Longeveron - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 revenue of $0.316M missed Wall Street consensus of $0.412M; EPS of -$0.33 beat consensus of -$0.353. The miss was driven by weaker Bahamas registry demand and reduced contract manufacturing activity, while EPS benefited from other income and lower per-share loss versus expectations.
• Completed full enrollment (40 patients) in pivotal Phase 2b ELPIS II (HLHS); top-line results expected Q3 2026 and BLA submission targeted for late 2026, assuming positive data—management emphasized organizational and CMC readiness via a CDMO strategy to accelerate commercialization.
• Cash and equivalents were $10.3M at quarter-end; following an August financing (~$5M + up to $12.5M in warrant proceeds), runway extends into Q1 2026; OpEx expected to rise through 2H25 and 2026 to support BLA-readiness (CMC/manufacturing).
• Pipeline expanded: FDA approved IND for Pediatric Dilated Cardiomyopathy (DCM) to proceed directly to a pivotal Phase 2 trial (initiation targeted 1H 2026, financing-dependent); AD program advanced with positive FDA Type B meeting supporting a single pivotal Phase 2/3 design.

What Went Well and What Went Wrong

What Went Well

• Full enrollment of pivotal ELPIS II (HLHS) achieved; management reiterated late-2026 BLA timing, focusing on readiness to potentially shorten submission timeline: “We are focused on organizational readiness for a potential BLA filing for HLHS in late 2026”.
• Regulatory momentum: FDA Type B alignment for AD pivotal Phase 2/3; FDA approved IND to move directly into a pivotal Phase 2 for pediatric DCM—rare accelerated pathway.
• CMC strategy de-risked via CDMO decision: “Pursue commercial manufacturing through a third party CDMO… leverage scale, experience, and compliance infrastructure” to mitigate timeline, cost, and facility readiness risk.

What Went Wrong

• Revenue contracted year over year and quarter over quarter, driven by decreased participant demand in the Bahamas registry and lighter contract manufacturing activity; total Q2 revenue fell to $0.316M (vs $0.468M YoY, $0.381M QoQ).
• Gross margin compressed sharply (to 46.2% from ~73% YoY/QoQ), reflecting unfavorable mix and lower volumes; gross profit was $0.146M vs $0.344M YoY and $0.275M QoQ.
• OpEx stepped up (G&A $2.589M; R&D $2.954M) with continued investment in personnel/equity comp and BLA-enabling CMC/manufacturing readiness, expanding net loss from operations (-$5.397M).

Transcript

Speaker 6

Welcome to the Longeveron 2025 Q2 financial result and business update call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, then zero, on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Derek Cole, in investor relations. Thank you. You may begin.

Speaker 3

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to review Longeveron's 2025 second quarter financial results and business update. After the U.S. markets close today, we see the press release with financial results for Q2 2025, which can be found under the investor section of the Longeveron website. On the call today are Wa’el Hashad, Chief Executive Officer; Dr. Joshua Hare, Co-Founder, Chief Scientific 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 releases and risk factors discussed in the company's filing 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 Wa’el Hashad, Chief Executive Officer. Wa’el.

Speaker 7

Thank you, Derek. Thank you all for joining us today. We are very excited about our updates for the quarter, and the progress we continue to make advancing sensor research in multiple important indications. First and foremost, I am heartened by the team's ability to identify the most expedient, cost-effective pathway to advance our technology, develop the corresponding strategy, and effectively implement it. We have made tremendous progress and delivered on multiple important milestones across our pipeline. 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, Lomecel-B, has delivered several positive initial results across five clinical trials in three indications. Phase one and two in Alzheimer’s disease, phase one and two in aging-related frailty, and phase one in hypoplastic left heart syndrome for 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+ billion, $4+ billion, and up to $1 billion, respectively. As we have indicated previously, for 2025, we are focused on three primary operational goals. Number one, advancing LPAS-2, our pivotal Phase 2b study for HLHS. Two, HLHS BLA's concurrence and commercialization readiness. Three, pursuing strategic collaboration for Alzheimer’s disease programs. 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 were very excited to share in June that we have completed enrollment for pivotal LPAS-2 Phase 2b study, evaluating Lomecel-B as a potential adjunct treatment to the standard of care for HLHS patients. The determination by the U.S.

Food and Drug Administration at our meeting in August of last year that LPAS-2 is pivotal significantly accelerates the potential regulatory path for Lomecel-B. As supported by data from the clinical trial, this would allow us to initiate rolling submission of the biologics license application to the Food and Drug Administration in late 2026. This would be our first BLA submission, and it would be for an important indication with large unmet needs and a significant market opportunity. Now, I want to take a moment to acknowledge and give credit to the Food and Drug Administration and its staff for their diligence, preparation, and professionalism. We have had three important interactions with the agency over the past 12 months.

