Welcome to the Caladrius Bioscience Second Quarter 2020 Financial Results and Business Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, Thursday, August 13, 2020. I'll now turn the call over to John Menditto, Vice President of Investor Relations and Corporate Communications at Caladrius. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Welcome to Caladrius' second quarter 2020 conference call to discuss our financial results. Joining me today from our management team is Dr. David Mazzo, President and Chief Executive Officer. Earlier today, we issued a news release announcing our 2020 second quarter financial results, which is available under the Investors section of our website. If you have not received this news release or would like to be added to the company's email distribution list, please e-mail me at jmenditto@caladrius.com. Before we begin, I'll remind you that the 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 Caladrius. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, its forms 10-K, 10-Q and 8-K, which identifies specific 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 the live broadcast, Thursday, August 13, 2020. Caladrius Biosciences undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. Please keep in mind that the company continues to conduct calls from different locations during the COVID-19 pandemic, so we appreciate your patience, should we have any technical difficulties. With that said, I will now turn the call over to Dr. David Mazzo. Dave?

Thank you, John, and good afternoon, everyone. I hope all of you are in good health and remain safe. We thank you for joining us for our second quarter business update. In light of the ongoing COVID-19 pandemic, we are very pleased with our second quarter results and I'm especially proud of the entire team at Caladrius for their ongoing efforts and dedication that has resulted in another quarter of strong operational performance. Specifically Caladrius strengthened its cash position in conjunction with advancing and expanding on our CD34+ cell technology based clinical programs in particular CLBS119 for the treatment and repair of COVID-19 induced lung damage. CLBS12 as a treatment for critical limb ischemia or CLI in Japan. And CLBS16 for the treatment of coronary microvascular dysfunction or CMD. I will discuss each program in more detail in a few moments, but before we get into that, I will discuss a few organizational changes. As we announced earlier this week, Joe Talamo, our Chief Financial Officer tendered his resignation in order to explore opportunities outside Caladrius. Joe will be with us through August 21 and working closely with him we have organized an orderly transition of roles and responsibilities until we conclude our search for a highly qualified permanent replacement. As a result of the change, however, Joe will not be joining us on today's call. On behalf of the entire company, I reiterate our gratitude to Joe for his long time service and contributions. He played an integral role in the formation and definition of what is now Caladrius and leaves the company in excellent financial condition. We wish him all the best in his new endeavor. As we also previously announced, we are honored to welcome Dr. Michael Davidson, most recently of Corvidia as the newest member of…

Thank you. [Operator Instructions] Your first question comes from the line of Kumar Raja from Brookline Capital Management. Your line is open.

Congratulations on all the progress and thanks for taking my questions. And with regard to the lung repair trial, there's data available in literature that the COVID-19 virus, it targets C as well as Oct-4 expressing cells. So in terms of treatment, what kind of markers do you think you'll be selecting for in this trial? And also what kind of lung damage do you expect to have patients in this trial? Like what state of lung damage?

Okay Kumar thank you very much for your kind words and for your questions and for being on the call today. We be looking to enroll patients in the CLBS119 pilot program, who have suffered debilitating respiratory failure as a result of COVID-19. So these will be patients who have been on ventilators and have been successfully extubated, but still have lung deficiencies, or they could be patients who are on ventilators, who have cleared the virus and are otherwise, I'll use the term, healthy, but cannot be successfully extubated, because they are not capable of properly oxygenating on their own. And so this is a sort of a dual set of patients, and this will be the target of the trial. When we are looking at the trial, we'll be looking, of course, at efficacy endpoints that include clinical measures, such as oxygen saturation, supplemental oxygen requirement, pulmonary function testing, and also the resolution of pulmonary infiltrates. And of course, we'll follow that with safety endpoints as well. Although like with all of our other CD34 trials, we do not expect to see any serious adverse events because we've never reported a SOL-related adverse event in any of our trials.

And in terms of targeting sales to the lung, do you think intravenous of closing will lead to that? Or what are your thoughts in terms of targeting the sales to the lung?

Our data from previous study shows that an intravenous injection of the cells will allow them to enter the circulation system. And the cells have a honing mechanism due to CXCR4 surface proteins that allows them hone to move to the areas of ischemic and so they clearly will be based on models that we've seen, that clearly will also migrate to the lung as part of an intravenous infusion.

