Athersys, Inc.
Q2 2015 Earnings Call Transcript

Published: 7 Aug 2015

[Operator:]

Good afternoon. My name is Brittney. And I will be your conference operator today. At this time, I would like to welcome everyone to the Athersys' Second Quarter 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Ms. Laura Campbell. You may begin your conference.

[Laura Campbell:]

Thank you, and good afternoon, everyone. I'm Laura Campbell, Vice President of Finance for Athersys. Thank you for joining today's call. If you do not have a copy of the press release issued at the close of market, it is available on the Athersys' website at athersys.com or you may call Matt Celesnik at 216-431-9900 to receive it via email. Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer; and B.J. Lehmann, President and Chief Operating Officer will host today's call. The call is expected to last approximately 45 to 60 minutes and may also be accessed at athersys.com. A replay will be available two hours after the call's conclusion and access information for the replay is in today's press release. Any remarks that we may make about future expectations, plans and prospects, constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements as a result of various important factors, including those disclosed in our Forms 10-Q, 10-K and other public SEC filings. We anticipate that subsequent events and developments may cause our outlook to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. For the benefit of those who may be listening to the replay, this call was held and recorded on August 6 of 2015. Since then, we may have made announcements related to the topics discussed, so please refer to our most recent press releases and SEC filings. With that I would like to turn the call over to B.J. Lehmann. B.J.?

[William Lehmann:]

Thank you, Laura. Good afternoon and welcome, everyone. I'm B.J. Lehmann, President and Chief Operating Officer at Athersys. I'll briefly review our second quarter 2015 financial results and then turn the call over to Gil for a corporate update. For the second quarter of 2015 revenues were $216,000 compared to $388,000 for the same period of 2014, and are comprised of grant revenues and royalties from our collaboration with RTI Surgical. The $10 million upfront payment from the license agreement with Chugai Pharmaceuticals which was announced in March is recorded as deferred revenue at June 30, 2015, and in accordance with our accounting policy for such arrangements. Under the terms of the agreement, we may terminate the collaboration in the event that Chugai did not pay us the $7 million milestone payment following its review of the interim result from our case# 2 ischemic stroke study. This payment is due during the third quarter of 2015. Research and development expenses were $5.3 million in the second quarter of 2015 compared to $5.8 million in the prior year second quarter. The difference reflects decreases in clinical and preclinical development cost and sponsored research, which were partially offset by increases in patent legal fees. General and administrative expenses were relatively consistent at $1.9 million in the second quarter of 2015 and $1.8 million in the same period of 2014. The change in the fair value of our warrant liabilities resulted in income of $6 million in the second quarter of 2015 compared to income of $7.9 million in the comparable 2014 period, reflecting primarily the impact of changes in our share price. Net loss for the second quarter of 2015 was $1 million compared to net income loss of approximately $700,000 for the second quarter of 2014. The increase in net loss reflects $200,000 reduction in loss from operations as offset by the $1.9 million increase in non-cash expense from our warrant liability valuation. Net loss per share was $0.01 per share in the second quarter of this year compared to net income of $0.01 per share in the second quarter of 2014. It's important to note that our reported net loss of $1 million for this quarter includes non-cash income of $6 million related to the change in fair value of our warrant liabilities, and non-cash expense is $700,000 related to stock-based compensation aggregating $5.3 million of non-cash income. Further, our reported net loss does not include any revenue impact from the Chugai license, since the unpaid payment is recorded as deferred revenue as of June 30, 2015. Similarly, our reported net loss per share of $0.01 for this quarter includes and $0.06 per share favorable impact from the $5.3 million of non-cash income. As of June 30, 2015, we had $32.3 million of cash and cash equivalents compared to $26.1 million at December 31, 2014. Additionally, we are expecting a $2 million Japanese tax to refund during the third quarter. During the second quarter of 2015, cash used in operating activities was $5.8 million, compared to cash used in operating activities of $6.1 million in the second quarter of 2014. Cash provided by financing activities in the second quarter of 2015 was $2.7 million compared to zero at the prior year's second quarter and include proceeds from the use of our equity facility. With that, I like to turn the call over to Gil for a corporate update. Gil?

