Hello and welcome to Longeveron's call today to discuss the Company's 2021 Fourth Quarter and Year-End Financial Results. All participants are currently in a listen-only mode. Following the formal presentation, we will open the call up for question-and-answer session. I'd now like to turn the call over to Brendan Payne from Stern IR.

Brendan, you may proceed..

Thank you, operator. Good morning, everyone, and welcome to Longeveron's call today to provide a business update and to discuss financial results for the fourth quarter of 2021 and year-end, that were also contained in a press release issued earlier this morning.

You can access the press releases by join to the Investor Relations section of our website at longeveron.com. I'm joined on the call today with the following members of Longeveron's management team, Mr. Geoff Green, Chief Executive Officer; Dr. Joshua M. Hare, Co-Founder, Chief Science Officer and Chairman; and James Clavijo, Chief Financial Officer.

We'll begin with a brief general update and summary of recent events followed by recap of our 2021 fourth quarter and full year financial results and then conclude with a Q&A period.

As a reminder, during this call, we'll be making forward-looking statements, which are subject to various risks and uncertainties that could cause our 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 discussion in our filings with the SEC, including our last Annual Report and Form 10-K, which is being filed later today and cautionary statements made during this call.

We assume no obligation to update any of these forward-looking statements or information. Now, I'd like to turn the call over to Geoff Green, Chief Financial Officer of Longeveron.

Geoff?.

Thank you, Brendan. Good morning, everyone and thank you for attending Longeveron's fourth quarter 2021 business update and financial results call. For background, Longeveron is a leading clinical stage biotech technology company developing living cell therapies for chronic aging related diseases and other specific life-threatening conditions.

2021 was a tremendous year for us and I'm extremely proud of the progress the Longeveron team made during the period.

During 2021, we announced clinical data in three different studies and this data has provided additional meaningful insight into our lead product Lomecel-B potential mechanisms of action, contributed important safety and tolerability information, and provided the foundation for advancement into later stage trials.

In the second half of 2021 and into the early part of 2022, we successfully advanced Lomecel-B into Phase 2 trials in two indications, Alzheimer's disease and Hypoplastic Left Heart Syndrome. And this now place is Lomecel-B squarely in Phase 2 for three different indications.

In addition, we achieved substantial regulatory milestones, having been granted both orphan drug designation and rare pediatric disease designation for the FDA in support of our HLHS program.

Also, from a regulatory standpoint, we have been given permission to proceed with our Japanese Aging Frailty Phase 2 trial from both the Japanese PMDA and the local IRB of the National Center for Geriatrics & Gerontology in Nagoya, which intended the University Hospital in Tokyo's IRB approval pending.

Financially, we increased our year-end cash position to $35 million as a result of a private placement in December 2021, significantly strengthening the balance sheet and giving the Company a cash runway into 2024 based on current estimates. We anticipate a very active 2022 and are financially and operationally poised to execute our plan.

We expect to achieve several important milestones this year, which I'll detail for you during this call. Just as a refresher, our lead investigational product called Lomecel-B is a living cell product made from specialized cells isolated from the bone marrow of young healthy adult donors aged 18 to 45.

These specialized multi-potent cells that we call medicinal signaling cells or MSCs reside in different concentrations within various tissues in our body and our endogenous or built-in repair mechanisms.

MSCs are known to perform a number of complex functions including the ability to form new tissue and homing in on sites of injury or disease and secrete bioactive factors that are immunomodulatory and regenerative.

Unfortunately, in both animals and in humans, there's a clear age related decline in both the number and the potency of the cells, and this is believed to be one of the primary reasons for age associated increase in chronic disease.

It is our goal to increase health span and reverse or prevent chronic disease and other life threatening conditions by harnessing the regenerative potential of MSCs. I'd like now to provide some updates specific to our various Lomecel-B clinical programs beginning with Alzheimer's disease.

It is believed that a significant contributing factor to the pathology of Alzheimer's is early and substantial brain inflammation, leading to neurodegeneration and neuronal cell death, which that manifests in the hallmark symptoms of progressive dementia, among others and in many cases eventual death.

In published studies of MSCs in Alzheimer's disease animal models, MSCs have been shown to cross the blood brain barrier, decreased cytokines associated with harmful inflammation and increased anti-inflammatory cytokines leading to new neuron growth and improved vascular function.

We are evaluating the potential anti-inflammatory pro-regenerative and pro-vascular effects of Lomecel-B for the purpose of learning whether the product may prevent slow or even reverse the progression of Alzheimer's disease.

To that end, as we announced earlier this quarter, we have initiated the Phase 2a trial of Alzheimer's and I am very pleased to report that the first patient was treated on Friday, February 24.

