UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-40060
LONGEVERON
INC.
(Exact name of registrant as specified in its
charter)
(Address of Principal Executive Offices) (Zip Code)
(305)909-0840
(Registrant’s telephone number, including area
code)
Securities registered
pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.001 LGVN The Nasdaq Capital Market
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer
Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and
non-voting common equity held by non-affiliates was approximately $18,000,000 as of June 30, 2022 (the last business day of the registrant’s
most recently completed second fiscal quarter).
As of March 7, 2023, the registrant had 6,163,050
shares of Class A Common Stock, $0.001 par value per share, and 14,871,085 shares of Class B Common Stock, $0.001 par value per share,
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE. Part
III of this Annual Report on Form 10-K incorporates certain information from the registrant’s definitive proxy statement for its Annual
Meeting of Stockholders to be held on June 2, 2023 (the “2023 Proxy Statement”).
TABLE OF CONTENTS
PART I 1
Item 1. Business 1
Item 1A. Risk Factors 21
Item 1B. Unresolved Staff Comments 57
Item 2. Properties 57
Item 3. Legal Proceedings 57
Item 4. Mine Safety Disclosures 57
Item 6. [Reserved] 58
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. 68
Item 8. Financial Statements and Supplementary Data 68
Item 9A. Controls and Procedures 68
Item 9B. Other Information 69
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 69
PART III 70
Item 10. Directors, Executive Officers and Corporate Governance 70
Item 11. Executive Compensation 70
Item 14. Principal Accountant Fees and Services 71
Item 15. Exhibits and Financial Statement Schedules 72
SIGNATURES 74
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
In this document, the terms “Longeveron,”
“Company,” “Registrant,” “we,” “us,” and “our” refer to Longeveron Inc. We
have no subsidiaries.
This Annual Report on Form 10-K (this “10-K”)
contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current
expectations about our future results, performance, prospects and opportunities. This 10-K contains forward-looking statements that can
involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this 10-K, including
statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals,
research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations,
future results of anticipated products and prospects, plans and objectives of management are forward-looking statements. These statements
involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking
statements by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “will,” or “would” or the negative of these
terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained
in this 10-K include, but are not limited to, statements about:
● the success of competing therapies that are or may become available;
● our financial performance; and
We have based these forward-looking statements
largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we
believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not
guarantees of future performance or development. These forward-looking statements speak only as of the date of this 10-K and are subject
to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this
report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified,
you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our
forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking
statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained
herein after we file this 10-K, whether as a result of any new information, future events or otherwise.
In addition, statements that “we believe”
and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available
to us as of the date of this 10-K, and while we believe such information forms a reasonable basis for such statements, such information
may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or
review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly
rely upon these statements.
ii
PART I
Item 1. Business
Overview
We are a clinical stage biotechnology company
developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-BTM
brand MSCs, an allogeneic medicinal signaling cell (MSC) therapy product isolated from the bone marrow of young, healthy adult donors.
Lomecel-BTM has multiple modes of action that include pro-vascular, pro-regenerative, and anti-inflammatory mechanisms, promoting
tissue repair and healing with broad potential applications across a spectrum of disease areas.
We are currently pursuing three pipeline indications:
Hypoplastic Left Heart Syndrome (HLHS), Aging-related Frailty, and Alzheimer’s disease (AD). Our mission is to advance Lomecel-BTM
and other cell-based product candidates into pivotal Phase 3 trials, with the goal of achieving regulatory approvals, subsequent commercialization,
and broad use by the healthcare community.
With respect to HLHS, we are exploring the possibility
that Lomecel-BTM when administered directly to the myocardium of affected infants, can improve outcomes in this devastating rare
pediatric disease. The standard of care in HLHS is a series of three reconstructive surgeries, typically at 10 days, 4 months, and approximately
4 years of life. Despite these life-saving surgical interventions, it is estimated that only 50 to 60 percent of affected individuals
survive until adolescence. The pro-vascular, pro-regenerative and anti-inflammatory properties of Lomecel-BTM may improve the function
of the right ventricle in these infants. A previously published Longeveron Phase 1 open-label study (ELPIS I)1 indicated
that such a benefit may exist when outcomes were compared to historical controls. Longeveron is currently conducting a controlled study
to determine the actual benefit of Lomecel-BTM in these patients.
Our philosophy is that healthy aging can be improved
through regenerative medicine approaches. Life expectancy has substantially increased over the past century as a result of medical and
public health advancements. However, this increase in longevity has not been paralleled by the number of years a person is expected to
live in relatively good health, with limited chronic disease and disabilities of aging – a period known as healthspan. As we age,
we experience a decline in our own stem cells; a decrease in immune system function, known as immunosenescence; diminished blood vessel
functioning; chronic inflammation, known as “inflammaging”; and other aging-related declines. Our preliminary clinical data
suggest that Lomecel-BTM can potentially address these problems through multiple mechanisms of action, or MOAs, that simultaneously
target key aging-related processes.
