By Brad Sorensen, CFA
NASDAQ:LGVN
READ THE FULL LGVN RESEARCH REPORT
Longeveron (NASDAQ:LGVN) is a Miami-based, clinical-stage biotechnology company focused on developing cellular therapies for chronic diseases associated with aging and other life-threatening conditions. Management at Longeveron believes that by using the same cells that promote tissue repair, organ maintenance and immune system function, the company can develop safe and effective therapies for some of the most difficult disorders associated with the aging process.
Longeveron’s lead investigational candidate is a cellular therapy known as Lomecel-B, which is being evaluated in multiple clinical trials and life-threatening conditions under United States FDA-approved Investigational New Drug (IND) Applications. Although Longeveron’s main focus is on age-related maladies, breakthroughs can be found through the research process in other areas as well.
The company provided an update on these activities and their financial situation. Longeveron reported 2Q 2022 revenues of $0.5 million, in line with the same quarter a year ago, and a loss of $0.27/per share, mostly inline with expectations. We were happy to see that there were no surprises in the financial releases for 2Q and things appear to remain on track, with no major concerns.
Funding operation is one of the major issues facing clinical stage companies and we were pleased to see that the company also reported an ending cash balance, as of June 30, 2022, of $27 million. Management believes this cash balance will be adequate to cover expenses and capital expenditures into the first half of 2024.
The company also provided updates on some clinical trials—all of which we view as positive progress:
- The Phase 2a clinical trial of Lomecel-B to evaluate the safety of the drug in patients with mild Alzheimer’s Disease is at 50% enrollment and on track for complete enrollment by the end of 2022.
- The company provided updates on its progress in using Lomecel-B in the treatment of aging frailty disease announced top-line findings from the second phase of the Phase ½ HERA trial, which met the primary endpoint for safety.
o Management noted that the company plans to pursue additional studies of the immune system as it continues to study the range of impacts Lomecel-B has the potential to have on aging frailty.
- The company is pursuing approval of Lomecel-B in the treatment of Aging Frailty disease with the Japanese medical authority that would allow them to enter the market in Japan on an accelerated basis.
It also must be noted that the updates were given by the interim CEO as the company continues to search for a new permanent CEO--but we are pleased to see that operations of Longeveron appear to be on track through the transition in the C-Suite.
This update reaffirmed our view of LGVN that it remains at what we believe is a discount to its potential stock price should operations continue as they are. We believe Lomecel-B has the potential to be a major game-changer for multiple maladies and that leads us to think LGVN is worth a look by investors, although those investors should have a higher risk tolerance as companies at this stage have many risks that could derail progress and harm the stock price.
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