Athersys, Inc.
Q4 2015 Earnings Call Transcript

Published: 11 Mar 2016

[Operator:]

Good afternoon. My name is Shanin and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Athersys' Year-End 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] It is now my pleasure to turn today’s call over to Ms. Laura Campbell. Ms. Campbell, you may begin your conference.

[Laura Campbell:]

Thank you, and good afternoon, everyone. I’m Laura Campbell, Senior 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 I will host today’s call. The call is expected to last approximately 30 to 45 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 discussed 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 March 10, 2016. Since then, we may have made announcements related to the topics discussed, so please reference our most recent press releases and SEC filings. With that, I would like to briefly review our 2015 financial results and then turn the call over to Gil for corporate update, followed by a question-and-answer period. For the fourth quarter of 2015, our contract revenues were $10.1 million, compared to $131,000 for the same period of 2014, reflecting the revenue recognition of the full $10 million license fee from Chugai Pharmaceutical Company upon the termination of the collaboration in October 2015. We expect our future contract revenues to be comprised primarily of revenues associated with our recent collaboration with HEALIOS K.K. in Japan. Royalty payments and potential commercial milestone payments from RTI Surgical and potential proceeds from any new collaborations. Our grant revenue increased to $501,000 in the fourth quarter of 2015, from $104,000 in the prior year’s fourth quarter. Grant revenues fluctuate for period to period with the timing of grant related activities and with the award and expirations of grant. Research and development expenses decreased to $5.3 million in the fourth quarter of 2015 compared to $5.6 million in the fourth quarter of 2014. The decrease was primarily due to reduced clinical and preclinical development cost, which vary based on trials underway and clinical manufacturing campaigns. General and administrative expenses were $1.8 million in the fourth quarter of 2015, compared to $1.6 million in the fourth quarter of the prior year, reflecting increases in legal and professional fees, personal cost and stock-based compensation. We’ve recognized net income for the three months ended December 31, 2015, of $3.6 million compared to a net loss of $6.6 million for the same period of 2014. The $10.2 million net variance results primarily from the $10 million Chugai license fee and increased grant revenues, and to a lesser extent the net impact of the variances in R&D expenses, G&A expenses and other net expenses. Turning to the results for the full year, our contract revenues were $10.3 million in 2015 and $286,000 in 2014, with the increase related to the $10 million to the license fee. And our grant revenues increased to $1.7 million in 2015 from $1.3 million in the prior year. Research and development expenses decreased to $21.3 million in 2015, from $23.4 million in 2014 due to lower clinical and preclinical development cost, sponsored research costs, legal and professional fees and travel costs, with such decreases partially offset by increases in license fees and personnel costs. We will continue to have the same types of expenses in 2016 as we advance our programs and our cost may vary based on clinical manufacturing campaign, the timing and stage of clinical trials underway and manufacturing process of development activities. General and administrative expenses increased to $7.5 million in 2015 from $6.9 million in 2014 due primarily to increased stock based compensations, professional fees and consulting costs. We recorded non-cash income from the change in the fair value of our warrant liabilities of $772,000 in 2015, compared to $6.6 million in 2014 reflecting the impact of warrant issuances and expirations, the price and remaining lives of warrant and changes in our stock price. Cash used in operating activities was $13.8 million in 2015 and $25.8 million in 2014. Financing activities provided cash of $10.8 million in 2015 and $20.3 million in 2014 with the 2014 amount including a registered direct offering. Our net loss for 2015 was $16.4 million compared to $22.1 million in 2014. The difference reflects the impact of the $10 million Chugai license fee, the increase in grant revenue, the decrease in R&D expenses, the increase in G&A expenses, the variance in the non-cash income from the fair value of our warrant liabilities, and an increase in that other expenses. At December 31, 2015, we had $23 million in cash and cash equivalents compared to $26 million at the end of 2014. Additionally, in January 2016, we received $15 million in cash associated with our HEALIOS collaboration. With that, I’d like to turn the call over to Gil for a corporate update. Gil?

