Greetings, and welcome to Capricor Therapeutics First Quarter 2021 Earnings and Corporate Update Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr.
A. J. Bergman, thank you. You may begin.
J. Bergman:] Thank you. Before we start, I would like to state that we will be making 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. These forward looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports.
You're cautioned not to place undue reliance on these forward looking statements, We disclaim any obligation to update such statements. With that, I'll turn the call over to CEO, Linda Marvane.
Good afternoon, and thank you for joining us for our first We will begin today with an update on our Duchenne muscular dystrophy program, followed by an update on our exosome platform technology and our COVID-nineteen clinical program. We have several important updates on each of these programs and multiple key events We are looking forward to over the next several months. Let me begin with an update on our Duchenne muscular dystrophy program. 1 year ago, we reported positive top line data from our HOPE-two clinical trial, which was a randomized, Double blind, placebo controlled Phase 2 trial of CAP-one thousand and two, our cell therapy product In non ambulant boys and young men with advanced DMD, we saw improvements in skeletal muscle or upper limb as well as improvement in cardiac function. This trial was focused on older patients with DMD who were primarily non ambulant.
It is important to understand the market size for CAP-one thousand and two and DMD. There are approximately 20,000 boys and young men with this disease in the United States who have limited to no other options available to them. Current estimates Point to over half of the U. S. DMD population as being non ambulant and potentially eligible for CAP-one thousand and two.
If approved, we envision that CAP-one thousand and two may be administered 4 times per year over many years. Over the past several years, our cell therapy product CAP-one thousand and two has been given safely to over 200 patients And to approximately 35 DMD patients for which we have gathered robust safety and efficacy data to date. Based on the strength of the data and our desire to be ready for commercialization of CAPTEN02 should it be approved, we announced Early in the Q1 of this year, a collaboration with Lonza, a commercial manufacturing company for the development of CAP-one thousand and two for DMD and other potential indications. The collaboration aims to expand our ability and capacity to manufacture CAP-one thousand and two for potential late stage clinical trials and commercialization. Lonza operates in 120 sites and offices in more than 35 countries and has over 15,000 full time employees.
This collaboration with Lonza provides us with a partner Who has world class expertise in cell therapy manufacturing and an established track record of commercializing biologics. Now the path forward for CAP-one thousand and two and DMD continues to be very exciting, and I would like to update you today on We'll see the events that have occurred recently. First, we have submitted a new data package to FDA Based on the complete HOPE-two data sets and analysis and based on our RMAT designation, which allows preferred access And an expedited path to registration for cell and gene therapies, we have requested a Type B meeting To continue our discussions regarding our path towards registration for this product. We believe that based on the strength of the clinical data An expedited path to registration might be warranted. To this end, we continue to explore ways to work with the FDA to accelerate the pathway to approval of the therapeutic for DMD.
Now while we remain optimistic, We recognize that FDA may remain firm in their requirement for another clinical trial. To that end, we are engaged in discussions with various parties regarding a potential partnership opportunity for this program, and we will keep you updated as to our progress on this front as well. We do anticipate further clarity on this program by the Q3. Now shifting gears for a moment, let's talk about our exosome And specifically, our vaccine for SARS CoV-two commonly called COVID-nineteen. We continue our efforts to develop a novel vaccine candidate for SARS CoV-two.
While we are grateful that the currently available mRNA vaccines are working so well, this is by no means a solved issue. 1st predict that COVID will become endemic in the global population and therefore annual or even semiannual vaccines may be necessary to combat emerging variants or prolonged protection from the virus. Our approach, which is multivalent and uses the exosome as a delivery vehicle can potentially provide an alternative vaccine candidate to anything currently available or in development that we are aware of today. In addition, as we have been stating, The development of this vaccine product paves the way for expanded pipeline opportunities to use the exosomes as drug delivery vehicle, Essentially, with nature's lipid nanoparticles, whether for other infectious diseases or for therapeutics. Part of the clinical development of exosomes as delivery vehicles is to establish their regulatory pathway, And we believe that we have done that through our work to date.
Based on our recently submitted pre IND, we received feedback from the FDA on our multivalent Exosome mRNA vaccine. This feedback has given us the ability to focus on exactly what is necessary for approval of an IND. We are currently underway with IND enabling studies and as planned, we are aiming to submit an IND by the Q3 of this year. Based on our conversations with the National Institutes of Allergy and Infectious Diseases, A part of the National Institutes of Health with whom we have been speaking about our vaccine program, we are considering the following strategies. Since a high percentage of the U.
