Capricor Therapeutics, Inc. (NASDAQ:CAPR) Q2 2022 Earnings Convention Name August 10, 2022 4:30 PM ET
Firm Individuals
Anthony Bergmann – CFO
Linda Marbán – President and CEO
Convention Name Individuals
Joe Pantginis – H.C. Wainwright
Operator
Good day and welcome to the Capricor Therapeutics’ Second Quarter 2022 Earnings Name. At the moment’s convention is being recorded.
At the moment, I wish to flip the convention over to Mr. A.J. Bergmann, CFO. Please go forward, sir.
Anthony Bergmann
Thanks and good afternoon. Earlier than we begin, I wish to state that we’ll be guaranteeing forward-looking statements throughout right this moment’s presentation. These statements could embody statements concerning, amongst different issues, the efficacy, security, and supposed utilization of our product candidates, our future R&D plans, together with our anticipated conduct and timing of preclinical and medical research; our plans to current or report extra information; our plans concerning regulatory filings, potential regulatory developments involving our product candidates, potential milestone funds; and our potential makes use of of current money and funding sources.
These forward-looking statements are based mostly on present data, assumptions, and expectations which are topic to vary and contain plenty of dangers and uncertainties which will trigger precise outcomes to vary materially from these contained within the forward-looking statements.
These and different dangers are described in our periodic filings made with the SEC, together with our quarterly and annual studies. You might be cautioned to not place undue reliance on these forward-looking statements and we disclaim any obligation to replace such statements.
With that, I will flip the decision over to Linda Marbán, CEO.
Linda Marbán
Good afternoon and thanks for becoming a member of us for our second quarter 2022 convention name. At the moment I’ll present updates on our Duchenne muscular dystrophy program and our exosome platform expertise, in addition to define our priorities and path ahead. This quarter has been productive on many fronts and most notably, we achieved a number of key milestones throughout our lead program, CAP-1002 for the therapy of Duchenne muscular dystrophy, in any other case referred to as DMD.
To remind you, our present medical initiative is geared toward treating DMD sufferers who’re largely non-ambulant and within the later levels of their illness, and naturally, for whom only a few therapeutic choices exist.
This affected person group contains about half of the DMD inhabitants or about 10,000 boys and younger males in the USA. We have accomplished two profitable medical trials in DMD and CAP-1002 has confirmed to be secure and well-tolerated in over 200 sufferers to-date.
Now, let me stroll you thru a number of the key highlights and up to date updates. First, turning to HOPE-3, our ongoing Part III pivotal research, which was initiated within the second quarter, which included web site choice and activation of licensed Duchenne facilities. HOPE-3 is a randomized double-blind placebo-controlled research with the objective to enroll 70 sufferers at roughly 15 to twenty investigative websites in the USA.
In July, we reported the initiation of enrollments and I’m more than happy to tell you that as of right this moment, we’ve enrolled seven sufferers. We’ve a rising checklist of candidates and we’re optimistic that we’ll now achieve momentum within the recruitment of the trial.
HOPE-2, our Part II research, which was revealed in The Lancet final 12 months, along with the latest late breaking open label extension information offered at this 12 months’s Mum or dad Venture for Muscular Dystrophy, or PPMD Annual Convention in June, are amplifying the curiosity in our HOPE-3 trial. Our present projections for enrollments are to be full by the third quarter of 2023 or sooner.
The promise of HOPE-3 builds on the just lately reported HOPE-2 open label extension information, which proceed to underscore the therapeutic potential of CAP-1002 and spotlight it is sustained security and efficacy.
Let me recap that information so that you can spotlight its relevance to our regulatory technique and the medical improvement of CAP-1002. HOPE-2 open label extension was a really distinctive medical research, which permits every affected person for use as their very own management.
First, we carried out Hope-2 the place one group acquired placebo and one group acquired CAP-1002. These outcomes confirmed statistical and clinically vital enchancment in higher limb operate in non-ambulant sufferers with DMD, as earlier talked about and revealed.
Then, all sufferers went off therapy into what we name a spot part, which was roughly one 12 months. All sufferers it doesn’t matter what group they had been initially in declined in higher limb operate in the course of the hole days.
