Welcome to the Caladrius Biosciences Fourth Quarter and Full Year 2021 Financial Results and Business Update Conference Call. Currently, all participants are in a listen-only mode. Following management’s prepared remarks, we will hold a Q&A session. [Operator Instructions] As a reminder, this call is being recorded today, Tuesday, March 22, 2022. 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’ fourth quarter and full year 2021 conference call to discuss our financial results and provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer; Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer; and James Nisco, Vice President of Finance and Treasury. Shortly before this call, we issued a press release announcing our fourth quarter and full year 2021 financial results, which is available under the Investors and News section of the company website, along with the webcast replay of this call. If you have not received this news release or you would like to be added to the company’s e-mail distribution list, please e-mail me at jmenditto@caladrius.com. Before we begin, I will remind you that 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 identify 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 this live broadcast, Tuesday, March 22, 2022. Caladrius Biosciences undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that, I will now turn the call over to Dr. Mazzo. Dave?

Thank you, John, and good afternoon, everyone. Thank you for joining us today on our fourth quarter and full year 2021 business update and conference call. Despite the challenges of the COVID-19 pandemic and difficult financial markets, we successfully navigated 2021 with advancements across our development programs while strengthening our balance sheet, giving us the confidence and means to fund operations for the next several years, based on our current development portfolio. Notably, we further diversified and strengthened our management team with the addition of several highly qualified and experienced personnel including the appointment of Kristen K. Buck MD as Executive Vice President of Research and Development and Chief Medical Officer. In addition, Caladrius continued and continues its concerted efforts to identify and evaluate strategic development opportunities with the aim of consummating transactions that will deliver additional value to our shareholders beyond our current development pipeline. I’ll now turn the call over to James Nisco, our Vice President of Finance and Treasury, to review and provide commentary on our fourth quarter and year-end financial results. James?

Thanks, Dave. I’m pleased to join you today to present a summary of our fourth quarter and year-end financial results, starting with operating expenses. Research and development expenses for the fourth quarter of 2021 were $4.2 million, a 43% increase, compared with $2.9 million for the fourth quarter of 2020, and $17.7 million for the year ended December 31, 2021, compared to $9.3 million for the year ended December 31, 2020, representing an increase of approximately 91%. Research and development activities in both the current year and prior year periods focused on the advancement of our ischemic repair platform and related to expenses associated with efforts to continue execution and acceleration of enrollment of the FREEDOM trial, XOWNA, CLBS16, and expenses associated with the planning, preparation and initiation of the Phase 1 proof-of-concept trial for CLBS201 as a treatment for diabetic kidney disease, and ongoing expenses for the development of HONEDRA as a treatment for critical limb ischemia, and Buerger’s disease in Japan associated with maintenance of manufacturing facility and personnel qualification as well as contract research organization engagement despite no subject treatment execution due to the COVID-19 imposed states of emergency in Japan throughout the year. General and administrative expenses, which focus on general corporate-related activities, were $2.7 million for the three months ended December 31, 2021, representing an increase of 6%, compared to $2.5 million for the three months ended December 31, 2020, and $11.4 million for the year ended December 31, 2021, representing an increase of 15%, compared to $9.9 million for the year ended December 31, 2020. This increase was primarily due to an increase in directors and officers liability insurance premiums, something that generally has been experienced throughout the healthcare industry and strategic consulting expenses. Overall, net losses were $27.5 million and $8.1 million for…

Thank you, James. And good afternoon, everyone. As those of you who have participated in our quarterly conference calls before know Caladrius is currently focused on the development of autologous cellular therapies designed to treat or reverse disease. Based on human clinical trial data generated to date, our therapies have shown strong signs of efficacy and durability with an excellent safety profile unlike many allogeneic therapies. Importantly, we believe that curative cell therapy products when applied to the right indication and at the right price, they can restore human health and potentially improve quality of life with a single administration as compared to a treatment that requires frequent re-administration. Our CD34+ cell therapy technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia, a condition in which the supply of oxygenated blood to the healthy tissue is restricted. Previously published pre-clinical and human clinical studies have demonstrated that administrative of CD34+ cells induces angiogenesis of the microvasculature. That is these cells prompt the development of new blood capillaries, thereby contributing to the prevention of tissue death by facilitating blood flow to the area of ischemic insult. We believe that several conditions caused by underlying ischemic injury can be improved through the application of our CD34 cell technology, including, but not limited to, critical limb ischemia or CLI and Buerger’s disease, as well as coronary microvascular dysfunction, CMD, and diabetic kidney disease, DKD. With that as a general background, I will now expand on each of our clinical programs in numerical order kicking off with CLBS 12 also known as HONEDRA in Japan, our product candidate for the treatment of CLI and Buerger’s disease. HONEDRA was awarded a SAKIGAKE Designation from the Japanese regulatory authorities for the treatment of CLI and Buerger’s…