[Gil Van Bokkelen:]

Thanks, B.J., and good afternoon, everyone. As we describe for you each quarter, Athersys' is committed to developing innovative new medicines that have the potential to address serious areas of medical needs. We believe that by developing safer and more effective treatments that can provide substantial benefits to patients in areas like neurological, cardiovascular, inflammatory and immune disease and other areas that we are pursuing. We will be able to meaningfully improve medicine, enhance clinical outcomes, and patient quality of life, and improve the efficiency of healthcare. And so doing, we expect to create substantial value for our shareholders. Over the past several years we have made steady progress in some important areas, including advancing and expanding our portfolio of clinical programs, continuing to advance and mature our preclinical programs, and broadening our network of collaborative relationships and partnerships. We remain committed to building on that progress, and working with our partners to advance our programs through clinical development and commercialization. In the past few months, there has been a lot of attention focused on our clinical program for treating ischemic stroke, which represents a high priority area for healthcare systems around the world. Stroke represents the leading cause of serious disability and also represents a leading cause of death globally. The urgency of the need for new therapy is understandable given the rapidly expanding population of elderly around the world, the corresponding increase of ageing related diseases and conditions, the growing and projected shortage of clinicians and nurses, and the financial and operational impact on healthcare systems around the world as we discussed in our last earnings call. From a healthcare economic perspective, it is especially concerning for the three geographies that we are most focused on from a development perspective, including North America, Japan, and the European Union. In April, we summarized the initial interim results from our stroke trial, which showed that administration of MultiStem following a stroke demonstrated a favorable safety profile as we have seen in our trails. These initial results also provided encouraging evidence of reduced infections, complications, life threatening adverse events and mortality, encouraging signs of efficacy, especially when MultiStem was administered within 36 hours of the stroke. Today, we have some additional results and analysis we will share that provides further support to substantiate the benefits of treatment with MultiStem following an ischemic stroke. It's well appreciated by the clinical community that a 36 hour treatment window would represent a dramatic improvement over the current standard of care as represented by the 3 to 4.5 hour window for tPA and a 6 hour window for mechanical reperfusion, based on the recent American Heart Association recommendations. While these treatments can provide substantial benefit, both of these interventions only reach a small percentage of patients given that most stroke victims don't get to the hospital on time to be definitively diagnosed and treated, an unfortunate reality that is not likely to change anytime soon. In contrast, published studies suggest that more than 90% of patients reached the hospital within 24 hours of the stroke. And it is estimated that 95% or more reached the hospital within 36 hours. So in contrast to current standards of care, a therapy that could be safely administered within this timeframe could become a treatment option for the vast majority of stroke patients. The lead clinical investigator for the trial presented the initial result of our study at the European Stroke Organization Meeting in April, which was greeted with substantial support and enthusiasm from many key opinion leaders and clinicians, with quite a few expressing their desire to participate in the next clinical trial. Since that time, we have meet with and obtained positive and important feedback from stroke experts from around the world, while we've continued to conduct further analysis of the data. Initial investor and media response one of confusion and disappointment which we believe is a reflection of the media's focus on the trials pre-specified endpoint and was therefore characterized as a failure. But this reaction failed to appreciate the broader body of emerging evidence, important aspects of the original study design and the important realities and context regarding the purpose of Phase II clinical trials which by definition are exploratory in nature. By design, these types of trials are meant to provide relevant information and initial perspective that will help shape and inform future studies which could provide the basis for formal regulatory approval and subsequent commercialization. Studies from BioMed Tracker and other research project show that over the past 15 years or so, approximately a one-third of Phase II trial succeed, meaning that the therapy demonstrates unambiguous safety and efficacy. But among the two-thirds of trials they do not initially succeed, there is a spectrum of outcomes and it's important to understand why studies fail, that will help people appreciate the results of our trial, and help everyone understand the compelling nature of the impact we are seeing. When studies fail, it may be due to one of the three general reasons, which simplistically are that the therapy is not safe, it's not effective, or that the dosing, timing, frequency of administration, or predetermined endpoints were incorrect. When a therapy is inherently unsafe or simply doesn't work as expected from a biological perspective, it typically means the end of the development program. However, when there is appropriate evidence of safety, and evidence that the treatment can provide a substantial benefit to patients, and a