Mesoblast Limited
Q4 2018 Earnings Call Transcript

Published: 30 Aug 2018

[Operator:]

Hello, and welcome to Mesoblast Financial Update and Operational Highlights Webcast for the Three Months Ended June 30, 2018 and Year Ended June 30, 2018. An announcement and slide presentation has been lodged with the ASX. These materials will also be available on the Investor page at www.mesoblast.com. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, let me remind you that today’s conference call, the Company will be making forward-looking statements that represent the Company’s intentions, expectations or beliefs concerning future events. These forward-looking statements are qualified by important factors set forth in today’s announcement and the Company’s filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements. In addition, any forward-looking statements represent the Company’s view only as of the date of this webcast and should not be relied upon and representing the Company’s views of any subsequent date. The Company specifically disclaims any obligations to update such statements. With that, I would now like to turn the call over to Dr. Silviu Itescu, Chief Executive of Mesoblast’s. Please go ahead.

[Dr. Silviu Itescu:]

Thank you all for joining to the operational highlights and financial results for the year ending June 30, 2018. Joining me is our Chief Financial Officer, Josh Muntner. This has been a strong year. The first of that three Phase 3 programs our trial in graft versus host disease made its primary endpoint. This product candidate underpins the value of the Company puts us on track to first product launch in the United States. In addition, we have seen strong revenues from TEMCELL in Japan being marketed by our licensee JCR Pharmaceuticals and the ability to penetrate that market serves to give us great confidence in the growth trajectory and the potential for commercialization of our own product in United States. During the year, we also entered into an important licensing arrangement with TiGenix, which serves further to validate our strong intellectual property. We also recently entered into a strategic alliance with Tasly Pharmaceutical Group, China's leading cardiovascular pharmaceutical company, which is a validation of our technology platform and of the clinical results obtained to date in our heart failure program. We've worked hard to strengthen our cash position through a combination of reduced spend, increased revenues and strategic financial transactions. If we can now move to slide presentation please, Slide 4. Mesoblast is a disruptive technology platform, industrial scale manufacturing and multiple revenue-generating products and Phase 3 assets that we'll focus on during the course of this presentation. And the next slide is a highlight summarizing our disruptive cellular medicine technology, which is based on highly potent mesenchymal lineage precursor cells in their progeny whose mechanisms of action have been extensively characterized. Importantly, these cells target multiple pathways, which may be the basis of greater therapeutic benefits in complex and difficult to treat diseases. On Slide 6 is a summary of our commercial translation capabilities, our technology is well-positioned for scalable industrialized manufacturing. We’re able to scale and produce the anticipated commercial quantities in support of each of our potential launchable product. We have significant knowhow in regulatory activities for product approval and commercial launch and we've got proprietary scalable processes and media formulations. Slide 7 speaks to our commercial products and the clinical pipeline using Mesoblast’s intellectual properties and technology platform. Importantly, our technology underpins the first allogeneic regenerative medicine product approved in Japan, TEMCELL, where it's commercialized by our licensee JCR Pharmaceuticals. Our technology also underpins the first allogeneic regenerative medicine product approved in Europe, which will be commercialized by Takeda for perianal fistulae. The table below shows that clinical product candidates and the state of development, we have three that are in Phase 3 and will be talking in greater detail about each of those. Slide 8, I would like to just address the recent announcement about our strategic partnership in cardiology in China. We announced that we've entered into a strategic partnership with Tasly Pharmaceutical Group who have received exclusive rights and will fund development, manufacturing and commercialization activities for our product candidate MPC-150-IM in the treatment or prevention of chronic heart failure and for our product candidate MPC-25-IC in the treatment or prevention of acute myocardial infarction in China. In consideration, Mesoblast will receive $40 million on closing, comprising of $20 million upfront technology access fee and $20 million equity purchase at a premium per share. Mesoblast will also receive substantial milestone payment on product regulatory approval and sales related targets in China. In addition, Mesoblast will receive double-digit escalating royalties on net product sales. Importantly, each of the partners will leverage each others' clinical trial result in order to support their respective regulatory submissions in both the U.S. and China. This transaction has received certain government approvals and is subject to filing now with the State Administration of Foreign Exchange. I would like to now turn to Josh who will update you on the financials.