Thanks Kristen. Overall, we are pleased with the corporate and development achievements we made in 2021. Unlike many life science companies of similar of size and stage of development, we are financially sound and to-date have generated and continued to generate positive clinical data in indications of high unmet medical need, while also building out a team of highly and broadly qualified seasoned experts. Although our share price has traded over the last 12 plus months in line with relevant indices and the stock market in general, we and I’m sure all of you continue to be frustrated by the lack of value recognition afforded our company beyond that of our balance sheet. As a result, while we continue to work to create shareholder value based on our existing development pipeline, we are really looking toward a broadening of our development portfolio to revitalize and significantly increase interest in our company as indicated by our share price. As we advance all of our programs toward value inflection points in 2022 and beyond. And with that over to you operator, we are now ready to take questions.

[Operator Instructions] Your first question comes from a line of Kumar Raja with Brookline Capital Markets.

Thanks for taking my questions. First with regard to the strategic development options you guys mentioned a little bit about, the flexibility in terms of indications. But in terms of stage of development, how are you guys thinking about it? Is it like more like late stage or Phase 2 or where you already have proof of concept and also where you are in terms of the timelines for licensing this asset? Thank you.

Hey, Kumar, thanks very much for your questions and thanks for being on the call today. So as it relates to the assets, we’re looking at things quite broadly, but our strong preference is for assets that already have been and remain in the clinic. So ideally they will have at least Phase 1 data proof of concept data would be best. And are in the stages of development, where the experiences of our team can add materially to the development plan for the rest of the activities leading to registration. So we’re looking broadly, but clearly we’re preferring clinical assets. As it relates to where we stand in the process, we’ve been – as we’ve mentioned on this call for quite some time, we’ve been at this for quite a while. There are many, many assets and actually companies available due to the financial volatility of the markets and we’ve been looking at quite a few of them. In fact, we’ve looked at hundreds of assets over the course of the last 12 plus months. I would say that without being specific about timing, that I feel like we are zeroing in on a number of very attractive possibilities. And if things continue to go well, I’m hopeful that we can consummate a transaction perhaps sometimes during the course of 2022.

Your next question comes from a line of Joe Pantginis with H.C. Wainwright.

Hi everyone. This is Lander Ron for Joe. Thanks for taking my questions. So I wonder regarding HONEDRA. I wonder if you could if you could – I wonder if you’re considering alternative avenues other than securing a partner in Japan?

So Lander, thanks very much and say hello to Joe for us then. Thank you for being on the call. As it relates to HONEDRA, we’re looking at it as a broad and opportunistic strategy as possible. We have been enrolling this program for quite some time, but as we mentioned on the last call we’ve experienced approximately an 18 months delay due to the states of emergency in Japan and the inability during that time for studies like ours to enroll patients during the pandemic. So we’ve – as Kristen mentioned, gone back to the PMDA and we’re in, I think, collaborative discussion with them now about what’s the next steps could be, and whether it’s even required to enroll for more patients in the trial. Since this trial was never designed to be statistical in its analysis, it’s really to look at trends. And certainly we can establish strong trends with the data that we have. So depending upon on what PMDA says, as it relates to the need for additional patients and how they view the data analysis that we will provide for them we may be in a position to move the discussions with potential partners forward at a much more accelerated rate. Clearly we’re looking for ways to monetize this asset to see value created from the good work that’s been done in Japan over the last several years, and will continue to look broadly at ways to do so. But we are fairly convinced that spending more money that is Caladrius capital on additional work in Japan at this time is, is probably not to our benefit and that we should focus on using the data that we’ve generated and the SAKIGAKE designation as a means to generate value for this program.

Your next question comes from the line of Pete Enderlin with MAZ Partners.

Hello everybody. Thank you for taking my questions. The first one is just financially what’s likely to be the near-term trend of R&D with now a lower spending for HONEDRA? And with, of course, on the other HONEDRA a fairly limited scale up on the CKD program?

Hey, Pete, it’s Dave it’s nice to talk to you. So as it relates to, I mean, you’ve just said it yourself, we are – we haven’t provided specific guidance on exact R&D spending specifically because we’re unable to predict the rate of enrollment for XOWNA at the moment, and that’s the major R&D spend for the company for the rest of this year. But as you’ve already pointed out, we’ve essentially completed the capital spend on HONEDRA in Japan. And the DKD study is anticipated to cost in total only a few million dollars. So we would expect that we would be conserving capital as we continue to advance the programs, according to the plan that we described today.