clear indicator of when and how to appropriately administer the therapy to patients, there is a strong basis for advancement and eventual success. One tangible example of this principal is the historical, clinical and development experience with tPA. Initial clinical studies conducted by Genentech designed to evaluate safety and efficacy of tPA for treating an ischemic stroke did not need their pre-specified endpoints and were therefore technically considered failures. In addition, there were clear indicators that suggested an elevated risk of hemorrhagic complications when tPA was administered too late after the stroke had occur. But the data warranted further examination and investigators eventually realized that if tPA was given early enough after the stroke, initially defined as 90 minutes of the stroke, it could be administered safely and provide meaningfully benefits to many patients. The information generated from this post-doc analysis shaped to design an execution of subsequent studies which confirmed the clinical observations regarding safety in efficacy and led to the approval of tPA which now represents the standard care in many parts of the world. So how do our results compare to this experience? To begin with, our data show convincing evidence of safety when MultiStem is administered to patients following a stroke, and is further supported by the safety profile we've seen in other clinical trials, as well as results obtained during years of preclinical studies. In fact, one could justifiably argue that MultiStem has a much cleaner safety profile than improved standard of care treatments that are associated with an elevated risk of serious complications like hemorrhagic events. In our case, we see a substantial reduction in serious complications when MultiStem is administered. So what about efficacy? Our analysis shows that although the study did not meet the pre-specified endpoints when considering all patients enrolled in the trial. There is consistent pattern of evidence suggesting therapeutic benefit when MultiStem is administered to patients following an ischemic stroke. Specifically, this evidence includes a higher proportion of patients that achieved an excellent outcome which is a well-accepted benchmark and a pre-specified endpoint, and define clinically as the patient achieving an excellent score in each of the three clinical rating scales that's used in the study. These include the modified ranking scale, also referred to the MRS, which is a six point scale that stresses over disability with zero reflecting no disability and six indicating death. The NIH stroke scale, also referred to as the NIHSS, which is a 42 point scale that asses cognitive and motor scale deficits with zero reflecting no meaningfully disability in any category, and 42 reflecting maximum disability in all categories. And our Bartow [ph] Index which is a 100 point scale measured in 5 point increments, which evaluates the patient's ability to engage in activities of daily living such as feeding, grooming and other activities that most of us take for granted. In order to achieve and excellent outcome, a patient much show excellent improvement in each of the three clinical rating scales as evidenced by score of zero to one in the MRS, a score of zero or one in the NIHSS, and a score of 95 or 100 in the Bartow Index. When all subjects from the trial were considered, 15.4% of patients that received treatment with MultiStem achieved an excellent outcome versus on 6.6% of patients that received placebo, a difference of 8.8% that was nearly statistically significant. We also saw a reduction in complications such as secondary infections, reduced life threatening adverse events and mortality and reduced hospitalization as we've described previously. We also consider the individual chronicle rating scale, and use the global statistic as the primary endpoint which may essentially be considered as a weighted average of the three components. Good or excellent improvement for each clinical scale was prespecified as achieving the following at the 90-day clinical assessment, and Amrad [ph] score of 0 to 2, an improvement in the NIHSS of 75% or more, and a Bartow Index score of 95 or 100. However, at the time of the interim results we did get evaluated the proportion of patients that achieved a good or excellent outcome in all three clinical rating scales, a measure referred to global recovery. Recently however, this analysis was completed in consistent with the other indicators when we examined all patients, we observed that 30.8% of MultiStem treated subjects achieved good or excellent global recovery in all three clinical rating scales versus 24.6% of placebo treated patients. We also saw 19% reduction in average hospitalization for MultiStem treated patients compared to subjects that receive placebo. So in summary, when considering all subjects, we observed very good safety and a consistent pattern that suggest the potential for therapeutic benefit. We originally designed the trail to evaluate patients that receive treatment with MultiStem 24 to 36 hours after the stroke had occurred. We also defined the inclusion criteria to allow for patients that receive no intervention or those that had received tPA or mechanical reperfusion but did not meaningfully improve to participate in the study. As we and study investigators have disclosed previously, we intentionally excluded patients that received both tPA and mechanical reperfusions since at the time there was not enough known about the safety and potentially efficacy of that approach. As evidenced by the tPA experience, it is long been realized in the stroke clinical community that early intervention is key to effectively treating stroke patients. Our original trial design contemplated assessment and evaluation of patients during the initial 24 hour period after they have been definitely diagnosed with