Caladrius Biosciences Inc
LSE:0HS8
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Welcome to the Caladrius Biosciences First Quarter 2021 Financial Results and Business Update Conference Call. [Operator Instructions] 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.
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.
Earlier today, we issued a press release announcing our first quarter 2021 financial results, which is available under the Investors & News section of our company website. If you have not received this news release or if you would like to be added to the company's e-mail distribution list, please e-mail me at jmenditto@caladrius.com.
Before we begin, I will remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Caladrius. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, its forms 10-K, 10-Q and 8-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, Thursday, May 6, 2021. Caladrius Biosciences undertakes no obligation to update -- no obligation to revise or update statements to reflect events or circumstances after the date of this conference call.
Please keep in mind that the company continues to conduct calls from different locations during the COVID-19 pandemic, so we appreciate your patience should we have any technical difficulties.
With that, I will now turn the call over to Dr. Mazzo. Dave?
Thank you, John. Good afternoon, everyone, and thank you for joining us on today's call to discuss our first quarter 2021 financial results and recent business highlights. During the first quarter of 2021, we continued 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+ 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?
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. Research and development expenses for the 3 months ended March 31, 2021, were $5.1 million compared to $1.5 million for the 3 months ended March 31, 2020. Research and development in the current year period focused on the advancement of our ischemic repair platform and related to expenses associated with efforts to advance CLBS16 in the Phase IIb FREEDOM trial, which now has multiple sites actively screening and enrolling patients and ongoing expenses for HONEDRA in critical limb ischemia and Buerger's disease in Japan, for which we continue to focus spending on patient enrollment and Japanese rolling NDA preparation, and expenses associated with the planning and preparation of an IND and proof-of-concept protocol for CLBS201 as a treatment for diabetic kidney disease.
General and administrative expenses, which focus on general corporate-related activities were $3 million for the 3 months ended March 31, 2021, compared to $2.6 million for the 3 months ended March 31, 2020, representing an increase of 18% as a result of a performance stock award vesting, one-off consulting expenses and a large increase in Directors and officers liability insurance premiums as experienced throughout our industry. Overall, net losses were $8.1 million and $4 million for the 3 months ended March 31, 2021 and 2020, respectively.
Turning now to our balance sheet and cash flow. In January 2021, we announced that we had closed on a $25 million capital raise through the sale of the company's common stock to several institutional and accredited investors in a private placement priced at the market under NASDAQ rules. Shortly thereafter, in February 2021, the company announced that it closed a $65 million capital raise through the sale of its common stock to several institutional and accredited investors in 2 registered direct offerings priced at the market under NASDAQ rules.
In recent months, many small biopharma companies are experiencing an increasingly difficult time as they compete for capital. However, despite these market hurdles, we have successfully and opportunistically secured $90 million in new capital gross proceeds year-to-date in 2021, providing us with the financial security to focus on execution of our business plan. As of March 31, 2021, Caladrius had cash, cash equivalents and marketable securities of approximately $111.5 million. Based on existing programs and projections, we remain confident that the current cash balances will fund operations for the next several years. Notably, through study completion for the Phase IIb FREEDOM trial of CLBS16 through the registration eligible study completion for HONEDRA and through the Phase II proof-of-concept study for CLBS201, while still providing capital to explore additional pipeline expansion opportunities. That completes the financial overview.
With that, let me turn the call back to Dave.
Sorry, I was on mute. Everyone, apologize for the delay. Thank you, James.
As I do on all of our results calls, I will begin by providing a high-level summary of what we are doing at 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 allogeneic therapies that present the possibility of substantial pharmacoeconomic 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 readministration. Our CD34+ 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+ cells induces angiogenesis of the microvasculature that is, that these cells prompt the development of new blood capillaries, 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 underlying ischemic injury can be improved through the application of our CD34+ cell technology, including, but not limited to, coronary microvascular dysfunction or CMD, critical limb ischemia or CLI, Buerger's 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 CLBS16, our promising CD34+ cell therapy product for the treatment of coronary microvascular dysfunction. Like all of our CD34+ cell therapy product candidates, CLBS16 uses a proprietary and patented formulation of CD34+ 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. CLBS16 was the subject of the completed ESCaPE-CMD trial, a 20-patient proof-of-concept clinical trial evaluating CLBS16 as a treatment for coronary microvascular dysfunction, a disease involving damage to the microcirculation in the heart with no accompanying discernible large vessel blockages. CMD patients have an equally poor prognosis related to major adverse cardiac events and death as do patients who have identifiable large vessel blockages.
As a result of the lack of discernable large vessel disease, CMD sufferers are often underdiagnosed, misdiagnosed or untreated. It's especially important to note that CMD is even more prevalent in females than males, making this a more important emerging women's health issue. We remain committed to raising awareness of this growing women's health crisis and finding an effective treatment for it. CLBS16 is designed to address and reverse the underlying pathology of CMD by employing the CD34+ cells innate ability to increase microcirculation and thereby hopefully improve the long-term outcomes and quality of life in those living with CMD.