Improving healthspan is an imperative for governmental
health agencies. The National Institute on Aging (NIA), an institute of the National Institutes of Health (NIH), has promoted the concept
of geroscience – the idea that aging itself is the biggest risk factor for aging-related human diseases and that aging can be approached
as a treatable disease to improve healthspan. The geroscience hypothesis provides a strong rationale for the approach of treating underlying
biological processes contributing to aging as a way to reduce disease burden and advance global human health. Our investments into developing
and testing product candidates are aimed at reducing aging-related disease burden and improving healthspan.
Summary of Clinical Development Strategy
Our core strategy is to become a world-leading
regenerative medicine company through the development and commercialization of novel cell therapy products for unmet medical needs, with
a focus on HLHS. Key elements of our current business strategy are as follows.
1
Clinical Development Pipeline in 2023
We are currently in clinical development of a
single product, Lomecel-BTM for three potential indications (See Figure 1).
Figure 1: Lomecel-BTM clinical development
pipeline
Hypoplastic Left
Heart Syndrome (HLHS). Lomecel-BTM is being investigated in an ongoing Phase 2 clinical trial (ELPIS II) under FDA IND 017677.
ELPIS II is a 38-subject, randomized, double-blind, controlled clinical trial designed to evaluate safety and efficacy of Lomecel-BTM
in conjunction with reconstructive surgery compared to surgery alone. The trial is funded in part by the National Heart, Lung, and Blood
Institute (NHLBI, part of the NIH). The trial is continuing to enroll patients in the study, and is being conducted as a investigator-initiated
study led by Dr. Sunjay Kaushal through the auspices of the NHLBI at seven academic sites. This year it is anticipated that an eight
site will be added to enhance the enrollment rate. We have not provided a projection for the date of completion of this study as enrollment
to date has not been sufficient to provide such a projection.
2
Previously, we completed a Phase 1 study
under FDA investigational new drug application (IND) 017677 to evaluate the safety, tolerability and preliminary evidence of Lomecel-BTM
as a combinatorial therapy to surgery for this ultra-rare congenital heart defect. Babies born with this condition have an underdeveloped
left ventricle and undergo a series of three surgeries to prevent certain death. Despite these life-saving surgeries, HLHS patients still
have a high early mortality rate. We are investigating whether Lomecel-BTM, directly injected into the heart during the second stage
HLHS open-heart surgery, is safe and can improve short- and long-term outcomes in these vulnerable patients. These outcomes include heart
function, and heart-transplant-free survival. The Phase 1 study met the primary safety endpoint: no major adverse cardiac events (MACE)
nor any treatment-related infections during the first month post-treatment. In addition to the 12-month evaluation of outcomes from the
original study, we have continued to follow these 10 patients, none of whom have required a heart transplant nor died from their cardiac
disease for 3.4 to 5.0 years since the time of treatment with Lomecel-B. Of these patients, five have already undergone their stage III
palliation surgery. Based on historical data, approximately 20% of patients who undergo stage II palliation surgery either require a
heart transplant or die from HLHS within 12 months after their surgery. The apparent potential for a mortality benefit in HLHS paitents
treated with Lomecel-B is the reason the FDA granted Rare Pediatric Disease (RPD) Designation and Orphan Drug Designation (ODD). Most
recently, on August 24, 2022, the FDA granted Fast Track Designation for the potential treatment of HLHS with Lomecel-BTM.
Aging-related Frailty. Aging-related Frailty
is a life-threatening geriatric condition that disproportionately increases some patients’ risk for poor clinical outcomes from
disease and injury. It is believed by geriatricians to be treatable, although no approved pharmaceutical or biologic treatments currently
exist for the condition. The definition of Aging-related Frailty lacks consensus and would be a new indication from a regulatory standpoint.
As such, any approval of Lomecel-BTM for Aging-related Frailty will therefore require additional clinical data and continued discussion
with the U.S. FDA and Japan’s PMDA.
Manufacturing
The manufacture and delivery of cell therapy
products to patients involves complex, integrated processes. Commercial success in this area requires manufacturing processes that are
reliable, scalable, and economical. We currently operate a manufacturing facility in Miami, FL, which supplies Lomecel-BTM for our
clinical trials and also serves as our corporate headquarters. We have and will continue to devote significant resources to optimization
of process development and manufacturing to reduce per-unit manufacturing costs and to enable quick scale-up of production upon approval
of any of our candidates in a particular country. We also intend to expand the manufacturing capacities in the U.S. and potentially Japan
or other regions in Asia for commercialization at both a regional and global scale upon regulatory approvals.
Our cGMP facility went online in early 2017 and
consists of 4,150 ft2 (385.5 m2) with approximately 3,000 ft2 (279 m2) of cGMP space comprised
of ISO 7 cleanrooms, and ISO 8 ancillary areas and 1,150 ft2 (107 m2) of warehouse, research and development and
Quality Control space. The cGMP cleanrooms are used exclusively for the manufacture of human cellular therapy products for use in clinical
trials. The facility is in compliance with FDA regulations in 21 CFR Parts 210 and 211.
