Longeveron Inc. (NASDAQ:LGVN), a clinical stage biotechnology company developing regenerative medicines, today announced that the Company's CEO, Wa'el Hashad, issued the following letter to Longeveron shareholders.
Dear Shareholders,
I am delighted to mark my first anniversary as CEO of Longeveron this month. It has been an extraordinary journey thus far, and I am immensely grateful for the opportunity to lead such a pioneering organization dedicated to transforming healthcare through innovations in regenerative medicine.
Upon joining Longeveron, I set out with a clear objective: to develop a strategic roadmap building on the strength of our science while acknowledging the realities of the capital market environment. Longeveron's foundation in cutting-edge cellular therapy research, coupled with the promise of Lomecel-BTM, positions us to profoundly impact patients' lives for the better by addressing numerous unmet medical needs with U.S. market potential opportunities of up to approximately $10-$18 billion.
Today, I am excited to update you on our overall strategy, business objectives, approach to capital allocation, and 2024 key priorities and goals.
Strategic Overview:
Our focus remains steadfast on raising the funds necessary to continue our operations and delivering transformative solutions to patients and creating sustainable value for our shareholders.
Our lead investigational product is Lomecel-B™, which is derived from culture-expanded medicinal signaling cells (MSCs) that are sourced from bone marrow of young healthy adult donors. We believe that by using the same cells that promote tissue repair, organ maintenance, and immune system function, we can develop safe and effective therapies for some of the most difficult diseases and conditions.
In 2024, we are focusing our efforts on two of our most promising programs: Hypoplastic Left Heart Syndrome (HLHS); and Alzheimer's Disease.
HLHS:
HLHS is a rare pediatric disease affecting approximately 1000 live births per year in the US. The results of our successful Phase 1 trial showed 100% transplant free survival of all subjects at up to 5 years of age. Based on historical data, approximately 20% of patients would have been expected to receive a heart transplant or have died by age five. In response to our positive initial data, the US Food and Drug Administration (FDA) awarded our HLHS program with three distinct and important designations: Rare Pediatric Disease designation, Orphan Drug designation, and Fast Track designation, each of which offer benefits to our development and regulatory processes.
At present, we have completed approximately 60% of the enrollment of our randomized Phase 2 clinical trial that builds upon our successful Phase 1 trial. Our Phase 2 trial will compare outcomes of babies treated with the standard of care (SOC) plus Lomecel-BTM vs. the SOC alone. We expect this trial to finish enrollment in 2024 with data read-out at the end of 2025. We are laser focused on the effective execution of this program and we will be communicating with the FDA regarding the potential to use this trial as a pivotal trial for accelerated or final approval of Lomecel-BTM for HLHS.
Alzheimer's Disease:
In our Alzheimer's Disease (AD) program, we recently completed our Phase 2a CLEAR-MIND trial with 49 patients that builds upon our successful Phase 1 trial. The results of our CLEAR MIND trial provided encouraging signals of efficacy that clearly warrant further investigation.
As such, we are aggressively pursuing partnerships and funding opportunities to move this exciting program forward. Given the massive unmet need presented by AD, large resources are potentially available from federal and private funding sources. We will be heavily focused on seeking partnership opportunities and/or non-dilutive funding for this program.
Our Core Business Objectives:
- Focus on HLHS as the Main Value Driver:
- We endeavored to strategically position our Phase 2 study for HLHS as a pivotal head-to-head study, with potential for accelerated or full FDA approval, reflecting our commitment to expedite treatment access.
- We plan to leverage existing relationships with several treating surgeons in order to maximize our commercialization planning and potential future launch in HLHS.
- Recognizing substantial revenue potential from worldwide commercialization, we anticipate capitalizing on recent rare disease pricing trends and the unique aspects of our treatment.
- With in-house manufacturing capacity adequate to meet anticipated global supply demands, we expect that scale-up expenses for commercialization of this indication will be substantially reduced.
- Possession of a Rare Pediatric Disease priority review voucher associated with HLHS upon successful FDA approval could have significant monetary value and further enhance our product's value proposition upon approval.
- HLHS Commercialization and BLA Readiness:
- In 2024, there will be increased efforts and focus on organizational readiness for potential BLA filing for HLHS in 2026. These efforts are expected to include strengthening processes, conducting mock audits, and enhancing regulatory interactions which are paramount to expedite BLA readiness and ensure compliance.
