Lisata Therapeutics, Inc. (LSTA) Earnings Call Transcript & Summary

Welcome to the Caladrius Biosciences Definitive Merger Agreement with Cend Therapeutics Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, Wednesday, April 27, 2022. I will 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 morning, everyone. Joining me today from my management team are Dr. David Mazzo, President and Chief Executive Officer; and Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer. Earlier this morning, we issued a press release announcing the exciting news regarding our definitive merger agreement with Cend Therapeutics and proposed formation of Lisata Therapeutics. The press release, the link to this webcast and accompanying slides can be found under the Investors and News section of the Caladrius Company website. If you have not received the news release or if you would like to be added to the company's e-mail distribution list, please e-mail me at [email protected]. Before we begin, I'll 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 Slide 2 of this presentation, which covers certain disclosures, as well as 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, Wednesday, April 27, 2022. Caladrius 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 morning, everyone. I'm truly delighted to be here to speak to you about the creation of Lisata Therapeutics, a new diversified therapeutics company that is well positioned for future growth. And it is, in fact, the combination of 2 very exciting companies in their own rights, Caladrius Biosciences and Cend Therapeutics. As you all know, Caladrius for years has been focused on the discovery, development and commercialization of therapies designed to reverse disease and regenerate tissue, and Cend has also been working to develop novel approaches to significantly improve the efficacy of treatments for some of the most serious solid cancers that are in existence. And coming together, we will be able to focus our combined efforts on advancing the Cend platform and really providing what we hope will be great value for patients as well as for shareholders. Lisata Therapeutics, which will trade once the merger is closed under the NASDAQ symbol LSTA, is a public company or will be a public company that will have a diverse development pipeline, strong existing partnerships and really what we believe is a very attractive potential for future lucrative partnerships. Now most of the time when a new company is formed, one of the first questions that is asked is from where does the name come. And I will tell you that Lisata actually has a meaning. It is derived from the Finnish word for augmented and enhanced, and you'll see why those associations are relevant as I go through the remainder of the slides. The merger is expected to close in the third quarter of this year, pending shareholder approvals from both companies and the customary closing conditions associated with a transaction of this type. And the ownership of the new company will be divided as approximately 50% of outstanding shares to each of the Caladrius and Cend shareholders with an even distribution of Board representation as we go forward. So as an overview, Lisata will have a very experienced and experts' development and leadership team with extensive domain relevant experience and expertise. That is, the Caladrius team brings, of course, a vast amount of cardiovascular experience, but what's probably not known is the background of most of the Caladrius staff has experience working in the field of oncology and actually successfully developing oncology drugs. I will be the Chief Executive Officer of Lisata; David Slack, the current President and CEO of Cend Therapeutics, will become the President and Chief Business Officer of Lisata; and Dr. Kristen Buck will remain as the Executive VP of R&D and the Chief Medical Officer from Caladrius once Lisata is formed. It's important to note that the scientific founder of Cend's technology, Erkki Ruoslahti, who is Finnish by descent, is a world-renowned technical leader and scientist who has associations not only in Europe but spent a vast amount of his career here in the United States associated with a number of very high-quality institutions in California. And Erkki will be a member of our Board and also the leader of our Scientific Advisory Board. In order for us to start working collaboratively immediately prior to closing, we are announcing that Caladrius is making an immediate $10 million investment in Cend, and we will be providing resources over the course of the next several months leading up to the closing in order to maintain the momentum associated with the development of the exciting products in Cend's pipeline, and I'll describe those briefly in just a moment. The company will have a full capital efficient development and public company operational infrastructure. It's going to be lean, just like Caladrius has been, and very capital-minded. We will only be about 30 people of very appropriate expertise and experience scattered actually not only across the United States, but with a few members of the team internationally placed as well. The combined pipeline of multiple clinical-stage assets will be in a variety of indications, and there'll be potential value-creating milestones that will, I think, be attractive to shareholders over the next 12 to 24 months. At the time of closing, projected, as I said, toward the end of the third quarter of this year, the company is expected to have about $70 million in cash and investments, of course, no debt. And we have the ability to advance the combined pipeline in a manner that I think will be very attractive to investors. And then finally, Cend is bringing to the partnership and existing collaborative arrangements with Qilu Pharmaceutical of China. The deal provides exclusive rights of the CEND-1 technology to Qilu in China, Taiwan, Hong Kong and Macau, but they assume all development and commercialization responsibilities in the licensed territories. And Qilu will pay up to $225 million in milestones as well as double-digit royalties on any product sales that occur in the region. So there's a lucrative existing partnership already coming into the Lisata fold. Let's talk a little bit about the strategic rationale for why Caladrius felt that this was such a compelling merger. First of all, the proprietary platform technology that will be added to the Caladrius pipeline is the CendR Platform, which provides a targeted tissue penetration capability designed to specifically enhance drug delivery to solid tumor. This technology actually converts the tumor stroma from a barrier to a conduit for effective delivery via co-administration of a range of chemo and immunotherapies. It selectively depletes the intratumoral immunosuppressive cells, and there is an additional discovery platform, the Tumor-Penetrating Nanocomplex or TPN Platform that comes with the transaction, which also has broad potential applicability to enable nucleic acid-based therapies to effectively treat solid tumor cancers. And we'll talk more about that in just a moment. And along with the technology comes a strong intellectual property portfolio with patent protection well into the next decade, with the eligibility for patent term extension. As it relates to the clinical pipeline, it will be robust and will have broad therapeutic reach. It's focused on advancing the lead product candidate, CEND-1, in a variety of difficult-to-treat solid tumor applications. CEND-1 is currently in a Phase IIb study in first-line metastatic pancreatic ductal adenocarcinoma, or PDAC, in combination with standard of care chemotherapies. And we expect that the development of this compound will expand to additional difficult-to-treat tumors such as hepatocellular, gastric or breast cancers and additional anticancer drug combinations, including immunotherapies, over the course of the next year or so. It should be noted that CEND-1 has been granted fast track as well as orphan drug designation by the FDA. And then as to the value proposition, we have, as I mentioned, the strategic partnership in China with Qilu that has non-dilutive milestone payments, development collaboration and participation in downstream economics associated with it. I've already mentioned the potential for up to $225 million in milestones and potential future royalties. And importantly, there's a $10 million payment due for proceeding to Phase III in PDAC, and Lisata could receive that as early as sometime in 2023. We also have additional partnership opportunities for broad applications of CEND-1 and the CendR Platform with a variety of companies that are the innovators and distributors of the standards of care for a number of solid tumor treatments. There's anticipated clinical data and business development milestones across the consolidated pipeline over the next 24 months. And of course, all of this is going to be managed by an experienced management team that has extensive development expertise and with a series of leading scientific advisers to guide them. So let's take a moment and talk about the CendR Platform, and I'll give you a sense of what the mechanism of action of this exciting new technology is. So CEND-1 is a cyclic peptide that targets tumors by binding to alpha-v integrins, which are selectively expressed on tumor vasculature endothelium and are not expressed on normal healthy vasculature. Alpha-v integrins are also expressed on cancer-associated fibroblasts, a major component of tumor stroma, and the stroma or the noncancer and nonimmunocell layer of cells that act to hold tumor tissues together, and they often serve as a barrier to access to the actual tumor cells themselves. Alpha-v integrins are also expressed on the tumor cells themselves, and they are also found on intratumoral immunosuppressive cells, which contribute to an immunotherapy refractory or cold tumor microenvironment, which is evident in pancreatic and other cancers. Once down to the alpha-v integrins, CEND-1 is cleaved by proteases that are upregulated in tumors creating a C-end Rule, or CendR, linear peptide fragment. The CendR fragment then binds to a second receptor on the tumor endothelium, neuropilin, to trigger activation of the CendR pathway, a novel active transport pathway, thus enabling the penetration of the tumor by the CendR peptide and, importantly, any co-administered and/or bound drug, essentially converting the tumor stroma from a barrier to a conduit to each tumor cell target. So with that very brief technology background, I'm going to turn the presentation over to Dr. Kristen Buck to give you the background on the preclinical and clinical data that made us believe this is such a compelling opportunity. Kristen?

