Capricor Therapeutics (NASDAQ:CAPR) Q1 2020 Earnings Call

0:01 Greetings and welcome to the Capricor Therapeutics, Inc. First Quarter 2020 Earnings Conference Call. During the presentation, all participants will be in a single remote. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference has been recorded. Thursday, May 14, 2020. I would like to send the conference over to AJ Bergmann, Capricor CFO. Please go ahead.

0:41 Thank you. Good afternoon, everyone. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentation. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our product candidates. are future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filing, potential regulatory developments involving our product candidates, and our possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC.

1:29 We are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. With that, I'll turn the call over to Linda Marbán, CEO.

1:40 Good afternoon, and thank you for joining us for our first quarter financial results and corporate update call. The first months of this most unusual and challenging year have been a productive time for Capricorps. I am pleased to report that we have made significant progress in the midst of the coronavirus pandemic. And, as many of you know, we are not on the sidelines in the fight against this deadly virus. We are working to develop potential treatments and vaccines against COVID-19. Our lead product candidate, CAP 1002, is currently being used to treat patients who have COVID-19 under the U.S. FDA's Compassionate Use Pathway. I will discuss our efforts against COVID-19 in a few moments.

2:28 On the call today, I'm going to spend a few minutes discussing CAP 1002 for the treatment of Duchenne muscular dystrophy. But then the major focus of this update will be on CAP 1002 as a potential treatment for COVID-19 patients, the rapid progress of our exosomes program, which includes our vaccine initiative, and finally, our objectives for 2020. So first, let me update you on some of the company's recent highlights. Yesterday was a momentous day for Capricor as we released our 12-month data from the HOPE II clinical trial. The data was resoundingly positive with p-values below the 0.05 level in multiple measures of upper limb, cardiac, and respiratory function, and we believe it supports accelerated approval.

3:21 Dr. Craig McDonald hosted a call with me to discuss the data and its importance to the DMD community. We plan on presenting this data to the FDA this summer with the goal of accelerating the pathway to approval of CAP 1002 for DMD. I will present highlights and a bit more color on our HOPE II data later in this presentation. Regarding our COVID-19 program, on April 29th, We announced positive results in six critically ill patients with COVID-19 who were treated with CAP-1002, all of whom are currently alive, and four of whom have been discharged. In fact, one of the patients was recently interviewed on television, ABC7 in Los Angeles, on Tuesday, March, May 12th, and he attributes the cells he received to saving his life. A peer-reviewed publication in the journal titled Basic Research in Cardiology was published on May 12th, which highlights this study. When compared to a natural history group, survival in those patients treated with CAP-1002 was markedly increased.

4:38 Based on the positive data from the Compassionate Use series, we filed an expanded access IND with the FDA. We now have approval to treat up to 20 more COVID-19 patients with CAP-1002. However, we also submitted a revised protocol this week to add 20 more patients on placebo so that we can move quickly into a randomized placebo-controlled trial. I will elaborate a bit more on COVID-19 and CAP-1002 later in this presentation as well. In the second part of our two-pronged approach to COVID-19, we are harnessing our engineered exosome platform to build vaccines for COVID. To that end, on March 26th, we conducted a webcast with Dr.

5:26 Stephen Gould, professor of biological chemistry at Johns Hopkins University, during which time he explained why exosomes are uniquely suited as a platform for vaccine development, whether for infectious disease, He presented further Capricor's strategic plans to expand and capitalize on the vaccine and therapeutic opportunities of our exosome technology platform as well. Working with Dr. Gould gives us the ability to develop a novel engineered exosome pipeline with access to premier academic data and preclinical studies. Now, as you can see, we have had a busy start to this year and will continue to build on our various programs throughout 2020. But for now, let me give you some additional color on our programs.