ischemic stroke. This evaluation period was designed to identify patients that were exhibiting meaningful recovery as evidenced by a four point improvement or greater in the NIHSS from their initial screen to their baseline assessment, prior to patient enrollment in the trial. It was recognized that a meaningful number of patients exhibit spontaneous recovery, for example, because the patient has suffered a transendoishemic attack or TIA, or because they successfully responded to treatment with tPA or mechanical reperfusion. For those patients that did not exhibit substantial improvement, eligible patients were then enrolled and randomized to receive treatment with either MultiStem or placebo within 24 to 36 hour window. For operational reasons, we've described previously, midway through the trial we modified the inclusion and exclusion criteria to expand the treatment window from 36 to 48 hours, and based on the advice of certain clinical investigators, we also made an adjustment that allowed for the inclusion of patients that had received both tPA and mechanical reperfusion, provided they meet all other criteria and did not exhibit substantial improvement from screening to baseline. Once we have the initial results from the study, I determine that administration of MultiStem was safe and observed the pattern suggesting therapeutic benefit in multiple important parameters. It was logical for us to ask two key questions in order to further evaluate data from the trial. First, was there any evidence that suggest that earlier treatment is better with regard to MultiStem consistent with the original trial design and other clinical experience? Second, what was the impact of the medication that allowed for inclusion of patients that received both tPA and mechanical reperfusion? With regards to the first question the answer became pretty obvious, pretty quickly from an evaluation of the data. Just under half of the patients that received MultiStem were administered treatment within 36 hours or less of the occurrence of the stroke, total of 31 subjects. Whether we compare these patients with all patients receiving placebo or only those subjects that receive placebo within 36 hours or less, the pattern was the same. Clear and consistent evidence that administration of MultiStem within 36 hours was associated with better outcomes across a range of parameters which we have summarized previously. Additionally, we have found in subsequent analysis that the proportion of patients that achievement substantial improvement in each of the three clinical rating scales also refer to its global recovery rose dramatically for the patients that receive MultiStem within 36 hours. 41.9% of the patients from MultiStem treated individuals versus 24.6% for those receiving placebo. And an absolute difference of 17.3%. Furthermore, there was a consistent pattern of meaningful improvement for each of the individual clinical rating scales used to evaluate patients, and the proportion of patients that experienced secondary infections decreased to 19.4% for the MultiStem treated patients versus 49.2% for placebo patients, a difference of 29.8%. These results corresponded with other parameters including a significant reduction in hospitalization times with MultiStem treated patients experiencing a 30% average reduction in hospitalization time, equating to a reduction of three or fewer days in the hospital relative to patients that received placebo. We also saw in this patient population consistent improvement in other areas such as the proportion of patients achieved an excellent outcome, and other clinically relevant metrics that we evaluated. In short, for virtually every parameter we consider, there meaningfully improvement over catching a benefit for this early MultiStem treatment population compared to the larger treatment group. We next consider the impact of the second modification we had made to the trial which allowed for inclusion of patients that have received treatment with both tPA and mechanical reperfusion, provided they did not experience meaningful improvement from screening assessment to baseline. Among these subjects there were nine patients that received placebo and eight that received MultiStem, including four patients that had received administration of MultiStem in 36 hours or less. Upon examination of the results for these 17 patients, we noticed two important things. First, despite the fact that all of these patients that arrived early at the hospital and angling them to be treated with tPA and mechanical reperfusion. There was group of six patients that were in the late placebo group that had unusually late screening assessment. As evidenced by a meeting and screening assessment time of more than 22 hours post stroke. In contrast, the meeting time of screening assessments for the early placebo and early MultiStem patients that had received tPA and mechanical reperfusion were roughly 4 hours. Second, this group of patients in the late placebo group had substantially lower baseline NIHSS scores than other patients receiving similar treatment with tPA and mechanical reperfusion. The combination of late screening, meaningfully lower NIHSS baseline scores and other evidence suggested that these patients either had substantially improved following treatment with tPA and mechanical reperfusion which would have precluded their enrollment in the trials or had substantially less serve strokes skewing the data for this group. Regardless, among the subjects that received tPA and mechanical reperfusion, the greatest average improvement in NIHSS scores occurred in the patient that received early treatment with MultiStem. To address the imbalance and consistent with our initial study design, we excluded from consideration the patient that receive tPA and mechanical reperfusion. As we previously presented, we saw clear consistent and substantial evidence of