CNS Pharmaceuticals, Inc. (CNSP) Earnings Call Transcript & Summary

Yes, absolutely. If I think about the company just prior to the raise, so at a very low market cap at the time, single-digit millions, similar cash position. This capital raise, this financing, as you mentioned, it's not just the balance sheet strengthening event. This is truly enabling. With the $22.5 million in capital, we are very confident that will give us the ability to in-license or acquire a very compelling asset or assets. And then additionally, beyond that, give us the opportunity to advance that asset to a near-term clinical milestone, whether that be delivering clinical data or generating some kind of data that uncovers or retires any risk that there might be associated with the asset and essentially reset the valuation. So we think that's really what the opportunity here is. It's an ability to get behind an experienced leadership team who now has the capital to get an asset and bring it forward. And then beyond that, shape its future development in a very meaningful way. There's been a number of notable examples of late of companies that have successfully pivoted by in-licensing a new asset, and they can -- in those opportunities, you see companies completely reset their valuation, completely change perception amongst investors and the Street more broadly. And given where we started in our valuation, we think that this really has the potential for venture-like returns, but in the public equity space. And we think that, that is compelling to the investors who participated, but will continue to be compelling to investors as we go forward.

Excellent. So Steve, of note, this financing was oversubscribed as we had talked about, and it included participation from widely recognized fundamental health care-focused institutional investors. So how important is institutional support as CNS Pharmaceuticals execute this next phase of growth? And as we got on this discussion before we kind of hit the go button, you had some interesting and compelling news to share about this raise. So I'd love for you to share that with your audience.

Yes, absolutely. So this financing, like all or most financings evolved as we were executing the deal. And we had originally gone out with a target in mind that we felt would be sufficient to allow us to get an asset in hand. But as we start interacting with investors, the interest started to expand, and we ended up bringing in the $22.5 million, and it was very oversubscribed. We were looking at some of the recent capital markets data recently. And one of the things that we saw was year-to-date, our PIPE financing was the highest performing PIPE transaction that's been done year-to-date. So that's something that the team obviously took note of. It's something that we're proud of. But again, I think it speaks to the opportunity, which there's a very strong team that came together with a very clear vision, a commitment to executing and to creating value. And we checked the box by bringing in some really strong investors who we view as partners to us going forward, very notable, well-known investors, including some of the top-performing funds in the biotech sector. One thing I will also add is during the financing process, there were several investors who we spoke to who just said, look, right now, our funds can't invest, whether it be market cap or liquidity or the fact that we did not yet have an asset in hand. But a lot of funds say, look, we want to stay close. We want to be updated. We will keep you in mind with any assets that we come across that we think might be interesting. Similarly, please feel free to share any thoughts you might have or talked about therapeutic areas as you're starting to triage and diligence assets. So we feel like in the short amount of time, our team has built some very valuable relationships. And yes, going forward, institutional investor interest and support is going to be critical. As we get the asset in hand, take it forward, get it to a milestone or inflection point, we are going to be looking to continuing to advance that, potentially continuing to expand opportunities for that asset or bringing in other additional assets. So we will continue to engage with the institutional investor community, building out our shareholder base as we grow the company. And our commitment will be on execution, creating value for shareholders and creating value for patients by developing innovative and highly differentiated medicines.

And Steve, this is proven execution, proven momentum building, and this is just the beginning. So very exciting. All right. You know this is a What This Means segment. So I'm going to end with this last question. So stepping back a little bit, when investors look at the successful financing, the insider buying, which I want you to comment on and the strategic pivot underway, what do you ultimately want them to understand about where CNS Pharmaceuticals is headed and what this moment means for the company's future?

Yes. Like you said, I think this is just the beginning, right? This team came together only a few months ago with a lot of energy and enthusiasm and a clear goal in mind and something that we say internally is we are going to win. So this financing is -- it's an important milestone. It's an important achievement, but our work is just getting started and our energy and enthusiasm has only grown as a result of that. But what this capital does do is it enables us. It enables us to identify and acquire the asset that we believe will meet all of our metrics and the profile for which we're seeking. It will allow us to start to advance that asset and really commence the strategic pivot and then ultimately, when we complete a transformational financing to further advance that asset, at that point, I think we will feel that the strategic pivot has been completed. So there's a very motivated and committed team here. And yes, as you noted, the Chair of our Board recently made some stock purchases in the open market, which I think shows her commitment and enthusiasm for the opportunity. And yes, we're all just very excited and think that we have all come together at the right time with the right experiences, with the right skill sets, and we have the team and now the resources to execute.

Well, this is certainly an exciting time for CNS Pharmaceuticals. And with the momentum that you are building, your scorecard, you're checking so many boxes. And as you said, it's just the beginning. So we definitely want to have you back. I want to follow your progress. I know it's going to be an exciting time for investors to follow. With that, this concludes our Virtual Investor What This Means segment, featuring CNS Pharmaceuticals. I'd like to extend a huge thank you to Steve O’Loughlin for joining us today. I'd also like to thank our audience for your time and attention. As a reminder, CNS Pharmaceuticals trades on NASDAQ under the ticker CNSP. And if you like what you saw today, I encourage you to visit cnspharma.com for more information on the company and to sign up to follow the company. To receive their alert as well as follow their social channels to stay current on the latest information and you can also visit virtualinvestorco.com for a replay of today's event as well as our latest segments and events calendar. Steve, it's such a pleasure having you on. Can't wait to have you back to follow your progress, and I want to wish everyone a great rest of your day.