[Gil Van Bokkelen:]

Thanks Laura. And thanks everyone for listening in today. I’d like to just begin by wishing BJ Lehmann and his son the best of luck in the State Hockey Championships that are going on down to Columbus today and over the weekend. It’s a huge thrill to be part of something like that and we wish them all the best in the semifinals today, and if they advanced on to the championship game on Saturday. As we’ve summarized on previous earnings call, Athersys is an organization that was founded on the concept of developing and implementing, cutting edge in innovative treatment approaches that have the potential to meaningfully advance patient care and the practice of medicine. We are proud of the fact that we’ve willingly taken on significant challenges that many other organizations have avoided because they felt the task was too daunting or risky. To paraphrase the Legendary Olympic Hockey Coach Herb Brooks, we believe that great achievements are made possible by a willingness to take on great challenges. For many years the development of a safe effective and clinically practical treatment for stroke has remained one of the most significant challenges in all of medicine. There are many other areas of unmet medical need in medicine of course. But for anyone that has had a family member that has experienced a stroke or that understands the devastating global impact of stroke and the expected consequences of the aging demographic transition now occurring globally. It’s easy to appreciate just how serious a challenge this represents to patients, families and health care systems around the world. Over the past few months we’ve continued to review and analyze data from the interim results of our now completed Phase 2 clinical trial evaluating the impact of administration of MultiStem to patients that have suffered a serious and debilitating ischemic stroke. To our knowledge, this trial was the largest randomized double-blind placebo controlled study ever conducted evaluating a cell therapy treatment for acute neurological injury. As we’ve described previously, although the trial did not meet the pre-specified primary endpoint, the interim results of the trial did suggest a consistent pattern of benefit for patients to receive treatment with MultiStem, especially when treated was administer within 36 hours of the time of the stroke. This benefit was evidence in multiple clinically relevant parameters, including a higher rate of patients achieving an excellent outcome, which is define clinically as achieving an excellent outcome in each of the three clinical rating scales used to evaluate stroke patients, which include the NIH Stroke Scale, which measures cognitive and motor scale deficits, the Modified Rankin scale, which evaluates overall disability, and the Barthel Index, which assess the patient's ability to engage in activities of daily living. In addition, study investigators observe lower rates of life threatening adverse events and mortality, reduce occurrence of secondary infections and pulmonary complications, especially among those patients that had suffered more severe strokes, shorter hospitalization times and less time in the intensive care unit. Furthermore, the clinical evaluation of patients at day 7, 30 and 90 showed that on average patients receiving earlier treatment with MultiStem meaning within 36 hours, were improving faster into a greater degree than those patients receiving placebo as exhibited by strong trends or statistically significant differences. Furthermore, the pre-specified shift analysis that examines relative improvement for patients across the entire severity spectrum using the Modified Rankin scale, reinforce the evidence of this early treatment effect and improve recovery as well and was statistically significant at both 7 and 30 days post stroke. Additional analysis revealed that the benefit of early treatment with MultiStem was consistent, among both patients who had received no reperfusion therapy and those that had received either TPA or mechanical reperfusion. Furthermore, we absorbed that improvement was robust among patients age 65 and older, which was relevant and comforting as these patients represent the vast majority of stroke victims. So in total, we observed from the interim results of the trial that there was in our view and in the view of clinicians participating in the study, a consistent pattern of evidence that suggested that administration of MultiStem was beneficial. And early administration of MultiStem meaning within 36 hours after the stroke appeared to be particularly beneficial. In addition, biomarker data obtained from the trial has provided direct mechanistic support for key aspects of the underlying therapeutic hypothesis of the trial, namely that administration of MultiStem could meaningfully reduce the hyper inflammatory cascade that occurs following a stroke and which appears to called significant tissue loss and inhibit patient recovery in healing. This clinician is familiar with or specializing in the stroke area, no. The concept of an effective treatment widow is well established in the acute neurological injury field. However, historically the treatment window for TPA or surgical reperfusion using mechanical thrombectomy, were limited to the first few hours after a stroke. And as the literature shows, this narrow time window and other limitations have prevented the vast majority of stroke patients from receiving these types of treatments. In contrast, the treatment window of upto 36 hours would enable a much larger percentage of stroke patients to receive treatment. Clinicians and literature both suggest that perhaps 95% of stroke patients reach the hospital within this timeframe. Furthermore, the data suggesting a favorable safety and tolerability profile from MultiStem in conjunction with encouraging evidence of meaningful therapeutic benefit, if stroke patients are treated within 36 hours, which represents the treatment window used for the initial trial design, has been agreed enthusiastically by many clinicians in the stroke community around the world. More recently we obtained one-year results from the trial, which further evaluated patients using a range of metrics. I'd like to point out that both the patients and the clinicians participating in the trial were blinded through the one-year clinical evaluation. And in fact, remain blinded as to what form of treatment each subject received. As we clinical experts and members of the HEALIOS team discuss during our recent R&D Day event in New York. In advance of having the one-year results, we indicated that we were most interested in evaluating whether there was a significant impact on improving outcomes for patients in terms of their ability to regain their desired quality of life and independence. In clinical terms, as I described at the R&D Day event prior to evaluating any of the one-year results, this met we were most focused on how patients improved with respect to achieving an excellent outcome, which reflects