Then all sufferers went on CAP-1002 within the open label extension a part of the trial and illness development was attenuated as much as 70%, most notable and those who had been initially on placebo.
What can be attention-grabbing is that the unique CAP-1002 group declined off remedy on the identical charge that the placebo group did, however entered the open label portion of the trial with higher higher limb operate as a result of the truth that they’d the good thing about one 12 months of CAP-1002 in HOPE-2.
They began with higher higher limb operate and due to this fact, completed with higher higher limb operate. That is exemplary of potential illness modifying habits of a therapeutic.
We imagine this information have to be proven to FDA, each due to its statistical energy and medical profit, but in addition as a result of time is muscle, based mostly on this dataset, yearly that sufferers are off CAP-1002, they lose operate that can’t be recovered, based mostly on our regulatory designations of RMAT, or Regenerative Drugs Superior Remedy and orphan illness designation, and likewise the significance of this information to individuals with DMD.
We’re requesting a gathering with FDA, which ought to happen this 12 months to current this open label extension information, which we imagine will additional assist our path ahead in direction of potential regulatory approval.
Nonetheless, we stay targeted on executing on our HOPE-3 medical trial, which is slated to be our pivotal trial. To remind you HOPE-3’s main endpoint is the efficiency of the Higher Limb 2.0 a validated instrument to evaluate skeletal muscle operate in non-ambulant sufferers, and likewise the measure through which we noticed statistically vital outcomes and HOPE-2 and in HOPE-2 open label extension. This assembly will complement a CMC assembly, which is required previous to BLA submission, which we’re planning to carry later this 12 months as effectively.
One other key precedence for our CAP-1002 program includes getting ready for the long run potential industrial launch, together with the dimensions up of producing. Whereas our present manufacturing web site in Los Angeles is absolutely targeted on supplying our HOPE-3 medical trial, we’re supplementing our manufacturing efforts by changing a portion of our San Diego labs to assist potential early industrial launch.
We see this facility as a flexible and cost-effective measure. Moreover, our manufacturing plan encompasses the work we’ve performed at Lonza as they might be an essential a part of our future scaled up industrial plan for CAP-1002.
As you understand, we entered right into a distribution and industrial settlement with Nippon Shinyaku and its U.S. subsidiary NS Pharma, an skilled and well-resourced industrial companion in the USA. NS Pharma has been a trusted DMD companion for the group and has already established a revered infrastructure to assist sufferers and their caregivers.
If accredited, we imagine Nippon Shinyaku’s management on this area will serve CAP-1002 effectively, enriching extra eligible sufferers who may gain advantage from our remedy. As a reminder, Capricor’s settlement with Nippon Shinyaku got here with a $30 million upfront fee to Capricor and has a possible to achieve as much as $705 million in milestone funds, a few of which, if achieved, might be paid in the course of the course of HOPE-3.
To maximise the potential good thing about CAP-1002 and attain sufferers globally, we are going to proceed to discover ex-U.S. partnership alternatives. Our objective is to proceed to execute on our regulatory, medical, CMC, and enterprise improvement objectives as I simply outlined above, as we’re dedicated to usher in CAP-1002 to sufferers as shortly as potential.
Turning now to our exosomes expertise. The final 12 months has been targeted on creating exosomes as a flexible platform for drug supply and likewise on figuring out potential purposes. We’ve made vital progress within the manufacturing of exosomes as a aggressive different to different lipid supply methods with the extra profit of getting the potential to be focused to a selected biomarker or cell sort.
Our focused supply platform can carry therapeutic payloads which are produced through an exogenous course of for loading sure varieties of payloads, which has similarities to what most in our area are doing, or through an endogenous loading course of for different varieties of payloads, together with proteins.
This final strategy depends on our proprietary expertise, which permits for higher consistency and preservation of the integrity of the cargo. We imagine this positions Capricor to have the ability to entice potential partnerships and drive new therapeutic modalities.
The rising exosomes platform may have potential purposes in a number of domains, together with vaccines, supply of RNAs, together with small interfering RNAs, and antisense molecules, in addition to different payloads.
We’ve used our proprietary expertise to develop an exosome-based vaccine with sturdy preclinical information. We plan on positioning this chance for partnering dialogue.