6:25 Let's turn now to what is on everybody's mind and what is impacting almost everything we do, which is the coronavirus, commonly called COVID-19. This virus is causing so much sickness, death, and economic and financial destruction to the United States and the world. We have never seen anything that has had such a tremendous impact on our daily lives and which has so drastically disrupted the way we live and work. We at Capricor have taken this pandemic by the hand. As I mentioned a moment ago, we are taking a two-pronged approach to COVID-19. On the one hand, we are using CAP-1002, are cell therapy products, which, as you know, is in late-stage clinical development for Duchenne muscular dystrophy, to treat the cytokine storm which occurs in the later stage of the illness. On the other hand, we are developing our exosomes to be used as a vaccine platform to potentially prevent COVID-19.

7:24 Using CAP-1002 to treat COVID is a case of serendipity favoring the prepared mind. Over 100 papers have been published on the bioactivity of the CDCs, the main components of TAP-10-02. And we have shown that CDCs release exosomes as well as anti-inflammatory cytokines, those that attenuate inflammation in a variety of disease models of profound inflammation, including sepsis, trauma-related shock, Kawasaki's disease, and other autoimmune diseases. We decided to use CAP-1002 in COVID because the pathogenesis of the disease is a viral phase in which the virus attacks the body and causes symptoms which are ever-emerging, as we all hear daily in the popular press.

8:17 In some people, the virus leaves and the person recovers without sequelae. However, there is a subset of people in which the terror created by the virus overstimulates the immune system and the person developed a cytokine storm or post-inflammatory response phase. Paradoxically, our own immune systems can do more harm than good in these situations and trigger a whole host of inflammatory responses. Based on such strong preclinical and clinical data, we decided to offer CAP-1002 to patients with critical COVID-related ARDS, acute respiratory distress syndrome. through a compassionate use protocol.

9:02 To remind you, a series of six critically ill patients were treated with 150 million cells, the same dose that we are using in DMD. Two of the patients received two doses one week after the first dose. As of today, we currently have a 100% survival rate and four patients have been discharged from the hospital. Two of them remain in the ICU but are clinically stable. Now, as I mentioned a few moments ago, Earlier this week, along with our colleagues at Cedars-Sinai Medical Center, we published a paper in the journal Basic Research in Cardiology, which was peer-reviewed, detailing the patient's trajectory following the cell treatment. In order to evaluate whether those treated with TAP-1002 had a different outcome to those that were untreated, the data from the six were compared to a group of 34 patients from the same hospital who did not receive TAP-1002.

10:01 The treated patients did much better as the untreated patients had a mortality rate of 18% versus our 100% survival to date. Additionally, in this series of patients, and as noted in the publication, laboratory biomarkers correlated with poor outcomes were measured in all patients prior to cell delivery. Following infusion, several patients showed improvements in these biomarkers, such as ferritin, Absolute lymphocyte counts and C-reactive protein, which may be important in recovery from the cytokine storm. No adverse first events related to the administration of CAP-1002 were observed. We were so encouraged by this preliminary clinical data that we submitted an IND with the FDA for expanded access to treat up to 20 additional COVID-19 patients, which has been approved.

10:58 We expect to begin enrolling patients into this program soon. We also submitted a revised protocol this week to add 20 placebo patients and move immediately into the randomized placebo-controlled portion of the trial to treat patients with severe to critical disease. This is, of course, subject to approval by the FDA. Based on the global concern surrounding COVID-19, we hope to fund at least part of this program with non-dilutive funding for which we are now applying. Now please stay tuned for updates on this very important program. As we all know, if the cells continue to look promising, they could offer hope for hundreds of thousands if not millions of people.

11:45 Now let me turn your attention to Duchenne muscular dystrophy. As I mentioned, yesterday was a momentous day for Capricor. Based on the strength and value of the data from our HOPE II trial, We are getting calls from around the world from parents anxious to get CAP-1002 for their children with DMD. The data was perhaps the best ever seen in DMD studies with multiple areas of functional improvement in treated versus the placebo patients. To our knowledge, improvements in multiple areas of muscle function, including cardiac muscle, such as seen in HOPE2 have never been reported before. The only other positive data which has shown such profound effects are steroids.