Thanks, Dave, and good morning, everyone. I will begin with a summary of the preclinical data. This slide speaks to the targeted nature of CEND-1's effects. These mice each have orthotopically implanted pancreatic tumors and were administered fluorescent quantum dots. In the mouse on the left, you can see the quantum dots follow the mouse's entire circulation. Cend's collaborators developed an etching technology that quenches the fluorescence of circulating quantum dots, but not those that have penetrated tissues. In the mouse on the upper right, after quenching, you can see that the quantum dots did not penetrate the pancreatic tumor. But in the mouse on the lower right, in which CEND-1 was co-administered with quantum dots, we see dramatic penetration of the pancreatic tumor. It's notable that CEND-1 did not increase penetration of the quantum dots into other healthy tissues, only selectively into the tumor. Here is another preclinical model demonstrating tumor tissue-specific penetrating capabilities of CEND-1. As shown in this slide, new mice were transplanted with human cancer cell lines. The addition of CEND-1 synergistically and statistically significantly reduced tumor volume versus either agent alone. In the lung cancer model, peak tumor volume was reduced about threefold versus gemcitabine alone. And in the liver cancer model, peak tumor volume was reduced about twofold versus sorafenib alone. On Slide 15 here, again, a mouse model, the graph on the left shows that the combination of CEND-1 with trastuzumab, also known as Herceptin, eliminates the breast tumor altogether, whereas trastuzumab or Herceptin alone only prevents the tumor from expanding. The graph on the right shows whereas Abraxane was unable to control tumor growth, Abraxane plus CEND-1 prevented the tumor from growing. On Slide 16, in a gastric cancer model, the addition of CEND-1 enhances lymphocyte infiltration into tumors, which, as Dave noted, is typically a limiting factor in the therapeutic effect of adoptive cell therapy or chemotherapy. You see this by the red line in the middle with hearts versus the light gray line with squares in the top third. Additionally, adding CEND-1 to PD1 disrupted or program cell death protein 1 disrupted lymphocytes leads to further therapeutic efficacy. You see that here the pink line on the bottom was squares versus the gold line in the middle with diamonds. So we have seen on this slide and the previous 2 slides that CEND-1, in addition to anticancer therapies, improves tumor penetration and therefore makes the anticancer therapies more effective. Survival rates have also been examined in these preclinical models by 2 independent investigators. Shown here are the survival rates in animals with pancreatic ductal adenocarcinoma. Both investigators confirmed that the addition of CEND-1 prolonged survival versus standard of care alone. I will now summarize the data that provides the clinical validation for CEND-1, which was presented at ESMO in 2020. In this multisite Phase I clinical study of CEND-1 in combination with gemcitabine and nab-paclitaxel, 31 first-line metastatic pancreatic ductal adenocarcinoma patients were enrolled, and 29 were evaluable for efficacy. Overall, CEND-1 was very well tolerated, and there were no dose-limiting toxicities. In fact, the safety of the combination was consistent with the standard of care alone. CEND-1 had a favorable pharmacokinetic profile with a median half-life of approximately 2 hours. The trial was stopped early due to the COVID pandemic, but patients were kept on drug on a compassionate use basis. And despite the early stoppage, there were encouraging signs of increased antitumor activity. Specifically, I will note several lines. The median progression-free survival was 9.7 months, and the median overall survival was 13.2 months. The CA19-9, which is a circulating tumor biomarker for pancreatic cancer, was reduced in 96% of patients. And this slide, I believe, is the most compelling clinical slide as it provides a comparison of CEND-1 data versus recent historical registrational trials for pancreatic ductal adenocarcinoma from peer-reviewed journals. The data suggests that due to the enhanced tumor penetration CEND-1 can augment the antitumor effectiveness of standard-of-care chemotherapeutic agents in pancreatic cancer. I will call your attention to a few rows. The median overall survival was 13.2 months for the CEND-1 combination versus the 8.5 for the gem-nab-paclitaxel arm, which is standard of care given today in approximately 50% of patients with pancreatic cancer. Similarly, the progression-free survival was 9.7 months for the CEND-1 combination with gemcitabine and nab-paclitaxel versus only 5.5 months for the gemcitabine and nab-paclitaxel arm alone. And for the CEND-1 combination, 74% of patients had at least a 90% drop in their CA19-9 circulating tumor biomarker versus 31% of gemcitabine + nab-paclitaxel arm alone. And that completes the high-level CEND-1 preclinical and clinical validation summary. And with that, I will turn the call back over to our CEO, Dr. David Mazzo, for the review of the combined company's exciting clinical development pipeline. Dave?

