The clinical stage biotechnology company developing cellular therapies for life-threatening conditions, Longeveron Inc. (NASDAQ: LGVN) has been regaining some of the momentum it lost following its 128% surge. Considering that its AD treatment showed impressive results in phase 1 trials, many investors believe LGVN stock could be a profitable long-term play.
LGVN Stock News
As a biotechnology company, LGVN specializes in developing cellular therapies for life threatening conditions as well as those associated with old age. The company’s efforts are currently focused on – Lomecel-B – a treatment that uses bone marrow from young adult donors to repair tissues and maintain the organs of older patients infected with conditions and diseases associated with aging.
In this way, LGVN aims to improve regenerative drugs to promote healthy aging. While medical advancements have improved global life expectancy, it has not relieved the burden of chronic diseases or disabilities. With that in mind, LGVN designed Lomecel-B to address a wide range of issues – indicating the treatments potential if successfully commercialized.
This treatment’s potential led the FDA to give LGVN a Rare Pediatric Disease (RPD) designation for Lomecel-B in November which resulted in a 661.2% increase in LGVN stock. At present, the treatment is in a Phase 2a clinical trial for the treatment of Alzheimer’s Disease as well as a Phase 2a clinical trial for the treatment of Hypoplastic Left Heart Syndrome (HLHS) for infants. LGVN was granted the Orphan Drug Designation (ODD) and Rare Pediatric Disease (RPD) designation for its potential to treat Hypoplastic Left Heart Syndrome – a rare congenital heart defect affecting approximately 1,000 babies per year in the U.S.
As the company’s lead investigational therapeutic candidate, Lomecel-B showed successful clinical results in its HLHS Phase 1 trial and shared that the trial’s subjects did not require a heart transplant during the 2 – 3.5 years post-surgery. Now the company has submitted these Phase 1 results for publication in a peer-reviewed journal where the study will likely be published later this year.
Meanwhile LGVN is preparing to undergo its second clinical trial in Japan where it is exploring the therapeutic benefits of Lomecel-B for treating Aging Frailty. Currently, the company is on track to begin this trial during the first half of 2022 which could be significant since Aging Frailty affects 8.1 million people in the USA according to data from the 2019 census.
LGVN also expects the results of its Phase 1/2 “HERA” Aging Frailty trial investigating whether Lomecel-B could improve the adaptive immunity against influenza virus in subjects with Aging Frailty to be announced during the first half of 2022. At this time there is no treatment for Aging Fragility which is characterized by an age-associated decline in reserve and physical functions leading to low mobility, disability, weakness, fatigue, weight loss, and general slowness. If Lomecel-B is successfully commercialized, it could fill a so far unmet need affecting much of the world’s aging population.
As the company’s CEO Geoff Green noted, “There is increasing recognition of the unmet medical need in treating and preventing frailty in older adults,” and the company feels “the urgency to develop potential new therapies,” for its treatment within the scholarly community.
Like all biotech or pharma stocks, LGVN presents some risk as it works towards commercialization. However, the company’s recent update showed no setbacks in Lomecel-B’s progress which indicates that the treatment is on track to potentially achieve commercialization status. This is a bullish sign for LGVN which saw notable insider buying in October 2021 as well as the purchase of 5,000 shares by Todd Girolamo – a member of LGVN’s Board – in February.
These transactions were in advance of LGVN’s recently shared Q4 report, which showed a decrease in revenue from $1.2 million in 2020 to $0.2 million in 2021. The decrease was largely due to a decline in clinical trial revenue and grant revenue. In total, 2021 had $1.3 million in revenue but research and development expenses totaled $7.1 million – a 165% increase compared to 2020. The increase was due to R&D expenses for the completion of clinical trials which were not reimbursable by grants. Overall, LGVN beat expectations by $.05 after reporting a GAAP EPS of -$0.20.
In total, the net loss for 2021 was $17 million – a significant increase from the year before – however the company’s cash and short-term investments as of December 31st were $35 million thanks to the proceeds of LGVN’s IPO as well as its private placement offering. To facilitate the ongoing clinical development of Lomecel-B, LGVN sold approximately 1.17 million common stock shares at $17.50 per share. The gross proceeds of this offering are estimated to be around $20.5 million and a portion of the proceeds are expected to go towards additional research, product development, as well as general administrative purposes.
In light of LGVN’s current operating plan it’s management believes its current cash and short-term investment will be enough to cover its expenses and capital requirements into 2024. It’s also worth noting that due to the nature of its research on rare health conditions, LGVN was previously able to fund its operations with grants from various governmental and non-profit organizations. The company has received roughly $11.9 million in grants since its IPO and if it is able to attract similar funding in 2022, this will help reduce the risk of dilution.
Another bullish sign is LGVN’s insider ownership. According to its latest quarterly report, its executive officers and directors in total own 11.5% of Class A common stock shares. However, Joshua M. Hare – LGVN’s Co-founder, Chairman, and Chief Science Officer – beneficially owns 27.55% of common stock shares as well as 49.87% of Class B common stock shares.