12:34 And remember, steroids may negatively impact cardiac function, not improve it. We are energized by the data and are laser focused on our goal to bring CAHPS 1002 to patients with Duchenne muscular dystrophy. Let me also remind you that all of our patients were steroid treated, so the effect of the cells was on top of all standard of care medicines, including any of the exon skipping drugs for which they qualified. As you know, DMD is a genetic disorder that causes muscle degeneration due to the lack of dystrophin, which is a protein in the muscle fiber membrane. The lack of dystrophin causes muscle damage and makes them unable to function properly and also produces inflammation, which is responsible for much of the deterioration of skeletal and cardiac muscle.

13:27 DMD ultimately leads to an untimely demise, unfortunately at an average age of 27 with up to 40% of them related to heart failure. The HOPE II trials treated DMD participants who were mainly non-ambulant. These are boys and young men older than 10 years of age, Boys with DMD lose their ability to walk between ages of 12 and 15. Patients are living longer with DMD due to steroid therapy, and by the age of 18, 70% of patients with DMD have depressed heart function. Now, we presented the top-line data from the 12-month final data set from HOPE II yesterday. We were very pleased with the data, which we believe may offer real hope to the patients with advanced ages of DMD. The data is the first of its kind, as I said, because it is the first opportunity to treat skeletal and cardiac muscle dysfunction that comes from D&D and is targeted to those later stage patients for which no current therapies exist.

14:28 The data was very strong, with multiple measures of cardiac and upper limb function achieving P values that suggest very little of the data could be due to chance. Furthermore, there are other These patients are not typically eligible for the current gene therapy trials, and there are a lot of misgivings that gene therapy may not work well in the highly fibrotic tissue that occurs in the older boys.

14:52 Now, there are a few things that I would like to put into context.

14:57 Originally, HOPE II was powered to detect a one-point difference in the performance of the upper limb, commonly called the pull, 1.2 mid-level, which is essentially the use of the arms. But in discussions with the FDA, they have now recommended that we use the full pull and the newer, better calibrated version of the test, the 2.0, as a primary efficacy endpoint to support registration. So although we performed the analysis using the pull 1.2 version, we also performed the analysis using the pull 2.0 and consider this the most important finding of this study. And to that end, You can see we have a p-value of 0.05 in the full pull, in the full pull, which is what most clinical trials want to achieve.

15:48 Now we also came very close to significance in the pull 1.2 mid-level, with all of the data included. We also showed very strong p-values in measures of global cardiac function, never before seen in DMD, with ejection fraction and volumes improving over the one-year trial period. Taken together, this data set is very strong and suggests treatment with CAP-10 or 2 could improve outcomes in DMD. Now, I gave you a preview of the data that I was planning to present now, which I find very compelling, and I'm sure you will, too. You see, we noticed in every parameter that there was one treated patient who was an outliner, commonly a non-responder. He is included in every analysis that we have presented, but I wanted to understand more about him and why he might not have responded to the treatments.

16:37 What we found was that he did not respond to steroids either. He was non-ambulant before the age of 10, which is extremely uncommon in the era of steroids. And he had several other health issues that might have prevented him from responding. Dr. McDonald told us yesterday that it is not uncommon that there is a 60% non-responder rate. So the fact that we had one is not surprising and, in fact, suggests that the data has a very, very strong bent and a strong treatment effect.

17:07 Now let's see what happens when we remove him from the data analysis.

17:11 Shown here is the mid-poll 1.2, the originally stated primary efficacy endpoint for the fully enrolled study. The p-value is 0.08, which is very good for an orphan disease and can stand on its own merits. But look what happens when our non-responder is pulled out. We have a highly significant p-value, which suggests a strong treatment effect, and hence efficacy. We consider this to be very important data to present to the FDA. Similarly, look at the full Poll 2.0, the endpoint suggested by the FDA to support approval. Even with the non-responder included, we achieved what would be considered statistical significance at P equals 0.05.