Thanks, Kristen. Even with this brief overview of the preclinical and clinical data, I hope that you can all see why we are so excited about this combination and the creation of Lisata and the ability to work together with the Cend team to advance the CEND-1 technology in these difficult-to-treat tumors. So let's take a look at the combined pipeline of the 2 companies. Lisata will have a very novel, diverse and, we believe, risk-mediated product development pipeline. On the top of the slide, you see a number of the ongoing programs that Cend will be contributing, including programs that are in Phase II in first-line metastatic pancreatic ductal adenocarcinoma, as well as studies that are being done in resectable and borderline resectable PDAC, colon and high-grade other cancers as well as a solid tumor basket trial that Lisata will be planning for some time early next year. And then on the TPN platform, we are expecting to advance the discovery efforts in that area to identify a lead product candidate to bring to the clinic also coming in the near future. Joining that will be the existing Caladrius pipeline, you all know this very well, which consists of XOWNA in coronary microvascular dysfunction, HONEDRA in Japan for critical limb ischemia and Buerger's disease and CLBS201 in diabetic kidney disease. And all of these programs will be continued to their next development milestone evaluation date. And of course, as always, we will be taking data decision -- excuse me, data-driven decisions regarding the future of any of the programs. And then finally, to give a bit more specificity around the anticipated milestones for Lisata Therapeutics. You can see here, I'm not going to read them to you all. But you can see over the course of the next roughly 18 to 24 months, there are a number of data-driven milestones that, in any case, could provide a big lift to both patients and shareholders in terms of value creation. So with that, I'm going to end this brief overview, of course, in the months to come, we will be working diligently with our Cend colleagues to finalize the transaction to create Lisata Therapeutics and, of course, to provide you with regular updates on the progress, not only on the organization, but on the development activities of the combined company. We look forward to sharing what we hope will be great successes with you in the future. And with that, operator, I'll turn it back to you, and we can take some questions.