3
Our lead product, Lomecel-BTM, consists
of human allogeneic bone-marrow derived MSCs as the active ingredient. These cells undergo culture-expansion using proprietary processes,
and are then formulated, packaged and stored frozen (cryopreserved) until shortly before use. Fresh bone marrow is procured from
established, licensed U.S.-based third-party tissue suppliers, which harvest the tissue from young, healthy consenting donors. Lomecel-BTM
is produced using processes that FDA has reviewed and authorized as part of our INDs. We currently have bone marrow supply contracts
in place with two suppliers: the Oklahoma Blood Institute and Vista Health Research. These suppliers provide adequate bone marrow for
our current and anticipated needs; however, if one or both suppliers were to no longer provide bone marrow, alternate suppliers would
be needed or our ability to produce Lomecel-BTM in the future could be impacted.
Technology Capabilities
From the commencement of operations in 2014,
we recognized the potential for a cellular therapy product to be a novel therapeutic candidate in our chosen indications. We have assembled
a team of experts and proprietary technologies that we believe enables us to take a systematic approach to rapidly develop improved cell
therapies. We believe having established manufacturing capabilities and operations within the U.S. early in the development of our product
candidates is a competitive advantage. Over time, we expect to expand regional manufacturing capacity and potentially add external supply
nodes to meet projected product requirements for commercialization. We believe that anticipated future clinical and commercial demand
for Lomecel-BTM and new pipeline programs can be met, as our process has been designed to meet these demands as milestones are achieved.
We believe our scalable robust manufacturing process, along with our proprietary technologies and our industry experienced team, would
be challenging and costly for potential competitors to replicate.
Contract Development and Manufacturing Services
We produce all of our product candidates in the
ISO 7 cleanrooms of our cGMP facility to satisfy our ongoing clinical studies and The Bahamas Registry Trial. As a revenue-generating
opportunity, occasionally we utilize excess capacity, when available, to provide contract manufacturing and development services to third
parties; however, our business development activity is limited in this area.
Commercialization
We currently have no established sales, marketing
or product distribution infrastructure. In order to commercialize any of our product candidates if approved for commercial sale, we will
need a sales and marketing organization with technical expertise and supporting distribution capabilities or collaborate with third parties
that have sales and marketing experience. As we move our product candidates through development toward regulatory approval, we will evaluate
several options for each product candidate’s commercialization strategy. These options include further building an internal sales
force, entering into a joint marketing collaboration with another pharmaceutical or biotechnology company, or out-licensing any future
approved product to another pharmaceutical or biotechnology company. All such commercialization will be in accordance with applicable
federal and state law.
Competition
The field of regenerative medicine, which includes
gene therapies, cell therapies (such as Lomecel-BTM), and tissue-engineered products, is broadly defined as “products intended
to repair, replace or regenerate organs, tissues, cells, genes, and metabolic processes in the body,” per the Alliance for Regenerative
Medicine (ARM), an international advocacy organization. Regenerative medicine companies number over 1,300 worldwide as of the first half
of 2022.
In some of our indications, we face competition
from both cellular therapy companies, and pharmaceutical/biotechnology companies. In our most important indication, Hypoplastic Left
Heart Syndrome, we were unable to find a competing company currently addressing the condition. The following table is a general, non-comprehensive
list of cellular therapy companies that we believe could be considered our primary competition, either because they also develop MSCs
as their primary mode of action, albeit for different indications in most cases or on the basis that these companies are addressing the
same indications as Longeveron.
Name Corporate Headquarters Clinical stage pipeline indication(s)
Athersys, Inc. U.S. Ischemic stroke; ARDS; GvHD; Acute Myocardial Infarction
BioCardia, Inc. U.S. Heart failure; Acute myocardial infarction
BrainStorm Cell Therapeutics U.S. ALS; MS
Corestem South Korea ALS (Commercial in South Korea); Lupus
Cynata Therapeutics Australia GvHD
Healios K.K. Japan Ischemic stroke; ARDS
Medipost South Korea Osteoarthritis (commercial); BPD; AD
Pluristem Therapeutics, Inc. Israel CLI; ARDS; ARS; GvHD
ReNeuron U.K. Ischemic stroke; Retinitis pigmentosa
SanBio Co., Ltd. Japan Ischemic stroke; Traumatic brain injury
Stemedica Cell Technologies U.S. Ischemic stroke; heart failure; AD
ARDS = Acute Respiratory Distress Syndrome; GvHD
= Graft versus host disease; ALS = Amyotrophic lateral sclerosis; MS = Multiple sclerosis; BPD = Bronchopulmonary dysplasia; CLI = Critical
limb ischemia; CMD = Coronary microvascular disease; ARS = Acute radiation syndrome.
