Lisata Therapeutics, Inc.
Q4 2020 Earnings Call Transcript

Published: 26 Feb 2021

[Operator:]

Welcome to the Caladrius Biosciences Fourth Quarter and Year End 2020 Financial Results and Business Update Conference Call. As a reminder, this call is being recorded today, Thursday, February 25, 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’ fourth quarter and year end 2020 conference call to discuss our financial results and provide a business update. Joining me today is Dr. David Mazzo, the company’s President and Chief Executive Officer.

[David Mazzo:]

Thank you, John, and good afternoon, everyone. Thank you for joining us on our call today to discuss our fourth quarter and year end 2020 financial results and recent business highlights. Before I get into the prepared text, however, I again want to extend the best wishes of the entire Caladrius staff to you and yours, hoping that you are well and coping with the challenges that COVID-19 has brought us all in our professional and personal lives. Now to business, despite the continued hurdles of the global pandemic, Caladrius closed 2020 with strong momentum across our development programs, which has allowed us to strengthen our financial position, giving us the confidence and means to fund operations for the next several years in the context of our current development plans, while exploring additional pipeline expansion opportunities. Over the course of 2020, we delivered on a number of strategic priorities in support of our robust autologous CD34+ cell technology based clinical programs. I will further expand on this in a few minutes following my review, then comment on the financial results. Before that though, I will take a moment to acknowledge the hard work, focus, creativity and perseverance of the entire Caladrius staff throughout the pandemic, this because of their dedication, individual contributions and teamwork that we have done so well as a company during 2020.

[Operator:]

Your first question is from the line of Emanuela Branchetti.

[Emanuela Branchetti:]

Good afternoon, guys and thank you for taking my questions. Congratulations on all the progress. Just a couple of questions for me. So for NORDA, I am not sure how much you can disclose obviously, but can you give us a sense of what is on your wish list for the discussion with the FDA? Like I guess like what would be an acceptable patient population in your opinion in terms of the size given the fact that you have accumulated the asset that accumulated a large amount of clinical data already?

[David Mazzo:]

Well, thanks Emanuela for your nice words and also for your question. We appreciate your interest. So I will be very careful with my words, because we are in an ongoing discussion with FDA and that discussion is constantly evolving. But our position has been, from the beginning that this RMAT designated program should be considered perhaps eligible for conditional approval based upon the completed datasets already available. And that if that is not the case, certainly a Phase 3 confirmatory size trial should be of such size and scope that it shouldn’t take 39 months and more than $70 million to complete registration requirements. Those latter numbers 39 months and $70 million are our estimates of the protocol cost and duration for the trial that FDA has to-date asked us to complete. So, our wish list is to reduce that size and scope and to be in a position to do a trial that is affordable and sure enough in timeline that it makes sense competitively to execute.

[Emanuela Branchetti:]

Sure. And thank you for that. And if I remember correctly that trial was designed to include 400 patients or more than 400 patients, right?

[David Mazzo:]

That’s correct.

[Emanuela Branchetti:]

Okay, got it. Thank you. And for CLI, switching over, can you help us like you mentioned in your prepared remarks that for conditional approval, it will be sufficient to see positive trends in the patient population, but like can you give us more color on that and maybe help us in setting our expectation? Also, based on the positive data, you obtained in Buerger’s disease patients, what would make you happy as an outcome and what would you say is the data for conditional approval?

[David Mazzo:]

Again, thank you. I appreciate the opportunity to clarify that, a number of people continued to either believe and even communicate to others that it would be necessary for us to demonstrate a positive p value that is a p value of less than 0.05 to achieve approval for this product in Japan. And then they go on to indicate that, a trial of the size that we are conducting is not going to be large enough to ever achieve such a p value. And I want to be very, very clear that the ability to achieve conditional approval for Sakigake designated product in Japan in no way depends on the calculation of a p value. In fact, there are no p value requirements for this particular study. And it’s important to note that I have stated multiple times today and in the past that the study size was determined in direct collaboration with the Japanese regulatory authority. So, they have determined what is sufficient in terms of the number of patients to demonstrate a trend. And really, what we need to do is to show that there is the possibility, let’s say, of a therapeutic effect without the ability to do any harm and the product would be eligible for conditional approval. And depending upon the compelling nature of that trend, the authorities have it at their discretion to actually grant a full approval. So, there have been a number of products that with Sakigake designations that have actually achieved approval over the last several years in a variety of indications. And I would suggest that you go back and look at some of them. And you will recognize that many of them were not necessarily providing p values and that really, the safety issue was primarily the reason why they were approved that is the ability to be safe with the promise of a future therapeutic effect and those that received full approval already demonstrated some level of therapeutic effect during the smaller trials. So, I hope that clarifies the situation.

[Emanuela Branchetti:]

Sure, it does. Thank you. It’s very helpful. And lastly for me, you mentioned first of all, congratulations on the CMD progress. And I know you mentioned top line data are expected in the third quarter of 2022, but are you planning to present some of the data, let’s say from some of the patients, why you are accumulating them, for instance, at upcoming conferences, VHA or the VHC conference?

