad business to run that trial. So we're still in discussion we haven't given up. But you know, it's been slow going, mostly because FDA has been preoccupied with lots of other things this last year. But we'll keep at it. And hopefully one day we'll be able to reach agreement on the pivotal trial design that we can actually execute.

[Unidentified Analyst:]

All right. Thank you. Good luck.

[David Mazzo:]

Thanks a lot.

[Operator:]

This concludes the question and answer portion of the presentation. And now I'll turn the call back over to Dr. Mazzo for closing remarks.

[David Mazzo:]

Again, thank you all for participating on today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements and progress. We remain grateful for your continued interest in support of Caladrius Biosciences. And we ask that you stay well and have a good evening. Good-bye.