Zacks Small Cap Research – OTC Markets Hosts Virtual Investor Presentation with Wa’el Hashad, CEO of Longeveron, and Brad Sorensen, Senior Analyst at Zacks SCR – Technologist

NASDAQ:LGVN

John: Hello and welcome to Virtual Investor Conferences. My name is John Viglotti. On behalf of OTC Markets as well as our co-host, Zach Small Cap Research, we’re very pleased you joined us for our next presentation from Longeveron. This session will be moderated by Brad Sorensen. He’s the senior equity research analyst with Zach Small Cap Research. Please note, you can submit questions for Longeveron in the box to the left of the slides. At this point, I’m very pleased to welcome Wa’el Hashad. He’s the Chief Executive Officer of Longeveron, which trades on Nasdaq under the symbol LGVN. Welcome, Wa’el and Brad.

WH: Thank you.

BS: Thank you. Great to be here. I’m going to give full disclosure to investors listening to this that I have been covering Longeveron for about four years, and I’m excited to be bringing it to other investors because I love the Longeveron story. And, Wa’el, you became CEO, what was it, a year and a half ago now?

WH: Fifteen months ago. Yes. Good memory.

BS: I’ve written about this if you’ve read our stuff, but it’s just been quite a shift in Longeveron, the focus, the renewed goal setting that they have, the cost cuts they’ve made, and just the improved efficiency that they have. I want Wa’el to be able to talk about it and start off by giving us an overview of Longeveron, what they’re involved with, and what their vision is. It could go on for 45 minutes because there’s a long story with Longeveron. So I don’t want you to go that far, but tell us a kind of overview of Longeveron, and then we’ll get into some questions and answers.

WH: Thank you, Brad, for having me today. And John, yes, of course, I always love to tell the Longeveron story, and I know it can take a little bit of a long time, but I’ll try to be succinct here and give you the elevator speech about the story. Longeveron was established about ten years ago by a research scientist physician. His name is Dr. Joshua Hare. He is a cardiologist and really got interested in his basic research while he was doing that at Johns Hopkins University in how he could help patients who suffer from heart failure and heart attacks to recover some of their heart muscles. That led him to think about stem cells and the role that they can play in helping these patients recover. From there, he continued to advance his research and broaden his horizons beyond heart failure and MI. He later moved to the University of Miami Miller School of Medicine.

WH: From this, he spun off the technology and established Longeveron, as I said ten years ago, with a focus initially on longevity-related illnesses such as aging-related frailty and Alzheimer’s disease. Then his passion for cardiovascular continued to take over, and he could not resist bringing another rare, but unfortunately with a significant unmet need, a congenital heart disease known as hypoplastic left heart syndrome, or HLHS. They continue to do very good work. They also established a manufacturing facility very close to the University of Miami. We have eight clean rooms in this facility where we produce and harvest the cells that we use in our clinical program. They continued to advance the program. They had a very good and successful phase one across the three indications that I mentioned: Aging-related frailty, Alzheimer’s disease, and hypoplastic left heart syndrome. In the future, I’m going to call it HLHS to simplify things.

WH: They then moved into Phases 2B and A for some of these indications. So, on aging-related frailty, they concluded Phase 2B. In Alzheimer’s disease, they concluded Phase 2A. In HLHS, we are currently in the middle of Phase 2B. So, very good progress on the work that they have done in the past ten years. In 2021, the company went public. As you said, I joined them as the CEO about a year and a quarter ago.

WH: When I joined the company, my top priority was how can we continue to develop our programs but get to commercialization or launch our first program as soon as possible because that’s when you start to get a good return on investment for the shareholders. Of course, you bring the dream for the patient to reality as well by making these drugs available. When I evaluated the three programs, I found that the HLHS definitely had the highest possibility of getting into the market as the first opportunity. It may not bring billions of dollars, but it definitely has a significant opportunity to bring hundreds of millions of dollars from a revenue standpoint. If you look at the global market, not just the US market, it could even reach the low single-digit billions of dollars.

WH: That made it the top priority, and that’s where the company really focused its effort. We also concluded our Phase 2A trial on Alzheimer’s disease last year. Surprisingly, and I would say surprisingly, because I’ve been associated with Alzheimer’s disease for a very long time throughout my career in the industry, we really had a very positive signal coming out of that trial, knowing that this is a very tough area. Even when I joined the company, I was very skeptical, but the data was very promising. When the data comes out, we all have our own biases. But the first thing that I did was reach out to all my contacts and the thought leadership in the area of Alzheimer’s disease, got them under confidentiality, reviewed the data, and everybody agreed with the conclusion that there is a very good, promising future for this product in Alzheimer’s disease.

