Caladrius Biosciences Inc

LSE:0HS8

Earnings Call Transcript 2020-Q4

[Operator]

Welcome to the Caladrius Biosciences Fourth Quarter and Year-End 2020 Financial Results and Business Update Conference Call. [Operator Instructions]

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, executive]

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.

Earlier today, we issued a press release announcing our fourth quarter and year-end 2020 financial results, which is available under the Investors section of our company website. If you have not received this news release or if you'd like to be added to the company's e-mail distribution list, please e-mail me at [e-mail].

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, February 25, 2021. Caladrius Biosciences undertakes no obligation to revise or update any 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?

[David Mazzo, executive]

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 task, 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 positive cell technology-based clinical programs. I will further expand on this in a few minutes following my review of and comments 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. It is because of their dedication, individual contributions and teamwork that we have done so well as a company during 2020.

And with that, I will now review our fourth quarter and year-end financial results. Starting with our operating expenses. Research and development expenses for the fourth quarter of 2020 were $2.9 million, a 5% increase compared with $2.8 million for the fourth quarter of 2019 and $9.3 million for the year ended December 31, 2020, compared to $10.8 million for the year ended December 31, 2019, representing a decrease of approximately 14%. R&D expenses in both the current year and prior year periods focused on the advancement of our ischemic repair platform and related to the following. Expenses associated with CLBS119, a CD34+ cell therapy concept program for repair of COVID-19-induced lung damage, targeting patients with severe SARS-CoV-2 infection that required ventilatory support due to respiratory failure.

This program has been indefinitely postponed due to the ever-changing characteristics of patients who require chronic therapy post-COVID-19 infection as well as our inability to identify investigators and/or institutions with the capacity to take on a clinical study of this type.

Ongoing expenses for HONEDRA in critical limb ischemia in Japan, for which we continue to focus spending on patient enrollment and Japanese NDA preparation. Expenses associated with the proof-of-concept ESCaPE-CMD study for CLBS16 in coronary microvascular dysfunction, for which study enrollment was completed in the second quarter of 2019 and full results reported in May 2020 as well as expenses associated with the preparation and initiation of a Phase IIb study for CLBS16, the FREEDOM trial, in the second half of 2020. And finally, expenses associated with the ongoing dialogue with FDA regarding design and execution of a confirmatory Phase III study of OLOGO, CLBS14 in NORDA.

General and administrative expenses, which focus on general corporate-related activities, were $2.5 million for the 3 months ended December 31, 2020, compared to $2.3 million for the 3 months ended December 31, 2019, and $9.9 million for the full year ended December 31, 2020, compared to $9.3 million for the full year ended December 31, 2019, representing an increase of 6%. Overall, net losses, excluding the benefit from income taxes, that is the proceeds from sales of New Jersey NOLs, were $19 million and $19.4 million for the full years ended December 31, 2020, and December 31, 2019, respectively.

Turning now to our balance sheet and cash flow. As of December 31, 2020, Caladrius had cash, cash equivalents and marketable securities of $34.6 million, which consisted of the $10.9 million of non-diluted proceeds received from the sale of our qualified New Jersey NOLs as well as 2 registered direct offerings that raised a total of $9.3 million in gross proceeds. In July 2020, we increased our cash position with the closing of a $2 million private placement.

It is noteworthy that the 2 registered direct offerings and the July private placement were all priced at the then market. During 2020, the company also raised $8.5 million in gross proceeds through its common stock at the market sales agreement with H.C. Wainwright and Company, of which $7.2 million was raised in July and August of 2020.

Subsequent to the close of the fourth quarter, we were able to take advantage of investor demand for Caladrius shares and successfully completed 2 strategic capital raises in close proximity. In January 2021, we announced that we had closed on the $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 total, and despite the current economic environment and growing challenges, Caladrius successfully secured approximately $90 million in new capital year-to-date in 2021 and approximately $120 million over the last 12 calendar months. As of February 25, 2021, we have cash, cash equivalents and marketable securities of approximately $116 million.

And based on existing programs and projections, we remain confident that our current cash balances will provide operations for the next several years, notably through the completion of the Phase IIb FREEDOM study of CLBS16 through the registration eligible study completion for HONEDRA in Japan and through the Phase I/II proof-of-concept study for CLBS201 while still providing capital to explore additional pipeline expansion opportunities.

That completes the financial overview, and now I'll move on to our exciting clinical development pipeline. As I've done on previous calls, I will begin by providing a high-level summary of what we are doing at Caladrius and why we believe our development programs are an increasingly relevant and attractive investment opportunity.

Caladrius is focused on the development of autologous cellular therapies designed to reverse disease, and 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 and 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 B 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, pre-dialysis chronic kidney disease, or CKD, 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+ positive cell therapy product candidate 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 a coronary artery.

CLBS16 is 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 tiny arterial blood vessels, the microcirculation in the heart with no accompanying discernible large vessel blockages.