17:57 But look again at what happens when we pull it out of the analysis. An unequivocal sign of efficacy with a P value of 0.004. Again, we will take this data to the FDA in support of our request for approval. Now, our goal is to convince the FDA that this therapeutic needs to be approved with a confirmatory study to follow, and we plan on starting that discussion this summer. We respect the FDA process and welcome the opportunity to share our exciting data on the Full Pull 2.0 and other data with the FDA. Now last but not least, let's turn our attention to an update on our exosome technology. Our first mission is to develop vaccines using the exosomes as the platform.

18:44 Obviously, we chose COVID-19 as our first target based on its current place in global health risk and the need for mitigation. As we announced earlier this year, we have retained Dr. Stephen Gould of Johns Hopkins University and his laboratory to assist us in developing our engineered exosome platform. We did not have internal capabilities to conduct the primary research necessary for determining a viable vaccine product candidate, but we have a lot of expertise in terms of product development and early stage manufacturing of cell-based biologics. Bringing Dr. Gould in as an executive consultant and collaborating with his lab to develop exosomes was the best way to move this program forward quickly.

19:30 Briefly, on Dr. Gould's background, in case you missed it, he is a professor of biological chemistry at Johns Hopkins University, where he directs a research laboratory dedicated to understanding the biology of exosomes, especially in the context of human disease, while also serving as the director of Johns Hopkins University Graduate Program in Biological Chemistry. Dr. Gould is co-founder and acting president of the American Society for Exosomes and Microvessicles. On March 26th, we held a webcast hosted by Dr. Gould that was informative, interesting, and educational for all who are on the webcast. The replay is still available on our corporate website. I hope you can find time to listen to Dr. Gould's presentation. I believe you will find it worthwhile. I will provide you with some of the key points that Dr. Gould made on the webcast that clearly show the advantages of our exosome technology and why We believe that it is uniquely suited for the development of vaccines and treatments.

20:29 First, as we've been talking about for a while, exosomes are small secreted single membrane vesicles. They are approximately 30 to 150 nanometers in size and highly enriched in selected proteins, lipids, nucleic acids, and glycol conjugates released by all cells and are abundant in biofluids. Exosomes have the potential to be an excellent delivery vehicle. Normally, Concentration falls dramatically over distance. However, concentrations on or in exosomes remain constant, allowing enhanced signaling from a single molecule, multidimensional signaling, and biochemical pathways. Exosomes accumulate at sites of vascular leakiness, which of course includes sites of inflammation, tumors, and infection. This is an advantage for exosomes since the vascular permeability is limited in most tissues.

21:21 Vascular permeability is very high at sites of infection, wounds, and sites of inflammation, as I said a moment ago. Now, most vaccines are comprised of purified recombinant proteins, live attenuated agents, killed pathogens, or antigens encoding DNAs. While these other approaches are effective against many viruses, immunization with recombinant proteins and DNAs often yield relatively weak protection against infection, while immunization with killed virus or live attenuated strains Poses health risks to both the vaccinated individuals and those who produce the vaccine. Utilizing our exosome technology provides the opportunity to develop vaccines against newly emergent infectious disease such as COVID-19 without risk of infection.

22:06 We are developing two vaccine platforms in our collaboration with Dr. Gould. One is a tripartite exosome mRNA vaccine. Its formulation is designed to elicit a protective, long-lasting immune response to SARS-CoV-2 by targeting all four structural proteins of this virus. This vaccine includes portions of the spike protein, the X protein, which you've heard so much about, but also the N protein, which is the primary target of protective immune responses in COVID-19 patients, the M or membrane protein, and the E or envelope protein. Furthermore, Capricorn's mRNAs express these antigens in forms that are designed to induce a balanced, humoral, and cellular response that has the potential for long-lasting protection against SARS-CoV-2.

