Longeveron Inc

NASDAQ:LGVN

Earnings Call Transcript

[Operator]

Greetings, and welcome to the Longeveron First Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Derek Cole of Investor Relations Advisory Solutions. Thank you. You may begin.

[Derek Cole]

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to review Longeveron's 2025 first quarter financial results and business update. After the U.S. markets closed today, we issued a press release with financial results for Q1 2025, which can be found under the Investors section of the Longeveron website.

On the call today are Wa'el Hashad, Chief Executive Officer; Joshua Hare, Co-Founder, Chief Science Officer and Chairman of the Board; Nataliya Agafonova, Chief Medical Officer; Lisa Locklear, Chief Financial Officer; and Devin Blass, Chief Technology 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 release 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 Dr. Joshua Hare, Founder and Chairman of the Board. Josh?

[Joshua Hare, executive]

Thank you, Derek. Good afternoon, everyone, and thank you very much for joining us today. We greatly appreciate your interest in Longeveron. We are very pleased to update you on our continued successful progress advancing stem cell therapy with our lead product, laromestrocel for multiple chronic indications.

Simply put, this period of the past 2 years through next year is the most exciting time in the company's history. 10 years ago, when I cofounded the company, our stem cell therapy vision was an academic idea. Today, we can see the possibility of our first BLA submission seeking approval for laromestrocel for HLHS. This directly reflects our mission, seeking to help patients and families through the application of stem cell research.

In Alzheimer's disease, we've generated incredibly important clinical data supporting the therapeutic potential of laromestrocel in this devastating neurodegenerative disorder that leads to progressive memory loss and death and currently has very limited therapeutic options. This data has been accepted for presentation at multiple leading industry conferences and was published in the prestigious peer-reviewed journal, Nature Medicine in the April 2025 issue.

We were honored to also have the opportunity to discuss these Phase II results in a recent article in neurology today. Our motivation and dedication to advancing stem cell therapy research has only been further invigorated by the reception to this data from the thought leader community. The next 12 to 18 months are a potentially transformational period for Longeveron with multiple critical milestones, and we are incredibly excited about the opportunity for this progress and to share the developments with you.

I will now hand the call over to Wa'el. Wa'el?

[Wael Hashad, executive]

Thank you, Josh. As Josh stated so well, this is a very exciting time for the company. We continue to focus on diligent, efficient execution of our strategic plan for Longeveron and laromestrocel. In February of this year, we achieved a milestone when the International Nonproprietary Name Expert Committee of the World Health Organization approved laromestrocel as a nonproprietary name for Lomecel-B. This is an important step in the development and potential future commercialization of our cell therapy laromestrocel. We will be using the name laromestrocel going forward when referencing our cell therapy and reduce the usage of Lomecel-B.

As a reminder, for those of you newer to our story, Longeveron is a regenerative medicine company developing cutting-edge cellular therapies. Our stem cell therapy, laromestrocel, has delivered several positive initial results across 5 clinical trials in 3 indications: Phase I and II in Alzheimer's disease; Phase I and II in aging-related frailty; and Phase I in hypoplastic left heart syndrome, or HLHS, a rare pediatric and orphan disease.

The company's development program for these 3 initial indications address U.S. market opportunity of approximately $5-plus billion, $4-plus billion and up to $1 billion, respectively.

Our strategic plan is built on the strength of the science underlying our stem cell therapy, laromestrocel. Our goals for 2025 center on efficient, effective execution of that strategic plan with emphasis on 3 primary operational goals: ELPIS II, which is the Phase IIb study for HLHS completion; HLHS BLA preparedness and commercialization readiness; pursuing a strategic collaboration for the Alzheimer's disease program.

HLHS is a key strategic priority for us. We believe the HLHS program has high probability of success and the shortest path to potential regulatory approval and future commercialization across our pipeline. We are currently nearing completion of enrollment of the ELPIS II Phase IIb study, evaluating laromestrocel as a potential adjunct treatment to the standard of care for HLHS patients. ELPIS II has achieved approximately 95% enrollment, and we expect to complete enrollment in the second quarter of this year, which is the current existing quarter now.