[Josh Muntner:]

Thanks Silviu. I’m pleased to joining the call today as the CFO of Mesoblast. Since I joined the Company just over two months ago, my beliefs in the extraordinary potential of Mesoblast technology platform has been greater validation. As we said, we've made strong progress towards FDA for seeking FDA approval and eventual launch of our first product, remestemcel-L, a treatment which is now been needs for kids suffering from life-threatening graft versus host disease. Anyway, now turning to the financial slides. As shown on Slide 10, Mesoblast had a significant increase in revenue in our fiscal year ended June 30th. Total revenue was $17.3 million, an increase of nearly $15 million more than the prior year. Revenue included royalties -- revenues and royalties received from JCR Pharmaceuticals on sales of TEMCELL for GVHD in Japan, up 152% to $3.6 million for the reporting year. We also received $1.5 million in milestones from JCR based on their cumulative sales of TEMCELL for GVHD in Japan. We believe that JCR's ability to rapidly penetrate the Japanese GVHD market for the product that's based on our technology will be indicative of our commercial potential. Beyond our milestones and royalties from JCR, the bulk of revenue is due to a milestone stemming from our license agreement with TiGenix now owned by Takeda. The strength of our IP was demonstrated by the licensing of certain of our patens to TiGenix in order for them and now Takeda to commercialize our Alofisel, their mesenchymal stem cell product approved for the local treatment of fistulae. As consideration, Mesoblast recognized an upfront license fee in fiscal year 2018 of €10 million. Mesoblast is also eligible to receive additional milestone payments as well as single digit royalties on sales of Alofisel. Please turn to Slide 11 to look at the remainder of the P&L. We've seen significant improvement in our loss after tax in the fiscal year ended June 30, 2018. We've an increase in R&D spend as we continue to make progress in our late stage clinical trials. So this has nearly offset by a reduction in manufacturing spend as sufficient clinical products has manufactured in 2017. We also had a benefit on the P&L from a couple of non-cash items, including a gain due to the re-measurement of contingent consideration and an increase in our income tax expense benefit as a result of the recent changes in U.S. corporate tax rates. The overall impact of these changes was at 54% improvement in our loss after tax, which decreased to $35 million. Slide 12 shows our cash flows for fiscal year 2018. We have a substantial reduction in operating cash outflow in 2018 due to the increased revenue discussed as well as the lower expenses. This is a trend that we fully intend to maintain. Turning to Slide 13. Today, we have a significantly strengthened cash position. We completed the year with just under $38 million of cash, however, strategic transaction with NovaQuest brought in an additional $39 million in January instead of July. Since the end of the reporting year, we also signed agreements with -- agreements with Tasly, one of the Chinese largest pharmacy which will bring in an additional $40 million to our balance sheet at closing. Importantly, our facilities with NovaQuest along with the what we’re putting place with Hercules earlier this year include up to an additional $50 million, we can access upon achieving certain milestones. Turning to Slide 14. Let's look more closely at our non-dilutive transactions with Hercules and NovaQuest, each of which involves deep diligence by their investment teams. We entered a 75 million of non-dilutive four-year credit facility with Hercules in March of 2018 and to date it has gone 35 million. Our transaction with NovaQuest includes a 40 million non-dilutive eight-year credit facility of which our initial draw down was 30 million. At closing, NovaQuest also purchased 10 million of Mesoblast common stock. The credit facility has an interest only period of four years with interest in principal repayments deferred until after first commercial sale of remestemcel-L for children. To sum up, we’re proud of this year’s financial performance and the steps we’ve taken to strengthen the balance sheet to achieve our upcoming milestone. I would like to now hand the call back to Silviu to continue the presentation.

