Longeveron - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 revenue of $0.381M missed S&P Global consensus of $0.595M by ~36%; EPS of ($0.34) was roughly in line with ($0.33) consensus, with increased OpEx tied to BLA readiness driving a wider net loss year over year. Revenue consensus and EPS consensus from S&P Global*.
• Management advanced key catalysts: ELPIS II (HLHS) ~95% enrolled, on track to complete enrollment in Q2 2025; AD program secured FDA alignment on a single, pivotal adaptive Phase 2/3 design with the potential for interim BLA submission if positive.
• Cash and equivalents were $14.3M; runway now “late into Q3 2025,” lowered from prior “into Q4 2025,” as BLA-enabling CMC and manufacturing readiness spending ramps; the company intends to seek additional financing/partners/non‑dilutive funding.
• Potential stock catalysts over the next 6–18 months: ELPIS II enrollment completion and 12‑month follow-up to data lock, BLA preparedness milestones, and AD partnering progress/launch of the pivotal adaptive study.

What Went Well and What Went Wrong

• What Went Well

  • HLHS program execution: ~95% enrollment with Q2 2025 completion targeted; FDA previously confirmed ELPIS II as pivotal and acceptable for traditional-approval BLA if positive. “ELPIS II has achieved approximately 95% enrollment… we expect to complete enrollment in the second quarter of this year” — CEO.
  • AD regulatory clarity: FDA Type B meeting aligned on a single pivotal seamless adaptive Phase 2/3, with potential interim read to support BLA if positive.
  • Manufacturing readiness plan articulated: CMC master plan and strategic options (internal capabilities vs CDMO) to minimize bottlenecks and meet BLA timeline.

• What Went Wrong

  • Top-line miss: Q1 revenue fell to $0.381M (down 30% YoY), driven by lower Bahamas Registry demand; this missed $0.595M consensus, with limited offset from contract manufacturing. Revenue consensus from S&P Global*.
  • Operating intensity: G&A (+34% YoY) and R&D (+13% YoY) rose on personnel/equity comp and BLA readiness, expanding net loss to ($5.0M) vs ($4.1M) YoY.
  • Runway shortened: now “late into Q3 2025” vs prior expectation “into Q4 2025,” reflecting accelerated CMC/manufacturing readiness; management flagged need for additional capital/non‑dilutive funding.

Transcript

Operator (participant)

Reminder, this conference is being recorded. It is now my pleasure to introduce your host, Derek Cole of Investor Relations Advisory Solutions. Thank you. You may begin.

Derek Cole (Head of Investor Relations Advisory Solutions)

Thank you, Operator. Good afternoon, everyone, and thank you for joining us today to review Longeveron's 2025 first-quarter financial results and business update. After the U.S. markets closed today, we issued a press release with financial results for Q1 2025, which can be found under the Investor section of the Longeveron website. On the call today are Wa'el Hashad, Chief Executive Officer; Joshua Hare, Co-founder, Chief Science Officer and Chairman of the Board; Nataliya Agafonova, Chief Medical Officer; Lisa Locklear, Chief Financial Officer; and Devin Blass, Chief Technology Officer. As a reminder, during this call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements.

Any such statements should be considered in conjunction with cautionary statements in our press release and risk factors discussed in the company's filings with the Securities and Exchange Commission, which we encourage you to review. Following the company's prepared remarks, we will open the call to questions from covering analysts. With that, let me hand the call over to Dr. Joshua Hare, Founder and Chairman of the Board. Josh?

Joshua Hare (Chief Science Officer and Chairman of the Board)

Thank you, Derek. Good afternoon, everyone, and thank you very much for joining us today. We greatly appreciate your interest in Longeveron. We are very pleased to update you on our continued successful progress advancing stem cell therapy with our lead product, laromestrocel, for multiple chronic indications. Simply put, this period of the past two years through next year is the most exciting time in the company's history. Ten years ago, when I co-founded the company, our stem cell therapy vision was an academic idea. Today, we could see the possibility of our first BLA submission seeking approval for laromestrocel for HLHS. This directly reflects our mission, seeking to help patients and families through the application of stem cell research.