22:56 The other is called an exosomal antigen vaccine, which is vesicle-based, nucleic acid-free formulation carrying all structural proteins, again, of SARS-CoV-2. These are often referred to as VLPs, virus-like particles. These extracellular vesicles have the size range of exosomes and are produced by the same process pioneered by Capricor in its study of cardiosphere-derived cells currently used to treat COVID-19 patients and mimics the native composition of SARS-CoV-2 virus particles, yet is non-infectious and virus-free and can be produced at scale by industry-standard techniques.

23:41 We already have exciting cell-based data on these two candidates and expect to be in animal studies very soon. While there are many vaccines in development, we believe that the combination of the exosomes, the four proteins, and Dr. Gould's 20 years in the field could offer a unique opportunity for this potential novel vaccine. I tell my team regularly, David's Luke Elias. For this reason, we are exceedingly bullish about our vaccine program. In addition, everything we are doing in developing vaccines may be potentially applied as platform technology for other indications. I will now turn our call over to AJ Bergmann, our CFO.

24:25 Thanks, Linda. This afternoon's press release provided a summary of our first quarter 2020 financials on a GAAP basis, and you may also refer to our quarterly report on Form 10-Q, which we expect to become available very soon. and will be available on the SEC website as well as the financial section of our website. As of March 31, 2020, the company's cash, cash equivalents and marketable securities totaled approximately $13.2 million compared to approximately $9.9 million at December 31, 2019. In the first quarter, we completed a warrant inducement generating net proceeds of approximately $4.5 million. And in addition, from January 1, 2020 through May 13, 2020, who raised approximately $12.8 million in net proceeds under our at-the-market offering program.

25:15 Turning quickly to the financials, in the first quarter of 2020, our net cash used in operating activities was approximately $1.2 million. For the first quarter of 2020, excluding stock-based compensation, our research and development expense was approximately $1.1 million, compared to approximately $1.8 million in Q1 2019. Again, excluding stock-based compensation, our general and administrative expense was approximately $900,000 in Q1 2020 compared to approximately $800,000 in Q1 2019. Net loss for the first quarter 2020 was approximately $2.1 million compared to a net loss of approximately $2.5 million for the first quarter of 2019. In summary, as we move forward, we continue to manage our expenses diligently but we continue to focus on the advancement of our core pipeline programs as Linda articulated.

26:07 We will now open the line up for questions. If you'd like to register a question, please press the one followed by the four on your telephone. You'll hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. One moment please for the first question. As a reminder to register for a question, it is the 1-4. As a reminder to register for a question, press the 1-4.

27:12 and our first question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your question.

27:23 Hey there. I'm on the line for Jason. Thanks for taking the question. So first off, I'd like to get your take on the data from earlier this week, specifically some of the stuff with the whole 2.0 versus the pull 1.2. Because you missed on the 1.2, but it is a very small margin. But I'd like to see what are some of the differences between the endpoints that led to the slight variation in the results? Is there a specific measure in the 2.0 that drove that more significant result?

28:04 Yeah, thank you. So, actually, we didn't miss at all on the 1.2 measure. Thank you for joining us. really clinically very meaningful. And the statistical significance, as I just showed on the call, when you remove the one outlier patient, it's double zero and a four for the mid-level. So we consider this very clinically significant, and we don't feel like we missed it all. We feel like it's a big success. Having said that, the second part of your question is very relevant and important.

28:53 The pull 1.2 is the first version of the metric, and then pull 2.0 is a newer version. So it's like your smartphone. It gets better every time. And what they were able to do in the 2.0 is they were able to take out some of the tasks that were redundant, change the scoring system so it became more quantifiable, and then remove floor and ceiling effects. So the actual... Thank you for joining us. and success or failure by the patient might lead to a different total number or score, which then would ultimately impact the mean values and calculation of the statistical relevance.