At current, our focus is on the potential commercialization of CAP-1002 for DMD, whereas we proceed to develop our exosomes platform expertise for future pipeline alternatives. By prioritizing our core applications, we’ve the power to effectively make the most of our present money place, which carries us into the second quarter of 2024 to ship on essential political and associated milestones.
I’ll now flip the decision over to A.J. Bergman, our CFO for extra detailed replace on the financials.
Anthony Bergmann
Thanks, Linda. This afternoon’s press launch supplied a abstract of our second quarter of 2022 financials on a GAAP foundation. You may additionally check with our quarterly report on Type 10-Q, which we anticipate to turn out to be out there shortly and might be accessible on the SEC web site, in addition to the monetary part of the corporate web site.
As of June thirtieth, 2022, the corporate’s money, money equivalents, and marketable securities totaled roughly $51.4 million in comparison with roughly $34.9 million on December thirty first, 2021.
As Linda talked about, we imagine that based mostly on our present working plan and monetary sources, we anticipate that our out there money, money equivalents, and marketable securities might be adequate to cowl anticipated bills and capital necessities into the second quarter of 2024.
Turning now to the financials within the first half of 2022, our web money supplied by working actions was roughly $17.5 million, pushed by the $30 million upfront fee from Nippon Shinyaku.
For the second quarter of 2022, excluding stock-based compensation bills, our analysis and improvement expense was roughly $4.7 million in comparison with roughly $3.4 million in Q2 2021.
Excluding stock-based compensation, our basic and administrative expense was roughly $1.4 million in Q2 2022 and roughly $1.2 million in Q2 2021. Internet loss for the primary half of 2022 was roughly $14.9 million in comparison with a web lack of roughly $9.9 million for the primary half of 2021.
With that, we are going to now open the road up for questions.
Query-and-Reply Session
Operator
Thanks. [Operator Instructions]
We’ll take our first query from the road of Joe Pantginis with H.C. Wainwright. Please go forward, your line is now open.
Joe Pantginis
Hello Linda and A.J. Good afternoon. Thanks for taking the query. So, a pair questions truly. So, first, wished to get just a little extra coloration or element. Now, clearly, the solutions might be predicated on what the FDA says, however how would you describe your wish-list or objective for what you hope to get out of your upcoming FDA assembly, the place you mentioned the first objective is to current the OLE information? Are you trying to change the potential launch dynamic, have it probably come to market earlier? I imply, what’s the final objective right here?
Linda Marbán
Sure, I imply, our final objective, Joe — and initially, it is nice speaking to you. I am wanting ahead to seeing you in September. Our final objective is to get CAP-1002 to market and to those DMD markets as shortly as potential.
As I mentioned in my speak and I have been saying now for a couple of weeks’ time is muscle what grew to become very clear within the open label extension information is after they had been off CAP-1002, they do not want and as quickly as they return on CAP-1002, they get higher. The placebo sufferers had been on the regular course of decline just like pure historical past for 2 straight years, the 12 months on placebo and a 12 months on hole after which as quickly as they went on CAP-1002, the delay — we noticed the delay of the decline of the illness course of by about 70%.
We expect this information is extraordinary. We expect it’s consultant of illness modifying exercise. We’re going robust to the FDA to indicate this information and we’re excited to work with them to deliver this to approval as shortly as we probably can.
Joe Pantginis
And the muscle information actually communicate for itself in my perception, so I assume, I will ask it in one other approach, as I am occupied with it. So, with regard to the commercialization dynamic, so is there a possible I imply, let’s simply name it swing for the fences at this level with regard to does CAP-1002 have the potential to be available on the market previous to the readout of HOPE-3? And once I say available on the market, I imply, one thing like possibly a managed entry program on a patient-by-patient foundation based mostly on the information you’d look to current?
Linda Marbán
Sure, so our objectives proper now are very targeted, the constructing blocks are in place to get CAP-1002 prepared for commercialization. Which means assembly with the FDA concerning the CMC, ensuring that we’re BLA-ready, presenting the open label extension information to the FDA, getting their suggestions, after which we’ll resolve our path ahead there — what’s the perfect path ahead.