The determination by the U.S. Food and Drug Administration at our meeting in August of last year that ELPIS II is pivotal, significantly accelerate the potential regulatory path for laromestrocel. And if supported by clinical data from the clinical trial would allow us to initiate a rolling submission of a BLA with the Food and Drug Administration in 2026.

With the potential for BLA submission on the horizon, we hired Devin Blass as our Chief Technology Officer. He has over 15 years of distinguished experience in the development and manufacturing of advanced therapies and is leading the company's technological and manufacturing strategies. He will be providing a brief commentary on our HLHS BLA preparedness activities.

The laromestrocel Alzheimer's disease program continues to garner important recognition and support. As Dr. Hare mentioned, results from CLEAR MIND Phase IIa clinical trial evaluating laromestrocel in mild Alzheimer's disease were published in Nature Medicine in March of this year and featured in an interview with Dr. Hare in neurology today in April. Data from this trial were previously presented as a featured research oral presentation at the 2024 Alzheimer's Association International Conference held at the end of July of 2024 as a late-breaking -- and also presented as a late-breaking poster presentation at the 17th edition of the Clinical Trials on Alzheimer's Disease Conference, CTAD24 in October.

In March of this year, we held Type B meeting with the FDA to discuss the regulatory pathway for potential BLA for laromestrocel in mild Alzheimer's disease. We reached foundational alignment on the overall study design for the proposed single pivotal seamless adaptive Phase II/III clinical trial to support an accelerated path to potential approval. The FDA agreed to consider a BLA submission based on a positive interim results from this planned single study. With this regulatory clarity in hand, we are focused on seeking partnership opportunities and/or nondilutive funding for the Alzheimer's disease program.

I'm incredibly pleased with the progress we are making to advancing laromestrocel as a cellular therapy for multiple indications with important unmet medical needs. We are now approaching multiple potential transformational milestones over the next 12 to 18 months, and I am thoroughly excited by the opportunity for laromestrocel, Longeveron patients and shareholders.

With that, I will turn the call to Dr. Agafonova to provide update on our clinical development program. Nataliya?

[Nataliya Agafonova, executive]

Thank you, Wa'el, and good afternoon, everyone. Our lead investigational product is laromestrocel, a stem cell therapy derived from culture expanded mesenchymal stem cells, MSCs, that are sourced from the bone marrow of young healthy adult donors. The number of functional MSCs in the body declines as we age, which has driven interest in their use for aging-related conditions. Their unique properties, including the ability to reduce inflammation, promote tissue repair and regeneration, modulate immune response and improve vascularization also support their application in some rare cardiovascular disease conditions with high unmet medical needs.

We believe that by using the same cells that promote tissue repair, organ maintenance and immune system function, we can develop safe and effective therapies for some of the most difficult diseases and conditions. Based on positive initial data, laromestrocel development programs have received 5 FDA designations. For the HLHS program, Orphan Drug designation, Fast Track designation and Rare Pediatric Disease designation. And for the Alzheimer's disease program, Regenerative Medicine Advanced Therapy, or RMAT designation and Fast Track designation, each of which offer benefit for the program development and regulatory processes.

As Wa'el mentioned, our HLHS program is a primary focus for us with a near-term pathway to potential approval in an area of clear unmet medical need. HLHS is a rare pediatric disease in which the left ventricle, one of the pumping chambers of the heart is either severely underdeveloped or missing. Because the left ventricle is the chamber that normally pumps the blood to the body, infants born with this condition have a profound reduction in blood flow and thus cannot get the normal supply of oxygen to their organs. In order for the children to survive, they must undergo a complicated 3-stage heart reconstruction surgery over the course of the 5 years of their lives. Despite the surgical reconstruction, only 50% of the affected children survived to age 15 without heart transplantation.

Our program is designed to boost improve the heart function in these children with the goal of potentially enhancing their survival. In our Phase I clinical study, ELPIS I, evaluating laromestrocel in 4 months old infants with HLHS, we observed 100% transplant-free survival up to 5 years following treatment. This contrasts with an approximately 20% mortality rate observed in the historical control data. 5-year post-treatment long-term survival data from the ELPIS I Phase I clinical trial was presented at the Congenital Heart Surgeons Society 51st Annual Meeting in October 2024.