4
Biology of Aging Research Companies
To our knowledge, there are no other companies
currently conducting clinical trials for Aging-related frailty using a regenerative medicine approach. However, this is likely to change
as the emphasis on developing an effective treatment grows. Per ClinicalTrials.gov, as of February, 2023, there are a few groups testing
different types of MSCs for frailty. This is not an exhaustive list; moreover, only “applicable clinical trials” under U.S.
law are required to be listed in ClinicalTrials.gov:
The University of Texas Health Science Center
in San Antonio is collaborating with the NIH to conduct a randomized, placebo-controlled Phase 2 clinical trial of metformin, the Type-2
diabetes medication, for the prevention of frailty in subjects aged 65 to 95. Other academic groups or hospitals have or are testing
hormonal treatments such as ghrelin or testosterone to prevent or treat frailty. Most interventional trials typically involve lifestyle
intervention, specifically evaluating diet, dietary supplements, or exercise modifications, or a combination thereof. Several companies
are researching different approaches and therapeutics in the broad “anti-aging” category, developing therapies that may extend
“healthspan” by slowing or reversing diseases associated with aging, or the aging process itself.
Competition in Alzheimer’s Disease
There are several companies currently testing
cellular therapy in neurologic and cognitive disorders. However, in the U.S., we believe we are the furthest advanced in the clinical
development of a regenerative medicine approach to treating AD. The following companies have publicly indicated that they are conducting,
or intend to conduct, cell therapy clinical trials in AD (does not include studies that were withdrawn). In addition, there are some
academic groups (not listed) also exploring the potential therapeutic effects of MSCs in AD.
5
There are many other pharmaceutical and biotechnology
companies that are conducting clinical trials of various therapeutics for the treatment of AD. According to the Alzheimer’s Association,
in 2021 there were 121 unique therapies registered on ClinicalTrials.gov. Some of the more established and well-known companies in this
group include Biogen, Novartis, Eisai, and Eli Lilly.
Intellectual Property
We seek to protect our proprietary technology,
inventions, and improvements that are commercially important to the development of our business by seeking, maintaining, and defending
patent rights, whether developed internally, acquired from third parties, or licensed from third parties. We also intend to seek and
rely on any statutory or regulatory protections, including FDA’s expedited review program, data exclusivity, market exclusivity
and patent term extensions where available.
We have a combination of Company-owned and in-licensed
patents and patent applications related to cell-based therapy and its various uses. This portfolio includes patent applications directed
to use of allogeneic MSCs to treat sexual dysfunction. We also have in-licensed a patent family directed to methods of use of CD271+
MSC precursor cells. Our patent applications contain claims that, if allowed, specifically protect the use of our product in individuals
with Aging-related frailty, immunosenescence, and other age-related diseases. We also rely on trade secrets that may be important to
the development of our business. Trade secrets are difficult to protect and enforce and therefore provide us with only limited protection.
We expect to file additional patent applications
in support of current and new product candidates, as well as for process and manufacturing-related improvements or inventions, should
these arise. These expected additional patent applications may be related to existing patent applications or may create new patent families.
Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection for our current
and future product candidates and the methods used to develop, manufacture, administer, and use them. Our commercial success will also
depend on successfully defending our patents against third-party challenges and operating without infringing on the proprietary rights
of others. We are aware of several U.S. patents held by third parties covering potentially similar or related products, and their manufacture
and use. Generally, conducting clinical trials and other acts relating to FDA approval are not considered acts of infringement in the
U.S. If and when Lomecel-BTM MSCs are approved by the FDA, third parties may seek to enforce their patents by filing a patent infringement
lawsuit against us. Our ability to deter and, if necessary, to stop third parties from making, using, selling, offering to sell or importing
our products or products that are similar to our products depends on the extent to which we have rights under valid and enforceable patents
or trade secrets that cover these activities. We can neither be sure that patents will be granted with respect to any of our pending
patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any patents that may
be granted to us in the future will be commercially useful in protecting our product candidates, discovery programs and processes. Unpublished
third-party patent applications may exist that would have an effect on our freedom to operate. For this and more comprehensive risks
related to our intellectual property, please see “Risk Factors—Risks Related to Intellectual Property.”
The term of individual patents depends upon the
legal term of the patents in the countries in which they are obtained. In most jurisdictions where we file, including the U.S., the patent
term is 20 years from the earliest date of filing a non-provisional patent application. In the U.S., a patent’s term may be lengthened
by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office (USPTO), in
examining and granting a patent. Patent term in the U.S. may be shortened if a patent is subject to a terminal disclaimer over another
patent. Delays on the part of a patentee may decrease patent term adjustment.
