Morning, everyone. My name is Ted Tenthoff. I'm a Managing Director and Senior Biotech Analyst at Piper Sandler. And before I begin, I'm required to point out certain disclosures regarding the relationship between Piper and Capricor posted at the back of the room and also at the registration desk. Capricor is developing deramiocel to treat cardiomyopathy caused by Duchenne muscular dystrophy, as well as exosome therapies. Here with us from Capricor is my good friend, Linda Marbán, CEO, President and CEO. and CEO. Linda, thanks for being with us. Thank you, Ted. What an exciting time for the company too, right? It has been a meteoric rise over the past few months. Yes, indeed. So let's get right into it. Deramiocel is composed of cardiosphere-derived cells, or CDCs. Linda, I know you've been working, you know, a big chunk of your career on these cells. What exactly are CDCs, and how do they work? Yeah, so thanks for asking, Ted. You know, and I have. I've been working on them for a long time. They were discovered really in sort of its initial iteration almost 20 years ago. So cardiosphere-derived cells are a specialized population of cells that are actually present in the human heart. We isolate these cells from explanted human hearts that are transplant-qualified and could be used for transplantation, except cannot for technical reasons. Don't worry about supply chain issues. This happens about 40% of the time. In order to meet peak market demand as anticipated for Duchenne muscular dystrophy, we'd need about 40 hearts per year. 50 hearts per year, and we get offers of about 40 hearts per month. So it will never be an issue. What the cells do is that they are primarily an anti-inflammatory, immunomodulatory, anti-fibrotic, pro-angiogenic cell population. So how does that actually work? They work by releasing exosomes that then track to the sites of injury. These are natural processes by which exosomes are designed to find areas of injury. They're taken up by the macrophage, which are a primary immune cell, and then they ultimately drive the cells into repair mode, primarily in the heart, where they track naturally, and to skeletal muscle, where they also track based on some of the external markers that drive them to the cell. We know quite a bit about DMD, but tell us about the cardiomyopathy that these boys experience and sadly ultimately die from? Yeah, so just the final piece of the other question is they are not stem cells. They are not regenerative cells. They don't go in. They don't replace tissues. What they do is that they drive internal repair mechanisms, and that's really important. You can almost think of them like a CAR T without an antigen cell that has biologic activity. So let's shift to the more important topic, which, as you just asked, is what is the cardiomyopathy associated with Duchenne? So most people think of Duchenne as a skeletal muscle wasting disease. It's because it's what you can see on the outside. You see these little boys that ultimately lose their ability to walk, lose the ability to use their arms, and ultimately lose the ability to breathe regularly on their own. But what we don't know, what we did not know until recently, is that the insidious killer of these boys and young men is the heart disease associated with Duchenne. So the heart is a muscle. Let's not forget that. And the dystrophin that is typically there keeps the cells safe and allows them to to continue to function. These boys, really, from birth, their heart cells are breaking down. And so it's a disease of continuous breakdown of cardiac muscle cells, fibrosis, and then a fatty replacement. It wasn't highlighted as one of the real issues because originally these boys and young men were were dying primarily from the respiratory complications. Now, with ventilatory support that provides their ability to to continue to breathe well, we now can focus on the fact that what was stealing their lives is the cardiomyopathy, and that's the disease that we're working on, or the aspect of the disease. Walk us through the phase 2 HOPE-2 data that you've reported. Maybe start with the trial design and tell us about the data that you've reported? For sure. So HOPE-2 was a randomized double-blind placebo-controlled trial. We ended up enrolling 20 patients. We unblinded early because it was a novel delivery and a therapeutic regimen, which was four times per year of 150 million cells IV. Previously, we had been delivering the cells intracoronary. We looked for improvement in skeletal muscle function, which would be the measurement of the Performance of the Upper Limb. And the reason we used an upper limb measure of shoulder, arms, and hands is because 80% of our patients were non-ambulant, therefore unable to do any of the normal ambulatory assessments, such as the North Star Ambulatory Assessment, time to rise. So shoulder, arms, and hands is the Performance of the Upper Limb. We hit our primary efficacy endpoint with a p-value of 0.01, which was the mid-level Performance of the Upper Limb, ability to move your arm. But what we also discovered and was predicted was that we had improvements in cardiac muscle structure and function. We measured 22 measures of cardiac function using MRI, the gold standard of assessing