While appropriately challenging and demanding, the agency has sought to understand our development programs and provide input and feedback that has substantially clarified the regulatory pathway for Lomecel-B and HLHS, Alzheimer's disease, and now pediatric dilated cardiomyopathy, for which we recently received an initial new drug application approval, IND approval. We are grateful for their efforts and appreciate their collaborative approach and the opportunity to reach alignment on our development program. Our success advancing the HLHS and Alzheimer's programs both reinforces our confidence in our science and highlights our strategic plan's risk mitigation through a diversified pipeline. This approach, supported by expanding our pipeline to include pediatric dilated cardiomyopathy and license additional novel stem cell technology. These expansions to our pipeline build on a focused rare disease where we can potentially make a big difference while completing our existing pipeline and technology.

The next 12 to 18 months are a potentially transformational period for Longeveron with multiple critical milestones, and I am thoroughly excited by the opportunity for Lomecel-B with patients, Longeveron, and our shareholders. With that, I will turn the call to Dr. Agafonova to provide an update on our clinical development program. Nataliya?

Speaker 2

Thank you, Rael, and good afternoon, everyone. Our lead investigational project is Lomecel-B, a stem cell therapy derived from culture-expanded mesenchymal stem cells, or MSCs, that are sourced from the bone marrow of young, healthy adult donors. As Rael 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. The current standards of care for HLHS involve a complicated three-stage heart reconstruction surgery over the course of the first five years of patient life. Despite this surgical reconstruction, only 50% of the affected children survive to age 15 without heart transplantation. Our Lomecel-B program in HLHS is designed to boost, improve the heart function in these children with the goal of potentially enhancing their survival.

In ELPIS I, our phase one clinical study evaluating Lomecel-B in four-month-old infants with HLHS, we observed 100% transplant-free survival for five years in all patients following treatment. This contrasts with an approximately 20% death in heart transplant observed in historical control data. This translates to a potential number needed to treat of five, which is highly favorable, especially for the rare pediatric disease. We can prevent one death when treat five kids with HLHS. We are currently conducting the phase two clinical trial, ELPIS II, evaluating the potential of Lomecel-B to improve right ventricular function and long-term clinical outcomes in infants with HLHS. We completed enrollment of the trial in June, enrolling 40 patients at 12 senior infant and children's treatment institutions across the country.

The slight over enrollment of the trial, including two additional patients beyond target enrollment, reflects both their unmet needs in this area and our commitment to support patients suffering from this devastating condition. We are grateful for the participation of the patients, their families, and our investigative sites. With a 12-month follow-up period, we currently anticipate top-line results from the trial in the third quarter of 2026. If results from ELPIS II are positive, we would be positioned to initiate enrollment BLA submission with the FDA in late 2026. Switching over to Alzheimer's disease briefly.

With the positive results from the Phase IIa CLEAR MIND clinical trial, the publication of that data in Nature Medicine, and the positive study being meeting with FDA regarding pathway to BLA submission in Alzheimer’s disease, that yielded alignment on the proposed trial study design, population, and endpoints for the single pivotal Phase II/III clinical trials, that if positive would be acceptable for BLA submission for Alzheimer’s disease, we believe we have a strong opportunity to forge collaborations and partnerships for the advancement of Lomecel-B in addressing Alzheimer’s disease. Moving on to our pipeline expansion to pediatric dilated cardiomyopathy. Dilated cardiomyopathy is a disease that affects the muscle cells of the heart, known as cardiac myocytes. In DCM, dilated cardiomyopathy, this causes the size of the heart chamber to enlarge and the pumping strength of the heart to diminish.

Together, these adaptations lead to cardiac failure, diminished blood flow to the body, and over-congestive heart failure. The manifestation of congestive heart failure includes a buildup of fluid in the lung, liver, abdomen, and lower legs, diminished exercise capacity, and death. In a large number of cases, the exact cause of DCM cannot be determined. That’s why it causes idiopathic cardiomyopathy. Pediatric cardiomyopathies affect at least 100,000 children worldwide. DCM is the most common form of cardiomyopathy in children. About 50% to 60% of all pediatric cardiomyopathy cases are diagnosed as dilated. According to the Pediatric Cardiomyopathy Registry, DCM is reportedly more common in boys than girls. Although all age groups are affected, studies show that DCM is more common in infants before age one than in older children.