Despite the absence of large vessel disease, CMD patients have an equally poor prognosis related to major adverse cardiac events and death as do patients who have identifiable large vessel blockages. Notably, people living with CMD are often underdiagnosed, misdiagnosed and/or untreated because there are no large artery blockages to visualize. It is especially important to recognize that CMD is more prevalent in females than males, making this an important emerging women's health care issue. 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 of those living with CMD.

In May of 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. As predicted by preliminary results announced at the American Heart Association scientific sessions in November 2019, data showed highly statistically significant improvement in coronary flow reserve relating -- excuse me, correlating with symptom relief for patients with CMD after a single intracoronary injection of CLBS16.

We remain committed to raising awareness of women's heart health issues in general and in particular, CMD. And CMD is increasingly cited as a growing women's health crisis and we are working diligently to find an effective treatment for it. Consequently, the company recently initiated a rigorous Phase IIb clinical trial, known as the FREEDOM trial, which is currently recruiting and treating patients and is targeted to complete enrollment by the end of 2021 with top line data anticipated for the third quarter of 2022.

There seems to be some confusion around the size and scope of the FREEDOM trial based on a recent analyst report. So to be clear, the FREEDOM trial is a 105-patient double-blind, randomized, placebo-controlled Phase IIb trial, which will evaluate the efficacy and safety of delivering autologous CD34+ cells in subjects with CMD and without obstructive coronary artery disease. To our knowledge, FREEDOM is the first controlled regenerative therapy study in CMD. And 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 this debilitating condition.

Turning now to HONEDRA, or CLBS12, our product candidate for the treatment of critical limb ischemia in Japan. As I have described previously, CLBS -- excuse me, 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, non-healing 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. The SAKIGAKE designation is akin to an RMAT designation in the United States and affords the recipient prioritized 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 CLBS12 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 set from our ongoing prospective, randomized, controlled, open-label, multicenter study in CLI patients, which was designed in direct collaboration with the Japanese PDMA. Note that conditional approval of a SAKIGAKE product only requires demonstration of a trend toward therapeutic effect, along with acceptable safety requirements that our current study should be able to meet.

The ongoing study in Japan comprises subjects divided into 2 cohorts, totaling 37 patients, a number agreed to with the Japanese regulatory authorities. The aforementioned inaccurate research report states that there are only a handful of patients in this study. 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 smoking.

Those subjects who are allocated to treatment are dosed with our CD34+ cell therapy in a single treatment through a series of intramuscular injections in addition to receiving standard of care pharmacotherapy. Subjects randomized to the control arm only received 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 CLI is deemed to be progressing. The primary objective of this study is to show that HONEDRA can prevent the serious consequences of CLI by reverting the patients to a CLI-free condition through improved blood flow in the affected limb. CLI-free status is defined as 2 consecutive monthly visits in which waist pain is absent and previous non-healing 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 company 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 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 achieved a remission rate of approximately 60%, meaning that 4 out of 7 subjects have met the primary endpoint and are CLI-free. This is an outstandingly positive result for these patients who normally see continued progression leading to amputation. 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 the full dataset from all subjects.

Of all of our clinical programs, the HONEDRA study has been the most impacted by the COVID-19 pandemic. In Japan, as a result of the pandemic, a state of emergency was in effect for most of 2020, which effectively prevented patient recruitment into clinical studies like ours. Since the onset of the New Year and despite a new state of emergency in Japan being implemented from January 7 to March 7, we are encouraged by the patient prescreening pipeline that has been identified.

We have only a small number of patients remaining to be enrolled and expect to conclude trial enrollment during the second quarter of 2021, leading to top line data for the full study in the second quarter of 2022. Regarding commercialization, our strategy remains to license our 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 pre-dialysis chronic kidney disease, or CKD. Our most recently proposed development program, CLBS201, is designed to assess the safety and efficacy of CD34+ cell therapy as a treatment for pre-dialysis CKD. Based on a wealth of published preclinical and early clinical data, it appears that the innate ability of the CD34+ cell to promote the growth of new microvasculature could be a means to attenuate the progression of the disease or even reverse the course of CKD.

The company plans to file an IND for this program in the second quarter of 2021 and to initiate a proof-of-concept study of CLBS201 in a moderate-to-severe pre-dialysis CKD population shortly thereafter. Chronic kidney disease remains a largely underserved medical need, especially as the general population ages and the incidence of diabetes and hypertension increases.

And lastly, OLOGO or CLBS14 for the treatment of no-option disabling angina. As communicated on previous quarterly calls, Caladrius acquired the rights to data and regulatory filings for CD34+ cell therapy program for NORDA 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. We remain in discussion with the FDA regarding the size and scope of a Phase III trial, which, in combination with previously filed Phase I/II and Phase III data would be considered for the registration of OLOGO. Notably, the RMAT designation affords the product a 6-month review time for a Biologics License Application, or BLA, once submitted.

