LISATA THERAPEUTICS INC

Previous wording

We are a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases. Our investigational product, certepetide (LSTA1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively. Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to be unaffected. Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies and inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body). We and our collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics. To date, certepetide has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer. We are exploring certepetide as a means to enable a variety of treatment modalities to treat a range of solid tumors more effectively. Currently, certepetide is the subject of several Phase 2 clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

Current wording

We are a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other major diseases. Our investigational product, certepetide (formerly known as LSTA1 or CEND-1), is designed to activate a novel uptake pathway that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively. Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to remain unaffected. Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies while also inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body). We and our collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics. To date, certepetide has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer. We are exploring certepetide as a means to enable a variety of treatment modalities to treat a range of solid tumors more effectively. Currently, certepetide is the subject of several Phase 2 clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

Previous wording

Many solid tumor cancers, including, for example, pancreatic ductal adenocarcinoma (“PDAC”) and cholangiocarcinoma, are surrounded by dense fibrotic tissue, known as the tumor stroma. This stroma often limits the efficacy of current chemotherapies for these cancers. Emerging immunotherapies, including but not limited to checkpoint inhibitors and adoptive cell therapies (e.g., chimeric antigen receptor T cells (CAR-Ts)), also face challenges in penetrating solid tumors. Many tumors also exhibit an immunosuppressive TME, which suppresses a patient's immune system and can thus limit the effectiveness of immunotherapies and/or contribute to metastases. These factors negatively impact the ability of many therapeutic agents to effectively treat these cancers.

Current wording

Many solid tumor cancers, including, for example, pancreatic ductal adenocarcinoma (“PDAC”) and cholangiocarcinoma, are surrounded by dense fibrotic tissue, known as the tumor stroma. This stroma often limits the efficacy of current chemotherapies for these cancers. Emerging immunotherapies, including but not limited to checkpoint inhibitors and adoptive cell therapies (e.g., chimeric antigen receptor T cells (CAR-Ts)), also face challenges in effectively treating solid tumors. Many tumors exhibit an immunosuppressive TME, which suppresses a patient's immune system and can thus limit the effectiveness of immunotherapies and/or contribute to metastases. These factors, i.e., the combination of a dense stroma and an immunosuppressive TME, negatively impact the ability of many therapeutic agents to effectively treat these cancers.

Previous wording

To address the tumor stroma’s role as a primary impediment to effective treatment, our approach is to activate the C-end rule (“CendR”), or CendR active transport mechanism, a naturally occurring transport system. Our investigational drug, certepetide (a specific internalizing R-G-D or iRGD peptide), activates this transport system in a tumor-specific manner (Sugahara, Science, 2010). Certepetide enables more selective and efficient uptake of systemically administered anti-cancer drugs resulting in more intratumoral drug accumulation. The overall expected result is enhanced anticancer activity without an increase in adverse side effects. While it is possible to couple/tether or conjugate some anticancer drugs to certepetide, we believe that our initial approach of co-administration of certepetide with anti-cancer therapies is advantageous. Co-administration does not create a new chemical entity (“NCE”) with its attendant development and regulatory hurdles, thereby providing an anticipated faster-to-clinic and faster-to-market product opportunity for a range of co-administration therapies. That said, an attractive life-cycle management strategy for certepetide would be to molecularly bind it to a variety of anti-cancer agents (as an alternative to co-administration), thereby creating new NCEs with the potential for distinct patent protection, compositionally or otherwise.

Current wording

To address the tumor stroma’s role as a key impediment to effective treatment, our approach is to activate the C-end rule (“CendR”), or CendR active transport mechanism, a naturally occurring transport system. Our investigational drug, certepetide (a specific internalizing R-G-D or iRGD peptide), activates this transport system in a tumor-specific manner (Sugahara, Science, 2010). Certepetide enables more selective and efficient uptake of systemically administered anti-cancer drugs resulting in more intratumoral drug accumulation. The overall expected result is enhanced anticancer activity without an increase in adverse side effects. While it is possible to couple/tether or conjugate some anticancer drugs to certepetide, we believe that our initial approach of co-administration of certepetide with anti-cancer therapies is advantageous. Co-administration does not create a new chemical entity (“NCE”) with its attendant development and regulatory hurdles, thereby providing an anticipated faster-to-clinic and faster-to-market product opportunity for a range of combination therapies. That said, an attractive life-cycle management strategy for certepetide would be to molecularly bind it to a variety of anti-cancer agents (as an alternative to co-administration), thereby creating new NCEs with the potential for distinct patent protection, compositionally or otherwise.