We are currently conducting the Phase IIb clinical trial, ELPIS-II, evaluating the potential of laromestrocel to improve right ventricular function and long-term outcomes in pediatric patients with HLHS. ELPIS II is being conducted in collaboration with the National Heart, Lung and Blood Institute through grants from the National Institute of Health. We expect to complete enrollment of the trial before the end of the second quarter. We will then focus on supporting our investigative site through completion of 12-month primary endpoint follow-up period and preparation for the data collection and analysis at the end of the study to support potential BLA submission and readiness. If results from ELPIS II are positive, we would be positioned to initiate a rolling BLA submission with the FDA in 2026.

I now will hand the call over to Devin Blass, our Chief Technology Officer. Devin?

[Devin Blass, executive]

Thank you, Nataliya. Good afternoon. It's a pleasure to join the call for the first time with everyone. As Wa'el mentioned, my background is in the manufacture and development of advanced therapies, which is why I'm delighted to have joined Longeveron at this transformational period in the company's development of cellular therapies.

This year, we will see a significant focus on organizational readiness for the potential BLA filing for HLHS in 2026. The biological license application is a formal request for marketing approval submitted to the FDA for a biologic, somewhat analogous to the process of submitting a new drug application for a small molecule therapy. BLAs are evaluated by the Center for Biologics Evaluation and Research or CBER, an entity distinct from the Center for Drug Evaluation and Research or CDER.

In a relatively short period of time, we have developed a strategic plan to ensure BLA readiness should ELPIS II generate positive results. Our CMC or Chemistry Manufacturing and Controls plan is focused on meeting our BLA time line without delays at the lowest cost, and we are evaluating all strategic options to achieve that outcome. This includes exploring commercial manufacturing options for laromestrocel, either by enhancing our facilities and internal capabilities to meet commercial readiness or alternatively contracting the commercial manufacture of laromestrocel for HLHS to a CDMO.

Our CMC plan identifies the necessary tasks and outlines the substantial amount of work required to achieve BLA readiness, ensuring we are well-prepared to submit all the necessary CMC components of the application in a timely manner. While there's obviously a lot of work to accomplish ahead of any potential filing, we are off to a strong start and making consistent progress every day. Our goal is to substantially advance BLA readiness this year ahead of data readout to potentially shorten the time line from clinical trial data readout to BLA submission.

I will hand the call over to Lisa Locklear, our Chief Financial Officer, to discuss our financial results for the first quarter. Lisa?

[Lisa Locklear, executive]

Thank you, Devin, and good afternoon, everyone. This afternoon, we issued a press release and filed our quarterly report on Form 10-Q, both of which present our financial results in detail, so I will touch on some highlights.

Revenue for the first quarter of 2025 and 2024 were $0.4 million and $0.5 million, respectively. This represents a decrease of $0.1 million or 30% in 2025 compared to 2024, driven primarily by a decreased participant demand for our Bahamas Registry Trial, partially offset by an increase of our manufacturing services contract revenue.

Clinical trial revenue from the Bahamas Registry Trial in the first quarter of 2025 was $0.3 million, a decrease of $0.2 million from the first quarter of 2024, as I said, due to decreased participant demand.

Contract manufacturing revenue for the first 3 months ended March 31, 2025 and 2024, was $0.1 million and $33,000, respectively, reflecting an increase of approximately $0.1 million due to increased activity from our manufacturing services contract.

General and administrative expenses for the 3 months ended March 31, 2025, increased to approximately $2.9 million compared to $2.2 million for the same period in 2024. The increase of approximately $0.7 million or 34% was primarily related to an increase in personnel-related costs, including equity-based compensation.

Research and development expenses for the 3 months ended March 31, 2025, increased 13% to approximately $2.5 million from approximately $2.2 million for the same period in 2024.

Our net loss for the quarter increased to approximately $5.0 million from $4 million for the same period in 2024.