So in closing, we are very pleased with the corporate and development achievements made throughout 2020, which attests to our ability to successfully navigate the current global economic landscape with agility and to deliver on key strategic initiatives. We expect to build on this momentum as we further advance and expand our clinical development pipeline while working to achieve a number of important upcoming development milestones.

And with that overview, operator, we're now ready to take questions.

[Operator]

[Operator Instructions] Your first question is from the line of Emanuela Branchetti.

[Emanuela Branchetti, analyst]

Congratulations on all the progress. Just a couple of questions for me. So for NORDA, I'm 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 has accumulated a large amount of clinical data already.

[David Mazzo, executive]

Well, thanks, Emanuela, for your nice words and also for your question. We appreciate your interest. So I'll 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 III 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 short enough in time line that makes sense competitively to execute.

[Emanuela Branchetti, analyst]

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

[David Mazzo, executive]

That's correct.

[Emanuela Branchetti, analyst]

Okay. Got it. And so for CLI, switching over, can you help us -- like you mentioned in your prepared remarks that for conditional approval, it would 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 obtain in Buerger’s Disease patients. What would make you happy as an outcome? And what would you say is the bar for conditional approval?

[David Mazzo, executive]

Again, thank you. I appreciate the opportunity to clarify that. A number of people continue 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're 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 a 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've 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 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'll 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 their ability to be safe with the promise of 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, analyst]

Sure, it does. 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 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 while you're accumulating them, for instance, at upcoming conferences, the AHA or the ACC Conference?

[David Mazzo, executive]

Yes. At this time, the trial does not have a prescribed 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're motivated to amend the protocol to include an interim analysis. But unfortunately, in blinded trials, we all are in the same position, and we wait until the end of the trial before we can divulge any of the results.

[Operator]

Our next question is from the line of Pete Enderlin.

[Peter Enderlin, analyst]

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

[David Mazzo, executive]

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

[Peter Enderlin, analyst]

Okay. And sort of 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 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's still a large potential.

[David Mazzo, executive]

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, et cetera, they're 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 enroll 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 any more 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 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 the 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're 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 of 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 a chronic patient that is constant, it's like trying to hit a moving target.

And for us, it didn't make any sense to keep chasing that moving target because it's spending a lot of money. And basically, what we're 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'll revisit the rationale for doing that at that time.

[Peter Enderlin, analyst]

And can I get back to CLI 12, 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 3 people? I know 1 didn't make it. But I mean, is there just no further progress, no treatment or change in the other 2 people or what's happening with them?

[David Mazzo, executive]

No, the other 3 people did not achieve a positive and -- during the 12 months of the study. And that's the data that we report.

[Peter Enderlin, analyst]

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 of severity.

[David Mazzo, executive]

So these will -- right. They're 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...

[Peter Enderlin, analyst]

Their creatinine or GFR reading for that level...

[David Mazzo, executive]

Yes, there are, but I'm not going to quote that just yet because we're still working on that. Now -- 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 1 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, their GFRs are in the area of 15 to 29. So we're 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'll 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. Those are the ones that we have gone for treatment.

[Peter Enderlin, analyst]

How many people in the overall target population could be available as patients, longer-term?

[David Mazzo, executive]

Yes. The current -- 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 million to 18 million people with stage 3 or 4 CKD. So it's a huge population.

[Peter Enderlin, analyst]

Okay. And then I just had one kind of outside the box off the wall question. I'm sure nobody's asked 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, executive]

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 being -- 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've 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.

[Operator]

Your next question is from the line of Shubhendu Sen Roy.

[Shubhendu Sen Roy, analyst]

I'm Shubhendu from Brookline, here on behalf of Kumar, Kumara Raja. 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 or 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, executive]

They'll likely be on statins. The full range of products that they're on are actually -- I'm 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.

[Shubhendu Sen Roy, analyst]

Got it. Okay. Another quick question. So what is the expectation with respect to angina frequency for the study? I know you're going to measure it, but just wondering what's the -- what are we looking at?

[David Mazzo, executive]

Well, I mean, we're looking at something that would be a clinically meaningful reduction. Now remember, the purpose of this Phase IIb study is not to generate key 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 III 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'll be able to [ replicate ] that 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 III.

[Shubhendu Sen Roy, analyst]

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

[David Mazzo, executive]

Well, I mean, right now, our thought process is probably obvious to most people. We expect to have data in the third quarter of 2022 from this Phase IIb study, which will give us the opportunity to do 2 things in parallel. One, with the controlled 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'll then go to FDA with a proposed protocol using traditional -- traditionally accepted endpoints for angina trials and get their agreement at the end of Phase II meeting on the path to registration hopefully with an RMAT designation and compelling results coming out of Phase IIb, we'll be able to convince the agency that 2 large Phase III trials will not be necessary and 1 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.

[Operator]

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

[David Mazzo, executive]

Thanks, operator. And 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.