Good day, and welcome to the Longeveron 2024 and Full Year Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the call over to Derek Cole of Investor Relations Advisory Solutions. Please go ahead.

Thank you, Paul. Good afternoon, everyone and thank you for joining us today to review Longeveron's 2024 full year financial results and our business update. After the U.S. markets closed today, we issued a press release with financial results for 2024, which can be found under the Investors section of the Longeveron website. On the call with me today are Wa'el Hashad, Chief Executive Officer; Nataliya Agafonova, Chief Medical Officer; Lisa Locklear, Chief Financial Officer; and Dr. Joshua Hare, Co-Founder, Chief Science Officer and Chairman of the Board. As a reminder, during this call, we will be making forward-looking statements -- these statements are subject to certain risks and uncertainties that could cause 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 discussed in the company's filings with the Securities and Exchange Commission, which we encourage you to review. Following the company's prepared remarks, we’ll open the call to questions from our covering analysts. With that, let me hand the call over to Wa'el Hashad, Chief Executive Officer. Wa'el?

Thank you, Derek. Good afternoon, everyone, and thank you very much for joining us today. We are very pleased to update you on highly productive year in 2024 and provide an overview of what to expect and potentially transformational 2025 for Longeveron. As a reminder, for those of you new were to our story, Longeveron is a regenerative medicine company developing cutting-edge cellular therapies. Our stem cell therapy, Lomecel-B or laromestrocel represents a pipeline and a product opportunity that has delivered several positive initial results across five clinical trials in three indications: Phase I and II in Alzheimer's disease, Phase I and II in aging-related frailty and Phase I in HLHS or hypoplastic left heart syndrome, a rare pediatric disease condition. The company development program for these 3 initial indications, address U.S. market opportunity of approximately $5-plus billion, approximately $4 plus billion and up to $1 billion, respectively. Longeveron continued to make progress in 2024 with both the Lomecel-B and HLHS and Alzheimer's disease programs. hypoplastic left heart syndrome, or HLHS, is a key strategic priority for us. We believe the HLHS program has high probability of success and the shortest path to potential regulatory approval and commercialization across our pipeline. In 2024, we continue to advance enrollment in our ongoing Phase IIb study of ELPIS II, which is evaluating Lomecel-B as a potential adjunct treatment for HLHS. ELPIS II has now achieved more than 90% enrollment and we expect to complete enrollment in the second quarter of this year. Also importantly, last year, we completed a meeting with the U.S. Food and Drug Administration, the FDA, which confirm that ELPIS II is a pivotal and if positive, acceptable for biological license application or BLA submission for full traditional approval. This significantly accelerate the potential regulatory path for Lomecel-B and…

Thank you, Wa'el, and good afternoon everyone. Our stem cell therapy, Lomecel-B has multiple models of action that include provascular regenerative and anti-inflammatory mechanism, promoting tissue repair and healing both broad potential applications across the spectrum of disease areas. Based on positive initial data, Lomecel-B development programs have received five FDA designation. For the HLHS program orphan-drug designation fast track designation and rare pediatric disease designation. And for the Alzheimer's disease program for generated medicine advanced therapy RMAT designation and Fast Track designation, each of which offers benefit for the program development and regulatory processes. As Wa'el mentioned, our HLHS program is a primary focus for us, with the near-term pathway to potential approval in a rare area of clear unmet medical needs. We are currently conducting a Phase IIb clinical trial, ELPIS II, evaluating the potential of Lomecel-B to improve right ventricular function and long-term outcomes in pediatric patients with HLHS. ELPIS II is being conducted in collaboration with the National Heart, Lung and Blood Institute to grant from the National Institute of Health. We are very pleased to share that ELPIS II has now achieved over 90% enrollment. We expect to complete enrollment of this trial before the end of the second quarter, and then we'll follow the patients for 12 months. If results from ELPIS II are positive, we would be positioned to initiate the rolling BLA submission with the FDA in 2026. Turning now to our Alzheimer disease program. This is also an area of significant unmet need. Nearly 7 million Americans are living with Alzheimer disease. It kills more than more people than breast cancer and prostate cancer combined. And there has not been great progress in this area. Between 2000 and 2021, dead from heart disease decreased 2.1%, while death from Alzheimer disease increased…