- Strategic Collaborations:
- While Alzheimer's Disease programs hold immense potential, their larger-scale studies and commercialization requirements due to the large size of the affected population necessitate significant investment, prompting our focus on potential strategic partnerships with biotech/pharmaceutical companies or pursuit of grants and other non-dilutive funding sources.
- Our openness to collaborations with public and private organizations aligns with our mission of advancing therapies across various therapeutic areas.
- Leveraging Science and Manufacturing Capabilities:
- With our significant manufacturing capabilities and expertise, we intend to capitalize on these assets to provide greater strategic diversification and generate additional revenue by further soliciting and engaging in contract development and manufacturing services (CDMO) for third parties.
- We plan to continue investment in new products and technologies supportive of innovation and potency assay development and fostering long-term competitiveness and product differentiation.
- Efficient Resource Management:
- We plan to continue pursuing strategic advancement as much as possible without increasing headcount in order to maximize efficiency and alignment with strategic priorities.
- Our termination of the Japan Aging-related Frailty study reallocates resources to our priority programs in order to optimize resource utilization and ensure strategic focus.
These priorities underscore our commitment to delivering value to patients and shareholders alike, and to continue our pursuit of sustainable growth and impact in the healthcare landscape.
Financial Position and Capital Strategy:
Longeveron is working diligently to effectively manage expenses and reduce ongoing costs through strategic initiatives such as terminating the Aging-related Frailty study in Japan, making related staff reductions, and leveraging revenue-generating activities like contract development and manufacturing services (CDMO). However, there is a critical need for additional capital to achieve our business strategy and objectives. The development of pharmaceutical drugs is capital intensive and our current cash resources are insufficient to fund our planned operations or development plans beyond the beginning of the second quarter of 2024. Our ability to continue to execute the plans discussed above is contingent upon the Company obtaining financing, and unless the Company obtains sufficient financing, the Company will have to cut back on their plans discussed in this letter.
To help facilitate securing additional capital, we recently effected a reverse stock split and filed a registration statement with the Securities and Exchange Commission.
The following principles underscore our commitment to responsible financial stewardship:
- Long Term Investor Engagement: We are seeking stable investors committed to our work and strategy, fostering long-term partnerships aligned with our vision.
- Debt Financing Prudence: We are presently avoiding debt financing to minimize financial risk and optimize capital structure.
- Priority-Aligned Capital Allocation: We are working diligently to be prudent stewards of cash and allocating it to the organization's top priorities to effectuate optimal resource utilization and alignment with strategic objectives.
2024 Goals and Priorities
Our goals for 2024 center on executing our business objectives with speed, efficiency, and quality. The primary operational goal is to fully enroll our ELPIS II Phase 2 study for HLHS by the end of the year. To achieve this goal, we are implementing the following strategies:
- Site Optimization: We plan to close non-enrolling sites and add new high-potential sites to accelerate enrollment, leveraging, whenever possible, prestigious academic institutions in this field.
- Investigator Meeting: We intend to conduct an investigator meeting in May with the goal of expediting onboarding of new sites and reenergizing existing sites to meet study completion targets.
- Advocacy Group Partnership: We expect to further partner with advocacy groups to raise awareness about our clinical program among families of prospective patients, fostering community engagement and support.
Additionally, we plan to meet with the FDA to ensure alignment on our regulatory path forward. We also anticipate completion of the 5-year follow-up from our Phase 1 HLHS study by the second half of 2024 which, if we continue to have similar results, may allow us to announce additional favorable results on continued transplant-free survival. Furthermore, we plan to present data from our Phase 2a CLEAR-MIND Study in Mild Alzheimer's Disease patients at various scientific conferences and submit our findings for publication.
Conclusion
Longeveron has achieved significant operational and strategic advancements over the past 12 months, delivering promising results for conditions that profoundly impact patients and caregivers. With Lomecel-BTM's documented safety profile in clinical trials in vulnerable populations and its effects assessed in nearly 500 patients across various indications, we are optimistic about the potential for our drug candidate. We remain committed to executing against our strategic and operational goals with speed, quality, and efficiency. By leveraging our available resources wisely and improving our balance sheet, we are focused on bringing Lomecel-BTM to market to address the needs of patients suffering from these devastating conditions.
We deeply appreciate the support of our stakeholders over the years and look forward to continued collaboration and progress in the future.
Sincerely,
Wa'el Hashad
CEO, Longeveron