00:05 Good day, and welcome to the Capricor Therapeutics Incorporated Fourth Quarter and Full-Year 2021 Earnings Call. Today's conference is being recorded. 00:13 At this time, I would like to turn the conference over to Mr. AJ Bergmann, Chief Financial Officer. Please go ahead, sir.

00:20 Thank you. Before we start, I would like to state that we will be making certain forward-looking statements during today’s presentation. These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of our product candidates, our future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates, potential milestone payments and our possible uses of existing cash and investment resources. 00:53 These forward-looking statements are based on the current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings as made with the SEC, during our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements and we disclaim any obligation to update such statements. 01:19 With that, I’d like to turn the call over to Linda Marban, CEO.

01:23 Good afternoon, and thank you for joining Capricor Therapeutics fourth quarter and full-year conference call. I'm pleased to update you today on our accomplishments and progress as we enter 2022. I am delighted to say that with the Nippon Shinyaku deal the launching of HOPE-3 and our growing exosome platform technology and our strong balance sheet, we are in the strongest position we have ever been as a company. 01:52 Today, I will provide you updates on all of these programs. As you know Capricor is developing two distinct platform. First, our late-stage cell therapy program CAP-1002 is entering a Phase 3 pivotal clinical study for Duchenne Muscular Dystrophy, and is also being investigated as a potential therapy and the fight against COVID-19. Second, we are developing an exosome platform, where we are harnessing the power of exosomes, nature's delivery vehicle and engineering them with different payloads for a potentially more efficient targeted delivery of small molecules, RNAs, proteins and other payloads. We are focused on advancing both of these platforms with the efficient use of capital pursuing partnerships, as we have successfully done in DMD to validate and expedite product development. 02:51 We have assembled and continue to build a world-class team to deliver on both of these fronts. We are highly focused on achieving these objectives and then being capital efficient as well. We recently relocated the company's headquarters to San Diego, California to attract talent and one of the world's major biotechnology hubs and this strategy has thus far paid off. We continue to enhance our management team as we build towards potential registration of CAP-1002. 03:21 Recently, Ms. Yasmine Shad joined as Vice President of Quality and her experience is directly in line with our goals of building a commercial ready CAP-1002 products. Her background…

14:05 Thank you, Linda. This afternoon's press release provided a summary of our fourth quarter and full-year 2021 financials on a GAAP basis. You may also refer to our annual report on Form 10-K, which we expect to become available shortly will be accessible on the SEC website, as well as the financial section of the company website. 14:25 As of December 31st 2021, the company's cash and cash equivalents totaled approximately $34.9 million, compared to approximately $32.7 million on December 31, 2020. The company's cash balance as of December 31, 2021 does not include the expected $30 million payment, as Linda mentioned from Nippon Shinyaku. Based on the current pipeline and operating plan our cash position is expected to be sufficient to support operations for at least two years. 14:54 Turning now to the financials briefly. In the fourth quarter of 2021, our net cash used in operating activities was approximately $5.6 million for the fourth quarter of 2021, excluding stock-based compensation our research and development expense was approximately $4.1 million, compared to approximately $2.7 million in Q4 2020. Again, excluding stock-based compensation, our general and administrative expense was approximately $1.5 million in Q4 2021 and approximately $1.1 million in Q4 2020. 15:25 Net loss for the fourth quarter of 2021 was approximately $6.2 million, compared to a net loss of approximately $4.2 million for the fourth quarter of 2020 and net loss for the full-year 2021 was approximately $20 million, compared to a net loss of approximately $13.7 million for the full-year 2020. 15:44 Thank you for your time and we're now going to open the line up for questions.

15:49 Thank you, Mr. Speaker. [Operator Instructions] We will take the first question from Mr. Joseph Pantginis from H.C. Wainwright. Your line is open. Please go ahead, sir.

16:10 Good afternoon, this is Emanuela on for Joe, thank you for taking our questions. With regards to the partnership with Nippon, obviously they will be responsible for their commercialization and distribution of CAP-1002 is approved. But given that experience with DMD, we were wondering what additional influence should we expect from Nippon in the development of the asset?

