Longeveron Reports Year-End 2023 Results and Provides Corporate Update
Company Announces 2024 Strategic Priorities Focused on Advancement of Lomecel-B™ in Hypoplastic Left Heart Syndrome
ELPIS II Phase 2 Trial of Lomecel-B™ in HLHS Continues Enrollment; Completion of Study Enrollment Anticipated in 2024
Long-term Survival Data from ELPIS 1 Trial Presented at the 2023 Scientific Sessions of the American Heart Association
Announced Additional Validating Clinical Data and Imaging Biomarker Results from the CLEAR MIND Phase 2a Trial of Lomecel-B™ in the Treatment of Mild Alzheimer's Disease
Gross Proceeds of $6.4 Million in Equity Financing Secured in Q4 Registered Direct Offerings
Company to Hold Conference Call and Webcast Today, February 27, 2023 at 5pm Eastern Time
MIAMI, Feb. 27, 2024 (GLOBE NEWSWIRE) -- Longeveron Inc. (NASDAQ: LGVN) ("Longeveron" or "Company"), a clinical stage biotechnology company developing regenerative medicines for unmet medical needs, announced today its results for the year ended December 31, 2023 and provided a corporate update.
"In 2023 we made significant strides advancing studies of our investigational product, Lomecel-B™, in Hypoplastic Left Heart Syndrome (HLHS) and Alzheimer's disease, with long-term survival data from ELPIS I trial presented at the American Heart Association annual meeting and clinically meaningful results announced from our Phase 2a CLEAR MIND clinical trial of Lomecel-B™ in the treatment of mild Alzheimer's disease," said Wa'el Hashad, Chief Executive Officer of Longeveron. "For 2024 our main strategic priority will be focused on our lead clinical program in HLHS, our most important near-term value driver. Accordingly, we made the strategic decision to discontinue our Phase 2 clinical program in Aging-related Frailty in Japan. We are also exploring opportunities to advance our Alzheimer's disease program through potential partnerships or other sources of funding. These steps will allow us to focus our available resources on completing enrollment in our follow-on ELPIS II study in 2024. HLHS patients are in critical need of new therapeutic options to improve outcomes in this rare and life-threatening indication," concluded Mr. Hashad.
Recent Highlights
HLHS
Company prioritizing development of Lomecel-B™ in HLHS;
Long-term transplant-free survival data from the ELPIS I trial of Lomecel-B™ for patients with HLHS presented as a poster at American Heart Association 2023 Scientific Sessions;
Children in ELPIS I trial had 100% transplant-free survival up to five years of age after receiving Lomecel-B™ compared to approximate 20% mortality rate observed from historical control data;
Data reinforce potential survival benefit of Lomecel-B™ for patients in this indication;
Company anticipates completing enrollment in ELPIS II trial in 2024.
Alzheimer's disease
Announced topline results from the Phase 2a CLEAR MIND trial of Lomecel-B™ for the treatment of mild Alzheimer's disease:
The study met the primary safety endpoint, and no patient experienced Alzheimer's Related Imaging Abnormality (ARIA);
The study also met its secondary endpoint, a prespecified composite Alzheimer's Disease (CADS) endpoint with a prespecified p-value of p<0.1.
Additional clinical data and biomarker data announced in December, 2023 showed statistically significant improvements in the following clinical and biomarker endpoints in specific Lomecel-B™ groups compared to placebo, as follow:
Cognitive function improved as measured by Montreal Cognitive Assessment (MoCA) (p<0.05);
Daily life activity increased as assessed by the caregiver and measures by Alzheimer's Disease Cooperative Study Activities of Daily Living (ADCS-ADL) (p<0.05);
Brain MR imaging demonstrated whole brain volume loss slowed accompanied by significant preservation of left hippocampal volume (both p<0.05);
Brain neuroinflammation as measured by diffuse tensor imaging (DTI) also diminished (p<0.01).