Effective treatment options are limited, and near 40% of children with DCM require a heart transplant or die within two years of diagnosis. Current treatment for DCM focuses on managing symptoms, improving heart function, and preventing complications rather than addressing the underlying causes. Many therapeutic agents with known efficacy in adults lack the same evidence in children. Our development program in pediatric dilated cardiomyopathy reinforces Longeveron’s commitment to developing innovative stem cell therapy for rare diseases, particularly for cardiovascular conditions, where we believe Lomecel-B may have significant potential to improve patient lives. As we reported in July, the FDA had approved our IND application for evaluating Lomecel-B as a treatment for pediatric dilated cardiomyopathy. We greatly appreciate the positive interaction with the FDA and the extensive discussion of our development plans and the clarity provided on the regulatory pathway.

The accepted IND application provides for moving directly to a single Phase 2 pivotal registration clinical trial. Moving directly to a pivotal Phase 2 trial is significantly beneficial to the development program and the company. We currently anticipate initiation of pediatric dilated cardiomyopathy Phase 2 clinical trial in the first half of 2026, subject to obtaining necessary financing, and look forward to providing additional updates as the development program takes shape. I will hand the call over to Devin Blass, our Chief Technology Officer. Devin?

Speaker 5

Thank you, Nataliya, and good afternoon, everyone. As we look ahead to the potential BLA submission for ACLS, a key focus this year is our organizational readiness, particularly in industry manufacturing goals or CMC. We are executing against a strategic plan to ensure that our manufacturing infrastructure and operations are positioned to support both regulatory expectations and future commercial demands. While our GMP manufacturing facility in Miami remains and continues to support our early-stage clinical manufacturing, process development, and research activities, we've made a deliberate decision to pursue commercial manufacturing through a third-party CMO. This approach allows us to leverage the scale, experience, and compliance infrastructure of a dedicated commercial manufacturer while preserving our internal capabilities for future pipeline programs.

Our goal is to substantially advance BLA readiness this year ahead of the LPAS-2 data readout so that we can move efficiently towards a BLA submission should the data support it. This includes progressing key activities such as technology transfer, process, and analytical method validation planning. We believe this investment in CMC will enable our long-term success. I will hand the call over to Josh Hare, our Founder and Chief Scientific Officer. Josh.

Speaker 4

Thank you, Devin. Good afternoon, everyone. I'm absolutely delighted with the progress we are able to share with you. As Wa’el mentioned, our stem cell therapy Lomecel-B has now delivered positive results across five clinical trials in three indications. These include Alzheimer’s disease, aging-related frailty, and most importantly, HLHS. We are on the cusp of pivotal data in HLHS and hopefully our first BLA filing next year, which would be an important step in our mission to help patients and families through the application of stem cell research. We are building on our success thus far, adding to our pipeline the pediatric dilated cardiomyopathy, as Nataliya mentioned, and with the licensing of additional stem cell technology from the University of Miami. We believe the timing is right to add this new technology, which represents a major advance to our existing stem cell research.

Expanding our therapeutic pipeline expands our effort to multiple new potential applications and is aligned with our core strategic approach. Excellent science, lower required investments, speed to market, lower regulatory hurdles, all addressing important unmet medical needs. The composition of matter patents we license protects unique induced pluripotent stem cell-derived cardiomyogenic cells that have widespread therapeutic indications for heart disease. The stem precursor cells protected by this patent are obtained by deriving cells that bear a cell surface receptor known as the growth hormone-releasing hormone receptor, or the GHRH receptor. These cells are uniquely able to differentiate into human cardiac muscle cells and have the potential to be safer than existing strategies to derive new cardiac heart muscle cells. This technology provides a solution to one of the most difficult barriers to the implementation of induced pluripotent stem or iPS cell technology in the cardiovascular space.

The use of induced pluripotent cells is intended to be able to generate any kind of missing cell lost due to disease or damage. Importantly, the technique provides the possibility of generating unlimited supplies of the missing cell, and these cells are developed without using human embryos. However, in current approaches with iPS cells transplanted into the heart, a serious side effect has been observed. The dangerous side effect known as arrhythmia causes a potential life-threatening electrical instability of the heart. Our new technology provides an innovative solution to this problem as it develops a new method to select specific cells in the purification process that can form myocytes, heart muscle cells, without causing the arrhythmia. We plan to initiate preclinical studies to develop this technology to the next step of readiness for human use. I will now hand the call over to Lisa to review our financial results. Lisa.

Speaker 1

Thank you, Josh, 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. I will touch on some highlights. Revenues for the six months ended June 30, 2025, and 2024 were $0.7 million and $1 million, respectively. This represents a decrease of $0.2 million or 31% in 2025 compared to 2024, driven primarily by a decreased participant demand for our Bahamas registry trial and reduced demand for contract manufacturing services from our third-party client. Clinical trial revenue for the six months ended June 30, 2025, was $0.6 million, which is a decrease of $0.2 million or 31% when compared to $0.8 million for the six months ended June 30, 2024. This decline was primarily a result of decreased participant demand.