In May 2020, the company announced the full data results from the ESCaPE-CMD trial at the Society for Cardiovascular Angiography and Interventions, or SCAI 2020 Scientific Sessions Virtual Conference, showing a highly statistically significant improvement in coronary flow reserve correlating with symptom relief for patients with CMD after a single intracoronary injection of CLBS16. Consequently, the company recently initiated a rigorous Phase IIb clinical trial known as the FREEDOM trial, which is currently recruiting and treating patients at multiple sites in the United States. The study is designed to complete enrollment by the end -- sorry, the study is targeted to complete enrollment by the end of 2021 with top line data anticipated for the third quarter of 2022, barring any impact on enrollment due to COVID-19 or other unforeseen challenges.
The 105 patient double-blind, randomized, placebo-controlled Phase IIb clinical trial will evaluate the efficacy and safety of delivering autologous CD34+ cells in subjects with CMD and without obstructive coronary arterial disease. In support of the FREEDOM trial, the company is engaging with the American Heart Association for a variety of initiatives designed to raise awareness of CMD.
Turning now to CLBS12 or HONEDRA in Japan, our product candidate for the treatment of critical limb ischemia and Buerger's disease in Japan. As we have described previously, CLI is characterized by a severe obstruction of the arteries that significantly reduces blood flow to the lower extremities, principally the feet and legs, and represents the end-stage of peripheral arterial disease. CLI patients often experience severe rest pain, limited mobility, nonhealing skin ulcers, and if not successfully treated, eventual amputation. HONEDRA was awarded a SAKIGAKE Designation from the Japanese regulatory authorities for the treatment of CLI and Buerger's disease.
The SAKIGAKE Designation is akin to an RMAT designation in the United States and affords the recipient prioritize regulatory consultation, a dedicated review system to support the development and review process, including the option of a rolling registration submission as well as reduced review time of 6 months for the registration application once filed. HONEDRA is also eligible for early conditional approval and possibly full approval in Japan based on the compelling nature of the complete data from our ongoing prospective, randomized controlled, open-label, multicenter study in CLI and Buerger's disease patients, which was designed in direct collaboration with the Japanese PDMA.
Note that conditional approval of a SAKIGAKE product only requires the demonstration of a trend toward therapeutic effect along with acceptable safety. The ongoing HONEDRA study in Japan comprises subjects divided into 2 cohorts, totaling 37 patients, a number agreed with the Japanese regulatory authorities. Specifically, there is a 30-subject group with traditional arteriosclerotic no-option CLI, and a 7 subject group with Buerger's disease, a subcategory of CLI that is orphan in size and is often associated with heavy tobacco or nicotine product use. These subjects who are allocated to treatment are dosed with HONEDRA in a single treatment involving a series of intramuscular injections in addition to receiving standard of care pharmacotherapy.
Subjects randomized to the control arm only receive standard of care with drugs approved in Japan, including antiplatelet agents, anticoagulants and vasodilators, the choice of which is made by the investigators according to the protocol. The study allows for the rescue of subjects in the control arm by indicating the crossover to treatment if their disease is deemed to be progressing. The primary objective of this study is to show that HONEDRA can prevent the serious consequences of CLI and Buerger's disease by reverting the patients to a CLI-free condition through improved blood flow in the afflicted limb. CLI-free status is defined as 2 consecutive monthly visits in which rest pain is absent and previous nonhealing skin ulcers are completely healed as determined by an independent adjudication committee.
As previously reported and as you can review in our corporate presentation on our corporate website, the Buerger's disease cohort is completely enrolled and the results from that group are very positive and consistent with the beneficial therapeutic effect and safety profile as reported by previously published clinical trials in Japan and in the United States. For patients with Buerger's disease, amputation and even death are likely outcomes and no available pharmacotherapies prevent amputation. However, subjects in the Buerger's disease cohort in our study have shown a very strong signal with 4 out of 7 subjects meeting the primary CLI-free endpoint, which is an outstandingly positive result for these patients who normally see continued progression leading to amputation.
Of course, we are very encouraged by the study results to date and believe that they suggest a positive outcome for the overall trial, recognizing, however, that the final conclusions of the trial will be dependent on all full data results from all subjects. In addition, the company was pleased to report that the FDA recently granted orphan designation to CLBS12 as a treatment for Buerger's disease in the United States. While the other studies enrollment continues to be significantly slowed by the COVID-19 pandemic and the repeated state of emergency declarations in Japan, we remain encouraged by the current patient prescreening pipeline as we work doggedly toward enrollment completion, noting, however, that the exact date of completing enrollment is impossible to predict due to the continuing impact of COVID-19 on clinical studies like ours in Japan.
Regarding commercialization, our strategy remains to license or partner HONEDRA in Japan. And to that end, our conversations continue with prospective partners, and we continue to seek to consummate a deal in concert with the completion of the study, if not before.
Moving on to CLBS201 for the treatment of diabetic kidney disease. Our most recently proposed development program, CLBS201, is designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for patients with diabetes who are also suffering from chronic kidney disease, but not yet requiring dialysis. We refer to these patients as having diabetic kidney disease, or DKD. Based on a wealth of published preclinical and early clinical data, it appears that the innate ability of CD34+ cells to promote the growth of new microvasculature could be a means to attenuate the progression of DKD or even reverse its course. We are currently engaging FDA in discussions designed to finalize an initial development program for CLBS201 and continue to plan to initiate a Phase II proof-of-concept study in the third quarter of this year.