While there is likely a long journey of several years ahead before LGVN is able to begin commercialization of its therapies, the company appears to be in a good position to continue its endeavors. As LGVN’s CEO – Geoff Green – remarked on the progress Longeveron has made since its IPO in February of 2021 he highlighted that “2021 was a year defined by effective execution, successful financings, and significant progress across our robust Lomecel-B pipeline of clinical trials,” before adding that he believes that 2022 will be another eventful year.
*Updated April 22nd
With many investors anticipating the results of Lomecel-B’s phase 1 trials, LGVN published its findings in Alzheimer’s & Dementia®: The Journal of the Alzheimer’s Association. During these trials, the Alzheimer’s treatment was well tolerated and did not cause the development of a serious side-effect reported by other Alzheimer’s treatments.
Lomecel-B also showed some promising results since only three months after the infusion, brain imaging showed increased volume of the left hippocampus – the part of the brain responsible for memory formation. As a result, the treatment showed the treatment’s therapeutic potential to slow cognitive decline and improve quality. Considering that 6.5 million Americans older than 65 suffer from dementia resulting from Alzheimer’s, LGVN has the potential to not only help the aging population but develop a solid revenue stream if Lomecel-B is approved.
Aiming to further advance Lomecel-B’s phase 2 trials, LGVN partnered with the Department of Veterans Affairs to add a Miami clinical site to its trials. With ongoing studies on aging frailty and Covid-19, this is the third agreement between LGVN and the VA. In light of this, Green believes these partnerships “reflect our ongoing efforts to develop a safe and effective cell-based therapy for this devastating disease in the vital setting of the VA health system”.
To facilitate these pivotal trials, LGVN appointed Dr. Chris Min as its Chief Medical Officer. Beginning his career at Merck Research Laboratories, Dr. Min was the leader of more than 10 phase 1 clinical trials including the study which resulted in the approval of Bridion® in the US. By leveraging his extensive experience, LGVN will likely benefit from Dr. Min’s leadership of global clinical development and regulatory strategy – especially as it focuses on advancing Lomecel-B for approval.
In his new position as Chief Medical Officer, Dr. Min was awarded 151,978 shares. However, it appears that LGVN’s Chief Science Officer – Dr. Joshua Hare – has sold 20,000 shares on the open market or through private sale. Sold at $10 per share, Joshua now holds 7,913,263 shares directly. Similarly, LGVN’s director – Rock Soffer – acquired 139,912 shares before their affiliated entity DS MED LLC sold 748,694 shares – leaving 7,024,208 shares indirectly owned. Overall, this insider activity was likely a byproduct of this tax season.
Considering the company’s ongoing Alzheimer’s and Hypoplastic Left Heart Syndrome trials as well as a potential phase 2 study on Aging Frailty in Asia, there are many catalysts ahead for LGVN stock. As CSO and Co-Founder Dr. Joshua Hare recently shared on Bloomberg’s podcast, despite the time and funding put into potential Alzheimer’s treatments – only one new drug has appeared and even this treatment is highly controversial. Therefore, LGVN’s unique approach to treating Alzheimer’s – if successful – could capture a huge share of this largely underserved market.
Media Sentiment
@realwillmeade noticed a possible fish hook chart pattern forming in LGVN stock
Technical Analysis
LGVN stock price is currently $11.38 as the stock trades near its resistance at 11.56. LGVN stock shows a stronger resistance at 12.89 with a main support at 8.87 and a weaker support at 10.62. After surging 128% at the end of March with news of Lomecel-B’s positive results, accumulation has been falling. The MACD is currently bearish and the RSI is resting at 53.
Overall this price action appears to be forming a fish hook chart pattern on the daily chart. The fish hook chart pattern is characterized by rapid selling over a number of days – which we can see with the 20% drop starting on the 5th. Gradually, selling slows as panic selling stops and a brief period of consolidation follows. This is when the RSI drops near 30 which happened with LGVN stock around the 11th. Since then the RSI has increased rapidly, forming the last leg of the chart pattern – resulting in the roughly 40% increase over the last few days as volume poured in. With the pattern almost complete, it may be risky to enter now. But LGVN stock could see a further increase depending on volume.
With a low float of 4.46 million, LGVN stock shows significant volatility and typically runs on positive news. But like many biotech and pharma stocks, LGVN stock is a long-term investment for most investors holding out for FDA approval and commercialization. In this way, LGVN stock moves on binary events with lulls in between.
LGVN Stock Forecast
Given that Lomecel-B showed encouraging results in its phase 1 trials, LGVN’s treatment could have significant upside potential if it is able to continue achieving positive results in these larger clinical trials. Meanwhile, investors will be watching for LGVN’s next quarterly report after the positive results of its last report. If the company makes consistent progress this year in securing grants it will help offset the costs of its clinical trials putting the company in a better financial position. But as is, LGVN is confident that it has the funding to sustain its operations well into 2024 which lowers the risk of dilution. In light of this, many investors are bullish on LGVN stock’s long-term potential.
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