Previous wording

Certepetide has demonstrated favorable safety, tolerability, and activity to date in clinical trials enhancing the delivery of standard-of-care chemotherapies for mPDAC. Certepetide’s cancer-targeted delivery may also enable emerging solid tumor treatment modalities to prove more effective.

Current wording

Certepetide has demonstrated favorable safety, tolerability, and activity to date in clinical trials enhancing the delivery of standard-of-care chemotherapies for mPDAC. Certepetide’s cancer-targeted delivery may also enable emerging solid tumor treatment modalities to prove more effective. For example, preliminary results of the combination of certepetide with immunotherapy and chemotherapy are promising.

Previous wording

Certepetide is an investigational drug that actuates the CendR active transport mechanism. Certepetide has been shown to modify the TME, making it less immunosuppressive and thereby making the tumor more susceptible to attack by the immune system while also inhibiting the metastastic cascade. It targets tumor vasculature, endothelial cells, tumor cells and some intratumoral immunosuppressive cells by its selective affinity for alpha-v beta-3 and beta-5 integrins that are upregulated on these cells. Certepetide is a nine amino acid cyclic internalizing RGD (“iRGD”) peptide that, once bound to these integrins, undergoes proteolytic cleavage to release a linear peptide fragment, called a CendR peptide fragment. The CendR peptide fragment then binds with high selectivity and affinity to an adjacent receptor, called neuropilin-1, also upregulated in solid tumors, to activate a novel uptake pathway that allows circulating anticancer drugs to more selectively and effectively penetrate solid tumors. The ability of certepetide and iRGD peptides to modify the TME to enhance delivery and efficacy of co-administered drugs has been demonstrated in many preclinical models in a range of solid tumors. Lisata, its collaborators, and research groups around the world have published over 350 related scientific papers in this regard.

Current wording

Certepetide is an investigational drug that actuates the CendR active transport mechanism. Certepetide has been shown to modify the TME, making it less immunosuppressive and thereby making the tumor more susceptible to attack by the immune system while also inhibiting the metastatic cascade. It targets tumor vasculature, endothelial cells, tumor cells and some intratumoral immunosuppressive cells by its selective affinity for alpha-v beta-3 and beta-5 integrins that are upregulated on these cells. Certepetide is a nine amino acid cyclic internalizing RGD (“iRGD”) peptide that, once bound to these integrins, undergoes proteolytic cleavage to release a linear peptide fragment, called a CendR peptide fragment. The CendR peptide fragment then binds with high selectivity and affinity to an adjacent receptor, called neuropilin-1, also upregulated in solid tumors, to activate a novel uptake pathway that allows circulating anticancer drugs to more selectively and effectively penetrate solid tumors. The ability of certepetide and iRGD peptides to modify the TME to enhance delivery and efficacy of co-administered drugs has been demonstrated in many preclinical models in a range of solid tumors. Lisata, its collaborators, and research groups around the world have published over 350 related scientific papers in this regard.

Previous wording

Our intellectual property portfolio is comprised of notable programs available for out-licensing and/or partnering in order to augment or continue their clinical development. Our current long-term strategy focuses on advancing our therapies through development with the ultimate objective of obtaining market authorizations and entering commercialization, either alone or with partners, to provide treatment options to patients suffering from life-threatening medical conditions. We believe that we are well-positioned to realize potentially meaningful value increases within our own proprietary pipeline if we are successful in advancing our product candidates to their next significant development milestones.