S. Population will have been vaccinated by the fall and will likely be needing a booster, We are designing our Phase 1 vaccine clinical trial with the idea that it can be used in addition to currently available Vaccines as well as in a naive population. We still believe the Capsug's vaccine can be an important tool And to prevention of SARS CoV-two and further the data we have published to date has shown that exosomes are less toxic Then lipid nanoparticles and that the multiple proteins in the Capricor vaccine may potentially provide broader based immunity To the variance of COVID-nineteen, we are designing the Phase 1 trial to be conducted in approximately 20 patients And it will likely provide a roadmap for this product and future vaccines using exosomes to deliver mRNA. We are hopeful that the FDA will support this plan. In addition, we will survey the landscape prior to the time of clinical trial initiation and evaluate if our vaccine candidate will be synergistic or beneficial when compared to the currently available vaccine.
Various potential partners are intrigued by our approach as our various government agencies. We will keep you updated on possible funding to the expansion of our exosome platform technology. Earlier this month, we announced the execution of a worldwide Exclusive license agreement with Johns Hopkins University focused on exosome based vaccines and therapeutics to treat a broad spectrum of diseases. Expansion of our portfolio allows for rapid advances And the therapeutic development of exosomes as delivery vehicles and also continues to support the growth of our vaccine program. We have built a high throughput relationship with the lab of Doctor.
Stephen Gould at Johns Hopkins University. And this license agreement Codifies the opportunity to translate innovative science into new products with an expanding intellectual property portfolio, which we will continue to strengthen. As we have worked with Doctor. Gould over the past year, this relationship will create more opportunities for future licenses based on the work we do together. Now turning to our Exosome Therapeutic program, we can talk about The call that we had in March, we focused on some of the scientific work, which is ongoing in the Capricor Lab as we are focused on becoming a leading engineered exosome company.
Our first targets, as we mentioned, are based on loading RNAs into the exosomes and focus on our ultimate goal of generating formulation I've engineered exosomes and mRNAs to potentially prevent and treat human diseases. We have been focused on building out our core R and D, product development and manufacturing teams to support the expansion of our technology and plan to have 1 to 2 indications identified over the next 2 quarters for which we plan to file INDs. As you know, we began enrollment of a Phase 2 placebo Weibo controlled double blind trial in up to 60 patients with severe COVID-nineteen late last year. This is with CAP-one thousand and two, our cell therapy product. We have been selective in our inclusion exclusion criteria Because we only want to treat those patients that we believe will benefit from CAP-one thousand and two.
Let me remind you, the targeted patients are those that are in the hospital and need supplemental oxygen, but are not ventilated. Our goal is to keep these patients off ventilation because in many cases, once a patient is artificially ventilated for COVID complications, Their prognosis worsens considerably. Many are too sick for therapeutic solutions to save by that point. We look forward to seeing the data as our early clinical data suggested a potential benefit in this population of patients. A very recent paper in the journal Nature by Benjamin Azar and his colleagues showed that lung tissue from Terminal COVID patients are filled with macrophages and other immune cells.
We know from many preclinical studies That the exosomes from CAP-one hundred and two, the identified mechanism of action of the cells change macrophages from M1 Towards an M2 expression profile. In other words, it turns them from inflammatory towards anti inflammatory. The findings from this paper gives me great hope for CAP-one thousand and two in treating severe COVID. I expect us to have data available in the Q3 of this year. Following receipt of this data and if positive, we will plan to meet with FDA to discuss the next steps in development.
In Summary, we have various exciting programs ongoing at different levels of development with multiple key milestones coming up over the next several months. We have over $40,000,000 in cash to execute on our plans and are working on strengthening our senior management team to be able to execute on our strategic plans moving through 2021 and into 2022. Please stay tuned regarding the announcement of new leaders to our team. Earlier today, we had the opportunity to present And next week, we are presenting a poster at the International Society For Extracellular Vesicles. Additionally, in June, We plan to present data at the PPMD conference to discuss our CAP-one thousand and two program in DMD.
Lastly, we have multiple publications in review with peer reviewed journals and expect several key announcements over the next several months regarding our programs. I continue to be energized by the progress we are making both on our exosome platform and with regards to pursuing a pathway for CAP-one thousand and two towards potential approval and commercialization. I will now turn the call over to A. J. Bergman, our CFO, for an update on the financials.
Thank you, Linda. This afternoon's press release provided a Summary of our Q1 of 2021 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 Capricor website. As of March 31, 2021, the company's cash, cash equivalents totaled approximately $41,900,000 compared to approximately $32,700,000 on December 31, 2020. Based on our current plans and projections, Capricor expects its cash and cash equivalents will fund our research and development programs and other operations through at least the Q2 of 2023. In the Q1 of 2021, our net cash used in operating activities was approximately $3,300,000 And for the Q1 of 2021, excluding stock based compensation, our research and development expenses was approximately $3,200,000 compared to approximately $1,100,000 in Q1 2020.
