NASDAQ:LGVN
READ THE FULL LGVN RESEARCH REPORT
Longeveron (NASDAQ:LGVN) released its 2Q2024 financial update and announced that the company has enough cash on hand to finance operations through 4Q2025 given present projections. We view this as a very important and positive announcement and further proof that company management’s decision to narrow the company’s focus and cut expenses, while also adding to cash stores, continues to be an impressive move.
Additionally, the company has signed its first contract and manufacturing business and noted on the call following the release that it believes the company can generate $4-5 million annually when the program is fully up and running in 2-3 years. The company also noted in the call that it was being very deliberate and making sure it was bringing in the right partners, which we believe helps to ensure that this venture will be successful in the long term and help to finance advancement of Lomecel-B.
And management reminded investors that Lomecel-B, the company’s primary therapy, has been on a good roll with the FDA. Recently, Lomecel-B was granted Fast Track designation by the FDA only a week after being granted Regenerative Medicine Advanced Therapy (RMAT) designation by the FDA for the treatment of Alzheimer’s Disease. These two developments added to the designations received from the FDA that include Orphan Drug Designation, Fast Track Designation, and Rare Pediatric Disease Designation for Lomecel-B the treatment of hypoplastic left heart syndrome (HLHS), which we’ve written extensively about before.
Fast Track designation is granted by the FDA to facilitate the expedited development and review of new drugs that are intended to treat serious or life-threatening conditions, while demonstrating the potential to address unmet medical needs (FDA.gov). This further demonstrates the potential the FDA believes Lomecel-B has in treating the millions of patients suffering from Alzheimer’s Disease. As we’ve mentioned before, the pursuit of commercialization of Lomecel-B is on the back burner as the company focuses on what it believes is the most likely to be approved in the near term—Lomecel-B for the treatment of Hypoplastic Left Heart Syndrome (HLHS). But we believe that the recent FDA designation and the earlier released positive trial results will attract partners that will want a piece of this exciting technology and enable the company to continue to pursue the Alzheimer’s testing needed.
HLHS is a rare pediatric congenital heart birth defect in which the left ventricle (one of the pumping chambers of the heart) is either severely underdeveloped or missing. It is a devastating diagnosis for families with only 20-60% of babies with HLHS surviving their first year of life according to data compiled by the Cleveland Clinic. As we’ve written about, initial trials have shown that Lomecel-B has the potential to improve those odds dramatically. The Phase 2b clinical trial is ongoing and due to the rarity of the disease obtaining enough patients to test can be difficult, but the company believes that it should have full enrollment by the end of 2024 and already has 38 enrolled pediatric patients. The company also announced that it will be able to provide 5-year post-treatment data from the Phase I test that showed such promising results.
Summary
We continue to believe that Longeveron is an exciting clinical-stage company and investors aren’t appropriately appreciating the game-changing potential Lomecel-B may be able to have on multiple serious medical conditions. As a result of the prudent decisions made by management, we believe Lomecel-B will ultimately have a substantial impact on the health situations of thousands of patients. We believe the stock continues to be underpriced as investors aren’t appreciating the potential of Lomecel-B and encourage investors to take a look at LGVN.
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