[Dr. Silviu Itescu:]

Thank you, Josh. Let’s talk about each of our Phase 3 programs. Slide 16 speaks the market opportunity for remestemcel-L in acute graft versus host disease. This is a devastating condition that affects approximately 50% of patients receiving an allogeneic bone marrow transplant. In the more severe forms of the disease, mortality rates may be as high as 95%. There are no approved treatments for this condition outside of Japan, with the only approved therapy is TEMCELL commercialized by our licensee JCR Pharma. There are total more than 30,000 allogeneic bone marrow transplants bone transplants performed globally and on that basis we believe that there is a market opportunity for Mesoblast of approximately $700 million across the U.S. and the EU side. Slide 17 summarizes the operational update for this program. Phase 3 trial evaluated remestemcel-L in 55 children with steroid refractory grade C/D disease predominantly graft versus host disease. Almost 90% of children had grade C/D disease, most of severe form and historically associated with the highest mortality. The study successfully met the primary endpoint of improved Day 28 overall response with the 69% responder rates versus 45% protocol-defined historical control rate, P value 0.0003. As we recently reported the Day 100 overall survival with 75% and Day 28 responders 87%, the Day 180 survival results are expected shortly. Remestemcel-L is safe and the infusions have been well tolerated. And these findings are very consistent with previous results in 241 steroid refractory GVHD children treated under expanded access with remestemcel-L who had otherwise failed to respond to multiple biologic agents. Slide 18 updates you on the way we see the pathway to market in the U.S. We are in active discussions with the FDA and final preparations for Biologics License Application filing are underway by our team. We expect to have a pre-BLA meeting in the fourth quarter of this calendar year and the fast track designation for the product allows eligibility for priority review and a rolling BLA review process. In parallel, our commercial team is planning for pricing and reimbursement product launch. Here, we will be using real-world sales data of TEMCELL in Japan, to inform our commercial strategy for the U.S. And as we just reported, we're very pleased by the 152% increase in annual royalty income on TEMCELL that we've seen on sales in Japan, demonstrating rapid penetration of the addressable market within just two years of product launch. Let’s move on to our Heart Failure program Slide 20. Slide 20 shows you the patient journey and the general treatment pathway for patients with progressive heart failure. On the left-hand side, those patients with early stage heart failure Class I and Class II are well treated today with a variety of both generic and new oral therapies; however, most patients progress to advance and ultimately end-stage heart failure at which point, there are very limited therapeutic options. Our product candidate MPC-150-IM specifically targets those patients with end-stage and advanced heart failure and that's where our clinical programs are focused. Slide 21 talks through the market opportunity we see for our products in end-stage heart failure. More than 50,000 patients -- new patients, every year in the United States alone progressed to end-stage heart failure. The one year mortality of these patients exceeds 50% and the options for treatment of these patients are extremely limited, not more than 2,000 heart transplants have performed in the U.S. annually due to limited donors and artificial heart left ventricular assist devices are used in under 5,000 patients today, and even though they improved survival, the quality of life and complications associated with LVAD implantation remain a major obstacle to once produce. We believe that there is a potential to use ourselves as an adjunct to LVAD therapy and increased -- and improved outcomes in these patients. And as a result, we see there is a potential for us greater than 500 million U.S. market opportunity for that product. Slide 22 speaks to the clinical strategy for that product in end-stage heart failure. A prior 30 patients pilot study published in circulation to several years ago, first demonstrated that there was a positive signal injecting a low-dose of our cells in patients with end-stage heart failure receiving an LVAD. On the basis of that trial, the National Institutes of Health funded a 159 patients double-line placebo controlled 2

[Operator:]

Thank you. [Operator Instructions] Your first question comes from Mark Breidenbach from Oppenheimer. Please go ahead.

[Unidentified Analyst:]

This is Matt on for Mark. So a couple for me, if I may. First off, I just wanted to circle back on that NIH sponsored heart failure trial. Do you know which scientific meeting in particular we should expect these results to be presented? Do you know if the abstract has been submitted to any of those yet?

[Dr. Silviu Itescu:]

I can’t speak to any of that. The NIH investigators are running this program. It's there trial. We are quite independent that. Our focus is very much on the interface with the FDA.

[Unidentified Analyst:]

So also in terms of that data, do you -- and you may not know the answer of this. But do -- should we also expect the traditional endpoints like MACE as maybe a secondary endpoint. So I’m just wondering if there might be any way to read through from this trial to the larger HF trial.