In Alzheimer's disease, we've generated incredibly important clinical data supporting the therapeutic potential of laromestrocel in this devastating neurodegenerative disorder that leads to progressive memory loss and death and currently has very limited therapeutic options. This data has been accepted for presentation at multiple leading industry conferences and was published in the prestigious peer-reviewed journal Nature Medicine in the April 2025 issue. We were honored to also have the opportunity to discuss these phase two results in a recent article in Neurology Today. Our motivation and dedication to advancing stem cell therapy research has only been further invigorated by the reception to this data from the thought leader community. The next 12 to 18 months are a potentially transformational period for Longeveron, with multiple critical milestones, and we are incredibly excited about the opportunity for this progress and to share the developments with you.

I will now hand the call over to Wa'el. Wa'el?

Wa'el Hashad (CEO)

Thank you, Josh. As Josh stated so well, this is a very exciting time for the company. We continue to focus on diligent, efficient execution of our strategic plan for Longeveron and laromestrocel. In February of this year, we achieved a milestone when the International Non-Proprietary Name Expert Committee of the World Health Organization approved laromestrocel as a non-proprietary name for Lomecel-B. This is an important step in the development and potential future commercialization of our cell therapy, laromestrocel. We will be using the name laromestrocel going forward when referencing our cell therapy and reduce the usage of Lomecel-B. As a reminder, for those of you newer to our story, Longeveron is a regenerative medicine company developing cutting-edge cellular therapies.

Our stem cell therapy, laromestrocel, has delivered several positive initial results across five clinical trials in three indications: phase I and II in Alzheimer's disease, phase I and II in aging-related frailty, and phase I in hypoplastic left heart syndrome, or HLHS, a rare pediatric and orphan disease. The company's development program for these three initial indications addressed U.S. market opportunities of approximately $5 plus billion, $4 plus billion, and up to $1 billion, respectively. Our strategic plan is built on the strength of the science underlying our stem cell therapy, laromestrocel. Our goals for 2025 center on efficient, effective execution of that strategic plan, with emphasis on three primary operational goals. ELPIS II, which is the Phase II-B study for HLHS completion, HLHS BLA preparedness, and commercialization readiness, pursuing strategic collaboration for the Alzheimer's disease program. HLHS is a key strategic priority for us.

We believe the HLHS program has a high probability of success and the shortest path to potential regulatory approval and future commercialization across our pipeline. We are currently nearing completion of enrollment of the ELPIS II, Phase II-B study, evaluating laromestrocel as a potential adjunct treatment to the standard of care for HLHS patients. ELPIS II has achieved approximately 95% enrollment, and we expect to complete enrollment in the second quarter of this year, which is the current existing quarter now. The determination by the U.S. Food and Drug Administration at our meeting in August of last year that ELPIS II is pivotal, significantly accelerating the potential regulatory path for laromestrocel. If supported by clinical data from the clinical trial, it would allow us to initiate a rolling submission of a BLA with the U.S. Food and Drug Administration in 2026.

With the potential for BLA submission on the horizon, we hired Devin Blass as our Chief Technology Officer. He has over 15 years of distinguished experience in the development and manufacturing of advanced therapies and is leading the company's technological and manufacturing strategies. He will be providing a brief commentary in our HLHS BLA preparedness activity. The laromestrocel Alzheimer's disease program continues to garner important recognition and support. As Dr. Hare mentioned, results from CLEAR MIND Phase II-A clinical trial evaluating laromestrocel in mild Alzheimer's disease were published in Nature Medicine in March of this year and featured in an interview with Dr. Hare in Neurology Today in April.

