Prepared remarks
Good day, and welcome to the Longeveron's Second Quarter Financial Results Conference Call. You may press *2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Please be advised that today's conference is being recorded. I would now like to hand the call over to Derek Cole of Investor Relations Advisory Solutions. Please go ahead, sir.
Thank you, Rochelle. Good afternoon, everyone, and thank you for joining us today to review Longeveron's second quarter financial results and business update. After the U.S. markets closed today, we issued a press release with financial results for the second quarter which can be found under the Investors section of the Longeveron website. On the call today are Stephen H. Willard, Chief Executive Officer; Dr. Joshua Hare, co-founder, Chief Science Officer, and Executive Chairman of the Board; Dr. Nataliya Agafonova, Chief Medical Officer; Devin Blass, Chief Technology Officer; and Marie Washburn, Chief Financial Officer. 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 will open the call to questions from covering analysts. With that, let me hand the call over to Stephen H. Willard, Chief Executive Officer. Steve?
Thank you, Derek, and thank you all for joining us today. This is an incredibly important and exciting time for the company. Longeveron is approaching a series of potentially transformative milestones across our four stem cell therapy development programs that have the potential to redefine the trajectory of our business. As a reminder, we are developing Laromestrocel in four indications with high unmet medical needs: hypoplastic left heart syndrome, Alzheimer's disease, pediatric dilated cardiomyopathy, and aging-related frailty. We have focused our development activities to prioritize our most important near-term catalyst, the data readout from ELPIS II, our Phase 2b clinical trial evaluating Laromestrocel in HLHS. We expect to report that data readout in mid-September. Our approach to stem cell therapy development has garnered external recognition and validation, with encouraging data from our clinical trials having been published in Nature Medicine and Cell Stem Cell. Additionally, as you hopefully saw in our announcement yesterday, published clinical trial results which indicate Laromestrocel increases six-minute walk distance in patients with aging-related frailty were the basis for our selection as a finalist for the XPRIZE HealthSpan competition. XPRIZE HealthSpan is a seven-year, $101 million global competition to revolutionize the way we approach human aging. We are extremely humbled and appreciative to have our stem cell therapy, Laromestrocel, recognized in this manner. We believe that we are the only publicly traded company to receive this honor. XPRIZE team applications were rigorously evaluated for scientific merit and clinical readiness to identify the best, most feasible, and safe approaches to increase human health span. The Milestone 2 awardees, out of more than 600 applicants across 58 countries, were selected as finalist awardees. The XPRIZE criteria were that finalist awardees must present a single or combination therapeutic approach that demonstrates feasibility and potential to restore or preserve muscular, cognitive, and immune function lost to age-related degradation by at least 10 years with the ambitious goal of 20 years, and deliver their therapy in one year or less in adults aged 50 to 90 who are free of major or life-threatening disease and disability. The top Milestone 2 award-winning teams each received $1 million to advance their therapeutic approach into the final phase of the competition where teams will conduct coordinated clinical trials through 2029. The grand prize will award up to $81 million to the winning team. We look forward to the next chapter of the competition as we continue to develop our stem cell therapy that we believe has the potential to have a significant impact for patients and their families and extend healthy life. We believe the strength of our historical clinical data, external validation of our programs, and, hopefully, the ELPIS II data provide Longeveron with ideal timing to explore potential development and commercialization partnerships. We believe that leveraging the commercial infrastructure, capital resources, and global reach of established pharmaceutical partners represents the most efficient pathway to unlock the full value of our assets. It is a very exciting time for Laromestrocel, the patients we serve long-term, and our shareholders. With that, I will turn the call over to Dr. Nataliya Agafonova, our Chief Medical Officer, to touch on our clinical development programs.