cardiac function. And in a forest plot published in our Lancet paper, which highlighted the HOPE-2 data, we showed that 21 out of 22 measures of cardiac function were improved in these boys and young men. And that is one of the reasons why FDA has been so excited and perhaps bullish about the opportunity for deramiocel in treating Duchenne cardiomyopathy. That's great, and tell us about the OLE follow-up and sort of the durability so HOPE-2, a lot of the boys rolled over into the open-label extension study. Tell us about that data that you reported. So for those of you that don't know me, well, I'm a scientist by background, a cardiac physiologist, and so nothing excites me more than data. The open-label extension data was some of the most exciting data that I've had the opportunity to see, both in terms of skeletal muscle improvement in these boys and young men, as well as cardiac muscle function improvement. And that's because the placebo group in HOPE-2 obviously had the opportunity to roll over into the open-label extension. And what we saw is that the normalization of their skeletal muscle function through the Performance of the Upper Limb was absolutely clear, with a decline year over year in the year on placebo, and then a year off therapy. Once they came into open-label extension, they immediately had disease stabilization and, in fact, improvement. And then in measuring cardiac muscle function, we were able to show stabilization of ejection fraction. And especially in those that had originally been in the HOPE-2 trial, we saw really extraordinary stabilization of cardiac disease. We were lucky enough to be able to compare those data to natural history data sets. This data set was funded by the Food and Drug Administration to examine the risks for morbidity and mortality of Duchenne cardiomyopathy. And when we compared our data, the open-label extension data of the treated guys, to the natural history data, they were showing almost an eight-point improvement in ejection fraction if you happen to receive deramiocel compared to those that were in the natural history cohort from Vanderbilt. These data were maintained out to three years, if I'm not mistaken. So that's really durable. So what changed at the FDA for them to sort of reconsider how they're reviewing deramiocel? And what are the current regulatory plans? Thank you. Yeah, so FDA, I think, you know, everybody's been abuzz about FDA in the last year as we sort of saw the landmark Sarepta decision for Elevidys. And that has really driven the opening of FDA's eyes to the opportunity for totality of the data. And, you know, I think everybody used to sort of shrug their shoulders at that. It is really kudos to Peter Marks and CBER, where we've had most of our interactions for the ability to look beyond just the determination of a primary efficacy endpoint. Not that we didn't think that we would hit ours, and in fact, we did with HOPE-2, but actually with the idea that there's more to look at. And that was what happened to us. We were in a pre-BLA meeting getting ready for looking for approval for the skeletal muscle myopathy based on our HOPE-3 clinical trial. We showed them the cardiac data that I just mentioned, which was the HOPE-2 and the HOPE-2 open-label extension cardiac data compared to this natural history data set. And what we were able to to discern during that meeting was that there was no relevant therapeutics for the cardiomyopathy associated with Duchenne that were coming close to approval. And here we had very positive clinical data. So in our conversations with FDA, we agreed that submitting the BLA for the cardiomyopathy would benefit not only the patient population, but also sort of the unmet need of the cardiomyopathy moving forward. And while I'm sort of talking about this, this opens the door to other cardiomyopathies from rare diseases that have the implications of inflammation and fibrosis, such as the Becker muscular dystrophy, other types of muscular dystrophies. Myotonic dystrophy would be another one that we're very closely looking at. Excellent. And when do you think you could complete the filing? And, you know, how long would the review be? And I should mention, I think you would be awarded a priority review voucher on approval, which could be very lucrative too, right? Absolutely, yeah. So we anticipate submitting the BLA by the end of this year, which is just around the corner. Based on our designations, which are RMATs as well as Orphan, we are qualified for priority reviews. So we are anticipating that on approval, we would get a PRV, which, as you mentioned, can be very valuable and supportive of a balance sheet, which our balance sheet is already very strong. We have a balance sheet stability into 2027, and we expect to be revenue-generating prior to that. But in addition to that, we expect to hear from FDA theoretically by the end of the first quarter. And we're anticipating PDUFA, you know, end of the third, beginning of the fourth quarter of 2025. Yep, excellent. Now, you are also conducting the phase 3 HOPE-3 trial, which is a little bit less important now because of this breakthrough with the FDA in terms of reviewing for cardiomyopathy. But nonetheless, tell us about the trial design and