improvement in each of three clinical rating scales, as well as other parameters. For example, as I mentioned a few moments ago, we recently completed the assessment of the proportionate patients that achieved good or excellent recovery in each of the three clinical rating scales or global recovery. From this analysis we observe that 44.4% of the patients administered MultiStem within 36 hours or less achieved good or excellent recovery in all three clinical rating scales versus only 17.1% of patients that received placebo, a difference of 27.3%. In other words more than 2.5 times as many patients achieved improvement in all three clinical scales. This difference is statistically significant with the P-value of less than 0.01. We observed a consistent pattern of improvement in other clinical parameters as well including a greater proportion of subjects achieving excellent outcome 18.5% versus 3.8% with a P-value of equal to 0.3, a reduction in the life threatening adverse events and mortality, secondary infections is represented by 18.5% for the MultiStem patients and 55.8% for placebo and a 35% reduction in hospitalization costs which on average were 6.7 days for MultiStem versus 10.3 days for placebo treated patients or the equivalent of 3.6 days hospitalization per patient with the P-value of less 0.01. All of these parameters and others we have considered point in the same direction. The evidence tells us that MultiStem is safe and provides a meaningful therapeutic benefit that’s administered within 36 hours and that administration of MultiStem is associated with accelerated improvement as evidenced by patient recovery at 7 and 30 days post stroke. Furthermore the emerging biomarker data provides additional mechanistic evidence in support of these findings. Although work is ongoing data from the analysis we have already completed indicate that MultiStem administration results in a substantial reduction of multiple inflammatory [indiscernible] including TNS Alpha, IO6, IO12 and others and these effects are even more pronounced for subjects receiving MultiStem administration within 36 hours, in addition to the statistically significant reduction in circulating inflammatory cells we described previously this additional data provides direct support for key elements of our therapeutic hypothesis. So in summary we’re very confident in the evidence that tells us that MultiStem can provide a meaningful therapeutic benefit to patients that have suffered in ischemic stroke and lays a strong foundation for subsequent development and we’re moving ahead accordingly. We have already shared most of this data and information with our partner in Japan Chugai and we’re engaged in an ongoing discussion with them about potential ways to proceed. Under our license agreement Chugai has a defined period of time to conduct a full review of the trial results and make a $7 million payment to us. In the event that Chugai does not make this payment or if we do not reach some other mutually acceptable arrangement we have the option to terminate the agreement. The dialogue with Chugai continues to be constructive and we look forward to updating our shareholders once we have reached resolution. In the meantime we continue to explore other partnering opportunities around multiple programs including [indiscernible] and while we cannot make any guarantees we remain very optimistic about the path ahead. We also continue to advance our other clinical programs including adding clinical sites to our ongoing Phase 2 clinical trial for treating patients that have suffered significant damage from the Acute Myocardial Infarction. The study is designed to evaluate the safety and efficacy of MultiStem in patients that have suffered in nstemi heart attack the most common type of heart attack and to evaluate functional improvement as well as incidence and severity of adverse events. Functional improvement will be evaluated using MRI, assessment well established -- assessing well-established cardiovascular performance metrics with a primary efficacy assessment of 120 days post treatment. We will also assess patients for major adverse cardiovascular events for MACE after one year post treatment. In addition to further evaluating improvements in cardiovascular function. I would remind everyone that we have received a meaningful grand award from the NIH to conduct this trial. In addition we made important progress in our exploratory clinical program for treating patients with acute respiratory distress syndrome or ARDS. We recently received authorization from the FDA to initiate the study and working with our partner Catapult in the UK we expect to receive MHRA authorization for the trial there. We intend to launch this study which will also be funded with grant support from Innovate UK. To just to wrap up in our preliminary comments. We’re making steady consistent headwind in multiple fronts and we remain very excited about the road ahead. While we share investor frustrations regarding the recent decline in stock price we are focused on executing against the game plan that we believe will correct this in due course. In the mean time we appreciate the continued expressions of support. On a personal note I would also like to let everyone know that a senior member of our team will be transitioning into a new rule with the company in the weeks ahead. Dr. Robert Deans who has been a long time leader in our stem cell exploratory and translational research programs. We will be moving into a consultancy and advisory role allowing him to spend some more time with his family and pursue some other areas of interest. We’re immensely grateful to Bob for his leadership and all he has done for us and with us over the past more than 12 years he has been with the organization and we wish him all the best as he transitions into this new role. With that we will be happy to take a few questions.