Thank you, Nataliya, and good afternoon, everyone. This afternoon, we issued a press release and filed our Annual Report on Form 10-K, both of which present our financial results in detail. So I will touch on some highlights. Revenues for 2024 were $2.4 million, up $1.7 million or 237% when compared to 2023. We mainly as a result of increased participant demand for our frailty and cognitive impairment registry trial in the Bahamas and new contract manufacturing revenue. Contract manufacturing revenue for 2024 was $1 million, consisting of $0.5 million from our manufacturing lease services and another $0.5 million from our manufacturing services contract. This year, we have focused on prioritizing investments in our clinical programs and expense management, and we have successfully executed in both areas. Total operating expenses for the year declined 13% year-over-year, with G&A expenses decreasing to approximately $10.3 million from $12.2 million in 2023. This G&A expense decrease of approximately $1.9 million or 16% and was primarily due to lower personnel expenses, as a result of reduced severance in 2024 and lower legal and other administrative expenses. R&D expenses for 2024 also decreased approximately $1 million or 10% to approximately $8.1 million. The decrease was primarily due to a reduction of $2.3 million in expenses related to the completed CLEAR MIND Alzheimer's disease clinical trial, reduced cost for the aging-related frailty clinical trial following our decision earlier this year to discontinue trial activities in Japan and a $0.9 million decrease in supply costs. These reductions were partially offset by $1.7 million in higher compensation and benefit costs in R&D and another $0.3 million increase in equity-based compensation for that team. Net loss decreased 25% to approximately $16 million for 2024 from a net loss of $21.4 million for 2023. Cash and cash equivalents as of…

Thank you, Lisa. Over the past decade, stem cell therapy has made tremendous progress transforming from promising field into one delivering tangible clinical outcome. We have seen the solidification of cell therapy's role and regenerative medicine and its potential to treat a wide range of conditions, signaling an exciting future for both scientific innovation and patient care. We believe Lomecel-B has the potential to be important cellular therapy option for multiple chronic and life-threatening conditions. The data generated to date in HLHS Alzheimer's disease support that belief. The strength of our clinical data, our experienced and committed team and unwavering focus on patients give me confidence in the future of Lomecel-B and Longeveron. Operator, now we would like to open the call for questions from covering analysts.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Boobalan Pachaiyappan with ROTH Capital Partners. Please proceed with your question.

Good afternoon team, can you hear me okay?

Yes, Boobalan. Hi.

Hi, thank you so much. Thanks for taking our questions. So we have a couple of them. So firstly, with respect to ELPIS II enrollment delay. I was wondering maybe if you could provide some additional color of what's causing the enrollment delay because I mean I'm following up here story for quite some time. So initially, we were planning -- I mean, I wanted to see the enrollment wrap up sometime in fourth quarter of last year. And then after that, you said it will be first quarter. So I'm curious, what's causing the delay? I understand. You have no control in terms of setting the surgery date, which I feel is a key factor. But other than the surgery date, are there any other factors recording the enrollment delays. Wa’el Hashad : Yes. Boobalan, I will take that question, and Nataliya can add color. Of course, as you know, HLHS is a rare disease and actually goes into the border of ultra-rare disease -- and it is very hard sometimes to predict it with the great details of accuracy. The team is pushing to finish enrollment as fast as possible, but sometimes delays of the surgery itself can happen, things like that. The great news is we continue to make progress, as you can see from one quarter to another or from one call to another. And right now, we're sending above 90% enrolled. Actually, that means that we have 35 patients in also. We are talking about, honestly, the last couple of patients left in the trial. And we now with absolute full confidence we believe that we can finish that enrollment in the next couple of months.

Great. And then I have a question -- sorry, go ahead. Wa’el Hashad : I was going to say if Nataliya I want to add any comments, feel free as well if you have any --.

Thank you, Boobalan. This is a great question. And as Wa'el said, we are definitely making a very, very good progress. And the nature of disease sometimes have surprises. And as you mentioned, the Glenn surgery, sometimes the patient goes to the surgery seems promising and during the surgery, unfortunately, some patients are not eligible based on intra operative decision. So again, it's a very complicated indication, and we are so far have been very successful. So because of that, sometimes we have a promising patients, but they are not eligible at the end of [indiscernible] it's definitely decision. But we keep track of every single patient who are potentially eligible, we approach them, and we are making great progress on that. So hopefully, even 1, 2 months, we will be able to complete enrollment.

That's very helpful. Thanks for that. And then staying on ELPIS II lane. So I was wondering, I mean, I understand the primary endpoint is RVEF you are tracking this for 12 months. So I was wondering if the FDA would be open to the possibility of considering a composite end point because I'm not very sure whether a clinically meaningful difference could be recognized in that 12 months timeframe. So assuming -- I mean, in addition to RVEF, is it possible you can get some data about the other factors such as prolonged hospitalization and Macy's such as reoperation and percutaneous interventions and all other events that could potentially all these HLHS patients who would normally go through, whether that would be embedded in your composite end point? That was my question.