Thank you, Steve. Good afternoon, everyone. As Steve mentioned, our HLHS program is the primary focus for us. The topline results from the ELPIS II trial are anticipated over the next month. We look forward to sharing those results when they are available. ELPIS II is evaluating Laromestrocel as a potential adjunct treatment for hypoplastic left heart syndrome, or HLHS. HLHS is a rare pediatric congenital heart birth defect in which the left ventricle, one of the pumping chambers of the heart, is either severely underdeveloped or missing. We agreed with the FDA that only the most objective measures, including all-cause mortality, cardiac transplant-free survival, the event of cardiac transplantation, and well-defined measures of adverse cardiac events, could be informative of efficacy in ELPIS II. We have all of these measures in ELPIS II along with some additional key measures to support an efficacy determination. We are also continuing planning and preparation this year for a potential initiation in three to four months of a Phase 2 clinical trial in pediatric dilated cardiomyopathy, or PDCM. This is a rare pediatric cardiovascular disease in which the muscle in one or more of the heart chambers becomes enlarged or stretched, or dilated, with nearly 40% of children with PDCM requiring a heart transplant or dying within two years of diagnosis. Our Investigational New Drug (IND) application for Laromestrocel for potential treatment of pediatric dilated cardiomyopathy became effective in July 2025. This IND allows advancement directly into a single Phase 2 registrational clinical trial, reflecting the serious nature of this rare pediatric disease and the significant unmet medical need. I will hand the call over to Marie Washburn, our Chief Financial Officer. Marie?
Thank you, Nataliya, and good afternoon, everyone. This afternoon, we issued a press release and filed our Quarterly Report on Form 10-Q, both of which contain the financial results in detail. I will touch on some highlights. Revenues for the three-month period ended June 30, 2026 were $0.3 million. Revenues decreased by $29 thousand, or 10%, when compared to the same period in 2025, primarily due to the absence of contract manufacturing revenue. General and administrative expenses for the three months ended June 30, 2026 were $3.2 million compared to $2.6 million for the same period in 2025. The increase of $600 thousand, or 23%, was primarily due to a $400 thousand increase in legal spend and a $200 thousand increase in personnel costs. Research and development expenses were $3.2 million for the three months ended June 30, 2026 compared to $3.0 million for the same period in 2025. The increase of $200 thousand, or 7%, was due to higher clinical trial expenses to support the ELPIS II topline results expected in September. Net loss was $6.1 million for the three months ended June 30, 2026, compared to $5.0 million for the three months ended June 30, 2025. The increase of $1.1 million, or 22%, was due to the factors outlined above. Our cash and cash equivalents as of June 30, 2026 were $10.1 million. We currently anticipate our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditures into the fourth quarter of 2026 based on our current operating budget. I will hand the call over to Joshua Hare, our co-founder and Chief Science Officer. Joshua?
Thank you, Marie. Good afternoon, everyone. As we rapidly approach the availability of topline data from the ELPIS II Phase 2b trial in HLHS, I want to highlight some of the progress and accomplishments that underpin our belief in our allogeneic mesenchymal stem cell therapy, Laromestrocel, and support its potential application across multiple high-value indications. First, strong foundational science: Laromestrocel has multiple potential mechanisms of action that include anti-inflammatory, pro-vascular, and pro-regenerative effects. Laromestrocel is supported by a portfolio of 52 issued patents with over 60 pending patents worldwide. We have five FDA expedited designations including Regenerative Medicine Advanced Therapy (RMAT), Fast Track, Orphan Drug, and Rare Pediatric Disease. Longeveron has completed and has encouraging initial results warranting further investigation across five clinical trials and three separate indications. We have promising data from our clinical trials that have been published in prestigious journals such as Nature Medicine and Cell Stem Cell. We have favorable clinical trial results in aging-related frailty, supporting selection as a finalist out of over 600 development projects submitted worldwide for the XPRIZE HealthSpan competition, which also comes with a $1 million award. We continue to make progress across our entire development pipeline and look forward to sharing the results of ELPIS II shortly. I will now turn the call back to Stephen.