The thrilling factor with our regulatory designation of RMAT, we actually received most popular entry to FDA. So, they’ll work with us on this. And definitely everyone that we have proven the information to, is worked up by it. And anecdotally, the sufferers are saying they’re undoubtedly feeling and functioning higher. And so they’ll arise and say — and typically even shout the identical factor.
So, actually, we have put the crew in place. We have the supervisor there. And if anyone is aware of, I do know I am a giant baseball fan, so swinging for the fences will not be one thing I am afraid to do.
Joe Pantginis
There you go. Okay. After which, I assume, with regard to both concomitant timing of the assembly or a separate assembly with regard to CMC, I am glad you are, you are planning forward with regard to your manufacturing, and supplementing out of San Diego lab, I am glad you made these feedback. How would you probably mission your wants past that from a producing standpoint?
Linda Marbán
When it comes to the manufacturing, we’re engaged on that plan proper now. We’ve the ability, as I simply introduced that we’re constructing as a part of our San Diego labs right here, it’s a comparatively low value choice, which affords us an amazing alternative for not solely getting this product prepared for BLA, but in addition for industrial launch. We’ll consider together with our companion NS, the necessity because it turns into extra obvious. And we’ll maintain everyone up to date on our plans for that as we transfer ahead.
Joe Pantginis
Obtained it. After which simply lastly, as a result of clearly, the long run has numerous exosomes being mentioned. So, you talked about a pair issues right here and in your press launch too, that you’ll be searching for some preclinical information, possibly get just a little extra visibility about what sort of issues we’d see with out essentially tipping your hand. And also you mentioned you even have a possible companion in candidate within the type of vaccine candidate, is that one thing aside out of your COVID candidate that you’ve got mentioned beforehand?
Linda Marbán
Sure, it is type of a twist on the COVID candidate. So, I can not actually speak an excessive amount of about it proper now as a result of we’re actually working very arduous with our IP and authorized groups to ensure we’re protected on each degree.
What I can inform you about that is it is going to be very thrilling as a result of it takes the exosomes, which you understand we have been engaged on for a very long time, we have standardized the manufacturing of such, in order that they are often scaled up and manufactured in a approach that may make them aggressive with any lipid supply system on the market.
However we are able to put a concentrating on molecule on the surface, and we are able to put customized payloads on the within. The present vaccine candidate is just like a recombinant protein vaccine, so — however has the benefit of with the ability to be made into different varieties of vaccine candidates in a short time. So, we use COVID, type of, as our mannequin system, quickly out there and one thing that we have been engaged on for some time, however in actuality, may very well be translated to any infectious illness or different varieties of utility, the place a protein-based vaccine may be essential or desired.
Joe Pantginis
Obtained it. And my final query, for those who do not thoughts and it is truly form of essential, I believe simply based mostly on the present biotech surroundings, which appears to be like prefer it’s beginning to bounce again, however money is king proper now. So, with the ability to have a steadiness into the second quarter of 2024 speaks volumes. So, I wished to handle one among your feedback within the press launch and A.J.’s feedback about excluding potential strategic makes use of of this capital, is that this one thing that will look to develop your pipeline externally — from an exterior supply or additional develop an exosome program, or I assume what sort of issues might we have a look at if that will be one of many choices you take into account?
Anthony Bergmann
Sure, Joe, comfortable to take just a little little bit of that query. I imply, clearly, we’re being considered with our money spend. I believe we’ve a pleasant runway into the second quarter, as a result of we simply articulated of 2024.
And actually what we’re prioritizing what our present mission is targeted on CAP-1002 for DMD, and the exposome pipeline proper now in a preclinical standing. So, it is clearly on the market, and we’re contemplating all choices, however we’ll do our greatest to successfully handle our burn charge transferring ahead.
Joe Pantginis
Obtained it. Thanks guys.
Linda Marbán
Thanks Joe. Take care.
Anthony Bergmann
Operator, do we’ve one other query?
Unidentified Analyst
Whats up.
Anthony Bergmann
Hello, Alan.
Operator
[Operator Instructions]
Unidentified Analyst
Whats up.
Operator
Sure. Go forward Alan. It is open.