Wa'el, would you like me to? Wa’el Hashad : Yes, you can respond and I can add comments.

Okay, thank you so much. So it's a great question and you're reading our mind. So we definitely thinking in a line that -- just to have right in cheek or ejection fraction, it would be not sufficient. So we did have conversations with FDA and currently -- as we mentioned, if we accepted ELPIS II clinical trial, is pivotal, and also they were willing to see more thoughts around primary endpoint. And we're currently working our data. We are working to prepare response to FDA, to compile convincing evidence that composite endpoint would be the way to go. So we are thinking exactly what you mentioned. We are thinking about composite endpoint. We are thinking about different type of endpoints and hospitalization, maybe something else. So definitely. And we -- our plan is to get an alignment with FDA this year that we are analyzing the data based on this composite endpoint. Wa’el Hashad : Yes. So thank you, Nataliya. Boobalan I will add just one thing is -- it's not just our thoughts. We have actually had that discussion with the FDA as you said. So the agreement is, yes, they will accept the composite endpoints. And we want to make sure that these composite endpoints happen in the frequency that allow us to detect the difference and success of the trial. And the FDA was open to several suggestions from our side and including hospitalization, survival and other endpoints, and we are in the process of preparing and SAP and sharing it back and they said they will be happy to discuss that further once they receive the SAP from us.

Great. Switching gears and talking about the Alzheimer program. So you mentioned that you'll be speaking with the agency sometime this quarter. So I'm curious, what are some of the key items that you wanted clarifications from the agency because you have this RMAT designation, and this is -- it's a very long program. Alzheimer, -- it's not for the faint of art, just to tell you that -- so do you plan to sort of propose a plan such that you will have to do a Phase IIb prior to Phase III? Or is there a way you could sort of bypass to be and directly go to Phase III, is there a possibility to do that for that? Wa’el Hashad : So that's a great question. I will tell you that's the reason why we're meeting. We are proposing and we'll get into the details after the meeting, but we are proposing a very accelerated path to commercialization and regulatory approval, of course, -- but at the same time, providing the agency an opportunity to ensure that the safety and the efficacy of the product is fully demonstrated as well. And that path for approval, if the FDA agreed with our proposal, will definitely present a great differential opportunity over existing path and that would be one of the values that we can. And by the way, this is part of the RMAT because the RMAT give you an opportunity for an accelerated path for approval. So that's what we're asking for. And that's what we're hoping the FDA will agree with our plans for that as well. But we have to wait and see what happens at the meeting.

Great. Maybe one last question. I'm sorry, this is the last question from me. So after September 30, 2026. So the agency may not award any pediatric disease priority review voucher. And this news has been around for quite some time. So I'm curious, what are the prospects for -- in your case, for the Lomecel-B in terms of receiving PRV, should this agent be approved, say, either late '26 or first half of '27 for HLHS? Wa’el Hashad : It's a great question, Boobalan. First, as you know, the PRV is going for renewal next month. There is on the ballot that is give kids a chance at 5 to extend the whole PRV. We believe if we are -- and that's going to be part of the pre-BLA because we have been acting in a very fast and judicious way. We believe that we will have an extension on this one, but we have to get agreement with the agency at the pre-BLA meeting for this as well.

All right. Thank you team. Congrats on the progress.

Thank you. Our next question is from Ram Selvaraju with H.C. Wainwright.

Thanks so much for taking my questions and congratulations on all the recent progress. I was just wondering if you could confirm specifically how many patients remain to be enrolled in ELPIS II at this juncture. Wa’el Hashad : So that trial, as you know, it is 38 patients. We have enrolled 35. So we're waiting on three more patients. But if there is 1 or 2 more patients are in the hopper and things like that, we may take them and we are not declining them. But the goal is to enroll 3, but we could end up enrolling a couple of more if they happen to be in the hopper and consented.

Okay. So just to clarify, it is possible that you could over enroll the study by 1 or 2 patients if during the process of screening to finish enrollment you wind up having a couple extra. Is that correct? Wa’el Hashad : Correct. Sometimes you have to be -- I don't want to take a chance, Ram, on losing a patient as Nataliya has mentioned in her answer to Boobalan is sometimes you get surprises at the time of randomization and so on. So we keep the hopper or the feeding pools full because I'm interested in finishing the trial and get done with it once and for all. In that process, we may end up finishing one or two more patients, and that would be a good thing, not a bad thing to happen. But we are not delaying it beyond 38 being enrolled. I mean not inception. But if we happen to enroll few more patients, we'll enroll that.