Again, excluding stock based compensation, our G and A expense was approximately $1,300,000 in Q1 2021 and approximately $900,000 in Q1 2020. Net loss for the Q1 of 2021 was approximately $5,200,000 compared to a net loss of approximately $2,100,000 for the Q1 of 2020. Thank you very much for your time and attention today. We will now open the line up for questions.
Thank you. We will now
be conducting a question and answer session. Our first question comes from Alan Leone with BioWatch News. Please proceed with your question.
Hi, Linda. Hi, AG. Thank you for taking my question. In your extended DMD package to the FDA, can we safely assume that the longer term data Have the same trends as we saw before. There's no disconfirmation or contradiction from the earlier results.
Hi, Alan. Good to hear your voice. Yes, we are carefully Discussing what's in the package and also in a submitted manuscript because of embargo policies. I will say that I'm even more excited by the final data than I was by the top line data as happens sometimes in clinical trials. Once the database is locked and you can do the final analysis, the data is fine tuned in a certain way and I will just say that We believe more than ever that CAP-ten-two is an effective treatment for the treatment of DMT.
I'm looking forward to the manuscript when it comes out. I wonder if you could help differentiate from my clients, because I get some questions. You have the engineered exosomes and you have the assets Platforms, can you I know you talked about being engineered exosomes, but can you just go into a little more color and why And differentiate these provocative platforms. And I have a question about can you combine the capabilities and but really it's just to Kind of compare the 2, why there's a couple of different platforms there?
Yes. Thank you. We're very careful to say that our engineered exosome platform is expanding because it is. So we can start with multiple different cell types And then drive the exosome to do different jobs biologically. In certain cases, for instance, like with the SARS CoV-two vaccine, We're starting with a standard HEK293F cell, which is a commercially available cell line.
It's perfect for Loading in those RNAs for the vaccine and just getting them where we need to go to derive an immune response. On the other side, the Avtex Our engineered version of a CDC exosome or the exosomes that we believe are responsible for the mechanism of action Of CAP-one thousand and two, because, we wanted to be able to ascertain that these could be made commercially, we actually have fabricated them using a standard cell line And then putting several molecular components inside, so that we can drive that same benefit. Different uses, Potentially one is a therapy for inflammatory diseases and other potentially for vaccines for treatment of And we don't we reserve the right to custom load the Avtex as time goes on as well. This is a multi pronged platform starting with the same basic component within Exosome.
Thank you. And last question, and this is really for AJ, I think. How do you see funding going forward? Over the years, Linda has been kind of a magician. Do you have some general comments about how you approach this?
Yes, sure. Thanks, Alan. Well, I think you heard me say in our remarks, we're in a great cash position for our current time and what we've laid out. We have over $40,000,000 in the bank, and that will fund everything that we have planned right now from our Phase 1 vaccine trial To moving forward in the next steps of our Duchenne program as well as advancing pre clinically some of the candidates in areas that we're thinking of taking the exosome technology. Obviously, we are going to be opportunistic, but we're in a really good position right now to continue to deliver and hopefully lay out the progress for the milestones that you heard today.
There are opportunities for non dilutive funding and Capricor has been very successful in years past and we continue to pursue various options for that type of funding.
Well, thank you. Good luck to the future. I look forward to the things coming out for Q3. Thanks.
Thanks, Alan.
Thanks, Alan. Be well.
Our next question comes from Joe
Tangenas with H. C. Wainwright. Please proceed with your question.
Good afternoon. This is Matt on for Joe this afternoon. Just a couple of questions for you. The first one, as you continue discussions with the FDA regarding musculoskeletal atrophy, What do you consider to be the major limiting step at this point?
Can you clarify what You're trying to ask what is the major limiting step with FDA or for us? Or I help me understand what I can answer for you.
Yes, no worries. Particularly on your end, do you think that there's anything that with your conversations with the FDA that you guys can provide? Are you waiting on the FDA to come back to you quicker? Is there anything you can provide in the meantime that could slow down or speed up the process to move this forward?
Yes. No, we are proceeding very quickly and expeditiously towards our goal of registration. We're very lucky to have RMAT designation, which gives us preferred access to FDA. And so we've been in ongoing dialogue with them Over this very exciting data for a little bit of time now, so stay tuned for more exciting news on this program.