29:51 All right. Thank you very much. And actually, in that, you actually answered my second question. But I actually want to ask some clarification. When you said that your goal is to go to the FDA and seek approval with a confirmatory study, I just wanted to see if You were saying that you would be seeking accelerated approval and then running a confirmatory study, or if you were seeing a confirmatory study prior to approval?

30:17 Yeah, we're looking for accelerated approval with a confirmatory study on the backside. We believe that the best thing that we can do for the patients is broad access and availability of this therapeutic. They could get it in an infusion center five minutes from their houses rather than and putting boys and young men in wheelchairs to do yet another clinical trial. And the treatment effect appears to be so obvious, and we hope that FDA sees that and recognizes that, especially now in this environment of COVID-19, traveling for clinical trial visits is going to be virtually impossible. And the best thing to do would be to approve it. We can do a confirmatory study. We're willing to take it off the market if it doesn't meet the requirements. The requirements of an efficacious therapeutic, which we think is not likely, but we absolutely have to see this through to approval.

31:09 Thank you. And then I'd like to switch gears over to COVID-19 because you've shown some really encouraging data in ARDS patients. And it seems like it's tracking generally what we've seen from some other cell therapy companies in the space. Cell therapy really seems to be working well. in this highly inflammatory condition. But so, what I'd like to ask is then, for CAP1002, are there any specific features that could make it particularly efficacious in this setting? I recall that the cells tend to localize to lung tissue, so could that make them a bit more ideal for treating ARDS versus other types of cell therapy?

31:51 Yeah. So, thank you for asking that. It's a very important question, and yes, I think this is finally the The coming of age of cell therapy in general. However, what I can tell you is for many years we have been working to understand the mechanism of action of our cells. And as I've been saying for the last year or two, what we've learned is that when we deliver the cells intravenously, they do travel to the lung. They generally lodge in the microvasculature of the lung. And we know they're very safe because not only have we used them in a lot of patients with diseases like Duchenne, but now we've used them in COVID-19 and there were no infusion difficulties at all. We know that then they release the exosomes that contain microRNAs that are profoundly immunomodulatory. And we have never stopped trying to dig into the secret sauce of what makes the cells effective. And what we found a while ago is that in our exosomes, there are a large proportion of these non-coding RNAs called microRNAs.

32:48 and YRNAs that actually contract to control of inflammation, so triggering release of IL-10, which is a calming cytokine, as well as some of the other types of responses that one would assume would happen with repair rather than attack. Now, when we did a direct comparison, and we just published this paper also last week on the MedRxIV site, we show that the mesenchymal stem cell-based exosomes are some of the other cells that are out there being tried, do not have this type of microRNA profile. They have more tRNA, transfer RNA, so may not have the same type of bioactivity. So we are incredibly bullish on CAP-1002 as a treatment for COVID-19 hyperinflammatory states, both not only for the ARG, but also for the potential myocarditis that's occurring. And we also have very interesting studies.

33:44 Preclinical Data, and Kawasaki's Disease, which has become the talk of the town as many young children now seem to be afflicted by a Kawasaki-like syndrome post-COVID.

33:54 All right. Thank you very much, and congratulations on the progress.

34:00 Thank you. Our next question comes from the line of Emanuela Branchetti, which H.C. Wainwright. Please proceed with your questions.

34:13 Good afternoon, guys, and thank you for taking my question, and congratulations on the outstanding progress made thus far. My first question is related to the activities you are doing in preparation of the meeting with the FDA. I was actually wondering if there are any additional data sets you are working on or analyses that you are thinking about bring into the attention of the FDAs or other activities in general you are doing in preparation for this meeting?