And in terms of expectation of number of sales that would be needed?

That's part of the exploratory nature of this pilot study. We don't really know because we don't know enough about the disease and the extent of the damage it's caused. There also could be a spectrum of damages based on the patient population. So we'll be using dosing that's similar in size to the number of cells that we've used in our previous studies, but it will be hopefully millions of cells per kilogram of body weight.

Thank you.

Thank you, Kumar.

[Operator Instructions] Your next question comes from the line of Joe Pantginis from H.C. Wainwright. Your line is open.

Hey guys good afternoon. Hope you are all doing well. And thank you for the update. Dave my two questions are focused on clinical trial conduct now, now that more studies are coming up and we can get a little more into the weeds for the upcoming studies. So first, on COVID, I guess, even though it's only 10 to 12 patients, and it should be able to identify patients, just curious on any particular site restrictions with regard to knowledge around cell therapy delivery and also potential competition around other cell therapies that are being used for COVID right now as well.

Hi Joe, thank you very much again for your well wishes, same to you and yours, and thanks for being on the call. As it relates to the clinical trial for CLBS119, we – obviously, there are a lot of companies working on a variety of treatments. And as I said in my prepared remarks, though, a majority of the companies seem to be focused on the acute stage of treatment were on the infection prevention with vaccines. And they are a smaller group of people who are working on the long-term or chronic effect. Given that, coupled with what, unfortunately, now is the myriad number of cases of COVID-19 that exist in the United States, and the fact that those numbers are growing and are predicted to explode again as we get into the fall, we don't expect that there's going to be any shortage of patients here to enroll in our trials. We don't believe that the sites will have to have any specific knowledge of handling the cellular therapies. Remember, our cell therapies involve, in this particular case, a single day of mobilization using a pharmacotherapy. So it's just an administration of an available drug, which will mobilize cells to the peripheral blood stream, the ability to conduct an apheresis to collect a sample of monocytes, and then the ability to provide an intravenous infusion for the treatment. So it's really not anything that any competent clinic or hospital couldn't do. And we'll be looking to enroll the trial as quickly as possible, so that will likely take us to those places that either have been previous hotspots or are becoming hotspots with patients with pulmonary debilitation.

That’s perfect. I appreciate that. And then the other clinical protocol question that I have is for the upcoming CMD study with 16. And I guess I want to talk to the placebo-controlled aspect of that, what specifically you're going to be using to the control and for the control. And then, I guess, in-the-weeds question has to do with are there any sort of factors of comparing the cells part versus the control part that physicians or nurses might be able to tell the difference based on viscosity levels? And again, sorry, I'm getting in too much into the weeds there.

No, no problem, no. But we believe that it's important to provide placebo-controlled randomized data as we move into Phase 2b. And so we'll be doing a true placebo. So the patients, who are randomized to placebo, will go through the rG-CSF pretreatment and the apheresis, they will have a sample of their cells, their monocytes shipped off for preparation. But what was returned to them will be just cell-diluent without any of the cells, and they'll get the same intracoronary injection in the same way as the treatment arm will. So I doubt that it would be possible for nurses or the interventionists to determine who is getting cells and who isn't based upon the appearance or the method of administration. I think with time, in fact, we kind of hope with time that they'll have to – they will get some idea because based on the ESCaPE-CMD trial, we started to see those people were treated showing positive results in terms of improved exercise tolerance, reduced angina, general health improvement overall in as few as three months. And so they may see patients getting better, and they may attribute that to the fact that they think those patients had treatments. But there should be no way to break the blind by visual means until the study is completed, and we actually make an announcement of the results.

Perfect. I appreciate that color. And good luck.

Thanks, Joe.

This concludes our question-and-answer portion of the presentation. And I will now turn the call back to Dr. Mazzo for closing remarks.

Again thank you all for participating on today’s call. We look forward to speaking with you again during our next quarterly conference call and continuing to provide updates on our achievements and progress. And we remain grateful for your continued interest in our company and the support you provide to Caladrius Biosciences. Stay well. And have a good evening.