Contract manufacturing revenue for the six months ended June 30, 2025, was $0.1 million from our manufacturing services contract, which is a decrease of approximately $0.1 million or 35% when compared to the $0.2 million in contract manufacturing revenue for the six months ended June 30, 2024. General and administrative expenses for the six months ended June 30, 2025, increased to approximately $5.5 million compared to $4.2 million for the same period in 2024. The increase of approximately $1.2 million is 28%, primarily related to an increase in personnel and related costs in 2025, including equity-based compensation. Research and development expenses for the six months ended June 30, 2025, increased to approximately $5.5 million compared to $3.9 million for the same period in 2024.

The increase of approximately $1.6 million or 39% was primarily related to a $1.3 million increase in personnel and related costs in 2025, including equity-based compensation in support of ongoing CMC and manufacturing readiness activities as part of our BLA enabling efforts, and also a $0.2 million increase in amortization expense related to patent costs, partially offset by $0.3 million in lower clinical trial expense resulting from the discontinuation of activities related to the aging-related frailty clinical trial following our decision to discontinue trial activities in Japan in Q2 2024. Our net loss increased to approximately $10 million for the six months ended June 30, 2025, from a net loss of $11.5 million for the same period in 2024 for the reasons outlined previously. Our cash and cash equivalents as of June 30, 2025, were $10.2 million.

In August, the company completed a public offering raising approximately $5 million in gross proceeds, with up to an additional $12.5 million of potential aggregate gross proceeds upon the exercising full of quote for warrants. We currently anticipate our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2026 based on our current operating budget and cash flow forecast. We have been and will remain focused on prudent and efficient capital allocation strategies to advance our development programs, which we believe are highly cost-efficient both incentively and relative to other development programs. Following a successful type C meeting with the FDA in August 2024 with respect to the HLHS regulatory pathway, we've begun ramping up our BLA enabling activities.

We currently anticipate a potential BLA filing with the FDA in late 2026 if the current LPAS-2 trial in HLHS is successful. With the significant opportunity presented with a potential BLA filing, our operating expenses and capital expenditure requirements are currently expected to increase throughout the remainder of calendar 2025 and in 2026, in a large part to address CMC and manufacturing readiness. We intend to seek additional financing opportunities, capital raises, as well as non-dilutive funding options to support our operating plans. Additionally, following a positive type B meeting with the FDA in March 2025 with respect to the Alzheimer's disease regulatory pathways, we are focused on seeking partnership opportunities and/or non-dilutive funding for the Alzheimer's disease program, supporting a proposed single pivotal seamless adaptive phase two-three clinical trial.

There can be no assurance we will be able to attain future financing at terms favorable to us or at all. In the event we are unable to attain the financing needed, we will need to materially revise our current operational plan. The relatively near-term potential for pivotal clinical trial data for HLHS and possibly our first BLA submission late next year makes this an extraordinarily exciting time for Longeveron. I will now hand the call back to Wa'el.

Speaker 7

Thank you, Lisa. Longeveron has made tremendous progress advancing stem cell research for important development programs, including HLHS and Alzheimer's disease. With the addition of pediatric dilated cardiomyopathy and new stem cell technology license from the University of Miami, we are building a robust pipeline with the potential to help patients globally. We are now approaching multiple potentially transformational milestones, including completion of pivotal Phase 2b clinical trial in HLHS, our first potential BLA submission for HLHS, and based on the potential for Phase IIa clinical data, potential partnering for Alzheimer's disease program. I have mentioned before, I'm incredibly proud of our team's efforts and accomplishments on behalf of patients and shareholders. Their expertise, industry experience, and commitment allow Longeveron to achieve tremendous amounts of progress for a company of our size, with a smaller team and fewer resources at the moment.

We deeply appreciate the support of all of our stakeholders and look forward to continuous collaboration and progress in the future. Operator, we would now like to open the call for questions from the covering analyst.

Speaker 6

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star and then 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. The third question you have is from Raghuram Selvaraju of H.C. Wainwright & Co. Please go ahead.

Speaker 3

Thanks so much for taking my questions and congratulations on all the progress. Firstly, I wanted to ask a couple of clarificatory questions regarding your activities in rare cardiological conditions. Can you confirm whether or not the target patient populations and indeed target addressable markets in HLHS and pediatric dilated cardiomyopathy are to be considered as roughly similarly sized and therefore, approximately offer the same kinds of dynamics with respect to pricing and overall commercial value, particularly in the United States? If you believe that there are meaningful differences between the two, just in terms of, you know, the total addressable size in terms of number of individuals likely to be acquitted with these conditions.