WH: We continue to do that and are looking for ways to develop. As I said, we are currently in the mid-stage of HLHS, and hopefully, we’ll finish enrollment in that trial by the end of this year; we’ll wait for one year to get the readout, and if we are successful, our intention is to plan to file a BLA in mid-’26. We’re also planning to meet with the FDA later this year to confirm that plan and ensure that the investors are on the same page, not just with what we think but also with what the FDA thinks. That’s where we are today. A lot of good things are happening at Longeveron, and hopefully, we’ll continue to do that.

BS: I agree with that. Thank you for that overview. I have so many questions now, but I think you mentioned it. We talk a lot about the financials, which is, of course, important, but can you tell the investors a bit about HLHS and how it impacts families? Also, what are the initial, encouraging results we’ve seen from Lomecel-B for HLHS, and what difference can it make in the lives of these people and their children who are suffering from this?

WH: Sure. HLHS is a congenital heart disease. In the US, there are about 1000 babies born with that condition every year. Worldwide, there are about between 8 to 10,000 babies born with this condition every year. The condition is characterized by these kids being born without a fully developed left ventricle. Today, surgical procedures or operations are the only options available to these kids. They have made a huge impact on the survival of these children from birth, but still, the survival is not where it needs to be. 50% to 60% of these children survive to adolescence, and even 80% of them survive to five years of age with the surgeries. Hence came the thought about whether there is a way to improve on this. As I mentioned, we have concluded Phase 1 on all of our programs. In Phase 1 with HLHS, we treated ten babies by giving them our cells injected directly into the heart during the second procedure or second operation as an intracardiac injection. Eight of them actually get injected into the right ventricle. We followed them on two parameters: What we call the right ventricular ejection fraction, which measures the amount of blood being pumped by the heart.

WH: The second thing, most importantly, is survival. We have followed these ten kids for over five years. In August of this year, all of them would have concluded. But we presented that to the American Heart Association last year because several of these kids have already reached the five-year mark. All I can report to you is that all of these children have survived after getting our cells, which is 100% survival and no need for a transplant as well. I know the number sounds very small, but it’s very promising, considering that I mentioned that the survival rate is usually about 80% after five years. This is documented in the largest controlled trial done by the NIH. It’s called the SVR trial or the Single Ventricle trial data set. That gave us a lot of confidence. This data has also been published in the European Society of Cardiology Journal. And as I mentioned, it was presented last year at the American Heart Association in Philadelphia.

WH: One last thing I want to note here as well about the positive prospects of what we expect to see here is that the FDA recognized this data and granted this program three important designations. Orphan drug disease designation, of course, which you’d expect with a rare disease like this; rare pediatric disease designation with a priority review voucher that would be granted upon approval PRV. Then the last one is a fast-track designation. We continued our development program. We are currently conducting phase 2b. It’s a head-to-head pivotal trial.

WH: It is important as well. Who is interested in participating in that clinical program is indicative of our work. I can report to you, Brad, that we have the top academic institutions in the country doing this trial. Mass General, Boston Children’s Hospital, Emory University Children’s Hospital of Atlanta, Laurier Children’s Hospital, Northwestern Children’s Hospital of Los Angeles, which is USC, University of Utah, and University of Texas, Columbia University. Many top institutions are doing our trial, which is a testament to the advancement we’re trying to make here for these patients. We have currently enrolled about 26 patients and continue to make good advancements. The goal is to, hopefully, finish enrollment by the end of this year.

BS: Yeah, and let’s build on that a little so investors know the timing and the scope involved with this. When there are a thousand, it is a ton if one of them is yours. But when you’re trying to get FDA approval and do testing, a thousand isn’t very many because they usually require at least a thousand subjects to be tested. You said 26 so far. How many are you looking for, and when is the target for having those signed up? Like you said, you’re working with some great institutions. I’m sure there’s a lot of enthusiasm out there, and we don’t want other children to have this. But it’s going to happen. So, how many more children are you looking to sign up for this?

WH: The trial has a goal to enroll 38 patients. I completely agree with you. On typical clinical trials, as you know, you go with hundreds and thousands of patients. The one nice thing about rare diseases is that the FDA recognizes that this is probably impossible. They have much lower expectations with rare diseases than you have seen. For example, Sarepta got approval with 14 patients on their rare disease products. Many other companies have got approval in even lower numbers than the 38 for this one. Again, we’re not taking any chances. We’re planning to meet with the FDA. They know about the trial. Of course, we discussed it before we started it, but we also want to confirm our plans with the FDA later this year.