Thank you, Josh. The anticipated near-term clinical data for HLHS, the strengthening of our balance sheet, the support of high-quality fundamental investors, and the potential for partnerships across our development programs make this an extraordinarily exciting time for Longeveron. We deeply appreciate the support of all of our stakeholders and look forward to continuing collaboration and progress in the future. Operator, we would now like to open the call for questions from our covering analysts.
Questions and answers
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone. You may press *2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. Our first question will be from Raghuram Selvaraju with H.C. Wainwright.
Thanks so much for taking our questions, and congratulations on all the recent progress. Definitely coming up on exciting times here. Wanted to see if you could elaborate on the updated outlook for Laromestrocel in HLHS specifically as this pertains to the following three items. Firstly, the timeline with which you anticipate a regulatory submission could be completed for filing upon generation of positive data from ELPIS II. Secondly, where you are with respect to commercial scale-up and how that dovetails with the underlying market demand that you anticipate for Laromestrocel upon potential approval in HLHS. And lastly, any updated thoughts or feedback with respect to potential pricing discussions or the relative value proposition that you anticipate would be associated with it from the payer standpoint. Then just a very quick question on the aging-related frailty aspect: in the event that Laromestrocel ultimately received the top prize in the XPRIZE competition, how would this affect the company's strategic planning for future development of the drug in the aging-related frailty indication? Thank you.
Wow, that is quite a list of questions. Let me see if I can get to them in the order you provided. First of all, regarding the timetable, we are eagerly looking forward to engaging with potential partners of choice in the event of positive HLHS data. A partnership will determine some items such as pricing and commercialization timing. We have already had conversations with major potential partners and believe they are experienced in pricing and timelines. We do not see any blockers to moving toward a BLA submission if we obtain positive HLHS data. I would remind you that there are priority review vouchers in the market—one recently sold for $215 million. There is also potential for a priority review voucher related to our PDCM program, which will be starting next year. As I mentioned, manufacturing, pricing discussions, and timeline specifics will be informed by partner conversations. Regarding the XPRIZE, I think it is extraordinary recognition. While Longeveron is known for our work in rare pediatric and orphan indications over the past 12 years, we also have strong data relevant to longevity. We will very much seek to partner in longevity regardless of the XPRIZE outcome. We believe longevity is a fertile area that many are appreciating, and we may be the only public company at this cutting edge that investors can participate in today. Did I hit your questions, Ram?
Our next question will be from Boobalan Pachaiyappan with ROTH Capital Partners.
Good afternoon, everyone. Thanks for taking our questions. I wanted to start our discussion with a focus on the statistical analysis plan, or SAP. This is a hot-button issue given recent regulatory discussions. So I have a few questions: Where are you in terms of SAP alignment with the FDA? Were there any last-minute changes that needed to be made to the SAP or protocol prior to database unblinding? And is the lack of SAP alignment with the FDA the reason for pushing the deadline from August to September?
Thank you, Boobalan, for your questions. To clarify, we have had substantive discussions with the FDA and are aligned regarding the endpoint strategy, which includes both NIH-defined and sponsor-defined endpoints. We have incorporated all agency feedback into our statistical approach and submitted the SAP to the FDA for review, and we are currently awaiting their feedback. If we do not receive additional comments before database lock, we currently intend to conduct the pre-specified analysis according to the prospectively finalized SAP. I do not think there is anything unresolved at this time; we have thus far incorporated the FDA's input into the SAP. Of course, if we receive further comments prior to database lock, we will clarify and incorporate them as appropriate. Regarding the August versus September timing, the shift was not due to SAP alignment. We were waiting for the last patient last visit; there were a few delays in the Month 12 MRI for the last patient last visit. That was the reason we slightly delayed our database lock. We currently plan to lock the database on August 31st with the topline results data readout in September.
Alright. Let's say your former primary endpoint, which is RVEF, was not met in ELPIS II, but you are seeing improvements in other measures—length of hospitalizations, transplant-free survival, and adverse events—and those reach statistical significance. Can you regain pivotal status and file a BLA based on that? Put differently, what would be the minimum efficacy package that would justify a BLA submission?