Current wording

Our intellectual property portfolio comprises notable programs available for out-licensing and/or partnering in order to augment or continue their clinical development. Our current long-term strategy focuses on advancing our therapies through development with the ultimate objective of obtaining market authorizations and entering commercialization, either alone or with partners, to provide treatment options to patients suffering from life-threatening medical conditions. We believe that we are well-positioned to realize potentially meaningful value increases within our own proprietary pipeline if we are successful in advancing our product candidates to their next significant development milestones.

Previous wording

Overall, net losses were $5.0 million for the three months ended June 30, 2024, compared to $4.0 million for the three months ended June 30, 2023.

Current wording

Overall, net losses were $4.9 million for the three months ended September 30, 2024, compared to $5.3 million for the three months ended September 30, 2023.

Previous wording

For the three months ended June 30, 2024, operating expenses totaled $5.5 million, compared to $6.9 million for the three months ended June 30, 2023, representing a decrease of $1.4 million or 19.7%. Operating expenses are comprised of the following:

Current wording

For the three months ended September 30, 2024, operating expenses totaled $5.3 million, compared to $6.0 million for the three months ended September 30, 2023, representing a decrease of $0.6 million or 10.5%. Operating expenses are comprised of the following:

Previous wording

•Research and development expenses were approximately $5.8 million for the six months ended June 30, 2024, compared to $6.3 million for the six months ended June 30, 2023, representing a decrease of $0.5 million or 7.9%. This was primarily due to a reduction in expenses associated with the Phase 2b ASCEND trial which completed enrollment in the prior year, lower spend on chemistry, manufacturing and control (“CMC”) related expenses and lower equity expense partially offset by an increase in expenses associated with our enrollment activities in the current year for our certepetide Phase 2a proof-of-concept Bolster trial.

Current wording

•Research and development expenses were approximately $2.5 million for the three months ended September 30, 2024, compared to $3.4 million for the three months ended September 30, 2023, representing a decrease of $0.8 million or 24.8%. This was primarily due to a reduction in clinical research organization (“CRO”) expenses associated with our Phase 2a proof-of-concept Bolster trial as a result of trial protocol modifications and lower equity expense. In addition, there were start up expenses in the prior year related to our Glioblastoma Multiforme (“GBM”) study.

Previous wording

Total other income (expense) is comprised primarily of investment income from cash, cash equivalents and marketable securities for the three months ended June 30, 2024 and 2023.

Current wording

Total other income (expense) is comprised primarily of investment income from cash, cash equivalents and marketable securities for the three months ended September 30, 2024 and 2023 and an investment in Impilo which was fully expensed under the equity method of accounting within the current year period.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2024 and June 30, 2023:

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2024 and September 30, 2023:

Previous wording

Overall, net losses were $10.4 million for the six months ended June 30, 2024, compared to $10.2 million for the six months ended June 30, 2023.

Current wording

Overall, net losses were $15.4 million for the nine months ended September 30, 2024, compared to $15.5 million for the nine months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024, operating expenses totaled $12.1 million compared to $13.7 million for the six months ended June 30, 2023, representing a decrease of 11.6%. Operating expenses are comprised of the following:

Current wording

For the nine months ended September 30, 2024, operating expenses totaled $17.5 million compared to $19.7 million for the nine months ended September 30, 2023, representing a decrease of $2.2 million or 11.3%. Operating expenses are comprised of the following:

Previous wording

•Research and development expenses were approximately $2.6 million for the three months ended June 30, 2024, compared to $3.2 million for the three months ended June 30, 2023, representing a decrease of $0.6 million or 17.7%. This was primarily due to a reduction in expenses associated with the Phase 2b ASCEND trial which completed enrollment in the prior year, lower spend on chemistry, manufacturing and control (“CMC”) related expenses and lower equity expense partially offset by an increase in expenses associated with our enrollment activities in the current year for our certepetide Phase 2a proof-of-concept Bolster trial.

Current wording

•Research and development expenses were approximately $8.4 million for the nine months ended September 30, 2024, compared to $9.7 million for the nine months ended September 30, 2023, representing a decrease of $1.3 million or 13.8%. This was primarily due to a reduction in expenses associated with the Phase 2b ASCEND trial which completed enrollment in the prior year and lower equity expense. In addition, there were start up expenses in the current year related to our FORTIFIDE study that were offset by start up expenses in the prior year for our GBM study.