BS: Yeah, and that’s two good points. You are working closely with the FDA, which is important. I cover biotech. I’ve had problems with the FDA and how they do things sometimes. Not that it matters, but they are much more responsive in the orphan drug world than they used to be. I do appreciate that because this is desperately needed by patients, and getting it out there. I think this is why we’ll go to the financials, and then we’ll return to Lomecel-B quickly. I want to go to the financials because this is where we’re focusing on. I think that’s one reason you focused on this: you’re in the clinical stages. You can only have so many coals in the fire in order to fund those things. This is, like you said, your top prospect going forward. What does your financial situation look like now? You just had a fundraise to exercise some warrants. I saw that. How do you stand now? You just brought another revenue source online, and I think you want to address that here because that’s what investors always wonder about. Great product. Are we going to have funding to complete it?

WH: Sure. I’ll address the two points. First, if everything goes as planned and the FDA confirms the agreement with our proposed plan later this year, the goal is to file for a BLA around mid-’26. Because we are the first in this indication, we will have a priority review or accelerated review and probably get to the market by sometime Q1 or Q2, at the latest in ’27. That’s kind of the timeline. As I mentioned, we have a rare pediatric disease designation with a priority review voucher. The first source of revenue that can happen in 2027 is $100 million, which is the average price for a PRV that is sold in the market. That’s even before we start to sell one single unit of this one. If you look at the rare disease products, Brad, and the recent launches, they range from two to $4 million per patient per year. Remember, our product is administered in one single time. There is no annual cost or anything.

WH: Even if we go on the lower side, even a million dollars or less on a charge for this product, our risk-adjusted NPV is in the $300 to $800 million range. It’s a very nice, lucrative revenue that can come from this one. We anticipate that between now and 2026 when we file the BLA, we’re going to need about another $25 to $30 million. There will be another need to raise some capital in the future. We believe we have enough funds to take us to probably the second quarter of 2025.

WH: As you mentioned, we just raised the capital and haven’t done all the work yet. But approximately, it would be around that number. Then, in terms of the other sources of revenue, of course, investors want to know that not everything is going to come through dilution. Although it is the nature of the business, unfortunately. Hopefully, after we launch the product, we will start to get a very good return on investment.

WH: As I mentioned, we have eight clean rooms of our manufacturing. I have my own manufacturing staff that is very competent and high-quality. One of the things that we want to do here at Longeveron is leverage those eight clean rooms. Of course, I need the eight clean rooms once I go to manufacturing to commercialization with HLHS; we’re going to need this to produce the cells worldwide. But between now and that time, these rooms are not fully utilized. So the idea here is we have the capability both with our staff and with our clean rooms. The goal was to see how we could leverage this to bring more sources of revenue. We started this year. We signed the first agreement with a company called Secretome, and we are harvesting their cells in our labs. We also brought in someone from business development to actively pursue additional companies that could potentially bring another four to $5 million of revenue.

WH: The nice thing is that by having my manufacturing team work on different technologies. I’m strengthening and building capabilities within my organization. In my view, great companies are made of great people, not just walls and buildings. I think those are the benefits to investors and the company, both short-term and long-term.

BS: Yeah, I agree, and I was glad to see you guys do that. I think that’s a great opportunity. I think investors understand if you’re in a clinical stage, there will be dilution occasionally. That’s just part of the game. It’s always interesting writing about these because you hope the finances come through, but you’re also impacting thousands of people’s lives if you’re successful. There’s a lot riding on this, and that’s understood with the clinical trials. There’s a lot that I get excited about Longeveron. I want to go back to the Alzheimer’s research really quickly because I’ve seen the research, and I’m certainly not a doctor, but I’ve had people who are doctors explain it in depth to me. You can go to the Longeveron website and see it. It is pretty impressive and encouraging, and that is a plague on society. I live in Florida. It’s a big problem down here. At a high level, I’d like you to address what you have seen from Lomecel-B, its potential impact, and the test results that encourage you.

BS: Like I said, we don’t need to go into detail. Are you looking for partners? Are you waiting until you get more revenue to pursue it really aggressively? Let investors know where you stand with that. I know that perked up people’s ears because that’s a huge problem in the United States.

WH: There are three parts to your question. I’ll start by the data. Then we talk about the path forward and what we plan to do. So, first, regarding the data, as I mentioned, the trial was done as a phase 2A. We tested three different dosing regimens and strengths. A low single dose, a low multiple dose, and a high multiple dose. The trial was done with 48 patients, all of whom were versus placebo. The bottom line is this: the primary endpoint was safety. From a safety standpoint, I can confirm that for you. We have seen it now in more than 500 patients across all the indications. They are very safe drugs. We did not have any related serious adverse events. We did not have any deaths in the trial, which was also interesting because these patients had an average age of 75 years. You would expect that over one year, some of them would die naturally, but we did not have a single death. We also did not have a single ARIA, which is the imaging-related abnormality that has been a big issue for a lot of the monoclonal antibodies. So, from a safety standpoint, I can confirm that the drug is fairly safe.