Unidentified Analyst
Okay, I am sorry, I could not hear something for a bit. Linda, A.J., good to speak to you. And Linda I might wish to pursue one thing that was talked about earlier. And there was an off-time for the therapy situation in the course of the interim interval, and the functioning appears to be like prefer it continues its descent even after CAP-1002 is restored. How do you envision the therapy group would possibly appear like if it did not go off-treatment for that interim interval. And with that, be at liberty to offer any extra ideas you had in regards to the want for steady therapy?
Linda Marbán
Sure, thanks, Alan, nice to speak to you. Clearly, that is a query that we’re wanting ahead to answering as we proceed to maneuver this program ahead. What we all know from HOPE-2, the primary medical program known as HOPE-Duchenne and what we’re believing we are going to see and HOPE-3 is that being on CAP-1002 delays the development of the illness.
However once more, let me emphasize time is muscle, they do not get the operate again as soon as it is misplaced, it seems to be misplaced. So, we delay development, we delay it about 70%. If you wish to take into consideration that, in type of a temporal approach, you possibly can suppose that out of a 12 months of operate, we’re preserving eight months. And once you add that up over time, it is a very vital enhancements within the trajectory of decline.
We additionally imagine the CAP-1002 based mostly on its mechanism of motion, which has been revealed and mentioned, will carry out with gene therapies with exon skipper, different potential therapeutics which are coming alongside the pathway and the event for DMD. So, it is not going to be a one or the opposite, however a each situation. And so we’re very a lot wanting ahead to seeing the truth that we are able to, form of, preserve sufferers regular for years hopefully. It is a remainder of your life form of therapeutic, the way in which one visioning proper now which simply to spotlight half of the sufferers with DMD proper now are non-ambulant, that is 10,000 sufferers that make 10,000 boys, roughly eligible for 4 occasions a 12 months dosing began between 10 and 15 years of age and going till 25 or 30 years of age, which is now after they usually cross away may very well be longer if every little thing works effectively. So, this can be a long-term therapeutic choice for DMD, very secure as effectively.
Unidentified Analyst
If I can ask some superb strains on the intent on including industrial capability for CAP-1002. A long term, do you see it as a co-manufacturing concurrently Lonza? Or only a backup or one thing you see even bigger — long term as you as you proceed to develop in the USA and elsewhere?
Linda Marbán
As you possibly can think about, Alan, we had been extremely excited by the open label extension information. It actually put our program when it comes to getting ready for industrial launch on fast-forward. We are actually evaluating choices for scaling up and scaling out manufacturing. They’ve already been type of put the constructing blocks in place, how that is going to be enacted. As we start to maneuver into the market, we will higher assess as we get nearer to that.
The rationale that we determined to construct this facility right here in our San Diego labs is as a result of it permits us proper now to make doses which are industrial prepared. So, we’re already getting ready for industrial launch. And that is going to assist us hopefully with our regulatory technique, in addition to getting CAP-1002 into sufferers that wanted as quickly as potential.
Unidentified Analyst
I might like to slip once more. Rooting for you. I talked to sufferers from all over the world they usually’re truly monitoring you and I are enthusiastic about this trial. So, good luck and hope to see you quickly.
Linda Marbán
Thanks Alan. Be effectively.
Anthony Bergmann
Thanks Alan. Operator, I believe you might need some technical difficulties. In the event you can hear us, we’ll flip the — I believe that is the tip of the questions, and we’ll make some closing remarks.
Linda Marbán
Thanks for becoming a member of us right this moment. In abstract, we’re happy with our progress in Q2 and we are going to proceed to offer updates on our interactions with FDA on CAP-1002 in addition to our engineered exosomes program.
We’re extra inspired than ever in regards to the outlook of the corporate and over the following a number of months, we plan to offer additional updates on our progress at numerous conferences together with the H.C. Wainwright International Well being Care Convention, the Cantor Fitzgerald Cell and Genetics Medicines Convention, each being held in September, in addition to the Extracellular Vesicle-Primarily based Therapeutic Improvement Summit in October, the place we’re featured in a number of shows.
Earlier than we conclude right this moment’s name, I wish to thank our crew at Capricor, our buyers, and the many individuals who’ve been supportive alongside the way in which, together with our sufferers and their households. As soon as once more, thanks for becoming a member of us right this moment.
Operator
This concludes right this moment’s convention. Thanks to your participation. You could now disconnect.