[Operator Instructions] Your first question comes from the line of Emanuela Branchetti from H.C. Wainwright.

Congratulations on the merger. A couple of questions on the CD34 cell therapy pipeline first, if you don't mind. So you just mentioned that you're going to reach data readout and then make a decision on the next steps for each plan. So since the focus seems to be on CEND-1, I was wondering if you are thinking about allocating specifically or directly resources to the CD34 programs in case the data are positive. And -- or if you also have in mind to look for BD opportunities.

Emanuela, thank you for the questions. I'm pleased to have the opportunity to clarify that. As we have always done, our decisions about continued development of any products are data-driven, they're data-based. And we have a number of key data milestones projected for each of the 3 ongoing CD34 programs over the course of the next 6 to 9 months. And again, as always, we will use the data from those milestones to determine the next steps. We have always been and will continue to seek partnerships for the CD34 platform. Because as we have experienced with CLBS14 or oligo in the past, where the Phase III requirements from FDA were quite onerous in terms of study size and cost, it seems unlikely that Caladrius alone would have been able to bring these products through to registration. So we're hoping that the ongoing work in each of those 3 CD34 programs will provide sufficient and compelling data that will allow us to consummate partnerships, which will then help support the continued development of those programs going forward. But we, as I said, have always been looking for partnerships, and we'll continue to do so.

Okay. And regarding the status of HONEDRA, what is the goal of the PMDA clinical and nonclinical consultations?

Well, again, thank you, Emanuela, for that question. It's important to clarify. In Japan, under the Regenerative Medicine Law and with our Sakigake designation, there are a number of steps that one needs to take that lead up to the submission of a JNDA. I should remind you that because of, I would call them, the legal requirements that is having an organization present in Japan and certain infrastructure and a few other things, Caladrius by itself is not capable or legally qualified to file the NDA in Japan. And that's why we've always been seeking a partnership. As we've reported previously, the consummation of a partnership for HONEDRA in Japan is likely dependent on the upcoming clinical preconsultation where it will be determined whether or not the existing data set is sufficient for submission to the regulatory authorities for consideration or whether additional clinical work might be required. That's one of the steps, of course, in determining whether you can proceed to JNDA. The other one is having a CMC or preclinical or nonclinical consultation where the regulatory authorities do a preliminary review of the nonclinical data and also give you the green light that that's now in an acceptably advanced state that you could proceed to preparing the JNDA. But remember, our focus here is on consummating a partnership for the filing and registration of HONEDRA in Japan.