[David Mazzo:]

Yes. At this time, the trial does not have a prescribed information interim analysis. And so it is a placebo-controlled, randomized double-blinded trial. So, we will not be breaking the blind until the end of the trial, unless at some point we are motivated to amend the protocol to include an interim analysis. But unfortunately, in blinded trials, we are in the same position and wait until the end of the trial before we can divulge any of the results.

[Emanuela Branchetti:]

Got it. Thank you very much.

[David Mazzo:]

Thanks, Emanuela.

[Operator:]

Your next question is from the line of Pete Enderlin.

[Pete Enderlin:]

Thank you. Hi, guys.

[David Mazzo:]

Hey, Pete.

[Pete Enderlin:]

How are you?

[David Mazzo:]

I am well.

[Pete Enderlin:]

First question, how much did you spend on 119 last year you mentioned as your first item of R&D expenditures?

[David Mazzo:]

Yes, we spent a little under $2 million last year on 119.

[Pete Enderlin:]

Okay. And so looking back at that, there was a commentary going along that there could be thousands of patients and then the problem was really with that specific the hospital site, not so much with the overall potential. So, what have you learned about the decision-making process and the fact that you jumped in quickly and then jumped out quickly, but there is still a large potential?

[David Mazzo:]

Well, myself specifically and many of the people who work at Caladrius have a foundation from big pharma. And most successful big pharma and even small pharma companies espouse a philosophy that basically says rapid scale or rapid decision. You don’t want to continue to spend money on things that aren’t going to go anywhere, just simply because you think it’s a good idea. So, we think that the decision-making process was actually quite good. We had a strong scientific rationale and a strong engagement from a very reputable investigator and research institution, right here in our backyard in New York that indicated to us at the time that they had more than 400 patients available that would qualify for this study. Now, as we went through the process of filing the IND getting the emergency use authorization, preparing, manufacturing, getting things approved through their site, IRB, etcetera, they have contracting offices probably because like so many institutions in New York at the time they were feeling the effects of many people being out sick and also the inefficiencies of having to work remotely, they weren’t able to turn over the contracts quickly. And so by the time we got everything approved, so that we could actually involve patients at their institution, it was late summer. And at that point in time, the 400 patients that they had originally defined evaporated and they couldn’t find anymore patients with the profile that they had originally described. Part of that was simply because of the timing of the situation and the pandemic at that point was the seeing an ebbing in New York, but mostly it was because as the disease became apparent during the course of the early spring and then into the summer, the treatments that were used for patients with the disease, especially those who had the serious cases of disease were evolving extremely rapidly. And so what was in the early stages of the disease, standard protocol, serious patients got put on ventilators later became something that was actually contraindicated. You put patients on ventilators as a last resort, because it was determined that you were actually making patients worse in that case, that coupled with antibiotic and monoclonal cocktails and all sorts of other things changed the profile of the patient and the chronic patient profile. While that chronic patient still exists, the profile is extremely heterogeneous, because all those patients have received different types of treatments based upon at what point since last February, they received the disease. And in fact, the type of treatment and the treatment paradigms continue to evolve. So until we can actually define a profile for chronic patient that is constant is that trying to hit a moving target. And for us, it didn’t make any sense to keep chasing that moving target, because of spending a lot of money and basically, what we are doing is getting nowhere. So we decided to take a pause. And now we sit back and wait and see if at some point that patient population becomes stabilized and in fact, has characteristics that we believe we can treat with our technology then we will revisit the rationale for doing that at that time.

[Pete Enderlin:]

Thanks for clarifying that. And then can I get back to CLI12 and that is the Buerger’s component of that, which I think it’s been stated as basically 4 out of 7 achieved successful results since maybe almost a year ago. So, what happens with the other three people, I know one didn’t make it, but I mean, is there just no further progress, no treatment or change in the other two people or what’s happening with them?

[David Mazzo:]

No, the other three people did not achieve a positive.

[Pete Enderlin:]

Okay, positive…

[David Mazzo:]

Following the 12 months of the study and that’s the data that we report.

[Pete Enderlin:]

Fair enough. And then on 201, is there some simple way to say how sick the people have to be, because chronic kidney disease has a lot of different shades?

[David Mazzo:]

So, these looked very right. They are going to be what we call moderate-to-severe CKD, so most people would characterize them as Stage 3b or 4 patients. So these are patients...

[Pete Enderlin:]

In creatinne or eGFR rate reading for that level…

[David Mazzo:]

But I am not going to quote that just yet, because we are still working on that. Well, actually, give me a moment here, I will give you some information in that regard that will help you identify that, just bear with me one second, I want to be sure I quote the right numbers. So, for patients who are in Stage 3b of CKD, their GFRs are generally considered in the area of 44 to 30. And for those in Stage 4, the GFRs are in the area of 15 to 29. So we are going to pick a group of patients who have GFRs that span sort of 15 to the low 40s. The exact range is going to be defined in the protocol, which will be obviously available on clinicaltrials.gov once it’s finalized. So it will be those patients, they also will have to be patients who are demonstrating rapid progression. So, these are sick patients who are quickly getting sicker.