Speaker 4

Thank you, Ram, for this question. I'll take the answer to that. The overall answer is the markets are similar but not identical from the exact number of populations. I'll explain it just in a minute here. Both are orphan disease, both are rare disease. I believe from a pricing strategy standpoint, they should be comparable, though they may not be identical because they are not going to be administered in the same fashion. One, HLHS, as you know, these injections are given during the Glenn procedure, and they are injected directly into the right ventricle. For pediatric dilated cardiomyopathy, that would be an infusion, intravenous infusion. The method of administration is going to be different, and therefore, the big other difference is that on HLHS, it's the one-time use versus the pediatric dilated cardiomyopathy. The intention is to have a continuous use of the product. It's a chronic utilization.

Now, in terms of the size, the exact size of the population, the incidence of pediatric dilated cardiomyopathy is slightly lower than the HLHS. However, because these patients are, many of them live for a longer period of time, the prevalence of the disease is slightly higher than the HLHS. The prevalence is in the range of about 2,000 to 3,000 patients in the United States. As you know, the HLHS is about 1,000. The incidence is slightly lower. These are the newborn children with the condition for pediatric dilated cardiomyopathy. It is lower than 1,000. It's about 600 patients. Hopefully, that addresses. In terms of pricing strategies, we have not finalized any pricing strategy on both, but they should not be that far from each other from a pricing standpoint.

Speaker 3

It would not be inaccurate to state that because in PDC, you are looking at a different administration paradigm and, as you mentioned, longer-term administration that, in effect, whatever pricing you ultimately establish for ACLHS will, if transferred to PDC, ultimately result probably in higher market penetration because of the ease with which one can conduct an infusion as opposed to direct injection into the heart, as well as the fact that you would have more cycles of treatment. Is that correct?

Speaker 4

Correct.

Speaker 3

Secondly, just with respect to HLHS regulatory outlook and implications for PDC, if we look at the approval criteria for HLHS, the fact that positive results from LPAS-2 are expected to buttress the case for approval of Lomecel-B in this disease indication, would it be possible then to infer that a favorable approval decision in HLHS would effectively have some implications for what level of clinical evidence you would need to furnish in order to achieve an approval in PDC?

For example, if in HLHS, Lomecel-B is adjudicated approval based upon the results of the LPAS-2 trial, and as you mentioned in your prepared remarks, you are currently contemplating a phase two study in PDC as well, then if there are positive results in PDC and we use the Lomecel-B approval precedent in HLHS as illustrative or indicative of the regulatory outlook, then positive results from that phase two trial in PDC should ultimately represent an approval package. Apologies for the long-winded way of saying it, but what I'm trying to say is, is there, you know, direct implications of the regulatory outlook for Lomecel-B in HLHS in the PDC indication as well?

Speaker 4

Right. Of course, that's a question ultimately the FDA will have to decide on, but I will give you my thoughts. I do believe if we have positive data coming out of the HLHS trial that this will definitely help support the case for the pediatric dilated cardiomyopathy when we come to the regulatory review process. However, I do believe that the FDA will still want to see the study results from the pediatric dilated cardiomyopathy on its own. They want to see how we perform on the endpoints that we agreed with the agency on and so on. Definitely, having a positive outcome from HLHS would definitely be supportive to the overall regulatory review process. As you know, it's a benefit-risk ratio. At least on the benefit and on the risk side, that would be an added support from at least that point.

Speaker 3

Just one very quick question.

Speaker 4

Sorry, go ahead.

Speaker 3

Yeah, Nataliya, do you want to add anything?

Speaker 2

I just would like to add one more point, and we communicated this today as well. We already reached the agreement with the FDA that that Phase II study, which we just designed and submitted in a full IND based on, would be sufficient for approval upon the positive result for the pediatric dilated cardiomyopathy.

Speaker 3

Okay, great. That's very helpful clarity. Just one quick question for Lisa. If you look at the phase two study, the proposed phase two study that's envisaged in pediatric dilated cardiomyopathy, can you give us a sense of, you know, relativistically speaking, how much more expensive or whether it is likely to be comparable in expense to the HLHS LPAS-2 trial? Is there any point of comparability between those two just in terms of overall budget?