either complete or nearly complete recovery in each of the three clinical rating scales. We’d observe a strong trend in this key secondary endpoint and our intent to treat population at the interim 90 day read out. And both we and clinicians involved in the study, we’re interested in assessing the one year durability of this outcome. In addition we were focused on assessing patient recovery in terms of their ability to engage in a range of activities as reflected by the Barthel Index. Which evaluates patients function and independence in a range of tasks and activities that most of us typically take for granted, such as walking, eating, bathing, dressing, going to the bathroom, and going up or down the stairs without assistance. Upon the evaluation of the one year data, we saw clear and compelling evidence that the magnitude of benefit had increased meaningfully over time. As shown by an increase in the proportion of MultiStem patients compared to placebo that achieved an excellent outcome in each of the three clinical rating scales. Meaning specifically, the number and proportion of subjects that achieved complete or nearly complete recovery. This is exactly the type of improvement hoped for by patients, their families, physicians, and third party payers. And the intent to treat population meaning all subjects in the trial, the proportion of MultiStem treated subjects that achieved an excellent outcome at one year was 23.1% versus only 8.2% among subjects receiving placebo. The difference of 14.9% or an almost three fold increase. This difference was statistically significant with a P value of 0.02. Furthermore, when we consider patients that received treatment with MultiStem within 36 hours, the effect was even more pronounced. With 29% of MultiStem treated patients achieving an excellent outcome, which was also statistically significant with a P value of less than 0.01. Finally, when we considered subjects in accordance with the original trial design, meaning those that received treatment within 36 hours and including patients that received either no reperfusion, treatment with tPA or treatment with mechanical reperfusion. But excluding a small number of subjects that received both tPA and mechanical reperfusion, which was not committed under the original trial design. Study investigators observed that more than five times as many MultiStem treated patients achieved an excellent outcome relative to those patients that received placebo, which was also statistically significant with a P value of less than 0.01. Similarly, when we evaluated patient recovery using the Barthel Index metric, trial investigators observed that among all subjects, 61.5% of MultiStem treated patients achieved a score of 95 or higher reflecting an excellent score and ability to live that independently conduct activities of daily living across a range of areas versus only 44.3% of placebo patients. This was also statistically significant with a P value of 0.05. And when we evaluated subjects that received early treatment with MultiStem, the effect was even more pronounced, with 67.7% of MultiStem treated patients achieving an excellent Barthel Index score and increased by 23.4% over placebo. This was also statistically significant with a P value 0.03. Furthermore, we saw additional evidence of better recovery in MultiStem treated patients over time, including fewer serious complications and secondary infections, shorter hospitalizations on ICU few times and few were rehospitalizations, as well as improvement in other metrics. Importantly, even among those subjects that did not achieve an excellent outcome by the one year evaluation, we saw evidence of better improvement following MultiStem treatment. So in total, we believe that this trial represents an important demonstration of safety and provides meaningful evidence of clinical effectiveness for the treatment of the ischemic stroke in a clinically relevant window. It’s fair to say that both we and our new partner in Japan, HEALIOS are quite excited by the one year results. Over the past few weeks we’ve been actively working with the team of HEALIOS in preparation for some upcoming meetings of PMBA and in anticipation of obtaining authorization for launch our confirmatory stroke clinical trial in Japan, which will be funded by HEALIOS. Both teams have been working extremely well together. And I feel that we are well prepared and on the right path to achieving our goals. Our main focus for the near-term is working together with HEALIOS to obtain input from PMBA finalized the trial design and obtain authorization to conduct the study, so that we may then subsequently launch the trial. We're optimistic that we can achieve these goals within the next few months, which would place us and HEALIOS on a path towards sufficient use of the new regenerative medicine regulatory framework in Japan, which we both feel represents an attractive and efficient path to market. In addition to our partnership with HEALIOS, we remain actively engaged in discussions with other potential partners around stroke and in other areas. As we’ve discussed in the past, we are most focused on finding the right partner for specific programs and defining the right development approach, economics and relationship parameters. By continuing to advance our core programs and continuing to establish value enhancing partnerships in specific areas, we intend to create substantial value for our shareholders. In addition to our preparations for the trial in Japan, we're also engaged in early preparations for parallel international trial that we intend to conduct in North America and in EU. To achieve that goal, we've already had some initial communication with regulators and are in the process of scheduling a meeting with the FDA to discuss to be a 102 trial results in plans for the next study at their suggestion. During that and subsequent discussions with regulators, we anticipate establishing the clear path for the next phase of clinical development that would be consistent with our objective to obtain efficient approval for MultiStem in treating ischemic stroke both here in the U.S., EU and other key geographic territories. In the meantime, we continue to advance our other clinical and pre-clinical programs, including our ongoing Phase 2 trial for treating myocardial infarction patients and our trial evaluating treatment of patients that have been diagnosed with acute respiratory distress syndrome or ARDS, as I described in our last earnings call. For both of these trials we've been adding additional clinical sites and in the case of AMI study, making certain refinements to help improve the efficiency of trial enrollment, so that we can achieve our goals. So in summary, we are focused squarely on advancing our key programs, most importantly for stroke in exploring new partnering opportunities, where it makes sense to do so, reflecting our ongoing commitment to creating substantial value for our shareholders. And with that, we'd be happy to take a few questions.