6
In the U.S., the term of a patent that covers
an FDA-approved “active ingredient” or methods of its use may also be eligible for patent term extension, which permits patent
term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent
Term Restoration Act of 1984, the Hatch-Waxman Amendments, or the Biologics Price Competition and Innovation Act of 2009 permit a patent
term extension of up to five years beyond the expiration of the statutory term of a patent, including any patent term adjustment to which
the patent is entitled. The length of the patent term extension is related to the length of time the active ingredient or method is under
regulatory review. Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product
approval, only one patent applicable to an approved drug may be extended and only those claims covering the approved drug, a method for
using it, or a method for manufacturing it may be extended. Similar provisions are available in Europe and other foreign jurisdictions
to extend the term of a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect
to apply for patent term extensions on patents covering those products. We plan to seek patent term extensions for any issued patents
we may obtain in any jurisdiction where such patent term extensions are available. We are not assured that the applicable authorities,
including the FDA in the U.S., will agree with our assessment of whether such extensions should be granted, and if granted, the length
of those extensions. For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks
Related to Intellectual Property.”
We may file patent applications directly with
the USPTO as provisional applications. We may file U.S. non-provisional applications, direct foreign applications under the Paris Convention
and the Agreement on Trade Related Aspects of Intellectual Property Rights, and Patent Cooperation Treaty, or PCT, applications. Those
applications may claim the benefit of the priority date of one or more earlier filed applications, when applicable. The PCT system allows
a single application to be filed within 12 months of the original priority date of the patent application and to designate all of the
PCT member states in which national or regional patent applications can later be pursued based on the PCT application.
For all patent applications, we determine claim
strategy on a case-by-case basis. Advice of counsel and our business model and needs are considered. We seek to file patents containing
claims for protection of all useful applications of our proprietary technologies and any products, as well as all new applications and/or
uses we discover for existing technologies and products, assuming these are strategically valuable. We routinely reassess the number
and type of patent applications, as well as the pending and issued patent claims to pursue maximum coverage and value for our processes
and compositions. Further, we may modify claims during patent prosecution to meet our intellectual property and business needs.
We recognize that the ability to obtain patent
protection and the degree of such protection depends on a number of factors. These include the volume and scope of the prior art, the
novelty, non-obviousness, and utility of the invention, and the ability to satisfy the written description and enablement requirements
of the patent laws. In addition, the coverage claimed in a patent application can be significantly narrowed before the patent is issued,
and its scope can be reinterpreted or further altered even after patent issuance. Consequently, we may not obtain or maintain adequate
patent protection for any of our future product candidates or for our technology platform. We cannot predict whether the patent applications
we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide
sufficient protection from copying by competitors. Any patents that we hold may be challenged, circumvented, or invalidated by third
parties. We cannot predict whether, in certain jurisdictions, a third-party will use a method confidentially that we later independently
discover and patent, which may result in a limited grant to the third party of the ability to continue to practice that method despite
our patent.
In addition to patent protection, we rely on
trademark registration, trade secrets, know how, other proprietary information and continuing technological innovation to develop and
maintain our competitive position. We seek to protect and maintain the confidentiality of proprietary information to protect aspects
of our business that are not amenable to, or that we do not consider appropriate for, patent protection. Although we take steps to protect
our proprietary information and trade secrets, including through contracts with our employees and consultants, third parties may independently
develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our
technology. Thus, we may not be able to meaningfully protect our trade secrets indefinitely.
We require our employees, consultants, outside
scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment
or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial
affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential
and not disclosed to third parties except under specific circumstances. Our agreements with employees also provide that all inventions
conceived by the employee in the course of employment with us or from the employee’s use of our confidential information are our
exclusive property. However, such confidentiality agreements and invention assignment agreements can be breached, and we may not have
adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.
To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes
may arise as to the rights in related or resulting trade secrets, know-how and inventions. For more information regarding the risks related
to our intellectual property, see “Risk Factors—Risks Related to Intellectual Property.”
7
The patent positions of biotechnology companies
like ours are generally uncertain and involve complex legal, scientific and factual questions. Our commercial success will also depend
in part on not infringing upon the proprietary rights of third parties. Third-party patents could require us to alter our development
or commercial strategies or our products or processes, to obtain licenses or to cease certain activities. Our breach of any license agreements
or our failure to obtain a license to proprietary rights required to develop or commercialize our future products may have a material
adverse impact on us. If third parties prepare and file patent applications in the U.S. that also claim technology to which we have rights,
we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention. If third parties
file requests for inter partes review of our patents, then we may have to defend those patents in the USPTO. For more information,
see “Risk Factors—Risks Related to Intellectual Property.”
When available to expand market exclusivity,
our strategy is to obtain, or license additional intellectual property related to current or contemplated development platforms, core
elements of technology and/or clinical candidates.
Company-Owned Intellectual Property
Methods of Using Human Mesenchymal Stem Cells
to Effect Cellular and Humoral Immunity. Certain claims in this family of patent applications relate to the ability for mesenchymal
stem cell therapy to improve the immune system function in patients with chronic systemic inflammation, a hallmark of frailty. It is
believed that raising or lowering specific biomarkers after therapeutic intervention by a minimum amount may provide broad protection
from an intellectual property standpoint and reflects clinical goals of treatment and treatment response.