Data from this trial were previously presented as a featured research oral presentation at the 2024 Alzheimer's Association International Conference, held at the end of July of 2024, and also presented as a late-breaking poster presentation at the 17th edition of the Clinical Trials on Alzheimer's Disease conference, CTAD24, in October. In March of this year, we held a Type B meeting with the FDA to discuss the regulatory pathway for potential BLA for laromestrocel in mild Alzheimer's disease. We reached foundational alignment on the overall study design for the proposed single, pivotal, seamless, adaptive phase II/III clinical trial to support an accelerated path to potential approval. The FDA agreed to consider a BLA submission based on positive interim results from this planned single study. With this regulatory clarity in hand, we are focused on seeking partnership opportunities and/or non-dilutive funding for the Alzheimer's disease program.

I'm incredibly pleased with the progress we are making to advancing laromestrocel as a cellular therapy for multiple indications with important unmet medical needs. We are now approaching multiple potential transformational milestones over the next 12 to 18 months, and I am thoroughly excited by the opportunity for laromestrocel, Longeveron patients, and shareholders. With that, I will turn the call to Dr. Agafonova to provide an update on our clinical development program. Nataliya?

Nataliya Agafonova (Chief Medical Officer)

Thank you, Wa'el, and good afternoon, everyone. Our lead investigational product is laromestrocel, a stem cell therapy derived from cultured, expanded mesenchymal stem cells, MSCs, that are sourced from the bone marrow of young, healthy adult donors. The number of functional MSCs in the body declines as we age, which has driven interest in their use for aging-related conditions. Their unique properties, including the ability to reduce inflammation, promote tissue repair and regeneration, modulate immune response, and improve vascularization, also support their application in some rare cardiovascular disease conditions with high unmet medical needs. We believe that by using the same cells that promote tissue repair, organ maintenance, and immune system function, we can develop safe and effective therapies for some of the most difficult diseases and conditions. Based on positive initial data, laromestrocel development programs have received five FDA designations.

For the HLHS program, orphan drug designation, past drug designation, and rare pediatric disease designation. For the Alzheimer's disease program, Regenerative Medicine Advanced Therapy, or RMAT designation, and past drug designation, each of which offers benefits for the program development and regulatory processes. As Wa'el mentioned, our HLHS program is a primary focus for us, with a near-term pathway to potential approval in an area of clear unmet medical need. HLHS is a rare pediatric disease in which the left ventricle, one of the pumping chambers of the heart, is either severely underdeveloped or missing. Because the left ventricle is the chamber that normally pumps the blood to the body, infants born with this condition have a profound reduction in blood flow and thus cannot get the normal supply of oxygen to their organs.

In order for the children to survive, they must undergo a complicated three-stage heart reconstruction surgery over the course of the five years of their lives. Despite the surgical reconstruction, only 50% of the affected children survive to age 15 without heart transplantation. Our program is designed to boost and improve the heart function in these children with the goal of potentially enhancing their survival. In our phase I clinical study, ELPIS I, evaluating laromestrocel in four-month-old infants with HLHS, we observed 100% transplant-free survival up to five years following treatment. This contrasts with an approximately 20% mortality rate observed in the historical control data. Five-year post-treatment long-term survival data from the ELPIS I Phase I clinical trial was presented at the Congenital Heart Surgeons' Society 54th Annual Meeting in October 2024.

We are currently conducting the phase II-B clinical trial, ELPIS II, evaluating the potential of laromestrocel to improve right ventricular function and long-term outcomes in pediatric patients with HLHS. ELPIS II is being conducted in collaboration with the National Heart, Lung, and Blood Institute through grants from the National Institutes of Health. We expect to complete enrollment of the trial before the end of the second quarter. We will then focus on supporting our investigative sites through completion of the 12-month primary endpoint follow-up period, and preparation for the data collection and analysis at the end of the study to support potential BLA submission readiness. If results from ELPIS II are positive, we would be positioned to initiate a rolling BLA submission with the FDA in 2026. I now will hand the call over to Devin Blass, our Chief Technology Officer. Devin?