[Operator:]

[Operator Instructions] Your first question today comes from the line of Jason Kolbert from Maxim. Your line is open. Please go ahead.

[Jason Kolbert:]

Thank you so much. Thank you so much. Gil, congratulations and BJ, we wish him the best of the luck. I recently had a son who got to go to states. I know how exciting it is. So, go, go, go, that's really exciting BJ. Let's talk on a little bit of granularity, when we start talking about the clinical trial design and the timelines, both international and in Japan in particular, can you help me understand the next steps what role HEALIOS is playing and kind of how that's coming together. I just think that's going to really help us to find a sense of timing.

[Gil Van Bokkelen:]

Yes. So as you know Japan is strategically important to us and HEALIOS and we've been spending a lot of time focused on that over the past couple of years since the new regulatory framework went into effect there. At a high level, we and HEALIOS both anticipate the ability to run one trial, one well directed design study. And we think that would be sufficient for us to be able to obtain approval under the new regulatory framework in Japan. So we're really focused on making sure that we've got the right trial design and there's a number of specific steps that we're going through in order to get to where we want to be. So we and HEALIOS have agreed on the approach that we want to take in regards to the pending clinical trial in Japan. And we've already submitted relevant information to PMDA. And as I talked about on the last earnings call, we didn't even wait to have the contracts finalized and executed before we both sat down with PMDA to have a conversation around, to kind of explain the context of doing partnership with them or what we were planning on doing together and start to get their input. But in the near-term, we're working together to prepare for a couple of upcoming face to face meetings with PMDA to discuss the proposed trial design. As I mentioned we've already submitted information to PMDA in relation to that. And then discuss some other topics as well as address any point or answer any questions that they may have. If those meetings go according to plan as we expect then we would be in a position to soon thereafter submit our formal application to initiate the clinical trial. So we expect to submit the application some time in Q2 and then hopefully initiate the trial soon after that before the end of the summer.