In this family we own one pending U.S. patent
application, 12 patent applications outside of the U.S. (in 12 jurisdictions), and a patent registration in South Africa. With two exceptions
(The Bahamas and Taiwan), all of the applications are national or regional phase applications based on a PCT application filed in November
2017 and claiming priority to a U.S. provisional application filed in November 2016. The applications in The Bahamas and Taiwan claim
priority to that same provisional application but were not filed using the PCT. In addition to the applications in Taiwan and The Bahamas,
PCT national or regional phase applications were filed in the U.S., Australia, Canada, China, the European Patent Organization, Israel,
Japan, South Korea, New Zealand, Singapore, South Africa, and Hong Kong. If issued and assuming all maintenance and annuity fees are
paid, patents arising from these applications are projected to expire in 2037.
Treatment of Sexual Dysfunction and Improvement
in Sexual Quality of Life. This application family is directed towards increasing libido and improving sexual function and
satisfaction in a female patient through the use of allogeneic or autologous MSC therapy, whether derived from bone marrow, adipose tissue
or induced pluripotent stem cells (iPSCs). In this family we own one pending U.S. patent application, 12 patent applications outside
of the U.S. (in 12 jurisdictions) and a patent registration in South Africa. With two exceptions (The Bahamas and Taiwan), all of the
applications are national or regional phase applications based on a PCT application filed in June 15, 2018 and claiming priority to a
U.S. provisional application filed in June 2017. The applications in The Bahamas and Taiwan claim priority to that same provisional application
but were not filed using the PCT. In addition to the applications in Taiwan and The Bahamas, PCT national or regional phase applications
were filed in Australia, Canada, China, the European Patent Organization, Hong Kong, Israel, Japan, South Korea, New Zealand, Singapore,
South Africa, and the U.S. If issued and assuming all maintenance and annuity fees are paid, patents arising from these applications
are projected to expire in June 2038.
Potency Assay. This application family
is directed towards assessing potency of MSCs to produce anti-inflammatory cytokines in response to a pro-inflammatory stimulus. In this
family we own pending applications in Australia, the Bahamas, Canada, China, the European Patent Office, Hong Kong, Israel, Japan, New
Zealand, the Republic of Korea, Singapore, South Africa, and the United States. These applications have a filing date in April 2021 and
claim priority to a U.S. provisional application filed in April 2020. If issued and assuming that all maintenance and annuity fees are
paid, patents arising from these applications are projected to expire in April 2041.
Use of Mesenchymal Stem Cells in Treatment
of Juvenile Hypoplastic Left Heart Syndrome. This patent family is directed to treatment of hypoplastic left heart syndrome with
allogeneic mesenchymal stem cells. In this family we own pending applications in Taiwan, the Bahamas, and the PCT. These applications
share a common priority date of July 2021. National and regional phase applications, if any, that are based on the PCT application must
be filed as early as January 2024.
Administration of Mesenchymal Stem Cells for
Aging-related frailty. This patent family relates to administration of mesenchymal stem cells for Aging-related frailty. In this
family we own pending applications in Taiwan, the Bahamas, and the PCT. These applications share a common priority date of September
2021. National and regional phase applications, if any, that are based on the PCT application must be filed as early as March 2024.
Treatment of Alzheimer’s Disease with
Allogeneic Mesenchymal Stem Cells. We own one PCT patent application and an application in the Bahamas related to treatment of AD
with allogeneic mesenchymal stem cells. Those applications were filed in September 2021 and claim priority to three separate U.S. provisional
applications, the earliest of which was filed in September 2020. National phase applications, if any, that are related to the PCT application
are not required to be filed until March 2023 at the earliest.
8
License Agreements and Strategic Collaborations
The University of Miami (UM)
On November 20, 2014, we entered into an Exclusive
License Agreement with UM (the “UM License”) for the use of certain Aging-related frailty-related MSC technology rights developed
by our Chief Science Officer at UM. The UM License is a worldwide, exclusive license, with right to sublicense, with respect to any and
all know-how specifically related to the development of the culture-expanded MSCs for aging-related frailty used at the Interdisciplinary
Stem Cell Institute of UM (“IMSCs”), all SOPs used to create the IMSCs, and all data supporting isolation, culture, expansion,
processing, cryopreservation and management of the IMSCs. We are required to pay UM (i) a license issue fee of $5,000, (ii) a running
royalty in an amount equal to three percent of annual net sales on products or services developed from the technology, payable on a country-by-country
basis beginning on the date of first commercial sale through termination of the UM License Agreement, and which may be reduced to the
extent we are required to pay royalties to a third party for the same product or process, (iii) escalating annual cash payments of up
to fifty thousand dollars, subject to offset. The agreement extends for up to 20 years from the last date a product
or process is commercialized from the technology and was amended in 2017 to modify certain milestone completion dates as detailed below
In 2021 the license fee was increased by an additional $100,000, to defray patent costs. In addition, the Company issued 110,387 unregistered
shares of Class A Common Stock to UM.