Devin Blass (CTO)

Thank you, Nataliya. Good afternoon. It's a pleasure to join the call for the first time with everyone. As Wa'el mentioned, my background is in the manufacture and development of advanced therapies, which is why I'm delighted to have joined Longeveron at this transformational period in the company's development of cellular therapies. This year, we will see a significant focus on organizational readiness for the potential BLA filing for HLHS in 2026. The biologic license application is a formal request for marketing approval submitted to the FDA for a biologic, somewhat analogous to the process of submitting a new drug application for a small molecule therapy. BLAs are evaluated by the Center for Biologics Evaluation and Research, or CBER, an entity distinct from the Center for Drug Evaluation and Research, or CDER. In a relatively short period of time, we have developed a strategic plan to ensure BLA readiness.

Should ELPIS II generate positive results, our CMC, or Chemistry Manufacturing and Controls plan, is focused on meeting our BLA timeline without delays at the lowest cost, and we are evaluating all strategic options to achieve that outcome. This includes exploring commercial manufacturing options for laromestrocel, either by enhancing our facilities and internal capabilities to meet commercial readiness, or alternatively, contracting the commercial manufacturer of laromestrocel for HLHS to a CDMO. Our CMC plan identifies the necessary tasks and outlines the substantial amount of work required to achieve BLA readiness, ensuring we are well prepared to submit all of the necessary CMC components of the application in a timely manner. While there's obviously a lot of work to accomplish ahead of any potential filing, we are off to a strong start and making consistent progress every day.

Our goal is to substantially advance BLA readiness this year ahead of data readout to potentially shorten the timeline from clinical trial data readout to BLA submission. I will hand the call over to Lisa Locklear, our Chief Financial Officer, to discuss our financial results for the first quarter. Lisa.

Lisa Locklear (CFO)

Thank you, Devin, and good afternoon, everyone. This afternoon, we issued a press release and filed our quarterly report on Form 10-Q, both of which present our financial results in detail, so I will touch on some highlights. Revenues for the first quarter of 2025 and 2024 were $0.4 million and $0.5 million respectively. This represents a decrease of $0.1 million, or 30%, in 2025 compared to 2024, driven primarily by a decreased participant demand for our Bahamas Registry trial, partially offset by an increase of our manufacturing services contract revenue. Clinical trial revenue from the Bahamas Registry trial in the first quarter of 2025 was $0.3 million, a decrease of $0.2 million from the first quarter of 2024, as I said, due to decreased participant demand.

Contract manufacturing revenue for the first three months ended March 31st, 2025 and 2024, was $0.1 million and $33,000 respectively, reflecting an increase of approximately $0.1 million due to increased activity from our manufacturing services contract. General and administrative expenses for the three months ended March 31st, 2025, increased to approximately $2.9 million compared to $2.2 million for the same period in 2024. The increase of approximately $0.7 million, or 34%, was primarily related to an increase in personnel-related costs, including equity-based compensation. Research and development expenses for the three months ended March 31st, 2025, increased 13% to approximately $2.5 million from approximately $2.2 million for the same period in 2024. Our net loss for the quarter increased to approximately $5.0 million from $4 million for the same period in 2024. Our cash and cash equivalents as of March 31st, 2025, were $14.3 million.

We currently believe our existing cash and cash equivalents will fund our operating expenses and capital expenditure requirements late into the third quarter of 2025, based on our current operating budget and cash flow forecast. Following our successful Type C meeting with the FDA in August 2024 regarding the HLHS regulatory pathway, we have begun ramping up our BLA enabling activities. We currently anticipate a potential BLA filing with the FDA in 2026 if the current ELPIS II trial in HLHS is successful. The company's operating expenses and capital expenditure requirements will increase throughout calendar 2025 as a result of these BLA enabling activities. We expect that our current operating plan will require increased spending and additional capital investments to support these initiatives, and we intend to seek additional financing, capital raises, and/or non-dilutive funding options to support them.