Speaker 4

Ram, I think the overall budget we anticipate, and that's why we prefer to focus on rare diseases because we believe that the budget is definitely more manageable. The preliminary budget numbers that we have, and I'm saying preliminary numbers, is probably in the range of $15 to $20 million for the entire cost of the trial from A to Z. That is not per year cost. That's the total cost. Because this trial is going to span at least four or five years, the whole time period for measuring the efficacy of the drug is 13 months. We're looking at in startup time, enrollment time, and readout time. We believe that the cost per year could be in the range of about maybe $3 million. As Nataliya said, we're also looking for, similar to what we did with LPAS-2, non-dilutive funding to support that.

There is a lot of both private and government-supported entities that are interested in supporting that type of research.

Speaker 2

The next question I'll just add, that's from the chart. Ram, I was just going to say, I would just say that is a preliminary estimate as we're working through the feasibility right now.

Speaker 3

Understood.

Speaker 6

The next question we have is from Boobalan Pachaiyappan of ROTH. Please go ahead.

Speaker 0

Hi. Good afternoon, everyone. Can you hear me okay?

Speaker 3

Yes, you're fine.

Speaker 0

Hi. Great. Thanks. A few questions from us. First, with respect to HLHS, you have stated in your question that BLA filing could occur by year end 2026. If you look at, you know, from a logistics standpoint, at that time, the PSPRV program would have been suspended, assuming, you know, there is no new developments in that area. My question to you is, do you still get to seek the RAAP EDR designation and enjoy the associated benefits such as rolling submission and more frequent FDA interactions? Also, speaking of FDA interactions, can you comment upon whether there's any leadership changes or, you know, because there's a lot of flux at the FDA level, I wanted to make sure, you know, the offices that we are dealing with are still going to be the same or do you expect anyone to be different?

The reason I'm asking this question is because I wanted to make sure that scientists at the Phase 2b can still be registration enabling and not a separate Phase 3 study out of the blue.

Speaker 4

Those are great questions, Bumiland as well. Thank you for those. Let me address the PRV first. As we have previously disclosed in all of our communications, we realize that the current PRV will start in September of 2026 unless it's reauthorized by the Congress and approved by the Senate. I can tell you as a member of the board sitting on California Life Sciences, I got the opportunity to meet with a lot of members of the Congress from both sides of the aisle, Republican and Democrat. There is significant support for renewal of that, especially if it doesn't cost the budget anything because that is a non-budgetary item. Unfortunately, sometimes these types of things get left out by focusing on other important things that are happening and trade-offs. There is a lot of support, at least from both sides, to do it.

We are, as you know, a member of the Bio organization, and there is a lot of effort going also on Bio, and you can see also on their website that this is one of their top priorities. I'm constantly optimistic that this will be renewed, but definitely right now, as we stand, the likelihood is it is going to start in 2026. We have a lot of things that allow us for rolling submission. One of them is the rare pediatric disease designation, but also the fast track designation for HLHS is another way of also supporting the rolling submission. That's why we're going to move ahead and start to do the rolling submission immediately after data readout next year. In terms of your second part of the question, which is the FDA and the changes in the leadership and how this impacts.

You're correct, the fact that we had our HLHS meeting with the FDA last year at the same time as this client, in August of last year. The agreement is limited, and I do believe that we have very unique things to support our case, and I don't believe that the FDA will change. I will give you multiple reasons for those. Number one, we're doing head-to-head trial. We're not doing similar to Mesoblast or Capricor, I think the data submitted. We are doing head-to-head trial, and that is as robust as it gets. The number of patients, considering the prevalence of the disease or the incidence of the disease, is fairly sufficient. We cannot make any larger trial than that. For all those reasons, we feel confident. That is part one of answering your question.

Part two is actually we have met with the FDA two times over Zoom during the new administration. One in March of this year when we met with them for the type B meeting, and the second one in June to review the IND for the pediatric dilated cardiomyopathy. Because we were asking for to move directly to a pivotal phase two trial with pediatric dilated cardiomyopathy, the FDA requested that we meet in person via Zoom. We had those two interactions. I can tell you, yes, they have asked some appropriately challenging questions, but the spirit of what we have seen was very collaborative and supportive of the development of our program. I feel confident that we have a good plan.

The last thing that I will say, and I'm sorry for the long-winded answer, is that between now and the data readout, we are planning on several interactions with the FDA as well. We're going to be communicating with them around our final SAP. There are a few updates that we need to give them on the CMC and potential stay. We are planning on several interactions. I can tell you, if you have been following the company since we came, I don't want to lose anything for assumptions. We want to validate everything so there are no surprises when it comes to the finish line. Hopefully, that addresses both your question about the PRV and the regulatory support from the FDA.