You have a follow up question from the line of Kumar Raja [Brookline Capital Markets].

Thanks for taking up my follow up question. So with regard to the CMD program maybe you can talk a little bit about the different factors and how you think when we will have clarity in terms of how the enrollment is going to proceed? Obviously with regard to COVID we are seeing like a lot of opening up and most people are vaccinated. So when do you think we’ll get more clarity on how the enrollment is going to go and in terms of the additional sites what are you seeing there?

Again thanks Kumar for your question. So the – and I appreciate this, because it gives me the opportunity to augment what Kristen has already said about the program and perhaps do so in more layman’s terms. So we have several factors that have impacted enrollments in FREEDOM, all of which were unexpected, of course, the first was, was COVID and the pandemic, and the fact that we had a Delta wave that seemed to be going away and everything seemed to fall it back into place. And then we had an Omicron wave and perhaps there’ll be an Omicron BA.2 wave at some point or some other variant in the future. The bigger issue though is not what people think, it’s not so much that the pandemic has reduced the interest of patients where their desire to come in to participate in the study. The bigger impact that’s has been on the institutions, the hospitals themselves, and staffing and their ability to provide clinical coordinators and facilities dedicated to clinical trials, while many of their institutions have had to revert to handling largely unexpected waves of COVID patients. So that’s been really the issue and we hope that that will get better with time, but a lot of nurses and even physicians are a bit burnt out if you will. And clinical trials such as ours, which require the use of [indiscernible] lab, interventional cardiologist, anesthesiologist, radiologists, coordinating nurses, et cetera. It’s a very labor intensive and they are more difficult to execute when, when staffing issues exist. So that’s the first bit, and we hope that that will get better, but I can’t tell you exactly when it will get better. The second bit has to do with the technology issues that Kristen referenced during her dialogue. When…

You have a follow-up question from the line of Pete Enderlin [MAZ Partners].

Thank you. Given that your stock is extremely depressed, and I understand that you want to maintain flexibility to pursue other assets and so on, but why not repurchase a little bit of the stock. At about half of the cash alone of the company at this point, you would thereby increase the cash per share without having to use a lot of cash to do that?

Well, there are a couple of reasons why we don’t do that. And I think it’s atypical in general for biotech and biopharmaceutical companies, of our size anyway, to repurchase their own stock. We’re development companies. And the best way to create value for our shareholders, we believe, is to develop things. And so it’s better to spend that money on development opportunities than simply, what I would say, artificially trying to, by financial means, if you will, increase the share price. In the end, our share price, as I mentioned in my opening remarks, is really a function of our cash balance at this point in time. Frustratingly, that’s the case. So by repurchasing our own shares, I’m not sure that, that will change the overall valuation of us in the long run. If our market cap is a function of our cash balance, almost doesn’t matter how many shares are outstanding. Sure, the price per share could vary, but the overall value of the company isn’t going to change. And our goal is to see the value of the company increased substantially. And we believe the best way for that to happen is to achieve value inflection milestones in attractive development programs. Those that we have today and those that we hope to acquire in the future.

Fair enough. Are there other people in queue or just about out of time or can I kind of sneak in another one?

Go ahead and sneak in one, Pete. I’ll give you a pass.

Okay. Thank you. When you talk about wanted to get more strings to your boat, so to speak. You mentioned either assets early clinical stage programs or maybe possibly the company itself a corporate entity. So is there any sense of which way you’re more likely to go on that?

It’s really going to depend on the situation. The reason I mentioned companies is, because so many companies are single asset companies. And so if you buy the asset or you try to buy the asset, you have to buy the whole company. Otherwise, they have nothing left. And so there’s no point in them staying. What we’re trying to do is to find that needle in the haystack, that perfect match where either we can acquire an asset and just the asset or assets, or if we buy a company that the staffing and the additional things that come along with it are completely necessary and complementary to us. And as you can imagine, that’s a difficult water to fill. But we’ve got our eyes on a couple of things that might actually fit the bill, and we’ll see how the rest of the year unfolds as we continue our evaluations.

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

Well, 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 to continuing to provide updates on our achievements and progress. We remain grateful for your continued interest in and support of Caladrius Biosciences. Please stay well, and have a good evening. Thank you, and good night.

Ladies and gentlemen, this concludes today’s conference call. We thank you for your participation. You may now disconnect.