[Operator:]

[Operator Instructions]. Your first question comes from the line of Jason Kolbert.

[Jason Kolbert:]

Well I appreciate the run-down, can you do me a favor and just take your time and walk me through a little bit of the statistics the 17% difference that you called out in the p-values associated with it so that I can just jot it down and really capture the data that you’re talking about and I guess we can start with the excellent score. So when you reanalyze the data, talk with me about the percentage of patients that realize the excellent outcome what was the difference between the treated and non-treated patients, was there a p-value associated with that and then walk me through the exclusion criteria on the TPA and mechanically perfused patients and again what the data was when that group which was an anomaly was excluded so I can just capture the numbers precisely.

[Gil Van Bokkelen:]

But just beginning with the excellent outcome as reflected in the table that’s included in the press release, right out of the gate when we were looking at all subjects in the trial we saw meaningful difference between the percentage of patients that achieved an excellent outcome which has really stringent criteria associated with it. I mean you got to get as I defined you have got an MRS value of 0 or 1 reflecting no or slight disability and NAAHS score of 0 or 1 which again reflects or very slight disability in one category and our [indiscernible] index score of 95 or 100 which again reflects the ability to conduct the entire spectrum of activities of daily living that are covered under the barthel index. So what we saw and we evaluated all patients was that 15.4% of the [indiscernible] achieved an excellent outcome versus only 6.6% in the placebo treated patients or difference of 8.8%. But then when we went on to the do the next phase of analysis just looking at the patients that were treated early with MultiStem meaning within 36 hours or less we saw that there was actually a slight improvement in that metric were 16.1% of the patients treated with MultiStem achieved an excellent outcome versus only 6.6% of all placebo patients so that was identical to the first number that I just given you. When we then went on to assess the patients that had received either no intervention treatment with TPA or treatment with mechanical reperfusion but excluding those patients that had received TPA and mechanical reperfusion the difference became even more pronounced with 18.5% of the MultiStem treated patients versus only 3.8% of the patients that had been treated with placebo so that delta is noted in the table it's 14.7%. And then I will come back to the patients that around the TPA mechanical reperfusion piece in a minute but I want to just review the numbers in the other metric the global recovery assessment which requires good or excellent improvement in all three of the clinical rating scales. So again although we didn’t this analysis completed at the time that we announced the interim results or in the earnings call that we did shortly after that. When we actually have this analysis completed we saw that even when you look at all patients there was respectable difference between the percentage of patients that were treated with MultiStem that achieved recovery either good or excellent recovery in all of the three clinical rating scales. So 30.8% of the patients versus the patients that received placebo which was 24.6 so a difference of little over 6%. So when we looked at the patients that were treated within 36 hours or less with MultiStem that difference actually improved pretty dramatically. In that case we saw that 41.9% of the MultiStem treated patients achieved a good or excellent outcome versus only 24.6% in the placebo group so a difference of 17.3% so that was a very robust difference between those numbers and then when we excluded those patients in the group that got limited number of patients that got TPA mechanical reperfusion the difference became even bigger it was 44.4% of the MultiStem treated patients achieved a good or excellent outcome in all three clinical rating scales versus only 17.3% of the patients that received placebo. So a difference of 27.1% which was very statistically significant.

[Jason Kolbert:]

And just in order to address it for the naysayers, talk with me a little bit about the comparison of stroke size location and deficit and the two groups between active and control because I know we have discussed it previously but I just want to make sure that you continue to see that those groups in fact were properly balanced.

[Gil Van Bokkelen:]

That’s exactly right there was actually good balance across each of these different analysis. In fact the severity of the strokes for the patient groups in terms of average or medium severity was virtually identical for each one of the groups, maybe you’re talking about a 10th of point difference and in some cases it might have been a 10th of a point less severe for the placebo patients or it might have been slightly more, slightly less of your [indiscernible] but it was virtually identical for each one of the different groups. So we saw good demographic balance with respect to things like gender, age, stroke severity, side of the stroke or the location of the stroke, we really looked at a range of different parameters.

[Jason Kolbert:]

So do you conclude in your head that now given the fact that you’ve got a thought device, you freed up the ability to get the product MultiStem available to patients regardless of the hours of the VM lab that are trial focused on a 24 to 36 hour window, predicated on the day that you’re seeing. It sounds like your confidence level is pretty high, are you going be able to replicate this data?

[Gil Van Bokkelen:]

Yes absolutely, and in fact I think we make a slight adjustment on the timing of it, we will probably utilize the window that extends from 18 to 36 hours, so it will give us a little more length, I mean given that we are seeing this consistent benefit that earlier is better and in fact one of the things that I mentioned in one of the calls prior was we actually looked at patients that were treated within kind of the first third or the middle third or the late third and we saw the strongest responses in the first third, and which is consistent with the impact that we’re seeing in the 36 hours or else. Obviously the numbers get a little bit smaller so you always have to be a little bit cautious about that. But, for us this is a very clear, very robust pattern and it cuts across pretty much every clinical parameter that we have looked at.

[William Lehmann:]

I think Jason, I mean we do believe we will replicate this work in a prospective study and show the significance we want to show I mean one of the other aspects I think you mentioned we are doing biomarker analysis now so we have access to the data from the blood samples that were generated in addition to some of the tissue samples that were taken before and the biomarker data supports strongly this impact that we had early on modulating kind of the inflammatory [indiscernible] that follows a stroke, consistent with hypothesis it supports the biological activity of the product and that seems to be associated as well with the timing delivery and in other words we’re having the impact with all patients with MultiStem treatment we seem to be having more of an impact with patients that were treated earlier with MultiStem. So we feel very confidence about replicating these results in a perspective study.