Previous wording

•General and administrative expenses were approximately $6.3 million for the six months ended June 30, 2024, compared to $7.4 million for the six months ended June 30, 2023, representing a decrease of $1.1 million or 14.9%. This was primarily due to one-off related severance costs in the prior year associated with the elimination of the Chief Business Officer position on May 1, 2023, a reduction in equity expense, a decrease in directors and officers insurance premiums, and a reduction in spend on legal fees partially offset by one-off settlement related costs.

Current wording

•General and administrative expenses were approximately $9.1 million for the nine months ended September 30, 2024, compared to $10.0 million for the nine months ended September 30, 2023, representing a decrease of $0.9 million or 8.9%. This was primarily due to one-off related severance costs in the prior year associated with the elimination of the Chief Business Officer position on May 1, 2023, a reduction in equity expense, a decrease in directors and officers insurance premiums, and a reduction in spend on legal fees partially offset by one-off settlement related costs and an increase in consulting expenses.

Previous wording

Total other income (expense) is comprised primarily of investment income from cash, cash equivalents and marketable securities and losses on sales related to the sales of our New Jersey net operating losses (“NJ NOLs”) for the six months ended

Current wording

Total other income (expense) is comprised primarily of investment income from cash, cash equivalents and marketable securities and losses on sales related to the sales of our New Jersey net operating losses (“NJ NOLs”) for the nine months ended

Previous wording

June 30, 2024 and 2023 and an investment in Impilo which was fully expensed under the equity method of accounting within the current year period.

Current wording

September 30, 2024 and 2023 and investments in Impilo which were fully expensed under the equity method of accounting within the current year period.

Previous wording

As of June 30, 2024, we had cash, cash equivalents and marketable securities of approximately $38.3 million, working capital of approximately $37.5 million, and stockholders’ equity of approximately $38.2 million.

Current wording

As of September 30, 2024, we had cash, cash equivalents and marketable securities of approximately $35.9 million, working capital of approximately $33.0 million, and stockholders’ equity of approximately $33.7 million.

Previous wording

During the six months ended June 30, 2024, we met our immediate cash requirements through existing cash balances. Additionally, we used equity and equity-linked instruments to pay for services and compensation.

Current wording

During the nine months ended September 30, 2024, we met our immediate cash requirements through existing cash balances. Additionally, we used equity and equity-linked instruments to pay for services and compensation.

Previous wording

Our cash used in operating activities during the six months ended June 30, 2024 was $12.3 million, which is comprised of (i) our net loss of $10.4 million, adjusted for non-cash expenses totaling $0.6 million (which includes adjustments for equity-based compensation, depreciation and amortization, loss from equity method investment, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $2.5 million.

Current wording

Our cash used in operating activities during the nine months ended September 30, 2024 was $14.8 million, which is comprised of (i) our net loss of $15.4 million, adjusted for non-cash expenses totaling $0.9 million (which includes adjustments for equity-based compensation, depreciation and amortization, loss from equity method investment, and amortization/accretion of marketable securities), and (ii) changes in operating assets and liabilities using approximately $0.4 million.

Previous wording

Our cash used in operating activities during the six months ended June 30, 2023 was $12.4 million, which is comprised of (i) our net loss of $10.2 million, adjusted for non-cash expenses totaling $0.9 million (which includes adjustments for equity-based compensation, depreciation and amortization, a loss on disposal of fixed assets, and amortization/accretion of marketable securities) and (ii) changes in operating assets and liabilities using approximately $3.1 million.

Current wording

Our cash used in operating activities during the nine months ended September 30, 2023 was $16.0 million, which is comprised of (i) our net loss of $15.5 million, adjusted for non-cash expenses totaling $1.0 million (which includes adjustments for equity-based compensation, depreciation and amortization, a loss on disposal of fixed assets, and amortization/accretion of marketable securities) and (ii) changes in operating assets and liabilities using approximately $1.5 million.