The milestone payment amendments shifted the
triggering payments to three payments of $500,000, to be paid within six months of: (a) the completion of the first Phase 3 clinical
trial of the products (based upon the final data unblinding); (b) the receipt by the Company of approval for the first new drug application
(“NDA”), biologics application (“BLA”), or other marketing or licensing application for the product; and (c)
the first sale following product approval. “Approval” refers to Product approval, licensure, or other marketing authorization
by the U.S. Food and Drug Administration, or any successor agency. The amendments also provided for the Company’s license of additional
technology, to the extent not previously included in the UM License and granted the Company an exclusive option to obtain an exclusive
license for (a) the HLHS IND with ckit+ cells; and (b) UMP-438 titled “Method of Determining Responsiveness to Cell Therapy in
Dilated Cardiomyopathy.”
We have the right to terminate the UM License
upon 60 days’ prior written notice, and either party has the right to terminate upon a breach of the UM License. To date, the Company
has made payments totaling $140,000 to UM, and as of December 31, 2022, we had accrued $50,000 in milestone fees payable to UM and $100,000
for patent related reimbursements based on the estimated progress to date.
JMH MD Holdings
On December 22, 2016, we entered into a worldwide
exclusive license agreement with JMH MD Holdings (“JMHMD”), an affiliate of our Chief Science Officer, for the use of CD271+
technology, a subpopulation of bone marrow-derived MSCs. We are required to pay JMHMD a running royalty in an amount equal to one percent
of the annual net sales of the licensed product(s) used, leased, or sold by or for us by any sub-licensees, which amounts are payable
on a country-by-country basis beginning on the date of first commercial sale and ending on the latter of expiration of the last to expire
patent rights in such country or ten years from the first commercial sale in such country (provided that if all claims within the patent
rights have expired or been finally deemed invalid then the royalty will be reduced by 50%), and which may also be reduced to the extent
we are required to pay royalties to a third party for the same product or process. We are also required to pay an initial fee and, by
the first day of each anniversary of the Agreement, starting with the second anniversary, a minimum royalty of ten thousand dollars.
JMHMD also received an equity grant equal to one-half of one percent of the then outstanding units of the Company on a fully-diluted
basis. If we sublicense the technology, we are also required to pay an amount equal to 10% of the net sales of the sub-licensees.
Under the agreement, the Company is required
to use commercially reasonable efforts to achieve the following milestones: (i) submit an investigational new drug application to FDA
(or international equivalent) within one year of effective date of agreement, (ii) initiate a clinical trial utilizing bone marrow derived
CD271+ Precursor Cells within three years of the effective date; provided, that any of the milestones may be extended for up to six months
for a total of three times by notice and payment of a five thousand dollar extension fee. Failure to achieve these milestones within
five years of the effective date triggers a right of termination by JMHMD. Otherwise, the agreement is to remain in effect until either
the date all issued patents and filed patent applications have expired or been abandoned, or 20 years after the date of FDA approval
of the last commercialized product or process arising from the patent rights whichever comes later. Further, each party has the right
to terminate upon sixty days’ prior written notice, or in the event of breach. If the Company sublicenses the technology, it is
also required to pay an amount equal to 10% of the net sales of the sub-licensees. The Company to date has not incurred any royalty or
sublicense related expense, but has paid $45,000 in license fees($10,000 per year for 2021, 2020 and 2019) and for a $15,000 extension
fee. In addition, the Company paid legal fees of approximately, $25,000 for each of the years ended December 31, 2022 and 2021, in connection
with the patent prosecution, issuance, and maintenance fees related to CD271+ technology.
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In-licensed Patents and Applications
Bone Marrow Derived CD271+ Precursor Cells
for Cardiac Repair. We have in-licensed the exclusive right to use CD271+ MSC precursors from bone marrow to treat certain aging-related
conditions and diseases, such as frailty, Metabolic Syndrome, loss of muscle due to aging or frailty and neurocognitive disorders. That
patent has issued in Australia, China, Israel, Japan, South Korea, Mexico, New Zealand, Germany, Spain, France, the United Kingdom, Italy,
Sweden, and Singapore. The patent application remains pending in U.S. (where there are two pending utility applications), Canada, and
Brazil. The Canadian and Brazilian applications have both been allowed. One of the U.S. applications is currently under appeal with the
USPTO. While method of use claims may relate to the use of CD271+ cells for cardiac repair, our license terms exclude our use of CD271+
cells for preventing and treating cardiovascular diseases or disorders, including congenital cardiovascular defects. Assuming that all
maintenance and annuity fees are paid, patents in this family are expected to expire in August 2031.