Additionally, following a positive Type B meeting with the FDA in March 2025 with respect to the Alzheimer's disease regulatory pathway, we are focused on seeking partnership opportunities and/or non-dilutive funding for the Alzheimer's disease program, including a proposed single, pivotal, seamless adaptive phase II/III clinical trial. There are a lot of important things happening right now for Longeveron, and we are excited for these opportunities and to keep you updated on our progress. I will now hand the call back to Wa'el.

Wa'el Hashad (CEO)

Thank you, Lisa. Longeveron has made tremendous progress in two important stem cell development programs, HLHS and Alzheimer's disease. We are now approaching multiple potentially transformational milestones, including completion of pivotal phase II-B clinical trial in HLHS, our first potential BLA submission for HLHS, and based on the strengths of the phase II-A clinical data, potential partnering for the Alzheimer's disease program. Our team's expertise and industry experience enable the organization to accomplish so much with a small team and few resources, and I am incredibly proud of their efforts and accomplishments on behalf of patients and shareholders. We deeply appreciate the support of all the stakeholders and look forward to continued collaboration and progress in the future. Operator, we would now like to open the call for questions from our covering analysts.

Operator (participant)

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. The first question is from Boobalan Pachaiyappan from ROTH Capital. Please go ahead.

Boobalan Pachaiyappan (Analyst)

Good afternoon, everyone, and congrats on the progress. We have three questions. Firstly, I wanted to talk a little bit about the HLHS market. This is primarily for me to get some clarity the way I look at the market. You have said in the past, roughly 1,000 babies are born every year in the U.S. that have HLHS. Even if you assume 15% mortality, we still have 850 babies who need to undergo the stage two surgery every year within four to six months after the Norwood procedure. Right? My question is, do all stage one survivors ultimately qualify to receive laromestrocel, or is there a reason why certain stage one surviving patients would not want laromestrocel?

As you can imagine, the reason I'm asking this question is because I want to understand whether some of the enrollment challenges you're facing would ultimately impact your commercial adoption.

Wa'el Hashad (CEO)

All right. So Boobalan, that's a great question, and I may have several members of the team to answer this one. I'll answer the last part, which is regarding the enrollment challenges. I really believe that while everybody sees it and everybody loves to see more prediction, I think we have actually done a very good job as a company in enrolling in an orphan disease compared to other products. I mean, we are almost 95% enrolled. If you do the math, this means that we have one patient left, which we are confident we're going to get this quarter, and we finish the enrollment. Enrolling 4% of the annual population in the study, that's a sizable population for an orphan disease. The fact that we were able to enroll it in a matter of less than three years, actually, it's a very good achievement.

In that front, I know it has been challenging, and I know everybody would like to see more clarity. I really believe that we have done a very good job in the enrollment. As for the market, the market opportunity is very big because our exclusion criteria does not exclude a lot of patients, but I will have Dr. Hare or Nataliya answer exactly who are the patients who are excluded, and I will come back and talk about the market opportunity as well. Josh?

Joshua Hare (Chief Science Officer and Chairman of the Board)

Hi. Yes, I just wanted to make a comment on the trial as well. I think that I want to emphasize that not only is this trial excellently conducted, but it is going to be the most rigorous trial conducted in babies with congenital heart disease for cell therapy because of the rigorous design and size of the patient population. With regard to the market, I think that the majority of children who go to the stage two surgery, the Glenn procedure, will be considered for inclusion in this treatment once approved. I think there are very few reasons to not consider treating a child once they make it to stage two if the product is approved via BLA.

Wa'el Hashad (CEO)

Yeah. Boobalan, to be more specific and tell you how we're even forecasting our market for the market and the commercial opportunity, we anticipated 1,000 babies that are born with this condition every year. Many of them actually end up going directly because, as you know, the first stage surgery happened within the first week of birth. Even if 90% of them survive to the second stage surgery, that leaves about 900 patients every year. Within those 900 patients, we assumed the following. The only exclusion criteria, if these patients have a comorbidity with a valve problem with tricuspid valve issues, that population that has that comorbidity is less than 10%. Here is another out of that 900, you can take out about 10% of the population. That leaves you with 800.