Our cash and cash equivalents as of March 31, 2025, were $14.3 million. We currently believe our existing cash and cash equivalents will fund our operating expenses and capital expenditure requirements late into the third quarter of 2025 based on our current operating budget and cash flow forecast.

Following our successful Type C meeting with the FDA in August 2024 regarding the HLHS regulatory pathway, we have begun ramping up our BLA-enabling activities. We currently anticipate a potential BLA filing with the FDA in 2026 if the current ELPIS II trial in HLHS is successful.

The company's operating expenses and capital expenditure requirements will increase throughout calendar 2025 as a result of these BLA-enabling activities. We expect that our current operating plan will require increased spending and additional capital investments to support these initiatives, and we intend to seek additional financing, capital raises and/or nondilutive funding options to support them.

Additionally, following a positive Type B meeting with the FDA in March 2025 with respect to the Alzheimer's disease regulatory pathway, we are focused on seeking partnership opportunities and/or nondilutive funding for the Alzheimer's disease program, including a proposed single pivotal seamless adaptive Phase II/III clinical trial.

There are a lot of important things happening right now for Longeveron, and we are excited for these opportunities and to keep you updated on our progress.

I will now hand the call back to Wa'el.

[Wael Hashad, executive]

Thank you, Lisa. Longeveron has made tremendous progress in 2 important stem cell development programs: HLHS; Alzheimer's disease. We are now approaching multiple potentially transformational milestones, including completion of pivotal Phase IIb clinical trial in HLHS, our first potential BLA submission for HLHS and based on the strength of the Phase IIa clinical data, potential partnering for Alzheimer's disease program.

Our team's expertise and industry experience enabled the organization to accomplish so much with a small team and fewer resources, and I am incredibly proud of their efforts and accomplishments on behalf of patients and shareholders. We deeply appreciate the support of all the stakeholders and look forward to continued collaboration and progress in the future.

Operator, we would now like to open the call for questions from our covering analysts.

[Operator]

[Operator Instructions] The first question is from Boobalan Pachaiyappan from ROTH Capital.

[Boobalan Pachaiyappan, analyst]

Congrats on the progress. So we have 3 questions. So firstly, I wanted to talk a little bit about HLHS market. So this is primarily for me to get some clarity the way I look at the market. So you have said in the past, roughly 1,000 babies are born every year in the U.S. that have HLHS. So even if you assume 15% mortality, we still have 850 babies who need to undergo the Stage 2 surgery every year within 4 to 6 months after the Norwood procedure, right?

So my question is, do all Stage 1 survivors will ultimately qualify to receive laromestrocel? Or is there a reason why certain Stage 1 surviving patients would not want laromestrocel? As you can imagine, the reason I'm asking this question is because I wanted to understand whether some of the enrollment challenges you're facing would ultimately impact your commercial adoption?

[Wael Hashad, executive]

All right. So Boobalan, that's a great question, and I may have several members of the team to answer this one. I'll answer the last part, which is regarding the enrollment challenges. I really believe that while everybody see it and everybody loves to see more prediction, I think we have actually done a very good job as a company in enrolling in an orphan disease compared to other products. I mean, we are almost 95% enrolled. If you do the math, this means that we have 1 patient left, which we are confident we're going to get this quarter, and we finished the enrollment.

And enrolling 4% of the annual population in the study, that's a sizable population for an orphan disease. And the fact that we were able to enroll it in a matter of less than 3 years actually, it's a very good achievement. So in that front, I know it has been challenging, and I know everybody would like to see more clarity. I really believe that we have done a very good job in the enrollment.

As for the market, the market opportunity is very big because we have -- our exclusion criteria does not exclude a lot of patients, but I will have Dr. Hair or Natalya answer exactly who are the patients are excluded, and I will come back and talk about the market opportunity as well. Josh?

[Joshua Hare, executive]

Wa'el, yes. I just wanted to make a comment on the trial as well. I think that I want to emphasize that not only is this trial excellently conducted, but it is going to be the most rigorous trial conducted in babies with congenital heart disease for cell therapy because of the rigorous design and size of the patient population.