Speaker 0

Yeah. That's pretty comprehensive, and thanks for that. In the prepared remarks, Nataliya was mentioning about the five-year survival, 100% five-year survival I'm talking about in HLHS participants. That five-year data is now at least one year old now. Just curious, is there a six-year survival data available, or do you stop tracking the patient?

Speaker 3

I'll have Nataliya answer.

Speaker 2

Thank you so much for this question. The study was set up at the beginning to do the five-year survival after Glenn procedure, and that's all we have at this point. We don't have six-plus years' data.

Speaker 0

Okay. All right. That's very helpful. One more on HLHS before I move to my last question. Devin, can you sort of discuss the pros and cons of self-manufacturing and commercialization for Lomecel-B versus seeking partnerships?

Speaker 5

Sure. Just to clarify, you're talking about the CDMO contract manufacturing?

Speaker 0

Yes.

Speaker 5

Yeah. For us, there's three key factors. The first one was the timeline to our planned BLA submission. That was a critical driver. One of the options that we were previously looking at was to renovate our existing facility in order for it to pass the pre-approval inspection. That would have potentially caused delays in our overall timeline versus leveraging an existing facility from a CDMO. The second critical driver here was overall cost. The facility renovations, you look at that plus additional capital expenditures that you need for processing analytical equipment, validation, headcount expansion, ongoing operational overhead. When you total that up, the CDMO option was the one that was potentially more cost-effective. The last key driver to this was overall risk.

When you're able to leverage CDMO's current proven regulatory track record and experience by outsourcing this to a partner, that potentially mitigates any potential setbacks to facility readiness or BLA readiness. In summary, those were the three things that were some of the things that we were considering when moving to a CDMO.

Speaker 0

Great. This will be our last question. I wanted to follow up on Ram's question about pediatric DCM. Obviously, this is an interesting area of exploration because there's no FDA approved therapy yet. The FDA has given you a green signal to move directly into pivotal phase two. Can you speak to us about what gave the FDA the confidence in this program? Is there some preclinical data that you shared with them that they were very excited about? Maybe if you can tell us or maybe summarize this. Also, during your FDA discussion, can you clarify if the focus was on managing the congestive heart failure symptoms, or is it more towards mitigating the progression of the structural heart disease?

Speaker 4

Yeah, Nataliya or Josh can take that question.

Speaker 2

I can start, maybe Josh, you can pick up. I think what gave confidence to the FDA that we can move forward immediately to the approval with this study is that we design endpoints based on clinically meaningful clinical features for the patient. Definitely, heart failure is one of the biggest impacts for the dilated cardiomyopathy. We look at the all-cause mortality on hospitalization, heart failure, etc. I think the rigorous primary endpoint definitely can make a difference whether or not Lomecel-B affects this patient's life, improvement on heart failure, improvement on everyday activity, which is really meaningful for this patient, and of course, overall survival and transplant-free survival. We are going with the field looking at this patient in a complex using the composite endpoint. We didn't ask a lot of multiple questions on clinical biostatistics, etc.

I think all this really gave confidence to the FDA on the right direction. Josh, did I miss anything?

Speaker 4

One thing that I would mention that I think may have played into the FDA's decision was that we have, you know, there is an experience with this type of administration in adults. Particularly, we at Longeveron have treated adults with aging frailty. There are also published studies in which adults with congestive heart failure due to dilated cardiomyopathy have been treated with very favorable response in very preliminary studies. I think that may have played a role in allowing us to go directly to a phase two. With the rigorous study design and endpoints that you mentioned, Nataliya, you know, led them, it may have influenced them to allow this to be a pivotal study.

Speaker 0

All right. Thanks for taking notes.

Speaker 4

Sorry, go ahead, Ram.

Speaker 3

I was saying, it's always hard to know or predict what exactly the FDA thoughts are. We have been, as I mentioned, very transparent with the FDA. We shared with them all the data. I think that there is one thing that I don't think we get enough credit for, and hopefully, the FDA has seen that, is that you have a very robust safety data set as well on this product. We have over 550 patients in our data set. Of course, many of them are not pediatrics, and most of them actually are in the aging group. I think that safety, especially around immunogenicity and the infusion-related reactions and all of those types of things, I'm sure this has also been taken into consideration by the agency in weighing in this decision. I cannot really sit in their mind, but I can tell you, it wasn't like that.

They asked a lot of questions, and they requested face-to-face meetings. We have been able to answer all their questions to their satisfaction. We're glad that we are in the position that we are because I really believe that indicates the confidence of the agency in the work that we're doing, as well as it's also great for the patients that really don't have to go through multiple years of waiting until potential therapy like this can make it to the market.

Speaker 0

All right. Thank you, everyone, for taking your questions, and congratulations on your progress.