Those 800 patients, we assume that some of them, for whatever reasons they choose electively, that they would not want to have the therapy. Our penetration assumes about 65%, two-thirds of the market will have, which we believe that represents a very good sizable opportunity for us in the marketplace. This is on the most conservative pricing estimate, will be on north of $500,000,000 just in the U.S., and that's not including any patient from outside the U.S.

Boobalan Pachaiyappan (Analyst)

All right. Great. Thanks for the detailed answer. I just wanted to move to the second question, and I also have a follow-up. My second question about the FDA, there's been FDA has been in the news many times during the last few months for many reasons, and one of which is leadership changes at the CBER division. This is the division you'll be ultimately dealing with when you approach your BLA filing and potentially for the PRV. My question is, have you seen any indication or whatsoever, any signals, whatsoever, that basically makes you believe your BLA will be impacted by either leadership changes or by policy changes at the FDA?

Wa'el Hashad (CEO)

To be direct, we have not seen anything. I mean, the most recent interaction with the FDA was in March 13, of course, before the naming of the new CBER director. The interaction has been very supportive. The FDA has been very collaborative. The team has remained very supportive of our plans, and we have minutes again that we have agreed. There is nothing here to allow us to assume otherwise from the information that we have. I also want to tell you that regardless of any leadership change, our philosophy at Longeveron is that we have to be buttoned up in our application, and that's why we're having a head start regardless. We want to absolutely submit the best possible BLA ready with all the information that is needed to absolutely pass through the drug approval and get that approval on the first run.

Boobalan Pachaiyappan (Analyst)

All right. Great. One last question, and this is for Devin. Devin, nice to meet you. As you're contemplating manufacturing in-house versus contracting a CRO, I was wondering if you could provide some commentary on your current capacity and potentially your plans to scale your operations, assuming you're ultimately going to be responsible for manufacturing as you think about transitioning to a pre-commercial company. If you can lay out some of the current plans and maybe potentially the investments that might be necessary to rapidly advance towards commercialization stage, that would be helpful. Also in this regard, if you can tell us if there are any bottlenecks that would limit your freedom to operate, because when you go to commercial, I wanted to better understand whether you're hinging on someone else's patents. Any commentary would be helpful.

Devin Blass (CTO)

Of course. Regarding our capacity, one lot of laromestrocel, we believe, is enough to produce at least 1,500 doses for this product. With the commercial markets and the number of babies that are born this year, we believe that the current yield sizes are ones that will be able to supply the drug commercially. That is with our current manufacturing process. The investments that we will be making are primarily in ramping up our GMP systems, looking at facilities, which could include a CDMO that has commercial capabilities and is capable of receiving a BLA. Additionally, we are ramping up on internal staff as well, experts who have gone through this process before to ensure a timely BLA.

Boobalan Pachaiyappan (Analyst)

All right. That's it from me. Thank you, team, and advanced congrats to wrap up ELPIS II enrollment.

Wa'el Hashad (CEO)

Thank you, Boobalan.

Operator (participant)

The next question is from Ram Selvaraju from HC Wainwright. Please go ahead.

Ram Selvaraju (Managing Director)

Thanks so much for taking my questions. Again, congrats on all the progress so far. Looking forward to your wrap-up of the enrollment process with ELPIS II. Two quick things. Firstly, I was wondering if you could provide us with some feedback, some color on the applicability of value-based pricing to determine the best possible pricing paradigm for laromestrocel in HLHS. In particular, if value-based pricing is applicable, if it is applicable, in what context, how might this factor into how pricing is ultimately determined? If you look at recent drug launches in the rare and ultra-rare disease space, are there any that are currently ongoing or that we expect later this year that might provide appropriate precedent benchmarks for the pricing of laromestrocel in HLHS if ultimately approved?

