Welcome to Capricor Therapeutics’ Fourth Quarter and Full-Year 2017 Conference Call. My name is Jonathan and I will be your operator for today’s call. At this time, all participants are in a listen only mode. At the end of this call, we will open up the line for your questions. [Operator Instructions] Note that this call is being recorded. I will now turn the conference call over to Capricor’s CFO, AJ Bergmann.

Thank you. Before we move further along, I would like to state that we will be making certain forward-looking statements during today’s presentation. These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of our product candidates, our future research and development plans including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates and our possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements and we disclaim any obligation to update such statements. With that, I would like to turn the call over to Linda Marbán, CEO. Linda Marbán: Thank you, AJ. Good afternoon and thank you for joining us for Capricor’s fourth quarter and year-end conference call. Joining me on today’s call is AJ Bergmann, our CFO. 2017 was a pivotal year for Capricor. It was the year in which we shifted our clinical focus of CAP-1002, our allogeneic cell therapy to treating Duchenne muscular dystrophy, which I will now refer to as DMD. These are exciting days in the world of DMD therapeutic development, never had there been more opportunity for disease modifying therapies, including CAP-1002 and gene therapy. We believe that there will be no single treatment for DMD, rather addressing the various pathogenic mechanisms, including partial dystrophin…

Thank you, Linda. This afternoon’s press release provided a summary of our fourth quarter and full-year 2017 financials on a GAAP basis. You may also refer to our annual report on Form 10-K, which we expect to become available in the next several days ad will be accessible on the SEC website, as well as the financial section of our company website. As of December 31, 2017, the company’s cash, cash equivalents and marketable securities totaled approximately $14.1 million, compared to approximately $16.2 million on December 31, 2016. Based on our current plans and projections, Capricor expects its cash, cash equivalents and marketable securities will fund its research and development programs and other operations through the fourth quarter of 2018. In the fourth quarter of 2017, our net cash used in operating activities was approximately $2.7 million. Excluding stock-based compensation, our research and development expense was approximately $2.4 million in 4Q 2017, compared to $2.5 million in 4Q 2016. Again, excluding stock-based compensation, our general and administrative expense was approximately $900,000 in both the fourth quarter of 2017 and 2016. Additionally, in the fourth quarter of 2017, the company notified CIRM of its election permitted under the loan agreement to abandon the ALLSTAR CIRM-funded project and entered into an amendment, whereby the total loan balance, including principal and accrued interest, which totaled approximately $15.7 million was forgiven by CIRM, thereby terminating the company’s obligation to repay this amount. As a result of this classification, the company reported net income of approximately $12.3 million for the quarter ended December 31, 2017 and stockholders’ equity as of December 31, 2017 is approximately $11.2 million. And with that, I will now turn the call back over to Linda for her final remarks. Linda Marbán: Thank you, AJ. Over the next few weeks, we will be presenting at several conferences. On March 21, we will be presenting at the Oppenheimer and Company Banking Conference at The Westin Grand Central in New York City. And then again, on March 28, we will be presenting at the Needham Banking Conference in the same location, The Westin Grand Central in New York City. I look forward to seeing you there. Thank you for your time today, and we will now open the line for questions.

Certainly. [Operator Instructions] Our first question comes from the line of Joe Pantginis from H.C. Wainwright. Your question please?

Hey, guys, good afternoon. Thanks for taking the question. Couple of questions on the future conductive of HOPE-2, if you don’t mind. First, would you be willing to share any of your assumptions with regard to enrollment times and timeline for data? Linda Marbán: Yes. Thanks, Joe. So our anticipation is that the trial will enroll fairly rapidly, so we plan for fully enrolling the trial by, let’s call it, the second quarter of 2019. And then we’ll have an interim data analysis. We haven’t announced exactly when that will be available, but it will be sometime in 2019, where we look at some portion of the data and determine path forward. And then the full datasets, we anticipate to be available around the year after a full enrollment, which, let’s call, that the second quarter of 2020.

Great. No, that’s helpful. Thank you. And then with regard to patient identification, obviously, the market is – should be able to come to you. So maybe any comments with regard to patient identification? And more specifically, anything with regard to, say, rate-limiting steps in the screening of patients? And could you share any assumptions with regard to how many patients you think you might have to screen to get to the 84? Thanks a lot. Linda Marbán: Yes, thanks. So we’ll update with screening assumptions as they potentially become available. Of course, we’ve had a tremendous influx of queries from the Duchenne community. I think, most of the families know what we’re doing and because they have a therapeutic that can potentially treat the heart disease, there’s a tremendous amount of energy to, at least, look at the trial. In terms of screening, we don’t anticipate that there’ll be any potential barriers to screening and we anticipate that we’ll enroll well. But, of course, if anything changes, we’ll provide updates along the way.

Great. Thanks for the info, Linda. Linda Marbán: Thanks, Joe. Take care.

Thank you. Our next question comes from the line of Alan Leong from BioWatch News. Your question please?

Thanks for taking my questions and congratulations on the last quarter, as well as the provisions for the loan forgiveness. Linda, I don’t know how you do the ability to run on a dime is almost unbelievable. Can you give us a few – I’d almost ask you to give us a few lessons? Linda Marbán: Thank you. I think, that’s a compliment. So, I think, we stay very focused. We know what our goals are. Our goals now are to get to the milestone of data from HOPE-2, and our team is finally tuned and finally honed. We work very hard and spend our dollars wisely to get where we want to go.

Well, I wonder if you can – it’s really for the entire audience, kind of go into – can you apply a little color on the typical – typically why the FDA would allow for an early regulatory approval for such a disease? What’s the rationale and motivation for the FDA to even think about such a concept? Linda Marbán: I cannot speak for the FDA. What I can tell you is that the FDA has expressed in their public guidances that they are motivated to move approval forward for diseases that are of terminal nature. And that as long as you follow along with what they request, they’re happy to work very closely with you to get it done.

If I may, I wonder, because the company has made some interesting progress on the exosomes. When I look at the readings in generally about regenerative cells, the source for the regenerative cells has always been an important issue, that kept, of course, cardiosphere-derived source versus generic regenerative cells. Does the same apply to the source of exosomes? Can I make the same extension? Because it seems to me, it’s important to get exosomes from specific cells rather than from generic regenerative cells that I’m seeing in the literature. Could you provide any color on that issue? Linda Marbán: Yes. So I mean, this is all in the world of early science. We’re still, as a field, trying to get our hands around how the exosomes work and which ones do and don’t. What I can tell you specifically about our exosome, the CDC-derived exosome is that they mediate the mechanism of action of ourselves. So we’ve done a lot of studies. For instance, if you block the cells from making the exosome, you can block about two-thirds of the activity of the cells. And we have taken out the exosomes independently and are able to recapitulate the effect of the cells, for instance, by directly injecting them into the skeletal muscle of Duchenne mouse called the MDX mouse. So we believe that the CDC-derived exosomes mediate the bioactivity of the cells. And therefore, are potential important next-generation therapeutic forward generic medicine.

Okay. And lastly, did you want to provide any color on how the Cedar independent studies are going? Linda Marbán: Yes. So I can’t speak for the researchers of Cedar’s, but they publish quite regularly. So we’re happy to put you among the list if there’s a paper that comes out and we’ll send it along to you.

Amazing. Thank you very much. Linda Marbán: Thanks, Alan.

Thank you. [Operator Instructions] And this does conclude the question-and-answer session of today’s program. I’d like to hand the program back to management for any further remarks. Linda Marbán: Thank you. We look forward to providing updates at our next quarterly conference call. And with that, we’ll conclude this call. Thank you for your time today.

Thank you. Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.