You can confirm, right, that at this juncture, you don't see any issue with reaching full enrollment in the trial based on the current complement of sites that you have up and running. In other words, you would not need to open any new sites in order to complete enrollment. Is that correct? Wa’el Hashad : Absolutely correct.

Okay. Can you just remind us, let us assume that you complete the study in the second quarter or you complete enrollment in the second quarter, when approximately would you expect to report top-line results? Wa’el Hashad : So let's say, I'm just hypothetical here, so I can get. If I finish enrollment in May, I will -- we need 12 months for a study to lock the database and last patient out. And then within three, four weeks after that, we'll have the data announced and everything moving on. So within three weeks after the data base lock, which would happen 12 months from the last patient in.

So just to confirm, that's basically sort of like the summer of 2026 time frame. Is that correct? Wa’el Hashad : Correct.

Okay. Switching with respect to the potential future commercial scenario for Lomecel-B in the HLHS context. Maybe you can give us some sort of frame of reference regarding how the drug might be commercialized in that indication? And what kind of commercial infrastructure would need to be put in place. Because I would expect, given the nature of the epidemiology and how these patients are triaged, you would not really need significant sales and marketing infrastructure, and this is potentially an area in which Longeveron could handle commercialization independently. Is that correct? Wa’el Hashad : You are absolutely correct. Ram. I can tell you right now, the number of treating physicians is about 50 in the United States, is the surgeons who do -- doing this surgery. As you know, we are -- our treatment is adjunct to the surgery. So the surgeons are our target. And actually, more than 70% of these surgeries happen in the centers that we have conducted our clinical trial. So number one, we have a great opportunity that we know all the treating physician in the future because they have participated in the trial. And then the second thing is the 50 -- the number 50 of physician treating does not require a significant infrastructure from a sales organization. I mean it is actually -- at most, you don't need more than two or three sales individuals with a manager. The whole commercial organization can be less than 15 people, including payer, patient services, all of these type of things. So very minimal infrastructure on the commercial organization side, which is one of the beauty of operating in an orphan disease, it's -- you don't have to make a massive investment. So you are absolutely correct in your assumption.

Okay. With respect to Alzheimer's disease, I was wondering if you had, had any recent interactions with non-U.S. regulatory authorities and if there appears to be any differentiated picture with respect to how regulators outside of the U.S. are thinking about potential approvability criteria for a drug like Lomecel-B and if you are exploring the possibility of conducting any clinical exploration of Lomecel-B in Alzheimer's disease outside the U.S. at this time? And if so, what the format and scope of that might take? Wa’el Hashad : Yes. Thank you so much for this great question. So I'll answer the first part and explain what is our intention outside the U.S. So we have not had any interaction with any of the agencies outside the United States, specifically regarding the development path for Alzheimer's disease. So that's the answer to your first question. We are in the process of hiring a full-time regulatory person now that we are heading into the BLA submission next year for this one, and we have a lead candidates. And actually, one of the most important tasks that this individual will do as soon as the full time joined the company, is to have a discussion with both the EMEA, the U.K. MHRA, as well as South Canada, Australia and Japan. Those are the priority international markets that we're going to go after. And that is -- and our plan is to engage and start the discussion regarding the filing of the biological license application in this respective health authorities, but for Lomecel-B in HLHS, that is our top priority. And then once we do that, we'll get into the Alzheimer's disease. Our Alzheimer's disease focus moving on is going to be around partnership. We definitely don't want to dilute our efforts, but we want to focus 100% on partnership globally, U.S. and outside the U.S.