The second one is a very minor one, but I was wondering if you could comment on the timing with which laromestrocel would need to secure regulatory approval in order to be eligible for a PRV, assuming that the PRV program overall is not reauthorized by Congress. Thank you.

All right. Ram, let me answer the two questions. Regarding the PRV, right now, the current PRV expires in September of next year. I don't think that if it doesn't get renewed, this means that it will expire before we get a market authorization for laromestrocel. However, I absolutely know, and I sit, as you know, on the board of California Life Science and actually engage with a lot of the members of Congress, both on two sides of the aisle. I can tell you there is big support on both sides of the aisle to support the program or the initiative. It's called Give a Kid a Chance Act.

I believe once Congress starts to put all their priorities and budgets and things like that, it will get pre-authorized for an extension, and in this case, we will be eligible to get it. That is regarding the PRV and what is the likelihood and full transparency. We are working, and again, as I said, this is a very top priority for us. We are part of BIO, CLS, and BioFlorida and many other organizations, and they know how important that is. Regarding the value-based pricing and the reference pricing, the only product that is currently the closest product to our products in rare disease is the product that was approved for Mesoblast for GvHD, graft-versus-host disease, which is also an orphan disease as well.

The cost of therapy, I believe, as they have announced, and again, I'm just speaking out of their own disclosure, is about $1.5 million for the course of treatment. If you use this as a benchmark at the closest, you can throw your pricing. As I said, we have not made a final pricing decision on any of these things, but we are one-time use only, so there is no chronic utilization. We believe that we can command a good premium, especially that we're looking for saving lives. I mean, mortality is one of the endpoints that we're looking for or survival. We are also looking for things that can really provide a significant value to the healthcare system, such as hospitalization costs and other areas as well.

Overall, we believe that we will be able to have a very good story around value-based pricing if we need it. I believe that even on the most conservative estimate, as I mentioned, of pricing drugs in the field that we are operating with, which we have seen north all the way up to $3 million per course of treatment, I believe that we'll be able to generate substantial revenue for the company.

Thank you very much.

Operator (participant)

The next question is from Michael Okunewitch from Maxim Group. Please go ahead.

Michael Okunewitch (Senior Analyst)

Hey, guys. Thanks so much for taking my questions today. Congrats on all the progress you've made.

Wa'el Hashad (CEO)

Thank you, Michael.

Michael Okunewitch (Senior Analyst)

I guess to start things off, I'd like to see if you could talk a little bit about what sort of a salesforce you would need in HLHS. In particular, among those 12 centers that are running the ELPIS II study, how much of the volume of the Glenn surgery actually passes through these centers?

Wa'el Hashad (CEO)

All right. That's a great question. Honestly, I'm so excited in this call to start to see that we're getting commercial questions because that's what we're excited about here also in Longeveron. To answer your question, I will tell you, Michael, I came from the commercial world, and we used to say there is a rule called 80/20. 20% of our customers generate 80% of our business. I would tell you that 12 centers that we have used in our clinical trials actually conducted the majority, almost 80% of these surgeries. That's a big plus for us is that we are actually conducting a trial in high-volume centers. This is a very specialized surgery or set of surgeries, as you know. Having those relationships established and the experience with the drug will give us a huge benefit.

The number of pediatric cardiac surgeons who perform these surgeries in the U.S. is about less than 50 on my last count. We anticipate a need for more than four or five salesforces across the United States. The entire commercial organization will not exceed 12-15 people, and that assumes managed market support, marketing support, patient services support, and all of that. It is a very focused organization, and that is the beauty of operating in orphan diseases, you really do not need large resources to be able to service the patients who suffer from these diseases.

Michael Okunewitch (Senior Analyst)

Yeah. Thank you. That's certainly a good answer to hear. Then just talking a little bit about the plans for scaling out your manufacturing, I'd like to get a sense of how much the stage of partnering discussions in Alzheimer's might impact the decision to go for a CDMO or to build out in-house, or is that not really a factor here?

