CAPR - NASDAQ

Good day, ladies and gentlemen, and welcome to the Capricor Therapeutics Incorporated Third Quarter 2022 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. AJ Bergmann, Capricor Chief Financial Officer. Please go ahead.

Thank you, Linda. This afternoon's press release provided a summary of our third quarter of 2022 financials on a GAAP basis. You may also refer to our quarterly report on Form 10-Q which we expect to become available shortly and will be accessible on the SEC website as well as the financial section of our company website. As of September 30, 2022, the company's cash, cash equivalents and marketable securities totaled approximately $46.6 million compared to approximately $34.9 million on December 31, 2021. We expect that based on the current operating plan and financial resources, that our available cash, cash equivalents and marketable securities will be sufficient to cover anticipated expenses and capital requirements into the second quarter of 2024. Note that this expectation excludes any potential milestone payments under our exclusive commercialization and distribution agreement with Nippon Shinyaku that may become due. Turning now to the financials. In the first 9 months of 2022, our net cash provided by operating activities was approximately $11.8 million driven by the $30 million upfront payment from Nippon Shinyaku. For the third quarter of 2022, excluding stock-based compensation, our research and development expense was approximately $5.4 million compared to approximately $2.4 million in Q3 2021. Excluding stock-based compensation, our general and administrative expense was approximately $1.6 million in Q3 2022 and approximately $1.1 million in Q3 2021. Net loss for the first 9 months of 2022 was approximately $21.3 million compared to a net loss of approximately $13.8 million for the first 9 months of 2021. We will now open the line up for questions.

[Operator Instructions] We'll take our first question from Alan Leong with BioWatch News.

Let's suppose something, even if you don't get the partnerships -- and by the way, I've always been amazed, Linda, at how you've been able to keep things nondilutive over the years. So let's kind of play with this, so if you don't get the partnerships and things are a bit delayed, the amount of bridge that you need, the amount of financing you need, and correct me if I’m wrong, you're not looking at much, even the milestones -- cost side milestones payments then come along, things got delayed a little bit and the partnerships have delayed a bit. But that's just my conjecture. I wonder if you could reflect off of that a bit.

Yes. Happy to, Alan. I mean we're being very judicious with our financial expenditures. Obviously, a lot of energy is going into HOPE-3. The enrollment progress, which we're very pleased with, is critical to maintaining a nice cash position as we move through the completion of enrollment and then through the top line results as well as the interim analysis. So I guess my long-winded answer to that question is we are going to continually be disciplined. We're going to put our energy and focus on our Duchenne program as well as expanding the exosome program, in a very careful way. We're very hopeful that should things continue as planned, that these milestone payments under our Nippon Shinyaku agreement, will become due, which will help support that. And kind of the third piece to that is there's other opportunities for partnering CAP-1002 outside of the United States and exosomes, of course. So we're looking all around. We're well aware of the current financial status of the market. But I think from a cash management perspective, we're doing everything we can to put the right energy into our programs.

You've been generous with your answers, and good luck to both.

We'll take our next question from Aydin Huseynov with Ladenburg.

[Operator Instructions] We'll take our next question from Brian Corday with BullBear Partners.

Yes. I mean, obviously, we're looking at that, Bryan, over the next -- the duration as we move towards potential approval, we'll evaluate that. I think $600,000 is right now on the base case of what we believe we could charge based on some early payer discussions we had. I think you're aware of the current drugs on market are a little bit in excess of that. So I think it's a good price target, but of course, everything we can do in that arena, we will do the best of our ability.

Okay. And one last question, I know you can't give a specific, but how many milestones prior to approval are there? You don't have to say what they are, but how many would we be looking at payment-wise?

Yes. At this point, we're still not able to disclose more granular details of how many of them that they are. I think you did hear, though, hopefully, you caught in the remarks, that if we continue according to plan, in 2023, we should begin to trigger some of these milestones. But unfortunately, I'm not in a position as of today to disclose the exact amount of milestones moving up to regulatory approval.