Longeveron Inc. (NASDAQ:LGVN) 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 Mesenchymal Stem Cell (MSC) formulation sourced from the bone marrow of young, healthy adult donors. Lomecel-B™ has multiple potential mechanisms of action that promote tissue repair and healing with broad potential applications across a spectrum of disease areas.

Financials

Longeveron has incurred recurring losses from operations since its inception, including a net loss of $4.1 million and $4.6 million for the three months ended March 31, 2024 and 2023, respectively. For the full year 2023, the company reported an annual net loss of $21.4 million, annual revenue of $0.7 million, annual operating cash flow of -$19.0 million, and annual free cash flow of -$19.7 million.

In the first quarter of 2024, Longeveron generated revenues of $0.5 million, up 96% from $0.3 million in the same period of 2023. This increase was mainly due to higher participant demand for the company's Frailty and Cognitive Impairment registry trial in the Bahamas. Contract manufacturing revenue for the first quarter of 2024 was less than $0.1 million.

Total operating expenses for the first quarter of 2024 declined 8% year-over-year, with general and administrative expenses increasing to $2.2 million and research and development expenses decreasing to $2.2 million. The decrease in R&D expenses was primarily due to reduced expenses related to the Alzheimer's disease program and the discontinuation of the aging-related Frailty clinical trial in Japan.

As of March 31, 2024, Longeveron had cash and cash equivalents of $1.8 million and marketable securities of $0.4 million. In April 2024, the company completed two capital raises, resulting in gross proceeds of $11.4 million. Longeveron believes that the existing cash and cash equivalents, combined with the recent capital raises, will enable it to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2024.

Business Overview

Longeveron's mission is to advance Lomecel-B™ and other cell-based product candidates into pivotal Phase 3 trials, with the goal of achieving regulatory approvals, subsequent commercialization, and broad use by the healthcare community. The company currently has three pipeline indications: Hypoplastic Left Heart Syndrome (HLHS), Alzheimer's disease (AD), and Aging-related Frailty.

HLHS Program

Longeveron's HLHS program is focused on the potential clinical benefits of Lomecel-B™ as an adjunct therapeutic to standard-of-care HLHS surgery. HLHS is a rare and devastating congenital heart defect in which the left ventricle is severely underdeveloped. The company has completed a Phase 1 open-label study (ELPIS I) that supported the safety and tolerability of Lomecel-B™ for HLHS, when directly injected into the functional right ventricle during the second-stage standard-of-care surgery. Preliminary data revealed that several indices of right ventricular function show suggestions of either improvement or prevention of deterioration over one year following surgery. The ELPIS I trial showed 100% survival in children up to 5 years of age after receiving Lomecel-B™, compared to a 20% mortality rate observed from historical control data.

Based on these findings, the U.S. Food and Drug Administration (FDA) granted Lomecel-B™ both Rare Pediatric Disease (RPD) Designation and Orphan Drug Designation (ODD) for the treatment of infants with HLHS. Longeveron is currently conducting a controlled Phase 2b trial (ELPIS II) to compare the effects of Lomecel-B™ as an adjunct therapeutic versus standard-of-care (HLHS surgery alone). The company hopes that a positive outcome could add to the clinical data suggesting the functional and clinical benefit of Lomecel-B™ as part of standard-of-care treatment in HLHS patients.

Alzheimer's Disease Program

In September 2023, Longeveron completed its Phase 2a AD clinical trial, known as the CLEAR MIND trial. This trial enrolled patients with mild Alzheimer's disease and was designed as a randomized, double-blind, placebo-controlled study across ten U.S. centers. The study demonstrated positive results, with all Lomecel-B™ treatment groups meeting the safety primary endpoint and showing slowing/prevention of disease worsening relative to placebo. There were statistically significant improvements in the secondary efficacy endpoint, composite Alzheimer's disease score (CADS), for both the low-dose Lomecel-B™ group and the pooled treatment groups compared to placebo. Additionally, a statistically significant improvement versus placebo was observed in the Montreal cognitive assessment (MoCA) and in the activity of daily living observed by a caregiver and measured by Alzheimer's Disease Cooperative Study Activities of Daily Living (ADCS-ADL).

The results of the CLEAR MIND trial have been accepted for oral presentation in the Featured Research Session at the 2024 Alzheimer's Association International Conference (AAIC) to be held in July 2024. Longeveron plans to meet with the FDA to review future clinical and regulatory strategy for the Alzheimer's program and is actively pursuing a partnership to propel this initiative forward.

Aging-related Frailty Program

Improvement of the quality of life for the aging population is one of the strategic directions of the company. Longeveron is using Lomecel-B™ in registry trials in The Bahamas as part of the real-world data generation for the aging population. The company has discontinued its clinical trial in Japan to evaluate Lomecel-B™ for Aging-related Frailty, but will continue to enroll patients on the Frailty and Cognitive Impairment registry trials in The Bahamas and plans to also launch an Osteoarthritis registry trial.

Manufacturing Capabilities

Longeveron operates a current good manufacturing practice (cGMP)-compliant manufacturing facility and produces its own product candidates for testing. The company continues to improve and expand its capabilities with the goal of achieving cost-effective manufacturing that may potentially satisfy future commercial demand for potential Lomecel-B™ commercialization. Additionally, Longeveron plans to expand its contract manufacturing operations as part of its overall resource optimization strategy, which the company believes has the potential to generate approximately $4 million to $5 million in annual revenue once fully operational.

Liquidity

Longeveron has financed its operations primarily through its IPO, public and privately placed equity financings, grant awards, and fees generated from the Bahamas Registry Trial and contract manufacturing services. As of March 31, 2024, the company had cash and cash equivalents of $1.8 million and marketable securities of $0.4 million.

In April 2024, Longeveron completed two capital raises, resulting in gross proceeds of $11.4 million. The company believes that the existing cash and cash equivalents, combined with the recent capital raises, will enable it to fund its operating expenses and capital expenditure requirements into the fourth quarter of 2024.

Risks and Challenges

Longeveron faces several risks and challenges, including the need to continue advancing its clinical programs, obtaining regulatory approvals, and securing additional funding to support its operations. The company's future success is dependent on the successful development, approval, and commercialization of its product candidates, which may be affected by various factors, such as competition, intellectual property protection, and the ability to manufacture its products at scale.

Outlook

Longeveron believes 2024 has the potential to be a transformational year for the company, with multiple upcoming important catalysts. The primary focus is on completing enrollment in the ELPIS II trial for HLHS and meeting with the FDA to discuss the development strategy and potential approval pathway. Additionally, the company plans to meet with the FDA to review the future clinical and regulatory strategy for the Alzheimer's disease program and is actively pursuing a partnership to propel this initiative forward.

Conclusion

Longeveron is a regenerative medicine company with a promising pipeline of cellular therapies targeting unmet medical needs in HLHS, Alzheimer's disease, and Aging-related Frailty. The company's lead product candidate, Lomecel-B™, has demonstrated positive initial results across multiple clinical trials, and Longeveron is well-positioned to advance its programs and potentially bring new therapeutic options to patients. With a focus on optimizing resources, expanding manufacturing capabilities, and securing additional funding, Longeveron is poised to capitalize on the significant market opportunities in its target indications.