There is a lot of precedent where biologics have been approved with supportive evidence coming from exploratory endpoints. We already know the FDA has expressed that the most clinically significant endpoints—which we have incorporated in our analysis—such as all-cause mortality and hospitalization, are highly informative. The agency has indicated it is willing to exercise regulatory flexibility and has requested we share the results of our trial with them for consideration toward potential approval. So, absolutely: in the scenario you described—where right ventricular ejection fraction does not hit statistical significance but other clinically meaningful endpoints do—the FDA could consider those data as part of a pathway to BLA approval. We believe we have designed the trial to support that regulatory discussion.
And to add, remember this is a very devastating disease for which there are no alternative medicines available. The FDA has been quite positive and has indicated they want to work with us despite the challenges. We are collecting data that, if successful, could support a pivotal designation and BLA submission.
Okay. Marie, one last question: Let's say ELPIS II supports a BLA path. What are the remaining CMC items that need to be addressed? Or what other items need to be checked for a BLA filing, say, sometime in 2027?
We have made excellent progress with our CMC. We are actively working with a contract manufacturing provider to transfer and scale the manufacturing process. Everything looks to be on track. We will be able to fine-tune the program once we have a partner, and we expect a partner would support and agree with our approach to manufacture this important product. Based on our current view, we do not see any blockers or impediments to completing the CMC elements needed for a BLA should we have a positive clinical signal and alignment with regulatory authorities.
Alright. Congratulations again.
Thank you. Thank you.
Our next question will be from Michael Okunewitch with Maxim Group.
I just wanted to ask a little bit about how you are going to be collecting the event-based data because the primary RVEF endpoint is a 12-month endpoint. Is the event data something you are expecting to collect over time and plan to include as part of longer-term follow-up, or will you have sufficient event-based data to see any difference at the upcoming September readout?
Thank you, Michael. Great question. For long-term effects on patient outcomes, we are collecting event data before database lock for each patient. Some patients initiated the trial five years ago, so we have up to five years of data for certain participants. We are collecting survival status and transplant status for all patients, with varying durations depending on when each patient entered the trial. This is data we will collect at the end of the trial. In addition, we are planning a long-term extension trial to continue following patients for up to ten years; we have already shared this plan with the FDA, submitted required documentation, are addressing their questions, and are conducting feasibility assessments. Our goal is to initiate this extension and continue following these patients for long-term outcomes, which opens multiple regulatory options. We could pursue accelerated approval based on earlier data while continuing to collect long-term outcome data, or pursue traditional approval while awaiting the extension results. Long-term transplant-free survival is the most clinically important outcome for this population.
Certainly. Thank you for that additional color. Are we expecting that you will have sufficient survival data to go back to the FDA and potentially file for a BLA this September, or is this something where we really need to wait and see how the data looks before determining whether it can support approval in the near term?
For now, we believe we have sufficient data to demonstrate long-term outcomes. As we continue to collect data, we might have additional survival information. At the end of the current dataset in September, we will have sufficient data to demonstrate five-year survival for some patients. That will support regulatory discussions, though the final pathway will depend on the totality of the data and discussions with the FDA.
Thank you.
One last question: I know this is an exploratory endpoint, but do you have sufficient patients in the study to have statistical power on those event-based endpoints?
Yes. Even accounting for some missing data, we have sufficient data to support statistical testing if our assumptions are correct. The study remains blinded, but we designed the trial to have adequate power for these analyses.
Alright. Thank you. I appreciate the additional clarity, and congrats on all the progress.
Thank you for participating.
There are no further questions at this time. I would like to turn the floor back to Stephen Willard for closing remarks.
Thank you, operator, and thank you all for attending today's call. We greatly appreciate your interest and support and look forward to updating you in the coming weeks. Thank you. Operator, you may end the call.
Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.