With regard to the market, I think that the majority of children who go to the Stage 2 surgery, the Glenn procedure will be considered for inclusion in this treatment once the -- once approved. I think there are very few reasons to not consider treating a child once they make it to Stage 2 if the product is approved via BLA.

[Wael Hashad, executive]

Yes. So Boobalan, to be more specific and tell you how we're even forecasting our market for the market and the commercial opportunity. We anticipated 1,000 babies that are born with this condition every year. Many of them actually end up going directly because, as you know, the first stage surgery happened within the first week of birth. And even if 90% of them survived to the second stage surgery, that leaves about 900 patients every year. Within those 900 patients, we assumed the following.

The only exclusion criteria if these patients have a comorbidity with a valve problem with tricuspid valve issues. That population that has that comorbidity is less than 10%. So here is another out of that 900, you can take out about 10% of the population that leave you with 800. Those 800 patients, we assume that some of them for whatever reason they choose electively that they would not want to have the therapy. So our penetration assume about 65%, 2/3 of the market will have, which we believe that represents a very good sizable opportunity for us to -- in the marketplace. And this is the most conservative pricing estimate will be north of $0.5 billion just in the U.S. and that's not including any patient from outside the U.S.

[Boobalan Pachaiyappan, analyst]

I just wanted to move to the second question, and I also have a follow-up. So my second question about the FDA. There's been -- FDA has been in the news many times during the last few months for many reasons and one of which is leadership changes at the CBER division. And this is the division you will be ultimately dealing with when you approach your BLA filing and potentially for the PRV.

So my question is, like, have you seen any indication or whatsoever, any signals whatsoever that basically makes you believe your BLA will be impacted by either leadership changes or by policy changes at the FDA?

[Wael Hashad, executive]

So to be direct, we have not seen anything. I mean, the most recent interaction with the FDA was in March 13, of course, before the naming of the new CBER director. But the interaction has been very supportive. The FDA has been very collaborative. The team has remained very supportive of our plans, and we have minutes again that we have agreed. So there is nothing here to allow us to assume otherwise from an information that we have.

I also want to tell you that regardless of any leadership change, my -- our philosophy at Longeveron is that we have to be buttoned up in our application, and that's why we're having a head start regardless as we want to absolutely submit the best possible BLA ready with all the information that is needed for -- to absolutely pass through the drug approval and get that approval on the first one.

[Boobalan Pachaiyappan, analyst]

And one last question, and this is for Devin. So as you're contemplating manufacturing in-house versus contracting a CRO, so I was wondering if you could provide some commentary on your current capacity and potentially your plans to scale your operations, assuming you're ultimately going to be responsible for manufacturing as you think about transitioning to a precommercial company. So if you can lay out some of your -- the current plans and maybe potentially the investments that might be necessary to rapidly advance towards commercialization stage, that would be helpful.

And also in this regard, if you can tell us if there is any bottlenecks that would limit your freedom to operate because when you go to commercial, I wanted to better understand whether you're hinging or someone else's patents. So any commentary would be helpful.

[Devin Blass, executive]

Of course. So regarding our capacity itself -- one lot of laromestrocel, we believe, is enough to produce at least 1,500 doses for this product. So with the commercial markets and the number of babies that are born this year, we believe that the current yield sizes are one that we'll be able to supply the drug commercially. And that's with our current manufacturing process.

The investments that we'll be making is primarily in ramping up our GMP systems, looking at facilities, which could include a CDMO that has commercial capabilities and capable of receiving a BLA. Additionally, we are ramping up on internal staff as well experts who have gone through this process before to ensure a timely BLA.

[Boobalan Pachaiyappan, analyst]

Advance congrats to wrap up ELPIS II enrollment.

[Operator]

The next question is from Ram Selvaraju from H.C. Wainwright.

[Raghuram Selvaraju, analyst]

Again, congrats on all the progress so far. Looking forward to your wrap-up of the enrollment process with ELPIS II.