Previous wording

Our cash provided by investing activities during the six months ended June 30, 2024 totaled $18.1 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities) partially offset by an investment of $0.1 million in Impilo.

Current wording

Our cash provided by investing activities during the nine months ended September 30, 2024 totaled $11.8 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities) partially offset by an investment of $0.1 million in Impilo.

Previous wording

Our cash provided by investing activities during the six months ended June 30, 2023 totaled $3.6 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities).

Current wording

Our cash provided by investing activities during the nine months ended September 30, 2023 totaled $15.8 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities).

Previous wording

Our cash used in financing activities during the six months ended June 30, 2024 totaled $0.1 million and consisted primarily of tax withholding-related payments on net share settlement equity awards to employees.

Current wording

Our cash used in financing activities during the nine months ended September 30, 2024 totaled $0.1 million and consisted primarily of tax withholding-related payments on net share settlement equity awards to employees.

Previous wording

Our cash provided by financing activities during the six months ended June 30, 2023 totaled $0.4 million and consisted of proceeds from the issuance of shares through our ATM Agreement of $0.3 million, option exercise proceeds of $0.2 million partially offset by tax withholding-related payments of $0.1 million on net share settlement equity awards to employees.

Current wording

Our cash provided by financing activities during the nine months ended September 30, 2023 totaled $0.4 million and consisted of proceeds from the issuance of shares through our ATM Agreement of $0.3 million and option exercise proceeds of $0.2 million partially offset by tax withholding-related payments of $0.1 million on net share settlement equity awards to employees.

Previous wording

On June 4, 2021, we entered into the ATM Agreement with H.C. Wainwright & Co., LLC as sales agent, in connection with an “at the market offering” under which we from time to time may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million. As of the date of this filing and so long as our public float remains below $75.0 million, we are subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount we can offer to up to one-third of our public float during any trailing 12-month period. Subsequent to the filing of our Registration Statement on Form S-3 (File No. 333-279034) on May 1, 2024, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $26.7 million. Pursuant to the Baby Shelf Limitation, since the aggregate market value of our outstanding common stock held by non-affiliates was below $75.0 million at the time of such S-3 filing, the aggregate amount of securities that we are permitted to offer and sell is now $8,915,094, which was equal to one-third of the aggregate market value of our common stock held by non-affiliates as of March 21, 2024. If our public float exceeds $75.0 million on a future measurement date, the Company will no longer be subject to the Baby Shelf Limitation. There were no issuances of common stock under the ATM Agreement for the three and six months ended June 30, 2024. Since inception we have issued 64,394 shares of common stock under the ATM Agreement for net proceeds of $270,774.

Current wording

On June 4, 2021, we entered into the ATM Agreement with H.C. Wainwright & Co., LLC as sales agent, in connection with an “at the market offering” under which we from time to time may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million. As of the date of this filing and so long as our public float remains below $75.0 million, we are subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount we can offer to up to one-third of our public float during any trailing 12-month period. Subsequent to the filing of a prospectus supplement to our Registration Statement on Form S-3 (File No. 333-279034) relating to the at the market offering on August 21, 2024, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $29.6 million. Pursuant to the Baby Shelf Limitation, since the aggregate market value of our outstanding common stock held by non-affiliates was below $75.0 million at the time of such prospectus supplement filing, the aggregate amount of securities that we are permitted to offer and sell is now $9,855,890, which was equal to one-third of the aggregate market value of our common stock held by non-affiliates as of August 20, 2024. If our public float exceeds $75.0 million on a future measurement date, the Company will no longer be subject to the Baby Shelf Limitation. There were no issuances of common stock under the ATM Agreement for the three and nine months ended September 30, 2024. Since inception we have issued 64,394 shares of common stock under the ATM Agreement for net proceeds of $270,774.

Previous wording

There have been no material changes in our critical accounting policies and estimates during the three and six months ended June 30, 2024, compared to those reported in our 2023 Form 10-K.

Current wording

There have been no material changes in our critical accounting policies and estimates during the three and nine months ended September 30, 2024, compared to those reported in our 2023 Form 10-K.