The trial is a double-blind randomized placebo controlled design investigating safety and tolerability as well as multiple secondary endpoints that include cognitive function and biomarkers, following single or multiple infusions of Lomecel-B compared to placebo in individuals with mild Alzheimer's disease.

We will also be looking at changes in brain anatomy using MRI as well as assessment of inflammatory and vascular systems function. The study consists of four treatment arms of 12 patients each for a total target enrollment of 48 patients.

Currently, we intend to activate up to 12 clinical sites for enrollment including the Miami VA, which we expect to activate imminently. As more clinical sites open for screening we plan to provide guidance on enrollment rates and trial completion for this study.

The results of our Phase 1 study have been submitted to a peer reviewed journal and we anticipate acceptance and publication in the first half of 2022. Transitioning now to our Hypoplastic Left Heart Syndrome or HLHS program. As a reminder, HLHS has a congenital heart defect that affects approximately 1,000 babies per year in the United States.

Babies born with HLHS have an underdeveloped or absent left ventricle, impairing the hearts ability to pump blood. The current standard of care for HLHS typically consists of three reconstructive operations before the child is five years old. However, despite this, there still remains a roughly 30% mortality rate at three years.

Last year, we announced results of our Phase 1 open labeled safety study with Lomecel-B in HLHS patients.

That trial in which 10 infants received Lomecel-B during Stage II surgery met its primary endpoint, demonstrating an intricate ventricular injection of Lomecel-B was well tolerated, with no major adverse cardiac events nor any infections considered related to the product.

In addition, we observed that all 10 infants were alive and transplant free between 2 to 3.5 years post Stage II surgery. A transplant free survival rate exceeding that, which have been previously reported in a published study.

The results of our Phase 1 study have been submitted to a peer reviewed journal and we anticipate acceptance and publication in 2022. The Phase 3 HLHS trial referred to as ELPIS II was open for enrollment in July of 2021 and now has all seven clinical sites open for enrollment.

ELPIS II has a target enrollment of 38 infants with one-year of safety and efficacy follow-up per protocol. ELPIS II has been funded in part by a grant from the National Institutes of Health, National Heart Lung and Blood Institute, and is projected to complete enrollment in 2023.

Now that all pre-identified sites are open for enrollment, we intend to provide more specific enrollment rates and trial completion guidance as that trial progresses. In the fourth quarter of 2021, we were granted both rare pediatric disease and orphan drug designations from the U.S. FDA for Lomecel-B.

Both designations confer specific potential benefits, which may include market exclusivity upon approval for this indication and eligibility to receive a priority review voucher. These benefits are available only if all statutory and regulatory requirements and conditions are met. Moving on now to our Aging Frailty research program.

Aging Frailty is an age associated decline in reserve and function across multiple physiologic systems, leading to an inability to cope with stressors.

This is a common geriatric condition that affects up to 15% of the population over the age of 65, depending on the definition used, and manifests clinically, typically as a combination of several signs and symptoms that may include sarcopenia or involuntary loss of muscle, associated weakness, fatigue, weight loss, slowness, and low activity levels.

Older frail individuals are more vulnerable to poor clinical outcomes, such as infection, falls, fractures, hospitalizations, and death. So the plan to Japanese Phase 2 Aging Frailty trial is currently on track to initiate in the first half of 2022.

This is an investigator initiated randomized, placebo controlled double blind single infusion study being conducted by our clinical partners at the National Center for Geriatrics & Gerontology and the Juntendo University Hospital. Results from the Phase 1/2 HERA Aging Frailty trial are expected to be announced in the first half of 2022.

The HERA trial is a multicenter randomized placebo controlled study intended to evaluate safety and to explore the effect Lomecel-B may have on biomarkers in immune system function in Aging Frailty subjects receiving the influenza vaccine as well as other signs and symptoms of Aging Frailty.

In the fall 2021, we announced results of the Phase 2b multicenter randomized placebo controlled Aging Frailty trial. That trial demonstrated that at six months post infusion, patients in the three highest Lomecel-B dosing groups could on average walk statistically significantly further than they could at baseline.

And by nine months, two of the four Lomecel-B dose groups showed statistically significant increases in walking distance compared to both baseline and the placebo group, which we believe may suggest a durable sustained improvement in exercise tolerance and endurance.

On January 12, 2022, Longeveron announced publication of the Lomecel-B Phase 2b Aging Frailty trial design in the Journal of Aging Frailty. In addition to this publication, we anticipate submitting a manuscript of the Phase 2b trial results to a peer reviewed journal that would we anticipate acceptance and publication in 2022.

We plan to evaluate the results of the Phase 1/2 HERA study independently as well as in a context of the results from the Phase 2b trial as we plan the next steps in the U.S. frailty research program.