Two quick things. Firstly, I was wondering if you could provide us with some feedback, some color on the applicability of value-based pricing to determine the best possible pricing paradigm for laromestrocel in HLHS. And in particular, if value-based pricing is applicable, if it is applicable, in what context, how might this factor into how pricing is ultimately determined?

And if you look at recent drug launches in the rare and ultra-rare disease space, are there any that are currently ongoing or that we expect later this year that might provide appropriate precedent benchmarks for the pricing of laromestrocel in HLHS, if ultimately approved?

And then the second one is a very minor one, but I was wondering if you could comment on the timing with which laromestrocel would need to secure regulatory approval in order to be eligible for a PRV, assuming that the PRV program overall is not reauthorized by Congress?

[Wael Hashad, executive]

All right. So Ram, let me answer the 2 questions regarding the PRV. Right now, the current PRV expires in September of next year. And I don't think that -- if it doesn't get renewed, this means that it will expire before we get the market authorization for laromestrocel. However, I absolutely know, and I sit, as you know, on the Board of the California Life Science and actually engage with a lot of the member of the Congress, both in the 2 sides of the aisle.

And I can tell you, there is a big support on both sides of the aisle to support the program or the initiative is called Gait the Chance Act. And I believe once the Congress start to put all the priorities and budgets and things like that, it will get reauthorized for an extension. And in this case, we will be eligible to get it. So that's regarding the PRV and what is the likelihood and full transparency. And we are working. And again, as I said, this is a very top priority for us, and we are part of Bio and CLS and BioFlorida and many other organizations, and they know how important that is.

Regarding the value-based pricing and the reference pricing. So the only product that is currently the closest product to our products in a rare disease is the product that was approved for Mesoblast for GvHD, graft-versus-host disease, which is also an orphan disease as well. The cost of therapy, I believe, as they have announced, and again, I'm just speaking out of their own disclosure is about $1.5 million for the course of treatment. So if you use this as a benchmark at the closest, you can grow your pricing.

As I said, we have not made a final pricing decision on any of these things. But we are onetime use only. So there is no chronic utilization. And we believe that we can command a good premium, especially that we're looking for saving lives. I mean mortality is one of the endpoints that we're looking for or survival. And we're also looking for things that can really provide a significant value to the healthcare system, such as hospitalization costs and other areas as well.

So overall, we believe that we will be able to have a very good story around value-based pricing if we needed. And I believe that even on the most conservative estimate, as I mentioned, of pricing drugs in the field that we are operating with, which we have seen it north all the way up to $3 million per course of treatment, I believe that we'll be able to generate a substantial revenue for the company.

[Operator]

The next question is from Michael Okunewitch from Maxim Group.

[Michael Okunewitch, analyst]

Congrats on all the progress you made.

[Wael Hashad, executive]

Thank you, Michael.

[Michael Okunewitch, analyst]

So I guess to start things off, I'd like to see if you could talk a little bit about what sort of a sales force you would need in HLHS. And in particular, among those 12 centers that are running the ELPIS II study, how much of the volume of the Glenn surgery actually passes through these centers?

[Wael Hashad, executive]

All right. That's a great question. And honestly, I'm so excited in this call to start to see that we're getting commercial question because that's what we're excited about here also on Longeveron. So to answer your question is, I will tell you, Michael, I came from the commercial world, and we used to say there is a rule call it 80-20. So 20% of our customers generate 80% of our business.

And I would tell you that 12 centers that we have used in our clinical trial, they actually conducted the majority -- almost 80% of these surgeries. So that's a big plus for us is that we are actually conducting a trial in high-volume centers. This is a very specialized surgeries or set of surgeries, as you know, and having those relationships established and the experience with the drug will give us a huge benefit.

The number of surgeons who are -- or pediatric cardiac surgeons who perform these surgeries in the U.S. is they are about less than 50 on my last count. And we anticipate a need for more than 4 or 5 sales force across the United States. but the commercial -- entire commercial organization will not exceed 12 to 15 people, and that assume managed market support, marketing support, patient services support and all of that. So it's a very focused organization, and that's the beauty of operating in orphan diseases as you really don't need large resources to be able to service the patients who suffer from these diseases.