These results support the therapeutic potential of Lomecel-B™ in the treatment of mild Alzheimer's disease and provided evidence-based support for further clinical development;
Company anticipates presenting CLEAR MIND results at major medical meetings in 2024.
Aging-related Frailty
Company has discontinued its clinical trial in Japan to evaluate Lomecel-B™ for Aging-related Frailty in order to focus on its strategic priority in HLHS;
Longeveron management continues to believe in the potential of Lomecel-B™ in this disease state and will evaluate options for continued development at a future date.
Financial Results for Year Ended December 31, 2023
Revenues, Cost of Revenues and Gross Profit: Revenues for the years ended December 31, 2023 and 2022 were $0.7 million and $1.2 million, respectively. 2023 revenues decreased $0.5 million, or 42%, when compared to 2022 as a result of decreased grant and lower participant demand for our Bahamas Registry Trial. Grant revenue for the years ended December 31, 2023 and 2022 was less than $0.1 million and $0.3 million, respectively. The decrease of $0.2 million, or 85%, when compared to 2022, was primarily due to a reduction in grant funds available due in part to the completion of the grant-funded clinical trials. Clinical trial revenue, which is derived from the Bahamas Registry Trial, for the years ended December 31, 2023 and 2022 was $0.7 million and $0.9 million, respectively. Clinical trial revenue for the year ended December 31, 2023 decreased by $0.2 million, or 29%, when compared to 2022 as a result of decreased participant demand.
Related cost of revenues: Cost of revenues was $0.5 million and $0.7 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $0.2 million, or 33%, was primarily due to the decrease in the revenues earned from the Bahamas Registry Trials and reduced direct costs associated with our grants program. This resulted in a gross profit of approximately $0.2 million for the year ended December 31, 2023, a decrease of $0.3 million, or 56%, when compared with a gross profit of $0.5 million for 2022.
General and Administrative Expense: General and administrative expenses for the year ended December 31, 2023 increased to approximately $11.4 million, compared to $8.1 million for the same period in 2022. The increase of approximately $3.3 million, or 40%, was primarily related to an increase of $1.6 million for compensation and benefit expenses (including $0.4 million of separation costs), $1.0 million in legal, professional and consulting fees, $0.4 million of public company expenses, $0.2 million in equity-based compensation costs allocated to general and administrative expenses, and $0.1 million for higher board fees.
Research and Development Expenses: Research and development expenses for the year ended December 31, 2023 decreased to approximately $9.1 million, from approximately $9.4 million for the same period in 2022. The decrease of $0.3 million, or 3%, was primarily due to decreases of $0.5 million in equity-based compensation allocated to research and development expenses and $0.3 million in compensation and benefits, offset by increases of $0.4 million in supplies and costs to manufacture Lomecel-B™ and $0.2 million in research and development expenses that were not reimbursable by grants.
Selling and Marketing Expenses: Selling and marketing expenses for the years ended December 31, 2023 and 2022 were $0.8 million and $1.0 million, respectively. The decrease of $0.2 million, or 24%, was primarily due to decreases in investor relations and international development expenses.
Non-operating Lawsuit expense: Non-operating Lawsuit expense for the years ended December 31, 2023 and 2022 was less than $0.1 million and approximately $1.4 million, respectively. Additional detail can be found in Part I, Item 3 "Legal Proceedings" of this Form 10-K. Legal expenses incurred in ordinary business activities are reported within general and administrative expenses.
Other tax credits: Other tax credits for each of the years ended December 31, 2023 and 2022 was less than $0.1 million and $0.3 million, respectively. Other tax credit was greater in 2022 due to receiving the Employee Retention Credit under the CARES Act which encourages businesses to keep employees on their payroll. Eligible businesses receive a refundable tax credit of up to 50% of up to $10,000 in wages paid.