And then rounding out our clinical program of Lomecel-B, our Phase 1 trial and subjects experiencing acute respiratory distress syndrome due to COVID-19 infection continues to screen subjects at three participating centers in the U.S. and we expect enrollment to continue to run through 2022.

Transitioning now over to the leadership front, we made several key additions to the Longeveron team in 2021, including the appointment of four new directors, as well as Dan Gainesville as the Senior Vice President for Strategic collaborations in Scientific Affairs.

Our most recent addition to our Board of Directors announced last month is seasoned biotech executive Todd Girolamo. Todd brings to Longeveron and extensive body of experience in SEC and FDA compliance, corporate finance, M&A, and licensing activities as well as intellectual property litigation and drug development.

Todd is currently Chief Legal Officer and Senior Vice President of Corporate Development and Corporate Secretary of Caladrius Biosciences and also spent 12 years on Wall Street where he specialized in therapeutic healthcare equity securities, and served as an analyst and a portfolio manager for biopharma and medtech equities.

And with that, now, I'd like to turn the call over to James Clavijo, CFO to discuss our financial results for the fourth quarter of 2021 and full year 2021.

James?.

Thank you, Geoff. Good morning everyone. Most of what I'll be covering this morning will be presented in more detail in our consolidated financial statements and in our management's discussion and analysis of operations for the year ended December 31, 2021 in our annual report, on Form 10-K, which will be file today.

Fourth quarter ended December 31, 2021 and 2020. Revenue in the fourth quarter of 2021 was $0.2 million compared to $1.2 million in the same period of 2020. The difference was due to a decrease in clinical trial revenue and grant revenue as follows.

Clinical trial revenue which derives from our Bahamas Registry Trial was $0.2 million in the fourth quarter of 2021 compared $0.5 million in the same period 2020, a decrease of $0.3 million or 68%. Continued COVID-19 related travel concerns have negatively impacted registry traveling.

First quarter 2021 grant revenue was less than point $1 million compared $0.7 million in the same period of 2020, a decrease of $0.6 million or 93%. The decrease in grant revenue is due to the completion of several grant funded clinical trials and associated exhaustion of grant revenue.

Revenue for full year 2021 was $1.3 million compared to $5.6 million in 2020. Clinical trial revenue was $0.7 million in 2021 compared to $1.3 million in 2020, a decrease of $0.6 million or 46%. Grant revenue was $0.6 million in 2021, compared to $4.3 million in 2012, a decrease of $3.7 million or 86%.

The decrease year-over-year was due to the same reasons outlined above. Research and Development expenses in the fourth quarter of 2021 were $1.7 million compared to $1.2 million for the same period in 2020.

The increase of $0.5 million or 51% was primarily due to an increase in research and development expenses that were not reimbursable by grants related to the completion of those clinical trials. R&D expenses for full year 2021 were $7.1 million compared to $2.7 million in 2020.

The increase of $4.4 million or 165% was primarily due to an increase in research and development expenses in 2021 that were not reimbursable by grants related to the completion of clinical trials. Including 2.2 million of equity based compensation recorded for restricted stock units and stock options granted during 2021.

General and administrative expenses in the fourth quarter of 2021 were 2.3 million, compared to 0.7 million for the same period 2020. The increase of approximately 1.6 million or 225% was primarily related to an increase in compensation, insurance and professional expenses incurred during the current period.

Including 0.4 million of equity based compensation recorded for RSUs and stock options granted during the quarter. G&A expenses for the full year 2021 were 10.7 million compared to 2.7 million in 2020. The increase of $8 million or 293% was primarily due to an increase in compensation.

Insurance and professional expenses incurred in 2021, including 4.6 million equity based compensation expenses recorded during the year, as well as 1.1 million an investor relation costs. Our net loss was 4.1 million in the fourth quarter of 2021, compared to 1.4 million for the same period of 2020.

Net loss for full year 2021 was 17 million, compared to 3.7 billion in 2020. Net loss per share was point, was $0.20 in the fourth quarter 2021 compared to $0.08, for the same period in 2020. Net loss per share for the full year 2021 was $0.90 compared to $0.23 in 2020.

Cash and short-term investments was 35 million compared to 0.8 million as of December 31, 2021, and 2020, respectively. The increase in cash period over period was a result of the completion of the Company's initial public offering and private placement offering in February and December of 2021 perspective.

Based on the Company's current operating plan and financial resources, we believe that our existing cash and short-term investments will be sufficient to cover expenses and capital requirements into 2024. With that, thank you and I will turn the call back to Geoff..

Thanks you, James. Brendan, I believe this is we're transitioning to Q&A..

That's correct.

Operator?.

Thank you. [Operator Instructions] The first question today comes from Max Scanlon from [indiscernible]. Max, please go ahead. Your line is now open..