Okay. Great. And one more for me. With respect to the manufacturing revenue that you historically booked in 2024, can you give us some sense of what the perspectives are to potentially either emulate that level of business or grow it in 2025. As an example, I believe that you previously had a client called Secretome privately held company, which successfully raised capital. Not sure whether that is going to be a source of repeat business for you, but just wanted to get a sense of what you expect the level of manufacturing revenue to be in 2025. And if you think it could be the same or higher than what you saw in 2024? Thank you. Wa’el Hashad : Yes. So Ram, that's a great question. We continue to have a very good relationship with Secretome. And actually, we may have some small amount of work in 2025 for them. But -- and I don't know. I mean we're happy if they have any additional needs that come throughout the year, we'll definitely I think we establish a good relationship and expertise between the two companies. So we continue to develop depending on what their needs are. So they are better to speak up about their needs than me speaking it up. Regarding other opportunity, we remain open to other opportunities. I cannot guarantee the same thing. -- because honestly, the other thing that is going on in parallel here is our CMC readiness process, and that is going to require an extensive work on our side. As you know, shifting from a clinical development to a fully commercial CMC requirement is a major step upward. We have recently hired Devin Blass, which we are extremely excited about having him on board. He has been a tremendous addition to our team, making great progress in establishing what I would say is the CMC master plan that ensure that our pre-approval and inspection for the facility, as well as the whole product characterization will meet all the regulatory requirement at the time of the BLA filing. So we’re our full steam ahead on the CMC that will keep us busy, but definitely we’ll stay opportunistic on the CMC – sorry, on the CDMO business. And if there is an opportunity, we’ll definitely use it and deliver revenue for the company.

Thank you very much. Congrats once again on all the progress.

Thank you.

Our next question is from Michael Okunewitch with Maxim Group. Please proceed with your question.

Hi guys. Thank you so much for taking my question today. Congrats on a lot of really good progress here. Wa’el Hashad : Thank you Michael.

I guess just to start off, I wanted to follow-up on one of the previous questions. Specifically in regards to -- you mentioned potential outcomes from that upcoming meetings are really focused on designing the pathway forward and potentially getting something more accelerated and streamlined to approval. So do you consider the results of that upcoming meaning to be somewhat of a gating item for these potential partnering discussions and then especially if you have an accelerated pathway, do you think could really open up these discussions? Wa’el Hashad : Yes. So you are reading my strategy, my friend. So -- as you know, Michael, there is over 140 clinical development program currently in the marketplace in various phases of development from Phase I to Phase II. Many of them are developed by small companies. And many of these programs are all hoping to get a partnership from one of the major players because the development costs when -- as you move toward the finish line Phase III, it becomes extensive both on the clinical development and the CMC front in the hundreds of millions of dollars. So everybody is looking for the same partnership. I really believe we have -- our strategy is very simple. We have good clinical data and clinical outcome that we have demonstrated so far, which we have shared. We also are meeting with the FDA, and hopefully, the FDA agree with our approach and accelerated that also provides an economic opportunity for any partner to see a faster and more economical way to bring that product. And hopefully, those two things, the clinical data, combined with the accelerated path give us some competitive advantage over the other programs being developed in improving our chance of landing this partnership.

Now just EBITDA we increase in support from the FDA for cell therapy programs, in particular around granting these more streamlined path to approval. Do you think that could potentially de-risk this outcome from these upcoming meetings? Wa’el Hashad : I believe -- yes, definitely. I'm cautiously optimistic with your position, but I don't like to make a statement. I'm not in ownership of it. I would like to go through the meeting and hear the confirmation from the FDA with that principle.

So certainly fair. And then just one last one for me, and I'll hop back in the queue. I'd like to see if you could just touch a little bit on your current manufacturing capabilities and then what else is needed on that front to become BLA ready, just given the relatively small size of this market, I wouldn't imagine you would need to scale all that much. Wa’el Hashad : Yes. That's a great thing, Michael. We definitely -- as I said, I'm very, very happy. And I think in the next call, we can bring Devon to join our earnings call and also we'll be in a position where we can answer a lot of more specific questions around CMC and have those. But speaking on his behalf, I would tell you that moving from a clinical development to a fully commercial. It is a very major step up from a ramp-up, and that includes many steps, both at the facility level, as well as the product level as well including the stability studies and all of the final formulation and all of those type of things need to be done. And we have a plan. We have alignment from the FDA, but definitely that's a major work that has to take place. Also, in addition as you know, CMC, a big portion of that is our quality system. They need to all be 100% into the commercialization level. Our supply chain need to be upgraded to the same level and many other areas within the CMC that all need to do this. It is a major focus for us this year. We believe we have a good plan to ramp up these activities. It is going to be the largest portion of our investment this year is in the CMC. As I said, we have an agreement and alignment from the agency, but there is going to be a lot, a lot of work this year, and I'm happy in the future to bring Devon to answer any more specific questions related to CMC.

All right. Thank you so much for taking my questions. Lots of work ahead, but lots of exciting progress as well.

Thank you Michael.

There are no further questions at this time. I would like to hand the floor back over to Wa'el Hashad for any closing comments. A - Wa’el Hashad : Thank you, Paul. And thank you all for attending today's call. We greatly appreciate your interest and support and look forward to updating you on our progress soon. Thank you. Operator, you may end the call now.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Thank you.