Yes. Got it. Got it. Got it. Great. Makes sense. So switching to CEND-1. Is the program currently being developed only in China? And is there a plan of the studies to the U.S. and other territories? And if yes, what's the time line for that?

So the answer -- simple answer is no. There are studies that are ongoing or planned to be started in other territories around the world, including the United States and potentially Europe and Canada and also Australia. There are also are studies that have been completed in Australia. And if people are wondering why Australia, I think most people who are familiar with the development -- the pharmaceutical development environment in Australia will know that there is a substantial R&D tax credit, actually a reimbursement for work done in Australia that the Australian government provides, and Cend Technologies -- excuse me, Cend Therapeutics took advantage of that to do their early Phase I studies, and that's some of the data that Kristen described earlier in Australia. But there are clearly plans to initiate studies in a variety of different cancers in other territories, including, if not even focused on, the United States in the future.

Got it. And yes, thank you for the overview on the CEND-1 mechanism of action. I was wondering what is the rationale behind the choice of PDAC as the first indication? And what is the rationale for selecting the other potential target towards the indication?

Well, Emanuela, we hope to organize in the coming months a more detailed technical discussion, including our colleagues from Cend and perhaps even the technical founder of the technology, Erkki Ruoslahti, as well as some KOLs. But in very general terms, we have looked for cancers that have very high concentrations of the alpha-v integrins and neuropilin, which are the receptors for which CEND-1 has an affinity. And so these are cancers that have strong barriers and are generally the most difficult to penetrate and treat. So that's why we're looking at these. It's really the amount of stroma and also the fact that the microenvironment in terms of physical chemical characteristics such as pH and other things, are amenable to the CEND-1 technology.

Got it. And lastly, just -- and I'm sorry if I missed that, if you mentioned this. But how much cash were brought in by the merger? And what is now the expected runway of Lisata?

So the cash at closing, which, again, is targeted to be at the end of the third quarter of this year, hopefully sooner, but we're being conservative in our estimates, is expected to be approximately $70 million of cash and investments for Lisata Therapeutics. And at this point, I really can't comment on the true expected runway because we have a lot of things that are ongoing and will have a number of things proposed, and it will be based on decisions that will be taken by the new Board of Directors regarding prioritization of some of the proposed CEND-1 new programs, for example, as it relates to their timing, that will determine the runway. But with $70 million, we will be, I think, very well-funded, very financially stable. And we'll look forward to being able to operate our development activities in an unhindered fashion for some time. I'm being very careful not to mention months yet because there's still a lot to be worked out specifically.

Your next question comes from the line of Kumar Raja from Brookline Capital Markets.

Congratulations on the deal. So with regard to starting the Phase II trial in Australia, what needs to be done before you can start the trial? Do you have enough drug supply to start that trial?

Kumar, thanks for joining the call and for the questions this morning, and thank you for the kind words. Regarding the trial in Australia, as far as we are understanding, just about everything is in place to be able to begin that trial except for some last organizational details as it relates to clinical operations. There is drug substance and drug product available. And I believe all the necessary regulatory approvals are okay. The drug, of course, will be locally supplied in Australia. It's already there. So I think we're good to go there. And we hope that either Cend or Lisata will be making an announcement at the initiation of that trial in the coming months.

Okay. And with regard to the optimal dose of CEND-1, how are you guys thinking about based on the Phase I data? Will you be exploring other doses in the Phase II trial? And also, will there be a control of gem and Abraxane in that Phase II trial?

So just to answer this more specifically, we've already done dose finding or I should say Cend Therapeutics has already done dose finding in prior studies. But we will, of course, hone in on the dose that we think is most effective, best tolerated as we move to later-stage clinical trials where the costs and, let's say, the risk of getting the dose wrong has obviously increased. But we believe that the data that's been generated to date strongly supports the 3.2 milligram per kilogram dose that's been used in trials. We'll also get some more data out of the ongoing trials in China that Qilu was running. And we always have the opportunity to look at additional clinical work if we deem it to be necessary. And the second part of your question was?