[Jason Kolbert:]

And kind of that my second question is really linked to the first one. Have to do not only with the trial design and the ability to enroll the trial, but KOL awareness. And I know that you had – really created a lot of KOL awareness in the recent R&D Day, as well as the presentations that you did out at the stroke conference on the West Coast. Can you tell me are there similar events occurring in Japan? And if there are, what are you doing to be ready to kind of raise awareness to ensure that when you do have a trial design ready to execute that you’re going to be able to enroll sites and get patients?

[Gil Van Bokkelen:]

Yes. So for those people that aren’t familiar with the International Stroke Conference, it’s a huge event. It actually has about 6,000 attending stroke specialists and other attendees from around the world. It’s actually an international conference. And this year it’s taking place down in Southern California. And I think it’s fair to say that there was a lot of interest and excitement about the work that we’ve done in the trial results, has evident by the fact that we were asked to participate in five different or give study investigators involved in the trial were asked to be part of or give five presentations in all. It was actually three scientific presentations and two panels that talked about the meeting in the impact of the result in the potential impact in terms of a stroke treatment. But it’s also fair to say that we’ve been getting a lot of interest and excitement in Japan as well. And in fact to your question Jason, there’s actually a big stroke conference is coming up in a few weeks that we’ve been invited to give a special speech. It’s the annual congregation, if you will, of the stroke specialist and neurologist and neurosurgeon community and it’s focused entirely on stroke. And we’ve been invited to give a special symposium there. And there’s several thousand people that are actually going to be attending that conference. And so, one of the trial investigators that we have worked with very closely, is actually going to be giving the presentation that will summarize the result of the trial, and also talk about the upcoming trial that we intend to result to run in Japan. So, prior to that as we talked about previously we’ve engaged in multiple meetings and various conferences in Japan engaging with some of the leading stroke specialists there in the country, and that’s been happening over the past almost close to two years now. So there’s already a meaningful and even before we went into that ISC conference down in Los Angeles, there was already a high level of awareness of what we were doing and I think that the interest level has just grown since then. So there’s a lot of excitement and a lot of enthusiasm and a number of people has step forth and said that they really want to be part of the next trial whether would be the trial in Japan that we intend to run or the international study that we want to run.

[Jason Kolbert:]

Great. It’s great to hear and it sounds like you’ll have no problem lining up patients, when the trial was ready. Let’s just addressed to something that seems to be coming out more and more I think I understood it a little bit better from the R&D day. And it had to do with not just the efficacy, cognitive function and observations that occur in patients that are treated with MultiStem, but also with some of the natural adverse events that stroke patients face. Can you help me understand, if we were just to look at not it kind of that therapeutic cognitive benefits, but what’s been seen on the adverse event profile that occurs naturally in stroke patients versus MultiStem. I think you know it’s important to really better understand both sides of the coin if you will, which is one can you improve cognitive function, but two can you – we do the natural adverse events often seen in stroke. And thank you for letting me asked three questions, I’ll get back in the queue after that.

[Gil Van Bokkelen:]