16:35 Thanks. Hi, Emmanuel, it’s good to hear from you also had a [job] (ph) for me. We choose Nippon Shinyaku on our pharma very specifically to be our partner for DMD, because of their reach in the United States, because of their approved product, their mature sales team and also their commitment to the development of CAP-1002 in ultimate commercialization. We consider ourselves full partners in this arena. We are working very closely with them, they will be involved in all aspects of HOPE-3 with us and we'll sort of be standing together and working together as we work towards the very exciting opportunities in commercialization.

17:17 Understood. Thanks for that. And also regarding CAP-1002, are you considering an ex-US development as well.

17:29 Yes. Of course, I mean, our plan has always been to provide worldwide access to CAP-1002. We focused on the US as our first opportunity -- our first front, but as we build the programs we're looking for partners OUS and please wait for updates from us on this very important opportunity.

17:49 Of course. Thank you for that. And regarding the upcoming data on INSPIRE, can you help us maybe set our expectation on the results, especially with regards to efficacy and considering CAP-1002 mechanism of action?

18:08 Yes. So again, thank you for that question. So let me set the stage for you for a moment, so we employed CAP-1002 in the early stages of pandemic when everybody was pulling out whatever they have sort of in their warehouse of clinical opportunities to try and treat these poor patients for disease they knew nothing about. We knew based on the mechanism of action their anti-inflammatory, pro-regenerative, anti- apoptotic activities of the cells combined with the published work we did with United States Army, showing the reduction and the impact of shock and trauma, at least in animal models using our exosomes, which are the believe mechanism of action of the cells. 18:51 But we thought that we would have a good opportunity to use CAP-1002 potentially to help these patients. So we did a seven patient study, six of those patients were published in an article in Basic Research in Cardiology, where we saw some really intriguing results in terms of biomarkers and clinical outcomes. And what we saw from that study was that those patients that were severely although they needed oxygen supplementation, but had not yet proceeded to ventilation seem to do better on CAP-1002. And so we built INSPIRE very carefully, strategically and surgically to treat those patients that were sort of fitting that paradigm of severe, but not critical. 19:31 The trial was built around the primary safety endpoint with a variety of exploratory efficacy endpoints. We did that on purpose as well, because we want to be able to direct the clinical development of CAP-1002 in this particular patient population, where it seems to be most effective. So we're going to be getting that data soon. We're looking at, as I said, a variety of exploratory clinical endpoints, as well as biomarkers and once we get the data and we sort of have the chance to analyze it, we’ll decide our best path forward, which will include meeting with the FDA and plotting out the best way to move this product forward. 20:08 As I mentioned in my prepared remarks, we retain rights to this program. I will also say that it's a single infusion of CAP-1002 in a sick patient population. So it's very different than the therapeutic direction of CAP-1002 for DMD. So it's going to be very interesting from a scientific and medical perspective to see how that plays out. And I look forward to updating you on that.

20:30 Of course and thank you for that. Yes, looking forward to the data. And finally for me with the partnership for HOPE-3 secure, this is obviously increasing your resources available for the development of the exosome platform. But can you provide more color on what are you prioritizing on that front?

20:51 So in terms of resources, of course, we have a near-stage registration for our commercial product in CAP-1002 for DMD. We've been working on this for a long time as I've messaged many times, we now have two clinical trials with literally the same results, you know, the impact on performance of the upper limb strengthen these patients that are primarily non-ambulant, as well as a cardiomyopathy improvement with an improvement in ejection fraction, and HOPE-2. We're now entering HOPE-3 pivotal trial near-term commercial opportunity. We are primarily focusing on that right now. The exosome platform is in development in the background, it’s not impacting our burn very much and we’ll look forward to providing you updates on that program as they become available.

21:42 Got it, got it. Thank you.

21:46 Sure, Be well.

21:51 [Operator Instructions] It appears that there is no further question at this time. I'd like to turn the conference back to Mr. Bergmann for any additional or closing remarks. Please go ahead, sir.

22:22 I think you're getting Linda Marban CEO, so thank you for joining us today. We look forward to providing you updates on all of our programs. Look for an update on our publication imminently and further developments on HOPE-3 as they become available. Have a wonderful day and stay safe and well. Thank you.

22:44 This concludes today's conference. You may now disconnect.