Whether you'll have like a control arm with gem and Abraxane?

Yes. These will all be controlled studies.

Okay. And with regard to the China study, what can you say in terms of how big of a trial that is? And any additional details with regard to that trial? And also this $10 million based on proceeding to Phase III, that would be anywhere in the world? Or that would be based on entering a Phase III trial in China?

That would be based on any in the world. And I believe that the Phase I/II in China is in the 50- to 100-patient range. To be candid, I'm not exactly sure. I have to go back to look at what has been announced. We have not yet been introduced to Qilu yet, obviously, until the deal has been announced, and this will all occur over the course of the next several months. But we expect that data from that trial could be available for us to see as early as next year.

Okay. And CEND-1 has both fast track as well as orphan designation in the U.S. So what is the strategy in terms of starting trials in the U.S.?

Well, the strategy is, I think, broad in the sense that we -- with positive data coming out of the Qilu studies, which would then support the Phase Ib work that had been done in Australia, I think there's a clear expectation that we'll continue to explore appropriate standard-of-care combinations with CEND-1 in later-stage trials here in the United States. And we'll also be looking, as we noted on one of the milestone and pipeline side, that we'll be looking to initiate a basket trial in a variety of solid tumor cancers sometime in 2023 to explore CEND-1 in combination with standard of care for those difficult-to-treat cancers. And a lot of that work, we think, will have a U.S. component as well.

And the $10 million you are providing right now, will that be treated as a loan? Or how is that going to be accounted for?

No, it's actually, I would call it -- it's being treated as an investment. We will own an appropriate corresponding number of Series D preferred shares of Cend. If the deal closes, then that can be treated simply as pre-spend on the combined pipeline. If the deal doesn't close for some unfortunate reason, then we would own that much of an investment in Cend, and we would have certain rights associated with the Series D preferred stock. It's not a loan, no.

Your next question comes from the line of Steve Brozak from WBB.

Yes. Congratulations on this merger. I've got 3 questions. The first one, you actually opened up an interesting line by referring to the microenvironment. Given both companies have had a focus on that environment in terms of everything from revascularization to how to deal with oncological indications, can you tell me about what the synergies, what the understanding was and especially on the scientific level? If you can elaborate on that as much as possible, and then I'll follow up with 2 more questions, please.

Stephen, thanks for joining. Thanks for your question. We'll be able to get into this in much greater detail in the coming months. But to answer your question, sort of top line, the CEND-1 technology has the ability to function well in the microenvironment, and it up-regulates cytotoxic T cells and down-regulates the T regulatory cells. And in many instances, there have been proposals that the association of CEND-1 with a variety of cell therapies could actually be an interesting approach to cancer treatment. But I suppose we have the opportunity to more broadly look at whether CEND-1 can deliver cells and cell therapies in a variety of other indications. I think the thing we'll have to be very careful about going forward is we have 2 very exciting and very broadly applicable technologies that are going to be part of Lisata, and we have to be very careful to focus on development of those with the highest probability of success in the shortest amount of time in order to secure the success and sustainability of Lisata. As scientists, if you have all these things, you're in a candy store, you can go in many different directions, but we're going to have to stay very, very focused. But we can see the potential for synergies between the 2 technologies.

Got it. And on one of the next follow-up. You're obviously a small-cap biotechnology company, yet you seem to have a significant affinity for Asia-related relationships. And I know there's obviously a difference between China and Japan. But in focusing on the different partnerships and the leveraging, what can you tell us about that, about the environment that you've been past expert in and are expanding now as far as going forward and potential collaborations going forward? Because it's unusual to see these types of collaborations with large pharma but with a smaller biotechnology company, it's very, very rare. What can you give us on that front, please?