It's been an incredible quarter for you guys. Geoff, it was spectacular to see Longeveron do almost 2,000% at one point. And on that note, I'm just wondering, the decision behind your private placement for 20.5 million, when your stock has done so many multiples of itself. It's an incredible addition to the cash flow. You said you're good for years.

I'm wondering, why that was the number, that was decided upon? Thank you very much..

Sure. Thanks Max. I think at the time the board of directors and management of the Company looked at the potential range of financing options given the volume and appreciation in the stock price during that period.

And we had just completed our IPO nine months prior, so we still had a reasonably strong balance sheet, but you can't predict how things are going to go in the future, and we certainly are seeing that today the financing environment is fairly challenging for biotech companies right now.

So, I think for Longeveron, we chose to bring in an amount that we felt was appropriate to give us several years of cash runway and not bet at in a position of having to do financing and uncertain conditions in 2022, so we arrived at that number, about $20.5 million..

Yes, and I think you're better off than like 80% of other biotech stocks right now, definitely paid dividends..

Like we said, it's just very challenging to predict and of course for those that are out there right now looking to raise capital, they're facing more challenging headwinds than they did in 2021, but we're pleased that we were able to get out of the time..

Thank you. I would now like to pass over to Brendan Payne for questions asked independently. Brendan, please go ahead..

Great, thank you, operator, these questions were submitted independently before the call. The first is.

What specifically are some of the advantages of the orphan drug in rare pediatric disease designations received from the FDA?.

Sure, this is relates to the Lomecel-B for HLHS, Hypoplastic Left Heart Syndrome program that the Company is pursuing. So just a reminder, orphan drug designation program is basically an incentive for sponsors to develop therapeutic options for rare diseases that affect less than 200,000 people.

So -- and you get early engagement with the FDA for discussions and during the drug development process. So, it can be beneficial to the sponsor.

And some of the list of potential benefits, I think are, seven years of marketing exclusivity for an approved orphan product and federal tax credits, there's a waiver of the producer fee for orphan drugs which is several million dollars.

We qualified to compete for certain research grants, and again, eligibility to receive regulatory assistance and guidance from the FDA, and sort of in the design of the overall drug development plan. All of this assumes that certain regulatory conditions are satisfied.

For the rare pediatric disease designation, one of the primary potential benefits is the eligibility to receive a priority review voucher or PRV. And so, the priority review voucher is issued upon approval of a qualifying rare disease product, rare pediatric disease products.

So, it doesn't have an effect on the timing of the review of the original product because we would already potentially qualify for priority review. It does entitle the holder to designate a single subsequent drug application to receive prior review.

And so, since these priority review vouchers are transferable to another sponsor, they can be sold and they can be potentially a source of revenue to the Company in the future, and in some cases, it could be substantial revenue..

Perfect. Thank you. Moving on to the next question.

Do you anticipate your current post financing cash reserves to be sufficient to see through top line data from both ongoing Phase 2 trials?.

So Max kind of alluded to the cash position in his question. And so, because of that private placement in December, we have a stronger balance sheet, and therefore, we're not in any immediate need to raise cash. And so, the answer to that question lies in part on how quickly we can enroll our ongoing clinical studies as well as our cash management.

But I can say the objective of management is to achieve several milestones in 2022 and 2023. And thereby, ideally putting ourselves in a stronger position at the time in which we may need to raise additional capital.

So, as I indicated, stated earlier, the Phase 2a Alzheimer's trial initiated, just this quarter, we treated our first patient and several more patients are in screening. We're planning on activating currently 12 total sites.

So, right now, we have two sites up and running, we're going to get 10 more sites including the Miami VA, which should be very soon. We partnered with the Miami VA on multiple projects in the past. They are a very good partner.

We are very passionate about developing safe and effective therapeutics to treat some of the diseases and chronic indications that the veterans face. And the VA is always typically a large source of patients for our clinical trial. So, we're very enthusiastic about getting that site up and running and kind of getting moving on rapid enrollment.

But really, we certainly hope to enroll the Phase 2a trial fully this year, which would allow us to have a data readout next year, but really it's just premature right now to be more specific than that until we see what the enrollment rates like when we have all our centers up and running..

The final question was, when do you anticipate timing from a Phase 2a when we occur pretty Alzheimer? So I think you've answered that question. That concludes the question submitted independently. With that, I'll turn it back over to the operator..

Thank you. [Operator Instructions] There are currently no additional questions waiting at this time. So, we'd like to pass the conference back over to Geoff Green for closing remarks. Geoff, please go ahead..

Thank you. Just want to say on behalf of the Company, we'd like to thank everyone for their continued interest in supporting on Longeveron. And we look forward to updating you again as we discuss our first quarter 2022 results. Thank you..

Thank you. That concludes today's conference call. You may now disconnect your lines..