Yes, thanks. So in relation that last question it was interesting we spent a lot of time, a big part of hypothesis going into the study was that we could have an impact or that administration of MultiStem could have a very profound impact on reducing and neutralizing that hyper-inflammatory cascade that happens in stroke patients, who are in other forms of the acute neurological injury or in other forms of acute injury generally. That tends to leave these patients in an immunosuppressed or immunodepressed state for an extended period of time. And that [indiscernible] very, very vulnerable to a whole host of different complications and issues that can arise in the weeks following the initial event. In fact, a lot of people know this, but that if you survive the stroke the most common cause of death in the weeks that follow is complications related to that immunosuppressed state things like secondary infections or other things that can happen once that initial acute phase of the stroke has passed. So we look that the – we have some specific hypothesis going into that we were going to be able to mitigate that. A lot of those complications and that's exactly what we saw from the trial that we saw a very substantial reduction in a lot of complications that many of these patients would normally observe and/or experience. And interestingly enough there was one set of observations that, that we think are relevant to one of our other clinical programs that being in our ongoing clinical trial for acute respiratory distress syndrome. So when we look at patients that had the more severe stroke, so these are patients that were defined as being 15 plus on the NIH Stroke Scale in their baseline evaluation. So the more severe end of the spectrum if you will. And there were 49 patients in the trial that were at this end of the severity range in the study. And among these patients we specifically evaluated them for the occurrence of grade III-V adverse events, which are regarded as severe and life-threatening adverse events. And amongst the patients that received placebo, 43% of those patients experience one or more severe life-threatening adverse events. And this one include things like acute respiratory failure, or sepsis, or acute renal failure, or edema or other complications that can occur. But among the MultiStem treated patients with comparable strokes severity there was only one event. And that was a transient increase in white blood cells, which was characterized as a grade III adverse event. So I think the take-home message from our perspective is, we're having exactly the type of the fact that we hope for and predicted that we went into the trial. And we saw a meaningfully lower incidence of severe pulmonary complications or related types of complications that patients that are being treated for ARDS or similar types of clinical events may experience. So it's an indirect observation, but we think it's very clinically relevant and we also think it provide support for hypothesis for the treatment of ARDS, which is one of the reasons why we're excited about that trial.

[Jason Kolbert:]

Terrific. Thank you, Gil. Really appreciate the update.

[Gil Van Bokkelen:]

Thanks, Jason.

[Operator:]

Your next question comes from the line of Steve Brozak from WBB. Your line is open. Please go ahead.

[Steve Brozak:]

Hey, good afternoon, Gil, and thanks for taking the question. Since you're on the path of inflammation, you've actually picked some questions here, because people are familiar with small molecules are familiar with monoclonal antibodies and how they go out there and they shut down the immune system, or how they go out there and they basically shut down a lot of things. Can you give us any insight into how MultiStem works, not so much in shutting down. But what do you think it does in terms of going out there and dealing with that inflammatory cascade, because it obviously just doesn't apply for stroke or for ARDS. It applies for just about every other serious indication. So if you could start down that path and I've got a follow-up after that please.

[Gil Van Bokkelen:]

Yes, yes. It's a great question. And one of the things that we've tried to stress the people over and over again is the cells we administer MultiStem are not just dialing down the inflammatory cascade. That's an important part of what they do. But we have a lot of evidence from studies that we've run and published many of them over the past few years that the cells are doing other things, as well. So in the case of stroke or acute neurological injury or other things we've looked at, they're actually up regulating the repair process by stimulating cells like regulatory T cells or other cell populations that are really an important part of their repair process. So at the same time that we're dialing down that inflammatory cascade, we're up regulating and stimulating repair, which we believe is helping these patients recover. And it's creating a more conducive environment that actually allows and enables better long-term recovery. We think that's clearly reflected in the clinical data that we generated from this study. But the cells are doing other things as well. I mean we know that the cells express multiple factors that help promote the repair of a tissue that is damaged in ischemic injury, so promoting new blood vessel formation, for example. And it's not just one factor, it's actually a series of several things that the cells express. And we also have shown that the cells up-regulate expression of neurotrophic or neurogenic factors in the region of injury in the brain. So they're having direct effects and they're also having indirect effects by stimulating other things, other pathways, other cascades or other cell types that in their totality are having a profound effect that cuts across multiple different levels. So it's not just dialing down the inflammatory piece of it, but clearly we think there are many conditions where this type of inflammatory cascade is going to be relevant, whether from acute disease or injury, because we’ve done work in other indications whether it would be things like traumatic brain injury. Or we published recently I think a very compelling study in neonatal hypoxic ischemia, which was a large animal model using sheep, this was done with one of the research institutions that we collaborate with very closely in Europe. And they showed that when we administered MultiStem or when they administered MultiStem in that type of an environment that there was a dramatic impact in terms of reducing neurological damage in seizure activity. So both in terms of seizure incidents and duration, which was very, very profound and that’s consistent with some of the studies that we’ve published several years ago that had been conducted in other animal models looking at neonatal hypoxic ischemia. And then we’ve also published multiple studies that that illustrates the profound impact that these cells appear to have when we administer them in acute spinal cord injury, which is another area that we think is a real area of substantial unmet medical need and that we think our technology can have a difference. So across many of these areas not just in the neurological area, but in a few of the other conditions and some of which I’ve already mentioned today. We think that mitigating and reducing that inflammatory cascade that happens, which is kind of a defense mechanism with body [indiscernible] or triggers when these types of things occur. It is an important part of the therapeutic utility of MultiStem, but we think that the benefits actually extend well beyond that into these other areas, as I just described, which means that we think it’s going to have broad clinical relevance across or could have broad clinical relevance across a lot of different areas.