what role could this play for deramiocel approval if it's even needed. Yeah, yeah. So HOPE-3 is a randomized double-blind placebo-controlled trial, 61 patients in cohort A, 44 patients in cohort B. There were two cohorts because originally in sort of the bad old days with FDA, they wanted a clinical comparability study from our commercial manufacturing plant in San Diego. Because of the strength of our potency assays and identity criteria, we were able to shift that to non-clinical comparability. So we now have a 104-patient trial. We're combining those cohorts. The readout is slated for that towards the end of 2025. We'll use it for a post-approval label expansion into skeletal muscle myopathy, although almost every patient covered by that potential label would be covered by the cardiomyopathy label. However, HOPE-3 can be very important for approval in Europe. So we just announced we have ATMP, which is a priority opportunity with the EMA. As many of you know, there are no approved therapies in Europe for Duchenne that are relevant and certainly nothing for the cardiomyopathy. So we believe this trial will help to spur that forward. We may use HOPE-3 to add a few patients from outside the U.S. in order to support that label expansion in the U.S. and outside as well. And you mentioned manufacturing. I think I'm going to come visit you next week while I'm in San Diego and get to see the facility myself. But maybe you can explain these potency assays, and what is your plan to meet the significant demand for U.S. launch? Yeah, so, you know, Capricor has been around for a while, and we've been, you know, building this therapy, and because of that, the strength of our program is really quite extraordinary. The potency assays that we've built are ones that are based on an RNA-seq assay where we originally looked at 166 genes. And we were then able to discern that there were 37 genes that are differentially expressed in these cardiosphere-derived cells that are different than any other cell type out there. They are not a stem cell. I say that every time I get a chance. They don't regenerate. They don't go in. They don't become part of an injured tissue bed. What they do is they release exosomes. Exosomes carry nucleic acids and proteins that actually drive these cellular repair mechanisms. Our potency assays not only are based on this criteria of these 37 genes that are differentially expressed, but then we have another one on top of that that is an anti-fibrotic assay, which is one of the stated mechanisms of actions of our product, which has to meet the criteria. And we also have been able to quantify that the exosomes are actually driving that anti-fibrotic activity. So it's the strength of these potency assays that allow for lot-to-lot consistency and a manufacturing paradigm that can be repeated and grown. So what we do is we basically manufacture in modules, and modules can be expanded. Each module can meet the needs of about 500 patients per year. That's what our San Diego facility will be doing at initial launch, which should be enough for basic launch. And then in year one, we're anticipating tripling that potential patient opportunity. We have plans in place now and, in fact, completed a fundraise recently where we were able to expand our manufacturing footprint. And that's exactly what's going on. We manufacture ourselves. We plan on keeping it that way. And as the need grows, both for Duchenne muscular dystrophies as well as other indications, we can continue to expand manufacturing based on clean room space. Deramiocel has partnered with Nippon Shinyaku globally. Remind us of the economics and what does Nippon Shinyaku bring to the commercial launch? Nippon Shinyaku has now taken the rights for marketing distribution in the United States, Japan, and Europe. Obviously, the United States is coming out most quickly. They've already paid us $80 million in terms of upfront and meeting initial milestones. There are significant milestones that are slated to come based on approval, which should happen in 2025. Then there are sales milestones and royalties on top of that. The royalties are in the 30%-50% range. Based on their request, we are not able to disclose exactly what that number is. But what I can say is that they're healthy model revenue numbers, as I said, 30%-50%. What they bring to the table is 125 people in the United States that are slated to sell and market distribute in the Duchenne muscular dystrophy space. They have a product that is approved with accelerated approval for exon skipping. It's called Viltepso, and Viltepso is used to treat DMD, as I mentioned, so they know all the key opinion leaders. They know the advocacy groups. They understand the health economics. They've worked on reimbursement. Because of the strength of the opportunity for deramiocel, we believe that it will become the focus of this entire group. We meet with them regularly. They are already working very hard and have launch plans in place, and we will provide product to them based on forecasted numbers for them to sell, and the revenue model, as I mentioned, is very robust. In fact, market penetration in the United States could be extraordinary given that every boy with Duchenne muscular dystrophy has the