Wa'el Hashad (CEO)

I can absolutely, and Devin can add this. We absolutely know for a fact that we cannot manufacture for Alzheimer's within our existing facility because the plan that we aligned with the FDA on is that we're going to do a pivotal phase II/III, as you hear in our call today, which is a great plan because that is probably the fastest and most accelerated path that the FDA agreed to in that area, which we're really excited about. That also means that the clinical trial materials, even for that study, will have to be produced in a commercial-level facility, which in this case, we know it cannot be our existing facility. Either CDMO or we're going to have to see if the partnering discussion leads to a partner with a facility that can support that.

Definitely not going to happen in our facility in Miami. Do the decisions of the CDMO for HLHS and Alzheimer’s are tied together? To a very remote, I think we're looking at them as two distinct criteria. Definitely, if we're going to move the CDMO route for HLHS, that's one of the questions that we have on the table. Can this, in the future, also help us at a larger scale with Alzheimer's disease? Devin, do you want to add any comments on this?

Devin Blass (CTO)

Just to reiterate that while we're looking at multiple different options, the CDMO option is one of them. The CDMOs that we have been looking at do have the capability for a larger-scale manufacturing for an indication like Alzheimer's.

Michael Okunewitch (Senior Analyst)

All right. Thank you for that. And one last one for me, and I'll hop back in the queue. Just I'd like to see if you could help me understand a little bit more what the adaptive protocol might look like for the Alzheimer's study. Would that be something like a phase II portion that confirms powering and then a phase III portion for approval, or would it just be one single straight-through protocol?

Wa'el Hashad (CEO)

Yeah. I'll give you the high level, and Nataliya can get into the details. The agreement with the FDA is that we're going to do one single study. This study will have about 1,600 patients or 1,650. The first portion of the study, which we call phase II adaptive, will have 600 patients. It will be a three-arm study, one placebo and two different dosing regimens for laromestrocel. At the end of the period of the 600, we're going to do an interim analysis looking at the same primary endpoints that we would use for the end of the study. If that interim analysis at the 600 is positive, the FDA agreed that they will give us an approval based on the 600 with the principle to continue the study for the 1,650 to get larger patient sets after the approval is complete.

That's the plan that we agreed to with the FDA. Nataliya, feel free to give more details or answer any additional questions from Michael.

Nataliya Agafonova (Chief Medical Officer)

Absolutely, Wa'el. Just to add what Wa'el mentioned already, the idea of adaptive design, yes, is to do seamless. We are not interrupting phase two. We are moving directly to phase three. The traditional approval is based on interim analysis when 50% of participants complete all 72 weeks of treatment. We are talking about, as Wa'el mentioned, 600 patients, 200 patients per arm. Now decisions will be made based on the conditional power. At that time, we have opportunities either to go for traditional approval if there is evidence of efficacy, or we can choose another dose for the complete trial. We can also decide whether or not the trial is going to work.

The trial is going to continue in case we approve in this condition to complete the trial until all patients on the study complete 72 weeks of treatment with a full analysis at the end of the trial. This is the opportunity to have, first of all, to have one trial operationally seamless. We do not have to do all this operational feasibility, etc. It is going to be continuous treatment. Also, this is an opportunity to have a traditional approval sooner. Yeah.

Michael Okunewitch (Senior Analyst)

All right. Thank you very much for the additional color. Once again, congrats on all the progress you've made over the past several quarters.

Nataliya Agafonova (Chief Medical Officer)

Thanks, Michael.

Operator (participant)

There are no further questions at this time. I would like to turn the floor back over to Wa'el Hashad for closing comments.

Wa'el Hashad (CEO)

All right. Thank you, operator, and thank you all for attending our call today. We greatly appreciate your interest and support and look forward to updating you on our progress. Thank you.

Operator (participant)

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.