Speaker 2

Thank you.

Speaker 6

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

Speaker 3

Thank you, Josh, for taking my question and congrats on the great progress. I'd actually like to follow up on that previous question from Boobalan. What for an improvement in survival or time to transplant would be considered clinically meaningful in the DCM? Are there any established thresholds for benefit here?

Speaker 4

Again, Nataliya or Josh can take that question.

Speaker 2

The standard of care is, as you probably know, a very symptomatic treatment with main cardiovascular medication, ACE inhibitor, beta-blockers, etc., to maintain patient heart failure stable. With this therapy, we are really looking forward to see patients prolong the period of time when the patient needs heart transplant because eventually, what is happening from the time of diagnosis to the heart failure, sometimes it takes only two years for this case with dilated cardiomyopathy. Of course, you know, the heart transplant as a last stage of the treatment is not desirable. What we are looking forward to is to prolong transplant-free survival and improve overall well-being of the patient from the point of view of reducing the symptoms of cardiac failure and reducing the possibility for these patients to develop cardiac failure. We are looking for all-cause mortality transplant. We are looking for this in hospital.

We are looking for different skills to evaluate patient symptoms, development of heart failure, timing from the beginning of the treatment to development of heart failure. All these are really important for the patient. Are you looking for complete resolution of heart failure? We don't know. We don't know, but definitely, we are looking for a prolongation of time for the patient eventually developing heart failure, improvement of symptoms, and prolongation of transplant-free survival. Those are very important qualitative measures for this patient population.

Speaker 4

Yeah, let me just add.

Speaker 0

Thanks.

Speaker 4

Yeah, let me just add to that. If you take from the adult experience of therapeutic development, any measurable reduction in all-cause mortality or heart failure hospitalization is considered meaningful, particularly when you have a scenario of pediatric cardiomyopathy presents such a high burden of morbidity and mortality. Any measurable reduction would be, I think, considered meaningful. The other thing to bear in mind is the underlying biology of the disease and the possibility that there is a chance here for the therapy to increase the likelihood of a full remission. That has been seen in adults in published studies. However, as Nataliya said, we don't know that for certain. It is possible that there might be a subset of individuals who have a full remission or at least an increased likelihood of remission. By remission, I mean a meaningful recovery in cardiac function.

As part of the study, in addition to the clinical endpoints, we will definitely be measuring cardiac function as well.

Speaker 3

All right. Thank you. I really appreciate that additional color. Just one more, I'd like to ask a little about something you talked about earlier in the call. Can you even expand on the technology underpinning the RCSC platform? In particular, how does this differentiate it from other cell transplant therapy companies like Lineage or what Vertex is doing? Could you just expand on that a little bit?

Speaker 4

Yeah, I'd be very happy to speak to that. The current approaches for induced pluripotent stem cell transplant into the heart have used what you could call garden variety, I mean, that's not the appropriate term, but a standard-induced pluripotent stem cell that can be differentiated all the way to an immature cardiac myocyte. In studies in which those immature cardiac myocytes have been injected, largely in preclinical models like non-human primates, they've been observed to cause malignant ventricular arrhythmias, particularly over the first two weeks of transplantation. This observation has very much limited the translation into phase one clinical studies. Regulatory authorities, I think, have appropriately exercised the concern that this is an unacceptable side effect or potentially too dangerous.

I think one of the most important targets and advances is to develop a protocol where you can develop the cell, making them less likely to cause the arrhythmias and more likely to just form heart muscle cells that can engraft and beat. The idea is here we want to increase the recovery and the repopulation of cells and reduce the chance of introducing cells that have electrical activity. That is the discovery in the new technology we're going to start to develop in that we studied the biology of the cells as they go through the differentiation process from the induced pluripotent stem cell into the immature myocyte. We discovered that we could identify a subpopulation that eliminated the fraction that caused the electrical instability. We've been able to do that in the dish and biochemically at a molecular level. Now with this patented technology, the U.S.

patent was issued about six months ago. It is a patented discovery of composition of matter discovery. As I said in my prepared remarks, we are now about to engage on the necessary preclinical work to lead us to an IND.

Speaker 3

Right. Thank you. Seems like a really interesting program. Looking forward to updates.

Speaker 6

Ladies and gentlemen, that concludes the question and answer session. At this time, I would like to turn the floor back over to Wa’el Hashad for any closing remarks.

Speaker 4

Thank you, operator, and thank you all for attending our today's call. We greatly appreciate your interest and support and look forward to updating you on our continued progress in the future. Thank you. You may end the call now.

Speaker 6

Ladies and gentlemen, that concludes this conference. Thank you for joining us. You may now disconnect your line.