Yes, great. Thanks for the clarification there. And then switching gears a bit, it's very nice to see the Johns Hopkins agreement that you mentioned previously for exosomes and the progress you've made upfront. COVID and vaccines are obviously one of your leads. I was wondering if you can give any additional insight or be more specific about possible indications that you guys might be targeting That we can look for probably in the near future.
Yes. So thanks, Matt. We have been exploring multiple opportunities Using the exosomes as delivery vehicle. So what we've learned and are really excited about is that you can take mRNA, You can put it inside of an exosome and then you can derive biology in terms of the translation of a protein into a full and active protein. We've been able to show that with the vaccine candidate in animals driving expression and ultimately an immune response to the N nucleotapsid and the S spike protein, and then also and this has been published in bio archive online publication, we've been able to show that there is this Imaging mRNA called Antares that if you put it in an exosome and you deliver it, not only is the Antares protein But it has enzymatic activity, which allows us to drive that signal to light up and we can image and do all kinds of exciting biodistribution study.
In terms of indications, we have several that we are actively exploring and doing preclinical work on. And we look forward to updating you as the time comes.
Yes, great. It's very exciting. Thank you again for taking your questions and congrats on all the progress.
Thank you.
Call. Our next question comes from Mike Schwam with Helleser Capital. Please proceed with your question.
Hi, Linda, it's Mark Swayn. Nice to talk to you. Nice presentation. Two quick questions. Is there any possibility of Interim data analysis on the use of CAP-one thousand and two in COVID-nineteen for the lung involvement?
Yes. Hi, Mark. It's great to hear your voice. It's been a while. Yes.
We are Actively enrolling that study, we look to have full enrollment by Q3. And we have made the decision Not to do an interim analysis based on the fact that the trial is enrolling well and we'd like to see the full data set. So stay tuned. I know it's hard for all of us to wait, but we really believe that the best way to do this is to get all the patients in and then take a good look at the data. The good news is, Short endpoint.
So it's a 90 day endpoint, which is nice.
Could you give a little more granularity on how early in the course The illness of those patients, are they being randomized? I mean, the just the use of supplemental O2 is a Bit of a vague criterion. Is there an effort to get the credit affairs on board early?
Yes, exactly. So of course, we'd like to get in there as early as possible. But what we know unequivocally is that They seem to be most bioactive when there's pretty active inflammation going on. So we look for a reduced Saturations of oxygen in the blood, patients needing PO2 or needing oxygen supplementation, but not Meeting ventilation and we like to see them not needing ventilation sort of upcoming in the next 24, 48 hours. And there are several other Exclusion criteria that we could go through after this call or another time just for brevity.
But essentially, just to sort of get to the nut of what you're saying What you're asking is, we're trying to get them at the point where they've got active inflammation, active Attenuation of ability to breathe normally, but hopefully not being so far gone that they're in have ARDS or Multi organ system failure or other types of pathology such as that.
Yes. Are you tracking IL-six levels on those patients as a consequence of The Cardiospheres?
Yes. So we're just looking for several of the biomarkers, of course, IL-one IL-two, IL-six, IL-ten, IL-twelve, and then ferritin and some of the others that have been correlated With the outcomes.
And just a quick shift of gears and I won't keep annoying you, but on the issue of the DMD trial, That's a wonderful amount of cash on the hand to have. Is the thinking still that probably embarkation On a Phase III trial in DMD would be only with a partner?
You know, we are really enthusiastic about our DMD program.
As are we.
I'm holding back a little bit because I have to. We want to get this published in a major journal in our field. We feel that will power the data forward. We're working with FDA. We don't want to Say anything publicly that could change the tenor of those very friendly interactions.
But what I can say for sure is that once we have clarity from the FDA and the good news is we expect that by the Q3 of this year And then the manuscript should be published. We'll decide then what to do next with the program. We may decide to do the Phase 3. We may partner it. We may partner some of it, Do some of it ourselves.
It really depends on sort of the feedback we get from FDA.
Yes. Lots of moving parts, it sounds like. So, okay. Great. Thank you.
Long cap or quarter.
There's also just very quickly, there's also the opportunity in D and G of non dilutive funding. There's In support by the California Institute of Regenerative Medicine in the past, we haven't ruled out the opportunity of going back and seeing if that would There'll be a way of funding the program should we want to do it that way.
Wonderful. Okay. Really appreciate it, Linda. Thank you.
Thank you. Be well. We have reached the end
of the question and answer session. I'd like to turn the call back over to Linda Marban for closing comments.
Thank you for joining us today on our Q1 call. We look forward to providing updates to you over the next several months on these exciting milestones. And please look for us presenting at the various meetings that I mentioned and be well in these very trying times. Thank you.
This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.
Thank you.