And lastly, OLOGO, for the treatment of no-option refractory disabling angina. As disclosed on previous quarterly calls, Caladrius acquired the rights to data and regulatory filings for CD34+ cell therapy program for NORDA patients that had been advanced to Phase III by a previous sponsor. Based on the clinical evidence from the completed studies that a single administration of OLOGO reduces mortality, improves angina and increases exercise capacity in patients with otherwise untreatable angina, this product received regenerative medicine advanced therapy, or RMAT, designation from the FDA. Since then, we have been in discussions with the FDA regarding the size and scope of a Phase III trial of appropriate and practical size, which, in combination with previously filed Phase I, II and III data could be considered for the registration of OLOGO.
Currently, the FDA maintains that a 400-patient study, including a 50-patient standard of care arm and 150-patient placebo arm is the requirement. Epidemiological data indicates that the available NORDA population in the United States is orphan in size. In addition, input from KOLs have convinced us that enrollment in the study for NORDA patients, where there is a large chance of being randomized to standard of care or placebo will seriously deter subject enthusiasm for participation and will also have a negative impact on enrollment. Consequently, our position vis-à-vis FDA remains that a Phase III study requiring a large number of patients. And with a combined placebo and standard of care arm will take an unacceptably long time to enroll if enrollment completion would be possible at all. And we will only initiate a Phase III study for OLOGO if we can reach agreement with FDA on a study design that is practical and affordable.
So in closing, we are very pleased with the corporate and development achievements made during the first quarter of 2021, further attesting to our ability to successfully manage the current global volatile business environment. We expect to maintain this momentum in the coming quarters as we focus on execution to achieve our project development milestones.
And with that overview, operator, we are now ready to take questions.
[Operator Instructions] Our first question is from Joe Pantginis with H.C. Wainwright.
This is Sara Nik calling in for Joe. 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?
Well, thanks, Sara, 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 IIb for CLBS16 due to COVID. So we are -- we have opened the number -- we want 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.
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 and 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.
Your next question is from Shubhendu Sen Roy with Brookline.
I'm Shubhendu on behalf of Kumar from Brookline. I just had a question in terms of patient recruitment for the Phase IIb FREEDOM trial for CLBS16. I mean, since we know that gender and age impacts CMD and other cardiac outcomes, I was wondering if you were accounting for that during patient enrollment?
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 1/2 to 2/3 are female. Most of those females are [Technical Difficulty] and they seem to 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 are somewhere between 0.5 million and 1.5 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.
Your next question is from Pete Enderlin with MAZ Partners.
First question, I'll try to sort of combine 2 questions into one to abide by your protocol. You have $112 million, and the statement is, it's enough for several years. And I remember from English class that several typically means 3 or more. And so you burned $8 million in the last quarter, just reported, and if you annualize that, that would be basically about 3 years' worth. Now so -- excluding OLOGO. So is that the way you see the burn rate going? And how would you see it progressing over the next 2 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 roughly $8 million a quarter on average going forward?
I think -- well, first of all, thanks for your question, Pete. And the reason that we used a qualitative term like several rather than being specific is because all we can do is accurately predict the cost associated 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 assumed cost of the FREEDOM trial of completing the HONEDRA trial in Japan and of initiating completing the CLBS201 proof-of-concept trial, we would then -- 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 left over. And if there were no studies going on, that capital would last us a lot more than several years. But of course, we're a development company and the goal is to develop products, and so 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 3-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 a sequential fashion, ramping up and completing enrollment in the 201 proof-of-concept trial.
Okay, that helps a lot. And related to that, in the press release and before, you've said you would 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+? Or would it be a little further afield than that? And how far afield do you think you can go with your technology base?
Well, there's a bunch of questions, but I'll do my best to answer, Pete. The fact is that we're fortunate that 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 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 would treat a highly unmet medical need in a competitive way. And that could be -- 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't manage them from the perspective of capacity and expertise.
We do have an additional question from Joe Pantginis, H.C. Wainwright.
It's 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 the 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?
No. I mean -- Sara, that's the frustrating situation. So we have, I would say, tacit agreement with FDA and certainly a strong database that indicates that NORDA is orphan in size, all right? It doesn't have an orphan designation, but they're somewhere between 30,000 and 100,000 available patients in the United States. And so for something of that size, 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 nontreatment arm, these are patients who are having 7 plus angina episodes a day and with -- as the name implies, no-option, nothing's working, everything is refractory, they're not going to tolerate being randomized to standard of care, which is nothing or to placebo. They'll drop out. So there's no point in us initiating a trial, which, as suggested by FDA, by our best guess 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 CBER to see if we can 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 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.
This concludes the question-and-answer portion of the presentation. And now I turn the call back over to Dr. Mazzo for closing remarks.
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 and support of Caladrius Biosciences, and we ask that you stay well and have a good evening. Goodbye.