[Michael Okunewitch, analyst]

That's certainly a good answer to hear. And then just talking a little bit about the plans for scaling out your manufacturing. I'd like to get a sense of how much the stage of partnering discussions in Alzheimer's might impact the decision to go for a CDMO or to build out in-house? Or is that not really a factor here?

[Wael Hashad, executive]

The -- so I can absolutely -- Devin can add this. We absolutely know for a fact that we cannot manufacture for Alzheimer's within our existing facility because the plan that we aligned with the FDA on is that we're going to do a pivotal Phase II/III, as you heard in our call today, which is a great plan because that is probably the fastest and most accelerated path that the FDA agreed to in that area, which we're really excited about.

But that also means that the clinical trial materials even for that study will have to be produced in a commercial level facility, which, in this case, we know it cannot be our existing facility and either CDMO or we're going to have to see if the partnering discussion lead to a partner with a facility that they can support that. But definitely not going to happen in our facility in Miami.

Do the decisions of the CDMO for HLHS and Alzheimer are tied together? To a very remote, I think we're looking at them as 2 distinct criteria. But definitely, one of -- if we're going to move the CDMO route for HLHS, we definitely -- that's one of the questions that we have around the table, can this in the future also help us at a larger scale with Alzheimer's disease.

Devin, do you want to add any comments on this?

[Devin Blass, executive]

Just to reiterate that the -- while we're looking at multiple different options, the CDMO option is one of them. And the CDMOs that we have been looking at do have the capability to -- for a larger scale manufacturing for an indication like Alzheimer's.

[Michael Okunewitch, analyst]

And one last one from me, and I'll hop back in the queue. Just I'd like to see if you could help me understand a little bit more what the adaptive protocol might look like for the Alzheimer's study. Would that be something like a Phase II portion that confirms powering and then a Phase III portion for approval? Or would it just be one single straight-through protocol?

[Wael Hashad, executive]

Yes. So I'll give you the high level and Nataliya can get into the details. So the agreement with the FDA is that we're going to do one single study. This study will have about 1,600 patients or 1,650. And the first portion of the study, which we call it Phase II adaptive, will have 600 patients. It will be a 3-arm study, 1 placebo and 2 different dosing regimen for laromestrocel.

And at the end of the period of the 600, we're going to do an interim analysis, looking at the same primary endpoints that we would use for the end of the study. If that interim analysis at the 600 is positive, the FDA agreed that they will give us an approval based on the 600 with the principle to continue the study for the 1,650 to get larger patient set after the approval is complete. So that's the plan that we agreed to with the FDA.

And Nataliya, feel free to give more details or answer any additional question from Michael.

[Nataliya Agafonova, executive]

Absolutely, Wa'el. Just to add what Wa'el mentioned already, the idea of adaptive design, yes, is to do seamless. So we are not interrupting Phase II. We are moving directly to Phase III. And the approval -- traditional approval is based on interim analysis when 50% of participants complete all 72 weeks of treatment. And we are talking about, as Wa'el mentioned, 600 patients and 200 patients per arm. And our decision will be made based on the conditional power. At that time, we have opportunities either to go for approval -- traditional approval, if there is evidence of efficacy or we can choose another dose for the complete trial. We can also decide whether or not the trial is going to work.

And then the trial is going to continue in case if we approve this condition to complete the trial until all patients on the study complete 72 weeks of treatment with the full analysis at the end of the trial. So this is the opportunity to have -- first of all, to have one trial operationally seamless. We don't have to do all the operational feasibility, et cetera, is going to be continuous treatment. And also to have -- this is the opportunity to have a traditional approval sooner. So yes.

[Michael Okunewitch, analyst]

And once again, congrats on all the progress you've made over the past several quarters.

[Nataliya Agafonova, executive]

Thanks, Michael.

[Operator]

There are no further questions at this time. I would like to turn the floor back over to Wa'el Hashad for closing comments.

[Wael Hashad, executive]

All right. Well, thank you, operator, and thank you all for attending our call today. We greatly appreciate your interest and support and look forward to updating you on our progress. Thank you.

[Operator]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.