34:53 Well, yes, of course. I mean, you know, what we released yesterday was top-line data. We're continuing to do a deep analysis into the data to understand it. You know, one of the sort of late breakers, so to speak, was the understanding of our non-responder patient, which we'll call to the attention of FDA, and how that impacts the data. There's a lot of other data that we have not Thank you. And related to this question,

35:42 I actually have a curiosity regarding the creatinokinase MD marker you presented yesterday. I found that very interesting, and I was wondering why did you choose specifically that marker and why that marker may be particularly significant for patients with cardiomyopathy that you see in Duchenne cardiopathy.

36:09 The CKMB is a specific enzyme that's released by cardiac cells when they've been damaged. Up until pretty recently, it was actually used in hospitals to diagnose patients who had come in with suspicion of a heart attack. It's the kind of thing that you don't see typically in a patient's blood unless they have some type of damage to their heart. We know that Duchenne patients, their hearts are under constant attack just like their skeletal muscles. But this is the very first time that we've been able to track a biomarker of injury and show that it is different in the blood of patients with Duchenne when they've been treated with a therapeutic and that it correlates with some type of metric of global performance, such as ejection fraction and volume. So this is a story, and you called out actually the piece of data that's one of my favorites, because it really is very objective proof that something different is happening in the bodies of the treated patients versus the placebo patients and the amount of damage to their heart is going down and that's just so exciting for these families.

37:12 Yeah, that's very helpful. Thank you. And switching over to the COVID-19 program, I was wondering if you can give us a little bit more details on the target population of the next study Thank you for joining us.

37:48 What we've seen in terms of their survival is just astounding and certainly is very gratifying to me as a scientist as well as a human being. But what we'd like to do now is back up a step. Can we keep people from being intubated? So in the study that we are going to be starting, the Expanded Access Program, we'll be treating those patients that are either already intubated, they're still critical ones, but also those that are at risk of being intubated. So they're sick, they're getting oxygen, They're not doing well, but they're definitely not having ventilator support at that moment.

38:24 So, hospitalized patients possibly already in the ICU, maybe not yet on the ventilator or something like that. Exactly. Got it. And lastly, just a last question about the timeline for the vaccines, of course, also very exciting. I believe you mentioned in the past 3Q and 4Q as potential projected timelines for filing an IND. Considering the progress you have made, do you think those are feasible timelines or you can anticipate that?

39:05 No, we haven't provided guidance yet on the vaccine program specifically, except that we're Moving very quickly, obviously, we're as anxious as the entire world to get a vaccine candidate moving forward, especially one that works. We'll be in animal study soon, and we'll provide clarity and updates as the data moves forward. In addition, I just wanted to add, with the COVID-19 treatment, with our expanded access program, we also laser focus on those patients with cardiac dysfunction or myocarditis as Thank you very much. As a reminder to register for a question, it is the one for our next question comes from the line of Alan Leon. With BioWatch News, please proceed with your question.

40:07 Thank you very much. Congratulations. Linda, I have to commend you. You're pulling rabbits out of a hat through the Capricorn story. And when you had to abbreviate the trial, I was actually in a bit of a despair. I never thought you'd get any statistical significance. And this is a wonderful surprise, this whole saga. I want to frame the non-responder, but really get at your markets. There was a hint, as I remember in the McDonald presentation, that there's a need for going younger with treatments that have a better side effect profile than the incumbent meds. The need to prevent cardiac deterioration for accelerates, perhaps even at the very beginning of any signs. And although you target CAP 1002 for non-ambulatory patients, there's ironically a need for the other end. And especially thinking about the non-responder I have to wonder about the potential for much earlier intervention with CAP-1002.

41:04 And this is really a question about where you might go after you enter the non-ambulatory market.

