Lisata Therapeutics(LSTA) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Research and development expenses for Q1 2022 were $3.3 million, down from $5.1 million in Q1 2021, reflecting a focus on advancing the ischemic repair platform and related trials [11] - General and administrative expenses increased to $3.3 million in Q1 2022 from $3 million in Q1 2021, primarily due to higher fees related to potential strategic transactions [12] - Net losses decreased to $4.2 million in Q1 2022 from $8.1 million in Q1 2021 [12] - As of March 31, 2022, the company had cash, cash equivalents, and marketable securities of approximately $88.5 million, positioning it well for projected capital obligations [13] Business Line Data and Key Metrics Changes - The company advanced its CD34-positive cell therapy development pipeline, initiating a proof-of-concept study for CLBS201 in diabetic kidney disease [6] - The merger with Cend Therapeutics is expected to create a financially sound NASDAQ-listed company with a diverse product development pipeline [7] Market Data and Key Metrics Changes - The biotech sector, as measured by the XBI, is down approximately 35% year-to-date, with the aggregate enterprise value of the biotech sector down about 70% since February 2021 [29] - IPO and follow-on offerings are down nearly 100% year-over-year, indicating a challenging fundraising environment for life science companies [30] Company Strategy and Development Direction - The merger with Cend Therapeutics aims to diversify and derisk the development pipeline, focusing on oncology and solid tumor indications [31][32] - The company is excited about the potential of CEND-1, which could enhance the efficacy of existing cancer therapies [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging financial environment characterized by high inflation and tightening capital availability, emphasizing the need for proactive strategies [29][31] - The merger is seen as a critical step to control the company's destiny and address current headwinds [31] Other Important Information - The SAKIGAKE designation for HONEDRA in Japan allows for prioritized regulatory consultation and potentially expedited approval processes [18] - The company is focusing on securing a partner in Japan for HONEDRA, with several companies expressing interest pending regulatory guidance [37] Q&A Session Summary Question: Will the PMDA guidance be based on the pre-consultation meeting? - Management confirmed that the pre-consultation meeting will provide clear guidance on how to proceed with the regulatory process [35] Question: What is the status of finding a partner in Japan for HONEDRA? - Management indicated that there are more than six companies in diligence expressing serious interest, with expectations of closing a transaction increasing after receiving guidance from the PMDA [37] Question: What is happening with CLBS201 in diabetic kidney disease? - Management confirmed that the first patient has been treated, and the second patient was dosed recently, with plans to proceed based on the data safety monitoring board's review [39] Question: What is the strategy for data release regarding HONEDRA? - Management stated that full data sets will be released after discussions with regulatory authorities to avoid jeopardizing the review process [44] Question: What are the challenges faced in the XOWNA trial? - Management highlighted obstacles related to COVID-19, supply chain issues, and the need to amend protocols, but confirmed that additional sites have been added [46] Question: When will the proxy statement for the merger be filed? - Management aims to file the proxy statement by the end of May or early June, pending completion of financial audits [50] Question: Can you provide details on Cend stockholders? - Management noted that Cend is a closely held private company with less than 10 major shareholders [51] Question: What parameters determine the ownership ratio in the merger? - Management explained that the ratio will be based on valuations considering market potential, existing deals, and liabilities [53] Question: Is there high IP protection for Cend's technology? - Management confirmed that there is a high level of IP protection for the technology [58] Question: Will pricing affect partnerships for CD34 programs? - Management acknowledged that perceptions of high costs for autologous therapies may hinder partnerships, but emphasized the cost-effectiveness of their processes [60]