[Steve Brozak:]

Well then that brings back this the question to stroke because obviously the initial results looking at 90 days out. We are a one thing, but when you look further out you’re talking about stroke recovery and measuring it can take literally a year. How do you see this fitting in. And how do you see the clinicians understanding. How this would fit in for treatment of stroke. And I’ll hop back in to the queue after that. Thank you.

[Gil Van Bokkelen:]

Yes. So we’ve actually got a lot of feedback on how they view this and quite honestly we’ve heard from clinicians around the world that have said what, we’re really excited by a couple of things – several things. The first is that that this product appears to have a very, very clean and consistent safety profile. The – which is very comforting to them because that hasn’t been the case with other therapies or procedures that people have developed where you may have an elevated risk of hemorrhaging in the brain or other types of complications that can occur. So I think they’re very pleased with and actually very comforted by the fact that we see a clean and consistent safety and tolerability profile. The second thing is that we’ve made this really easy for them to use or as we talked about that the R&D day event and showed some video on this. We envision that this is going to be a product that can be stored right in the hospital pharmacy and with a very simple procedure can be prepped and administered directly to the patient in less than an hour. In fact that we think it’s actually closer to about thirty minutes in terms of prep time and then getting it right to the patient. It doesn’t require any specialized facilities or infrastructure or highly specialized training for personnel. It’s very, very simple to use. So I think a lot of clinicians look at this and say, okay. There appears to be a very consistent, safety profile. There appears to be robust evidence of clinical benefit among the patients that were treated with MultiStem and it’s easy to use and we don’t have to worry about a lot of complications in terms of how we prep it or give it to the patients. And I think all of those things just as we have been intending for quite some time really point strongly in terms of the utility of this product from a clinical perspective. In fact we’ve heard from quite a few clinicians that said you know what, if this product was available to me I would give it to every stroke patient that I treat because frankly there was no reason for them not. If it is safe and if they think they can provide meaningful benefit, they would want to give it to as many people as they possibly could. And I think that’s a pretty strong statement that on the part of these clinicians in terms of their interest level their excitement and their enthusiasm for what we’ve been doing. And in Japan, we think we could be one modest size trial away from having a product that’s approved and on the market there. And we think that that we have some interesting regulatory opportunities in front of us in other areas that will be able to take advantage of and I think in the case of an area that’s widely recognized globally is being such as substantial area of unmet medical need. I think that’s a good thing for patients and frankly it’s a good thing for us and ultimately it’s a good thing for our shareholders.

[Steve Brozak:]

Well. Again, I'm delighted by the progress obviously the validation on your transaction improves that – folks are looking at that your MultiStem and the same way you are look forward to hearing the good news of future trial results. Thank you again.

[Gil Van Bokkelen:]

Thanks, Steve.

[Operator:]

I would like to thank all of our participations for their questions today and turn today’s call back over to Mr. Gil Van Bokkelen.

[Gil Van Bokkelen:]

Well. If there is no other questions I'd like to just once again thank everybody for participating in the call and especially thank all of our shareholders for their continued support of the company. We look forward to providing additional updates in the coming weeks and months as we make progress towards our activities in Japan and in other areas. But in the meantime, we just like to thank all of you once again and say good night, everyone.

[Operator:]

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