[Gil Van Bokkelen:]

And we understand people's kind of nervousness around the ways that post-doc analysis maybe applied. I mean typically people get really nervous if you saw well if you look hard enough you will find one or two things that are pointing in your direction and but it's always problematic when you just search among 30 things and you find one or two that are basically pointed in your direction by kind of random chance if you will. I think it's really important for everybody to understand that that is not what we’re seeing there. Virtually every clinical parameter we look at is strongly in favor of administration of MultiStem within that 36 hour window, so it is a very strong and consistent pattern and it's collaborated by the biomarker analysis that BJ just described. So mechanistically it's consistent with all the things that we were seeing in the preclinical studies and we think that this is a very clear it gives us a very clear path with which to apply this now and which proceeds in the next phase of development.

[Operator:]

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

[Steve Brozak:]

You have gone through and meticulously talked about the where you believe that you got significant strength in terms of the analysis on stroke. Can you tell us what the KOLs you worked with are telling you in terms of what they look to see the difference between what current standard of care is going to be and what you need to do to make sure that the KOLs are on board because obviously this is something that frankly is different than what the current standard of care is but also what they are going to need to be able to implement and accept?

[Gil Van Bokkelen:]

So first off, the fact that a lot of KOLs compare this directly to the current standard of care is actually a big advantage for us because they compare and contrast the current very narrow time window that’s used for the currently available therapies whether it's TPA or mechanical reperfusion or the combination of those two things which will only be applied to a fairly small percentage of patients. And they also compare it to the overall risk associated with using those current forms of treatment and the potential of things like hemorrhagic complication or other events that can occur and I mean basically the feedback we have constantly gotten from KOLs both here in the U.S. as well as around the world has been, well the safety profile looks very, very clean and it appears that there is a pretty strong argument that you can actually help a lot of patients if you give it to them within 36 hours, so why wouldn’t I want to give this to as many patients I can. I mean they are not seeing that there isn't any apparent risk or downside to the treatment and we see exactly the same thing. So I think that there is a lot of willingness and a lot of enthusiasm and support to really want to continue to work with this and explore and hopefully validate it further in additional clinical trials. I mean we had a lot of people who step forward, and said, hey please can I participate in that next clinical study? And I think that speaks for itself. It's very comforting. And the other thing that I think is really kind of interesting about this is we’re not making the argument that this has to be the treatment in lieu of the other things that are already out there. You can give this in addition to and in fact meaningful percentages of patients in this trial receive PPA or they got from back to me and we saw these improvements on top and we did try to weed out the patients that we’re exhibiting substantially early robust improvement following treatment with TPA or mechanical reperfusion and this actually gets to a point that Jason was getting to which I didn’t fully address in my answer to him. But when we looked at the data we saw pretty clear evidence that there were patients in that late placebo group that had received treatment with TPA and mechanical reperfusion that should have not be enrolled in the trial, I mean I will just give you one example because I think it illustrate the point. There is a patient that improved by 11 points in their NIHSS score from screening to baseline, they never should have been included in the study but they were and because a lot of these patients in the late placebo group had this abnormally late screening assessment that was done. It was pretty obvious from going through the detailed records and looking at a number of things that patients in that group although they were treated early with TPA mechanical reperfusion had been in all likelihood responded pretty robustly before their first screening was done and that’s two things in a pretty meaningful way which is the reason why we decided to conduct a separate analysis kind of excluding the entire group of TPA mechanical reperfusion patients. But when we look at the different groups of patients that got TPA mechanical reperfusion the group that had the greatest improvement in their NIHSS scores, in the 90 day assessment was the group that got treated with MultiStem in 36 hours or less. Again I think pretty much no matter how you look at it there is a strong rationale for administering MultiStem within 36 hours and how it can meaningfully benefit patients and we’re seeing that very consistently across a broad range of parameters. The clinicians and the KOLs that have seen the data and that have taken the time to talk to us recognize that and they are actually quite excited by it.

[Steve Brozak:]

So actually that leads to the follow-up given the fact you have this much color, you have this much granularity you’ve this much insight into how you will develop the next go round of the tests that you’re contemplating. I would say that you’re pretty much prepared to go ahead no matter what happens and see about running the next trial with all the additional data, would that be a fair assessment?

[Gil Van Bokkelen:]

Yes we’re planning for the next phase of development which we intend and expect to initiate sometime next year. And obviously we’re looking at and this is part of the ongoing conversation people like Chugai what are we best positioned to do in Japan and what are we intend to do outside of Japan in North America and the EU. But I think that not only do we have a very strong rationale for what we want to do next and a lot of KOL and clinical expert buy-in but we feel like we got a very strong game plan for how we want to do, what we would propose to do next and we will unveil that in due course.