Well, I think the simple answer is you go to the partnerships where they have the greatest opportunity to have an impact in a lucrative market with very interesting technology, but also, candidly, where the capital is. And there are -- there is, I should say, quite a lot of available capital in China, in Japan and in Asia overall. And I think you know from my background, I spent a lot of time working in Asia and have a number of contacts there, but also have, I think, a reasonable working knowledge of the business environment. And similarly, our colleagues from Cend were able to cultivate a very interesting and lucrative deal with the Qilu Pharmaceutical Company, one of the major pharmaceutical companies of China. We are not only focused on Asia, though. I want to take that perfectly clear. I'm looking forward to future partnerships. We'll look toward the typical players in oncology and cardiovascular medicine, which, for the most part, are internationally based, although with a strong base of operations in North America.

And with that, you actually led into the next question. Because when you're dealing with this kind of powerful building block technologies, plural, you're looking at a situation that will afford you the opportunity for many tranches of licensing collaboration. I -- just in looking at your charts, you're talking about double the number of announcements just in this year based on the successful merger. What are you looking at in terms of, a, how would you envision partnering going forward with Lisata as far as what are your goals on that front? It obviously leads anyone to believe that this is going to be a significant partnering type of vehicle for, again, any biotechnology company. And I'll hop off the line.

Thanks, Steve. I think you've touched on probably the main point of consensus and shared vision between Caladrius and Cend. We collectively see the CEND-1 technology as being broadly applicable to any one of a number of existing chemo and immunotherapeutics and maybe even in the future nucleic acid and cell therapies for cancer treatment across a wide variety of solid tumor cancers as well. And so our most important goal here in the future is to exploit the full potential of CEND-1. And that, as you pointed out, I think, rightly, gives us the opportunity to explore nonexclusive licenses and partnerships with a wide variety of specialty pharma and big international pharma companies across quite a large number of potential indications. So we see this as really being sort of the sky is the limit kind of opportunity, and we're looking forward very much to exploiting that to its fullest potential.

Great. Congratulations. And obviously, good luck in all the announcements soon to come.

Thank you, Steve.

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

Dave and Kristen, a lot of information to absorb. Could you give us a little better sense of the relative strength that the 2 companies bring to this combined operation in terms of fundamental research and the ability to run clinical trials and, eventually, for commercialization, then of course, the financing aspects? I mean, are these going to be more or less 2 separate operations? Or is there going to be more integration between the 2 than you would have initially?

No. Pete, first of all, thank you for joining, and thanks for your question. To be very clear, Lisata will be a single organization operating as a single organization.

And by the way, where is it headquartered?

Basking Ridge, New Jersey. I should point out that the Cend organization really has only 3 full-time employees. It has been a virtual organization supported by a number of very well-known and high-quality consultants that have taken on a number of the operational roles. But one of the reasons that Cend was attracted to Caladrius is because we have a full operational and quite well-respected clinical and regulatory operations infrastructure as well as a public company infrastructure, which will provide Lisata with access to capital in the public markets, which Cend did not have as a private company. So it's really an integration of the Cend team into the Caladrius team and a shared vision going forward. But most of the operation -- really, almost all of the operational infrastructure comes from the Caladrius side. Cend is contributing existing technology, existing partnerships, existing plans and, in fact, some strong business development and, obviously, technological expertise in that particular area to the combination as well as strong expertise and experience for the people who will be joining us. So in many ways, this is a hand-in-glove kind of merger, it's the kind of merger that people dream about as being ideal because it's so easy to put the organizations together because there really is very little overlap and redundancy in the 2 organizations.

I appreciate your comment about not being able to really specify the runway. But based on the existing programs and clinical trials that you have, barring anything else that you add to the pile. Can you give us a sense of what the burn rate would be going forward?

I can't do it. Sorry. I mean, as I said, I can only give you -- I can only give you the burn rate if I know exactly which programs are going to occur on what time line and which ones will be done in partnership, which means there'll be shared costs and which ones will be -- where the costs will be borne by Lisata. So all of that will be worked out over the course of the next several months. And we -- as is our habit, we will be completely transparent about that once Lisata is formed and we can provide clarity on the exactitude of all of these things. But I would say that we, at Caladrius, projected multiple years of cash runway based upon just the Caladrius pipeline. And so I think it's fair to assume that there will be no immediate need for capital infusion for Lisata to operate. There may be interest in people making an investment in Lisata. In fact, we hope they will be, but we're not necessarily in a bind where we have to raise money in order for Lisata to be viable. Lisata will be viable financially from day 1.