Other Expense (Income), net: Other expense for the years ended December 31, 2023 and 2023 was $0.4 million and $0.8 million, respectively. Other expense for 2023 decreased mainly as a result of non-operating lawsuit expenses of $1.4 million in 2022, compared to less than $0.1 million in 2023. This decrease was partially offset by realized losses on sales of marketable securities of $0.3 million, write-offs of intangible assets of $0.3 million and reduced benefit of tax credits of $0.3 million. Also recorded in other (expense) income in 2022 was approximately $27,000 for a gain resulting from foreign currency changes and $27,000 of sublease rental income.
Net Loss: Net loss increased to approximately $21.4 million for the year ended December 31, 2023, from a net loss of $18.8 million for the same period in 2022. The increase in the net loss of $2.6 million, or 14%, was for reasons outlined above.
Subsequent events:
In line with the Company's 2024 strategic direction to focus its resources on HLHS and AD and to manage its cash spend, the Company decided to discontinue its previously disclosed clinical trial in Japan to evaluate Lomecel-B™ for Aging-related Frailty.
On February 21, 2024, the Company's stockholders approved an amendment to the Company's certificate of incorporation to effect a reverse stock split of its outstanding shares of Class A common stock and Class B common stock at a ratio ranging from one-for-five (1:5) to one-for-fifteen (1:15), with the exact ratio to be set within that range at the discretion of its Board of Directors without further approval or authorization of its stockholders. The date of the reverse stock split and the ratio has not yet been determined.
As of December 31, 2023, the Company had $5.4 million in cash and cash equivalents and marketable securities. We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024. We are actively seeking financing opportunities to extend our cash runway while taking measures to reduce our cash expenditures as we focus our resources on our primary strategic program in HLHS. These cost saving measures include the discontinuation of our Aging-related Frailty clinical trial in Japan, related staff reductions and continued prudent management of discretionary spend.
Conference Call and Webcast
Management will host a conference call today at 5:00 p.m. ET to discuss the Company's third quarter 2023 financial results and provide a business update.
Longeveron is a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company's lead investigational product is Lomecel-B™ an allogeneic medicinal signaling cell (MSC) therapy product isolated from the bone marrow of young, healthy adult donors. Lomecel-B™ has multiple potential mechanisms of action encompassing pro-vascular, pro-regenerative, anti-inflammatory, and tissue repair and healing effects with broad potential applications across a spectrum of disease areas. Longeveron is currently advancing Lomecel-B™ through clinical trials in three indications: Hypoplastic Left Heart Syndrome, Alzheimer's disease, and Aging-related Frailty. Additional information about the Company is available at www.longeveron.com.
Forward-Looking Statements Certain statements in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect management's current expectations, assumptions, and estimates of future operations, performance and economic conditions, and involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as "believe," "expects," "may," "looks to," "will," "should," "plan," "intend," "on condition," "target," "see," "potential," "estimates," "preliminary," or "anticipates" or the negative thereof or comparable terminology, or by discussion of strategy or goals or other future events, circumstances, or effects. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements in this release include, but are not limited to, our limited operating history and lack of products approved for commercial sale; adverse global conditions, including macroeconomic uncertainty; inability to raise additional capital necessary to continue as a going concern; a history of losses and may not be able to achieve profitability going forward; no FDA-approved allogenic, cell-based therapies for Aging-related Frailty, AD, or other aging-related conditions, nor HLHS or other cardiac-related indications; ethical and other concerns surrounding the use of stem cell therapy or human tissue; the use of our product candidates or future products in individuals may expose us to product liability claims, and we may not be able to obtain adequate product liability insurance; if our trade secret and patent position does not adequately protect our product candidates and their uses, others could compete against us more directly, which could harm our business and have a material adverse effect on our business, financial condition, and results of operations; if certain license agreements are terminated, our ability to continue clinical trials and commercially market products could be adversely affected; inability to protect the confidentiality of our proprietary