[Operator:]

Your next question comes from the line of Tracy Marshbanks with First Analysis.

[Tracy Marshbanks:]

I think you touched on this a bit but I just wanted to confirm with, what you know now you referred to maybe going a bit earlier in the time window, are there any sort of global constraints or criteria that you think will be in the future study that differ from the one that you just completed?

[Gil Van Bokkelen:]

Honestly, Tracy we expect it to be pretty similar to what we did in the last trial obviously the time window being a meaningful adjustment and we’re thinking of that 18 to 36 hour window is probably the appropriate window for us to pursue but other than that frankly we think the end points were well constructed. I mean obviously we learned some important things there about things we want to include in the assessment. We recently had a meeting in Japan with the PMBA [ph] to update them on the trial results and actually discuss kind of general parameters around what we might conduct in terms of a study in the future in Japan and got very constructive and positive feedback from that and frankly we’re getting, we think we got a pretty clear game plan but we think we have learned a lot and validated a lot from this prior study. So I think there might be some things that we refined and maybe that we elect not to include patients that receive treatment with TPA and mechanical reperfusion in the next study or that we make some adjustments that actually kind of limit how that might be done. Those are both possibilities and we haven't made kind of final determination on that yet.

[Tracy Marshbanks:]

And as far as inclusion exclusion, I know the prior study ran a little bit long and maybe one reason you open things up, do you think it will be relatively rapid or similar enrollment?

[Gil Van Bokkelen:]

Well I think the enrollment was complicated in the last study because of the complications we were seeing but the processing of the product prior administration of the patients. It required in the last study, it required that we work with the bone marrow and cell processing units at the hospitals that were participating in this study where they didn’t have such a unit and they had to rely on one from a neighboring hospital. The problem that we ran into and the reasons why we made the protocol adjustments that we did was that those processing centers were typically only open from 9 to 5 Monday through Friday and we were missing a huge percentage of patients that would have been eligible for inclusion the study simply because they were showing at the wrong time of the day or the wrong day of the week. Patients came in on Thursday afternoon they weren't, in all likelihood they weren't going to get into the study because there wasn’t going to be anybody around on Friday into Saturday that would actually be able to prep the product and treat them but we corrected for the complications that forced us to use those cell processing centers and now we have a [indiscernible] administer formulation of the product that essentially will be maintained in the hospital pharmacy and with a very simple process, very simple procedure that just takes a few minutes. You can transfer, you saw the product, transfer it directly into the IV bag and then it's ready to go into the patient. The pharmacies operate on a 24/7 kind of continuous basis whereas the cell processing facility did not. So the things that limited us in the last study and hampered enrollment are not going to be limitations in future studies for us and in fact we’re already applying some of this in some of the other studies that we’re running. So I believe that because of the safety data that we have and the very positive feedback that we have gotten from clinical KOLs and clinicians around the world that because of the safety data the very promising and encouraging signs of efficacy and the much simpler logistics that then next trial is actually going to be much more efficient than what we had to do with in this last study.

[Tracy Marshbanks:]

And another important study that you haven't spent quite as much time in detailing, could you just take us through AMI and are there sort of the current status and plan there if there have been any changes?

[Gil Van Bokkelen:]

Yes, we have got the first sites up and running, we’re adding site which we intend to do through the rest of the summer and even into the early fall and our game plan is still to complete the study sometime next year and have data sometime next year. Again the general parameters I talked about in my prepared comments we’re looking at a variety of well accepted and validated cardiovascular performance metrics, we’re looking at things like injection for action or stroke volume or a number of other things that we and others use as performance benchmarks and we’re also looking at major cardiovascular events that occur during the first year of treatment and that’s all pretty well established and validated from a regulatory perspective.

[Tracy Marshbanks:]

And the sites are up and running are sort of enrolling and progressing as expected?

[Gil Van Bokkelen:]

Yes those sites are screening patients and they are busy working on it. So I think we’re making good headway there and I think we’re going to make even faster ways as we get some of these other sites up and running.

[Operator:]

Thank you. That’s the last caller we had time for today and I will now like to turn the call back over to speakers for closing remarks.

[Gil Van Bokkelen:]

Well I would like to thank everyone and since there are no further questions I would like to wrap up the call thanking you again for your time and attention and your continued support of the company. We look forward to providing you with additional updates in the coming weeks and months and in the meantime goodnight everyone.

[Operator:]

This concludes today's conference call. You may now disconnect.