41:10 Yeah, thank you, Alan. So, you know, the issue that you raise is obviously in our mind. In fact, when I was putting together my remarks for today, I actually had, you know, we were going after these later stage non-ambulant patients in our first iteration or as our first label. And I took it out because I thought, well, I think that's something that is implied. We always would like to go younger. Here's the thing that makes us very lucky, and one of the reasons why with a shortened trial with fewer patients we were able to see a difference. The later stage patients, the patients that we are treating, are on a steep slope of decline, and you are able to pick up changes much more easily and much more rapidly than in the little kids who decline more slowly. Once we get this approved in the later stage patients, and remember, we've seen profound treatment effects here. This is at the level of, wow, when you think about there's less than a 0.4% chance that the data that you're seeing is due to chance, you have a realistic understanding that something is happening in the treated patients versus the placebo that is inarguable.

42:15 Once we get approved for the non-ambulance, Our goal will be to step back into the littler kids and then do the appropriate studies, which are usually longer, a couple of years, to see if we can attenuate their decline because, of course, our goal will be to keep them on their feet.

42:34 Switching gears on the vaccine approach, one of the things I was impressed with Gold in his presentation, he advocated the need to have sterilization or neutralization levels attained with the T cell response. and I wonder if you could provide some color on what he was seeing in his lab with the animal models for exosome vaccines and I know you probably won't be able to get into strong color about what's ongoing but I assume that from your statements Gould isn't seeing any major roadblocks for attaining his objectives right now so I wonder if you just probably provide some kind of general color.

43:11 I think most of you know I'm a scientist and I love The merging of science and medicine. And I can truly say that I have never seen a program that is going as smoothly as this one in transition from academia into potential product development. Steve is going full speed ahead. He himself is spending 20 hours a day in the lab. And so far, knocking on wood, which is my own head, we have seen absolutely nothing that gives us a hint that we're going to slow down. We are moving fast and furious into animals. hopefully into non-human primates very soon and then directly into human beings of which I will be at the front of the line to get that vaccine.

43:50 This is really good news because I've been watching a few of the other approaches and they're not looking at targeting such high levels of immune response. Good work and I'm really excited too. Thank you.

44:02 Me too. Thank you. Our next question comes from the line of Tim Chang. with Northland Securities. Please proceed with your question.

44:16 Hi, thanks. Linda, congrats on the recent data set that you guys announced. You know, my question really is, you know, as you guys approach the FDA meeting, you know, how important do you think it will be to have some of the patient advocacy groups also there at the meeting? You know, for instance, PPMD You know, and it seems like from the presentation that Dr. McDonald gave, it seemed like this study, you know, was given a lot of support from PPMD. So, did you comment on that?

44:51 Yeah. So, you know, the advocacy groups and DSADS are obviously incredibly important. Those families are speaking loudly for their children and for their right to have every possible therapeutic that could potentially augment their lives. One of the mothers said to me a few weeks ago, you know, the real world is now dealing with what we deal with every day, which is, you know, life and death. What will the day bring? And we were talking about COVID. To answer your question, yes, we had PPMD and Pat Furlong with us at our meeting with the FDA in October. We plan on bringing her with us again when we go back this summer. We have other advocates that we are working closely with. We have a variety of regulatory counsel that we are working with as well as lobbyists and we are going to rally the troops and make sure the FDA hears loud and clear that this data cannot be turned away from.

45:48 I guess just one follow-up, Linda. How long would it take to scale up commercially CAP-1002? I know that you guys I think announced that you've hired a CMO to help you with that. But is that a lengthy process, or are we talking six months, or are we talking a year to scale up?

46:16 So we're already in the process of the scale-up. We planned it because we knew, based on the interim data, that if the natural history of the patients continued to decline, which it is, and we had good hope that the therapy would work, Thanks, Tim. Thanks. Ms. Marban, do you know for the phone questions at this time, I would now like to send the call back to you. Please continue with your presentation or closing remarks.

47:09 In closing, we are excited about the continued progress that we expect to receive in 2020, and we look forward to updating you on our progress as we move forward in our programs for COVID-19, as well as in our Duchenne Muscular Dystrophy Program. Thank you, and please stay safe and stay well. Bye. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.