Trademarks
We have registered trademarks or applied for
registered trademarks for “Longeveron” in the following jurisdictions. We have begun to phase out the registrations and applications
for “LMSC” in favor of registrations for “LOMECEL-BTM”. In some jurisdictions multiple registrations and/or
applications exist so that multiple goods and/or services may be listed:
Territory “LOMECEL-BTM” “Longeveron” “LMSC”
The Bahamas Registered Closed
Brazil Registered
Canada Registered
China Registered Registered
European Union Registered
Hong Kong Registered
India Registered
Japan Registered Registered
South Korea Registered
Morocco Registered Registered
Panama Registered
Switzerland Registered
Taiwan Registered
U.S. Allowed Allowed Pending
Vietnam Registered
Government Regulation and Biologic Drug Approval
Government authorities in the U.S., at the federal,
state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture,
quality control, approval, labeling, packaging, storage, recordkeeping, promotion, advertising, distribution, marketing and export and
import of products such as those we are developing. We believe that the FDA will regulate Lomecel-BTM as a biologic drug (i.e.,
a biologic) through the biologics license application (BLA) process under the jurisdiction of the Center for Biologics Evaluation and
Research (CBER). We will work with FDA to confirm that a BLA is the most appropriate pathway and that CBER will be the FDA center responsible
for review and licensure (i.e., approval). However, FDA may disagree with us, in which case we will follow FDA’s recommendation.
For future product candidates we will also confirm the appropriate approval pathway (i.e., BLA or new drug application (NDA)) and the
appropriate FDA center with regulatory oversight (i.e., CBER or the Center for Drug Evaluation and Research (CDER)).
U.S. Biologic Drug Development Process
In the U.S., biologic drugs—or simply “biologics”—are
regulated under two statutes: The Public Health Service Act (PHS Act) and the federal Food, Drug, and Cosmetic Act (FFDCA) and their
implementing regulations. However, approval of only one application—typically either a BLA or an NDA—is required prior to
marketing. Numerous FDA “Guidance Documents” and other materials address specific aspects of development for specific types
of product candidates (e.g., cells, tissues, gene therapies, or vaccines). The process of obtaining approval and complying with applicable
statutes and regulations requires substantial time and financial resources. Failure to comply with the applicable U.S. requirements before,
during, or after approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s
refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold on ongoing clinical trials, issuance
of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions,
fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement
action could have a material adverse effect on us.
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The process required by the FDA before a biologic
may be marketed in the U.S. generally involves the following steps:
● submission of a BLA after completion of all clinical trials;
● satisfactory outcome of an FDA advisory committee review, if applicable;
The specific preclinical studies and clinical
testing that is required for a BLA varies widely depending upon the specific type of product candidate under development. Prior to beginning
a human clinical trial with either a biologic or drug product candidate in the U.S., we must submit an IND that must become effective.
The focus of an IND is the general investigational plan and protocol for the proposed clinical study. The IND also includes results of
animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product;
chemistry, manufacturing, and controls (CMC) information; and any available human data or literature to support the use of the investigational
product. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises
safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor
and the FDA must resolve any outstanding concerns or questions before the clinical hold is lifted and the clinical trial can begin. Submission
of an IND therefore may or may not result in FDA authorization to begin a clinical trial.
Clinical trials involve the administration of
the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, including that
all research subjects provide their informed consent to participate. Clinical trials are conducted under protocols detailing, among other
things, the study objectives, safety monitoring, and effectiveness criteria. A separate submission to the existing IND must be made for
each successive clinical trial conducted during product development. Other submissions to an IND include protocol amendments, information
amendments, IND safety reports and annual reports. Furthermore, an independent IRB for each clinical trial site (or a single “commercial
IRB” must review and approve the protocol and informed consent form before the clinical trial may begin. The IRB also monitors
the clinical trial until completed.
Regulatory authorities, the IRB or the sponsor
may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable
health risk or that the trial is unlikely to meet its stated objectives. Some clinical trials also include oversight by an independent
group of qualified experts organized by the clinical trial sponsor, known as a data monitoring committee (DMC). A DMC authorizes whether
or not a study may move forward at designated check points based on access to certain data from the trial. The DMC may halt the clinical
trial based on an unacceptable safety risk or on other grounds, such as a failure to demonstrate efficacy. Related reporting requirements
for the sponsor, clinical investigator, and/or IRB also include IND safety reports and updating clinical trial results in public registries
(e.g., ClinicalTrials.gov).
Human clinical trials are typically conducted
in three sequential phases that may overlap or be combined:
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Concurrent with clinical trials, sponsors usually
complete additional animal studies, develop information about the chemical and physical characteristics of the biologic and finalize
a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must
consistently produce quality batches of the product candidate. Furthermore, the manufacturer must develop methods for testing the identity,
strength, quality and purity of the final biologic. In addition, the sponsor must develop and test appropriate packaging, and conduct
stability studies to demonstrate that it does not undergo unacceptable deterioration over its shelf life.
During the development of a new biologic, sponsors
are given opportunities to meet with the FDA. These meetings typically occur prior to submission of an IND (i.e., pre-IND meeting), at
the end of Phase 2 (i.e., EOP2 meeting), and before a BLA is submitted (i.e., pre-BLA meeting). Meetings at other times may be requested.
These meetings provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice,
and for the sponsor and the FDA to reach agreement on the next phase of development. Sponsors typically use EOP2 meetings to discuss
Phase 2 clinical results and present plans for the pivotal Phase 3 clinical trials that they believe will support approval of the new