Lisata Therapeutics, Inc. (NASDAQ:LSTA) Q3 2023 Earnings Call Transcript

Lisata Therapeutics, Inc. (NASDAQ:LSTA) Q3 2023 Earnings Call Transcript November 4, 2023

Operator: Welcome to the Lisata Therapeutics Third Quarter 2023 Financial Results and this is a day conference call. Currently, all participants are in a listen-only mode. Following managements’ prepared remarks, we will hold a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded today, Thursday, November 2, 2023. I will now turn the call over to John Menditto, Vice President of Investor Relations and Corporate Communications at Lisata. Please go ahead, sir.

John Menditto: Thank you, operator, and good afternoon, everyone. Welcome to Lisata’s third quarter 2023 conference call to discuss our financial results and the opportunity to provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer; Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer; and James Nisco, Vice President of Finance and Treasury. Shortly before this call, we issued a press release announcing our third quarter 2023 financial results, which is available under the Investors & News section of the Company website, along with a webcast replay of this call. If you have not received this news release or if you’d like to be added to the Company’s e-mail distribution list, please e-mail me at jmenditto@lisata.com.

Before we begin, I remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Lisata. I encourage you to review the Company’s filings with the Securities and Exchange Commission, including, without limitation, its forms 10-K — sorry, 10-Q, 8-K and 10-K, which identify specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, Thursday, November 2, 2023. Lisata Therapeutics undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that, I will now turn the call over to Dr. David Mazzo. Dave?

Dr. David Mazzo: Thank you, John, and good afternoon, everyone. Thank you for joining us today as we provide an overview of recent business highlights, discuss our third quarter 2023 financial results and give an update on the progress of our various development programs. The third quarter was another productive quarter for Lisata as we added to the momentum of the first half of 2023, with the initiation and advancement of new clinical development programs targeting a variety of advanced solid tumors using LSTA1, our lead product candidate, in combination with multiple anticancer agents of different modalities. As we have previously reported, we have both preclinical data and early clinical data in humans that we believe demonstrates the potential of LSTA1 to become an integral part of a revised standard of care treatment regimen for many difficult-to-treat cancers.

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Q&A Session

During this call, our Chief Medical Officer, Dr. Kristen Buck will provide an update on our clinical programs following the review of our financial results. And with that, I now will turn the call over to James Nisco, our Vice President of Finance and Treasury. James?

James Nisco: Thanks, Dave. Good afternoon, all. I’m pleased to join you today to present a summary of our third quarter 2023 financial results. Starting with operating expenses. For the three months ended September 30, 2023, operating expenses totaled $6 million compared to $37.7 million for the three months ended September 30, 2022, representing a decrease of 84.2%. Excluding the in-process research and development expense of $30.4 million related to our merger with Cend Therapeutics in September 2022, operating expenses decreased by $1.4 million or 18.6% compared to the three months ended September 30, 2022. Operating expenses comprise the following: Research and development expenses were approximately $3.4 million for the three months ended September 30, 2023, compared to $3.3 million for the three months ended September 30, 2022, representing an increase of 1.3%.

Expenses this quarter were primarily due to study activities associated with the BOLSTER trial here in the United States, enrollment activities for the ASCEND study in Australia, start-up activities for the Glioblastoma Multiforme study in Europe and general chemistry, manufacturing and control activities for LSTA1 to support all development activities. General and administrative expenses were approximately $2.6 million for the three months ended September 30, 2023, compared to $4.0 million for the three months ended September 30, 2022, representing a decrease of $1.4 million or 35.3%. This was primarily due to nonrecurring merger-related costs in the prior year, a decrease in equity expense due to prior year performance stock unit vesting, merger option assumption expense and departing Board member restricted stock unit vesting and timing of our annual stockholder meeting versus the prior year.

Overall, net losses were $5.3 million for the three months ended September 30, 2023, compared to $37.4 million for the three months ended September 30, 2022. Excluding the in-process research and development expense of $30.4 million related to our merger with Cend Therapeutics in September ’22, net losses for the three months ended September 30, 2023, decreased by $1.7 million or 24.7% compared to the three months ended September 30, 2022. Turning now to our balance sheet and cash flow. As of September 30, 2023, the Company had cash, cash equivalents and marketable securities of approximately $54.4 million. The Company remains confident that its projected capital will fund its current and proposed operations into early 2026, encompassing anticipated data milestones from all its ongoing and planned clinical trials.

This completes my financial overview and I will now turn the call over to our Chief Medical Officer, Dr. Kristen Buck for the review of our clinical development pipeline. Kristen?

Dr. Kristen Buck: Thank you, James, and good afternoon, everyone. As those who have been following us know, Lisata’s pipeline is built on a portfolio of proprietary and patented technology that is grounded in strong scientific rationale and a body of published preclinical and early clinical data. Our platform technology is designed to address major impediments to the successful treatment of advanced solid tumors in an environment of increasing pharmacoeconomic pressures. Generating meaningful clinical data is critically important in this field and I can assure you that our entire organization has this goal top of mind in everything we do. With that, I will now provide an overview of LSTA1 for the treatment of advanced solid tumors in combination with other anticancer agents.

Despite advances in cancer therapy today, many solid tumors remain difficult to treat effectively. Cancers, such as pancreatic cancer, gastric cancers and other solid tumors are surrounded by a dense fibrotic tissue known as the stroma, which limits access of most pharmacotherapies to the tumor. Many tumors also have a hostile tumor microenvironment, or TME, which suppresses the patient’s immune system and makes it less effective in fighting cancer. The combination of a dense stroma and a hostile tumor microenvironment prevents many chemotherapies and immunotherapies from being optimally effective in treating these cancers. This, coupled with the fact that most anticancer therapies are not efficient in targeting only cancerous tissue, defines the major challenge of maximizing effectiveness and safety in the treatment of solid tumors.