cardiomyopathy, and there is nothing for them available at this time until this drug gets approved. Excellent. So I'm just going to pause there and see if there's any questions about deramiocel or DMD or. And we mentioned earlier that one of the mechanisms, the primary mechanism for the CDCs, is through exosomes. And you guys are working on developing engineered exosome therapies for, I think, in a COVID vaccine, DMD, but there's really opportunity even beyond this. Tell us a little bit about some of these efforts. So the exosome story is a really interesting one. So we discovered that the exosomes mediated the mechanism of action of our cells quite a few years ago now. And as I said, that's been validated by actually showing that the mechanism of action of the cell is through the release of these exosomes. Exosomes are nanometer-sized lipid bilayer vesicles. They are the way cells communicate with one another. They are in every bit of fluid in your body. They are in blood. They are in milk. They are in beer. So they are everywhere, and they are very easy for the body to ignore because they are so prevalent. And in fact, if you ever worry about the immunogenicity of an exosome, think about blood transfusion where you're getting trillions of somebody else's exosomes, which cause absolutely no problem. So while we were excited that the mechanism of action of the cells were driven by the exosomes, we also realized that the cells are doing a darn good job of releasing them. So why mess with what works? But I was intrigued by the concept of using exosomes as a delivery vehicle. So we now have developed an engineered exosome platform, which we call StealthX. It has been developed and patented by Capricor. The first proof of concept of this opportunity was a COVID vaccine, as you mentioned. We have no designs to become a vaccine company. We're really using it to show that you can use an exosome to target something and drive a biologic response. And however, that program has been adopted by Project NextGen, and the phase one trial for that should be initiated in the first quarter of 2025. We use this opportunity with Project NextGen and the funding by NIAID, National Institute of Allergy and Infectious Diseases, to build out a manufacturing paradigm for exosomes. So the interesting part of exosomes is that they are way better at delivering molecules that you want to protect than a lipid nanoparticle. As I mentioned, they slide through the body without being detected, hence the name StealthX. They are able to have moieties attached to the surface because they already have extracellular receptors on them, and they're used to carrying cargo, unlike a lipid nanoparticle, which has to be convinced. But what we needed to do as a field was develop a manufacturing paradigm that would make the cost of goods and the ability to manufacture these relatively competitive with a lipid nanoparticle. And that's what we've been able to do with this vaccine program. So now we're slated in 2025 to bring forward therapeutic exosomes where we're going to put coveted cargo, such as an ASO or an siRNA or some other type of nucleic acid that now has to be delivered in large doses just to get it where it's going. We're using a targeting moiety on the surface, a TFR, one that's very common, to get to skeletal and cardiac muscle and deliver the coveted contents and look forward to those clinical programs in 2025. So all of our years of experience in cell therapy has driven the opportunity for this engineered exosome platform to be developed, and that is what we'll be focusing on scientifically while we're launching deramiocel on the commercial side. Yeah, excited to hear more about where you're going to intend to take that, and maybe there's partnering opportunities around that too. Now, following the recent offering and including the $20 million upfront from Nippon Shinyaku for Europe, we estimate you guys have pro forma cash around $186 million, something like that. How long does this fund the company, and what's it enable you to accomplish? Yeah, so it's really exciting. This was a pivotal fundraiser for the company, and and it has allowed us to have a runway to 2027. We are anticipating being able to market deramiocel by the end of 2025. So we expect to be revenue-generating long before the balance sheet would ever become an issue again. Having said all that, what we're really excited about is the fact that this money now allows us to expand our manufacturing footprint as we prepare for launch, build out a commercial team that's sort of shadow boxing with Nippon Shinyaku. Our goal is to make sure that our product has the best opportunity to get to as many DMD patients as possible. We're planning on a Becker muscular dystrophy program beginning in 2025. We have opportunities in Europe, as I mentioned a few minutes ago, and we need to get this product going in Japan, where they also have the same type of deal: sales, marketing, distribution. So we have a lot to accomplish, and this balance sheet strength allows us to completely meet our deliverables. Great. Very exciting. Linda, thank you so much. Thanks. Good luck with the filing. Thank you. Looking forward to a lot of good news next year. Me too. All right, you guys. Thank you.