Okay. And in terms of the overall long-term strategy, let's say, is it fair to intuit that there will be relatively less emphasis on CD34-positive technology versus all the oncology programs?

I think it's reasonable to assume that our Caladrius CD34 technology pipelines will have their future determined by the data that comes out of the ongoing clinical work and also by the interest that's shown by potential partners and by the regulatory agencies and especially by investors. We do believe that the oncology portion of the Lisata pipeline will receive the near-term emphasis because oncology tends to be an area where patients and shareholders show greater interest, where the opportunity for partnerships and even conditional approvals comes earlier because of the immediate life-threatening nature of the diseases and where I think there's a greater interest just generally from the population because it's seen as such a deadly disease. Notwithstanding the fact that cardiovascular disease remains the #1 killer, it's a long-term killer. It kills by attrition. Whereas many of these cancers, unfortunately, you can see the patients deteriorate sort of before your eyes. And so it's much more visceral, much more emotional and the need is seen as much more immediate.

Okay. And you mentioned, if the deal closes, are there specific regulatory issues that could come up in terms of...

No, no.

Okay. Go ahead.

No, that's me simply repeating what our lawyers have said to say. We're -- we can't promise you or guarantee anything. It's how the saying go. It's not over until the robust female sings. I'm trying to be politically correct here. But generally speaking, until it's done, it's not done. And so we have to put all the caveats around it. But we see no specific reason why this deal shouldn't close. Both sets of shareholders should see this as a compelling opportunity for near-term and long-term value creation.

Your next question comes from the line of Walter Schenker from MAZ Partners.

David, we're not trying to double-team you. I'm in Florida, and Peter is up in New York -- New Jersey, sorry. Just a quick financial question. The last financing done by Cend, which is a private company, put what broad valuation on it, [ ensure they're de-preferred ]. I assume they've done some preferreds and other financings to get to this point.

Yes. The last, I guess, technically speaking, Walt, the last financing was a C round that was actually part of an acquisition of a company that Cend did to acquire the TPN technology. And I don't have the specifics of that deal. I believe that the -- that what we were looking at was that Cend was looking to do a financing prior to agreeing to this merger, and they were marketing that financing as a $100 million pre-money. So we believe that the $90 million valuation is both fair for Cend, but also a good deal for the Caladrius shareholders. And of course, Cend then gave Caladrius a $90 million valuation, which we think is much more in line with our intrinsic value than what our market cap has reflected in the past months.

Well, since your cash was well above $90 million, we've had that discussion. I'm sure you've had with everybody. It's easy to make an intrinsic valuation. Just a quick cash question. At December you had about $95 million, $10 million is going into Cend, which gets you to $85 million. You didn't probably burn $15 million in 6 months. You're paying off a little bit of their debt on the closing as well?

No, no. They have no debt. They are not paying off.

[ You're just trying to get to $70 million? ]

Yes. Well, I mean there's operations between both companies -- well, I should say this, Caladrius still has operational expenses through to the closing, which includes 3 clinical programs that are ongoing. So we're still enrolling patients in FREEDOM. We're enrolling patients in the 201 trial. And we're undergoing site closeout in Japan. So we'll be still spending money on our current pipeline as things go on. I think the finances, Walt, if you -- I'm sorry to put you off a little bit, but if you could be patient, we'll be filing our Q from the first quarter in just a week. And so you'll have a much clearer idea of what was available at the end of March and what's projected going forward through the second quarter at that point in time. But I think you can see that we've had money that's being spent -- and you're right, we didn't spend $15 million in the first quarter, but I won't preannounce what the Q is going to say. And you'll see what was spent, what was invested, what remains and what's projected through the closing.

Thank you. And we have reached the end of our Q&A session. I would now like to hand the conference back to Dr. David Mazzo. Sir, please go ahead.

Well, thank you, operator. And again, thank you all for joining us on this short notice. I think you can understand that we wanted to have an opportunity to talk to you to provide a bit more color and detail around the press release, but the press release, we believe, is quite detailed and provides all the salient operational and investment information at the moment. We look forward as the months unfold to giving you more on the progress of the formation of Lisata. Again, we're delighted to have this opportunity, excited about the future, and we look forward to your continued support. We wish you all a very fine day. Thank you very much.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.