Biotechnology is a rapidly evolving sector, and it has expanded immensely with the arrival of biological big data with respect to genomics, microbiome, exosomes, and so on. With the availability of all this information, scientists now have a better understanding of fundamental human biology which is now driving research in the direction of the age-old quest of increasing life expectancy. Many scientists now feel that this is a reality which can be achieved through treating chronic diseases and slowing down the process of cognitive function decline. Our stock pick for the day, Longeveron Inc. (NASDAQ:LGVN), is engaged in research & development in this field and is also carrying out stem cell research to develop therapies designed to counter aging, frailty, Alzheimer’s Disease and various other aging-related disorders.
What Does Longeveron Do?
Longeveron is a clinical-stage biotechnology company developing cellular therapies for aging-related and life-threatening conditions. The company’s lead candidate is Lomecel-B, a cell-based therapy obtained from medicinal signaling cells (MSCs) that are derived from the bone marrow of young healthy adult donors. The company’s clinical pipeline is focused on a variety of ailments such as aging frailty, Alzheimer’s disease, related dementias (ADRD), and metabolic syndrome (MetS). Longeveron is a recognized leader in regenerative medicine and aging research and is conducting one of the most advanced multicentre interventional clinical studies for aging frailty. Moreover, the company has its own manufacturing facility and research and development laboratories, which it uses not only for product development but also for contract manufacturing purposes. Longeveron has a team of experienced scientists and production specialists at its facilities who specialize in cell processing, biomarker analysis, potency assays, product characterization, quality control, and quality assurance.
Lomecel-B progress
Lomecel-B is a cellular therapy made from specialized cells called Medicinal Signaling Cells (MSCs) that are isolated from fresh bone marrow tissue, donated by adult donors aged 18 to 45. Longeveron’s core business strategy is to become a world-leading regenerative medicine company through the development and commercialization of novel cell therapy products like Lomecel-B, with emphasis on aging-related indications. As of the first quarter of 2021, over 260 subjects have received Lomecel-B via direct injection, and there have been no serious adverse events reported that were considered related to the product candidate. Additionally, Lomecel-B was recently approved to conduct a Phase 2 Aging Frailty clinical trial by the Japanese Pharmaceutical and Medical Devices Agency (PMDA). It is worth highlighting that In March 2021, the company announced that the U.S. Food and Drug Administration (FDA) had granted expanded access approval for the administration of Lomecel-B to a child with HLHS (Hypoplastic Left Heart Syndrome), a rare congenital heart disease that affects about 1000 babies per year, and the full results of Longeveron’s Phase 1 trial in HLHS are expected in the second quarter of 2021. In this program, Lomecel-B is administered via direct injection into the heart during pre-planned standard-of-care reconstructive surgery. The Phase 1 trial established the safety of this type of administration in HLHS babies, and now Lomecel-B is planned for Phase 2 testing, and has been awarded a $4.5 million multiyear grant from the National Heart Lung and Blood Institute (NHLBI).
Alzheimer’s trials and other key developments
Longeveron just completed its Phase 1 Alzheimer’s Disease (AD) clinical study in 33 mild AD patients. Alzheimer’s disease is the leading cause of dementia in which the death of brain cells causes cognitive decline and memory loss and there are no approved medications that can prevent, stop, or reverse the progression of the disease. There are five currently approved drugs for AD that provides only partial symptomatic relief but do not treat disease progression. Reasons for these failures include the inability of these other approaches to treat multiple pathological aspects of AD, and the inability to promote neuroregenerative responses, which is highly muted in the brain. Longeveron is testing Lomecel-B as a potential treatment for AD based on the hypothesis that its multiple possible mechanisms of actions can simultaneously address several features of Alzheimer’s. In 2020, the company completed Phase 1 of its AD trial in conjunction with its funding partner, the Alzheimer’s Association. Management is extremely satisfied with the safety and preliminary efficacy results, is expected to announce the final trial results in the second quarter of 2021, and is planning a multicenter, randomized, placebo-controlled Phase 2 trial expected to initiate enrolling patients this year. Further to recent developments, notably, Longeveron received approval from the U.S. FDA to proceed with Phase 1 clinical trial for Acute Respiratory Disease Syndrome (ARDS) which is related to either Covid-19 or Influenza infection. Moreover, the company also treated three Covid-19 ARDS subjects with Lomecel-B under FDA-approved expanded access. The company is pursuing large indications, particularly Aging Frailty and Alzheimer’s disease, and areas of significant unmet medical need.
Strong Management Team
Longeveron’s management team is headed by CEO Geoff Green who is a versatile life sciences executive with over two decades of experience in leadership roles spanning clinical drug development, clinical operations, and business development and has been with the firm since 2016. He is ably supported by a team of skilled scientists, spearheaded by the company’s Chief Science Officer and Chairman, Joshua M. Hare, a graduate of the University of Pennsylvania & Johns Hopkins University School of Medicine, who served as a research fellow at Harvard University and has many years of experience. The high pedigree of the management team, coupled with their ability to assemble the highest quality scientific personnel under one roof is a major green flag in favor of the stock.
Final thoughts
As a contrast to most clinical-stage biotech companies, Longeveron is flush with cash from its grant revenues, its clinical trial and contract manufacturing revenues as well as the funds from their recent over-subscribed IPO. With net proceeds of north of $24 million in cash, Longeveron is well-positioned to cover all expenses and capital requirements for into late 2022. With the IPO, the management is in a comfortable position to complete the current ongoing trials and to initiate approximately four additional Phase 2 clinical trials, which may subsequently lead to pivotal trials, the last step towards potential commercialization and a huge spike in revenues. The company has great momentum with respect to its Alzheimer’s disease trials. According to a 2020 market research report by Market Insight Report, the global market for treatments for this disease is expected to reach $10.5 billion by 2025 growing at a CAGR of 17.5%. In summary, we believe that given its strong pipeline, its solid cash position, and its revenue generation potential, Longeveron is definitely one stock that deserves a place in your portfolio.
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