[Pete Enderlin:]

And is there some sense of how many people in the overall target population could be available as patients long-term?

[David Mazzo:]

Yes, the current – let’s see, let’s see in the census from 2015 and 2016, it was reported that about 15% of all U.S. adults had evidence of CKD Stages 1 through 4, so 15% of the entire U.S. population, that reduces to about 15 to 18 million people with Stage 3 or 4 CKD. So, it’s a huge population.

[Pete Enderlin:]

Okay, thank you. And then I just had one kind of outside the box off the wall question.

[David Mazzo:]

Okay.

[Pete Enderlin:]

I am sure nobody has asked you this question before. Given the efficacy of CD34+ cells for regenerating vasculature, is there any potential not necessarily for you guys, because you don’t need a whole lot more stuff to work on, but as a potential with a partner perhaps or something to apply that technology to cerebral vasculature?

[David Mazzo:]

There are some considerations. In fact, we had explored at one point a number of years ago, the application of our trial in stroke, but there are several problems that come with this one is you have to ensure that the cells can cross the blood brain barrier and can end up becoming integrated into the brain in order to grow the microvasculature there and that you can do it in the right places and that takes a much more preclinical work that we haven’t done. So I think CNS applications of the technology are on the list of hypothetical possibilities. But as you said, we have got enough on our plate right now. And I think just to be candid until we demonstrate some more positive data from some of these cardiovascular indications, I think it would be unlikely that a CNS company would try to take this up on their own.

[Pete Enderlin:]

Okay, thanks. I will get back in line. Thank you.

[David Mazzo:]

Alright. Thank you. Thanks, Pete.

[Operator:]

Your next question is from the line of .

[Unidentified Analyst:]

Hi, I am from Brookline here on behalf of Kumar – Kumar Raja.

[David Mazzo:]

Hi, . Thank you.

[Unidentified Analyst:]

Hi. Thanks for the presentation and discussing the progress with us. I have a question with regard to the CLBS16 study. So I was wondering what kind of background medication would the placebo-controlled patients be on? I mean like, would they be on an ACE inhibitor or high intensity statins or something like that?

[David Mazzo:]

They will likely be on – and it’s the full range of products that they are on or actually, I am not going to try to quote them by memory, but the protocol is posted on clinicaltrials.gov. So, you can look it up there and it will give you the exact background medications that are allowed.

[Unidentified Analyst:]

Got it. Okay, thank you. Another quick question, so what is the expectation with respect to angina frequency for the study and you are going to measure it, but just wondering what’s the – what are we looking at?

[David Mazzo:]

Well, I mean, we are looking at something that would be a clinically meaningful reduction. Now remember, the purpose of this Phase 2b study is not to generate p values toward a registration with the FDA. The purpose of this trial is, in fact, to give us a good definition of effect sizes, so that we can appropriately size a Phase 3 trial for registration using endpoints that the regulatory authorities traditionally require and angina frequency is among them, but so is exercise tolerance and a few others. I think, if you look at the data that was presented in the ESCaPE-CMD trial from angina frequency, we were able to reduce daily angina frequency from 4.2 – excuse me 4.42 episodes a day per patient to around 2 episodes a day per patient. So, that’s more than a 50% reduction in angina frequency. Now, I don’t know that we will be able to replicate that magnitude of reduction in this larger trial. But whatever that magnitude is, it will give us a sense of how many patients will be necessary if we choose to use that as the primary endpoint in Phase 3.

[Unidentified Analyst:]

Right. Thank you. Another follow-up question. So, you have the data by the end of 2022, so what do you think would be the thoughts to potential approval?

[David Mazzo:]

Well, I mean, right now our thought process is probably obvious to most people. We expect that data in the third quarter of 2022 from this Phase 2b study, which will give us the opportunity to do two things in parallel. One with the control data from this trial, we can file an application for an RMAT designation for CLBS16, which would then afford us a certain number of regulatory benefits, which should accelerate the potential approval of the product. And in parallel, we will then go to FDA with a proposed protocol using traditionally accepted endpoints for angina trials and get their agreement that has ended Phase 2 meeting on the path to registration hopefully with an RMAT designation and compelling results coming out of Phase 2b, we will be able to convince the agency that two large Phase 3 trials will not be necessary and one trial can be agreed to as being sufficient, but all this remains to be discussed, but that’s the regulatory strategic thinking at the moment.

[Unidentified Analyst:]

Thank you so much. That would be all. Thank you.

[David Mazzo:]

Okay, thank you.

[Operator:]

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

[David Mazzo:]

Thanks, operator. 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 and we remain grateful for your continued interest in and support of Caladrius Biosciences. Stay well and have a great evening.

[Operator:]

This concludes the fourth quarter and year end 2020 financial results and business update conference call. Thank you for participating. You may now disconnect.