information, trade secrets, and know-how; third-party claims of intellectual property infringement may prevent or delay our product development efforts; intellectual property rights do not necessarily address all potential threats to our competitive advantage; inability to successfully develop and commercialize our product candidates and obtain the necessary regulatory approvals; we cannot market and sell our product candidates in the U.S. or in other countries if we fail to obtain the necessary regulatory approvals; final marketing approval of our product candidates by the FDA or other regulatory authorities for commercial use may be delayed, limited, or denied, any of which could adversely affect our ability to generate operating revenues; we may not be able to secure and maintain research institutions to conduct our clinical trials; ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations; if we receive regulatory approval of Lomecel-B™ or any of our other product candidates, we will be subject to ongoing regulatory requirements and continued regulatory review, which may result in significant additional expense; being subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our therapeutic candidates; reliance on third parties to conduct certain aspects of our preclinical studies and clinical trials; interim, "topline" and preliminary data from our clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data; the volatility of price of our Class A common stock; we could lose our listing on the Nasdaq Capital Market if our current share price continues to decrease; provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Class A common stock; we have never commercialized a product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize any products on our own or together with suitable collaborators; and in order to successfully implement our plans and strategies, we will need to grow our organization, and we may experience difficulties in managing this growth. Further information relating to factors that may impact the Company's results and forward-looking statements are disclosed in the Company's filings with the Securities and Exchange Commission, including Longeveron's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 14, 2023 and its Quarterly Reports on Form 10-Q. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Longeveron Inc. Statements of Operations (In thousands, except per share data)
Years ended December 31,
2023
2022
Revenues
Grant revenue
$
41
$
282
Clinical trial revenue
668
940
Total revenues
709
1,222
Cost of revenues
488
725
Gross profit
221
497
Operating expenses
General and administrative
11,401
8,119
Research and development
9,066
9,370
Selling and marketing
783
1,051
Total operating expenses
21,250
18,540
Loss from operations
(21,029
)
(18,043
)
Other (expenses) and income
Lawsuit expense
(30
)
(1,398
)
Other refundable tax credits
23
306
Other expense (income), net
(377
)
300
Total other (expense)s and income, net
(384
)
(792
)
Net loss
$
(21,413
)
$
(18,835
)
Deemed dividend attributable to warrant down round feature
(798
)
-
Net loss attributable to common stockholders
$
(22,211
)
$
(18,835
)
Basic and diluted net loss per share
$
(1.02
)
$
(0.90
)
Basic and diluted weighted average common shares outstanding
21,734,901
20,969,032
See accompanying notes to unaudited condensed financial statements.
Longeveron Inc. Condensed Balance Sheets (In thousands, except share and per share data)
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
4,949
$
10,503
Marketable securities
412
9,155
Prepaid expenses and other current assets
376
404
Accounts and grants receivable
111
218
Total current assets
5,848
20,280
Property and equipment, net
2,529
2,949
Intangible assets, net
2,287
2,409
Operating lease asset
1,221
1,531
Other assets
193
244
Total assets
$
12,078
$
27,413
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
638
$
1,751
Accrued expenses
2,152
650
Current portion of lease liability
593
564
Estimated lawsuit liability
-
1,398
Deferred revenue
506
506
Total current liabilities
3,889
4,869
Long-term liabilities:
Lease liability
1,448
2,041
Total long-term liabilities
1,448
2,041
Total liabilities
5,337
6,910
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2023 and 2022
-
-
Class A Common Stock, $0.001 par value per share, 84,295,000 shares authorized, 10,251,764 shares issued and outstanding at December 31, 2023; 6,127,320 shares issued and outstanding at December 31, 2022
10
6
Class B Common Stock, $0.001 par value per share, 15,705,000 shares authorized, 14,855,539 shares issued and outstanding at December 31, 2023; 14,891,085 shares issued and outstanding at December 31, 2022
15
15
Additional paid-in capital
91,800
83,712
Stock subscription receivable
(100
)
(100
)
Accumulated deficit
(84,984
)
(62,773
)
Accumulated other comprehensive loss
-
(357
)
Total stockholders' equity
6,741
20,503
Total liabilities and stockholders' equity
$
12,078
$
27,413
See accompanying notes to unaudited condensed financial statements.
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