WH: Then the second thing is regarding the efficacy. One of the things that we really wanted was because we believe the mechanism of action is anti-inflammatory, pro-regenerative, and pro-vascular. If we are really an anti-inflammatory, we believe that the best way to test that is to do an MRI and see the impact of the inflammation levels using MRI. MRI is a very precise machine; as you know, it’s all measured by millimeters. We did it with Clarion, which is a central lab that all the major companies, the Lilly and the Biogen, have used, and we did this as a centralized reading. The part that we’re very excited about is that we’ve seen less shrinkage of the total brain and less shrinkage of the hippocampal part of the brain compared to placebo. This means that we slow the rate of shrinkage that you see on both sides. That was highly statistically significant.

WH: That’s what got us really excited. We’re working with some of the top thought leaders around MRI and Alzheimer’s. They reviewed the data and confirmed that this is very exciting. Of course, everybody, including myself, will tell you we definitely don’t have a final answer. But, we have enough data to say that we need to continue advancing our work and potentially bring a solution that the patients may benefit from with this devastating illness that continues to grow exponentially as people live longer and age as life expectancy increases. That’s what is exciting. The data has been accepted at the Alzheimer’s Association International Conference, the largest Alzheimer’s conference. It is next month, and we are chosen to be the featured presentation on July 28, the first day of the conference. Longeveron has also been asked to chair the session. I think that’s another testament to the excitement around the prospects of this program. Advancing this program will require a significant investment. But the beauty of rare diseases is that the investment level is manageable.

WH: As I mentioned, I need $25 to $30 million to reach the finish line with HLHS. The next stage for Alzheimer’s, even phase 2B, would require $50 million or more. That’s a big, large investment. We are pursuing two paths: public and private funding. Many organizations have significant grant funds on both the public and private sides. We have applied for several grants, hoping one or more will be approved. The other path is partnering with biotech or pharmaceutical companies that see the value in our data and are willing to invest. Our goal is not just to secure funding but to advance the research to the next level and give it a chance to live. Our team has been actively pursuing these paths and making good progress, but we have not secured anything definitive yet.

BS: I’m glad to hear you say that because, as I followed the company, I understood the decision and agreed with it. I think it’s important to focus. However, I was very excited about the Alzheimer’s research and hoped we would keep it going because I want to see where it leads, too. So, I’m glad to hear you say that. We could talk about more, but we’re running low on time here. The one thing I want to get across is that this Lomecel-B has proven to be a very intriguing product that could have multiple uses out there. I think investors should look at it and the opportunities that Longeveron has going forward because I think they’re multiple. I want to give you a chance. You have about a minute to wrap up and leave investors with one final thought that you want them to have.

WH: Yeah, I truly believe Longeveron is a hidden gem. We’ve accomplished a lot within the company, and I’m not just saying that as the CEO. From my past experience, we are a mid-clinical stage company in phase 2 across all our programs. We have de-risked much of our work and made advancements on multiple fronts. We’ve seen positive outcomes across all three indications of the product. Our safety database now includes more than 500 patients, confirming the drug’s safety. It’s an allogeneic stem cell therapy, off the shelf, so patients don’t need to do anything special. It can be applied to anyone. We have our own manufacturing facility and have been very mindful of our spending and investments. We’ve also sought non-dilutive funding and found creative ways to optimize our resources. We have milestones coming up, including filing a BLA in 2026, which may seem far off but is within reach.

WH: But in the life of a drug development company, sometimes these things take ten years. Hopefully, we are in the home stretch of getting things to the finish line here. So, I’m really excited about all the work that we’re doing here. I think this is a great opportunity for investors to think about Longeveron and the work that we’re doing and decide whether or not they want to come in at one point in time in the near future before it’s too late.

BS: Yeah, I agree, and investors should think about that. If you read my research, you’ll know that I appreciate the cost consciousness that Wa’el has shown because a lot of clinical-stage companies don’t do that. If you have questions, please feel free to contact the company. Ask questions in the thing, I will get to the company, and they will respond to you because they do want to be responsive to investors. I want to thank Wa’el and everybody else for coming. I really appreciate your time.

WH: Thank you very much, Brad, and I really enjoyed the discussion and thanks to John and the team as well. Thank you for having me.

John: Thank you.

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