[Dr. Silviu Itescu:]

I think the primary endpoint is on the ability to switch off the device and focus on the native heart's ability to maintain circulation, which will measure things like systolic volumes, ejection fraction. There will be functional has the ability to exercise for the device we stop, et cetera, et cetera. All of those endpoints will have specific lead through into the ability of the cells to strength of the native myocardium, not just in end-stage heart failure but also in patients with advanced heart failure. So I think there will be direct directional conclusion that can be made between the two programs. Of course, one target population is much, much thicker than the other. So, that rep, that remains the caveat. In addition to that, there are specific complications of the left ventricular assist device that aggravates the inflammation associated with the heart failure. And to the extent that we are able to reduce the inflammation related complication then I think you’ll also be able to extrapolate to probability of these cells having the impact on inflammation associated with earlier stage heart failure.

[Unidentified Analyst:]

And then maybe just turning to the Phase 3 trial in back pain, there was some discussion in the past as to whether we might see in term 12 months read out. Do you know what that might still be on the books or should we expect to wait until the full 24 month data?

[Dr. Silviu Itescu:]

I think we’ll be updating the market over the next quarter or so as that plan on interims or other ways of this program.

[Operator:]

Thank you. Your next question comes from Jason Kolbert from H. C. Wainwright. Please go ahead.

[Jason Kolbert:]

Can you talk a little bit about what TEMCELL is doing or the relationship in Japan? And can you talk a little bit about what you think the market opportunity would look like for the launch of that in the U.S.? Congratulations, you have a lot of cash on the balance sheet. Can you talk a little bit about how long you expect that cash to last on a pro forma basis of course?

[Josh Muntner:]

Let me see if I can address each of those questions, those are complex question. Our relationship with JCR in Japan is very good. And of course, we shared a lot of information between the two companies, both in terms of uptake penetration, use of products and exchange of safety data. And I think, not only have we been very helpful with our U.S data in terms of as you recall their ability to get initial approval, but I think the real-world data is going to be extremely helpful to our plan both for FDA filing registration and ultimately our commercial plan in the U.S. I think this is still relatively early days. We're only about two years out on product sales in Japan, but we've been very pleased by what we've seen so far. We’ve seen no evidence of any plateauing. We continue to see robust growth quarter-on-quarter, and we have every expectation that will continue over the next 12 months period. And as we watch this closely, I think it will give us great information on how we expect to have product rollout in the U.S., remembering of course that we already have established expanded access program in the U.S. with where our product is well known to the investigators. It already is -- expect in many hospitals. And I think that the way this is unfolding in Japan is reflective of the unmet need, it's reflective of the strength of the results with the product, and I would expect a similar sort of benefits in the U.S. We believe that something like 50% of pediatric transplants have done in top 15 centers in the U.S, and so therefore building out a sales and marketing is going to be relatively, relatively inexpensive. I think you asked about the cash position as well. Look, we have much stronger cash position than we've been in quite a long time, and I think we've got sufficient cash for at least the next 12 months.

[Jason Kolbert:]

[Indiscernible]

[Josh Muntner:]

Yes.

[Operator:]

Thank you. Your next question comes from Tanushree Jain from Bell Potter Securities. Please go ahead.

[Tanushree Jain:]

I echo Jason's sentiments. It was great to see with the strong balance sheet and so much is progressed and tying up I guess the key inflection point in the near future. Just a quick few one for me. So in terms of the GVHD product, when do you expect to file the BLA losing of the timeline for that?

[Dr. Silviu Itescu:]

As I said, our pre-BLA meeting will be happening late fourth quarter. After hearing on that, there are no surprises than really the filing of the BLA is relatively mechanical where the whole point of the pre-BLA meeting is to get alignment and agreement on the FDA that's the modules in the filing or as they should be. And remember that, we have a fast track designation for the trial which allows us to file in a rolling manner. So each module as we complete will be filed in a rolling BLA which means that we can have an interactive ongoing dialogue with the FDA rather than having to wait to get the end of the six months periods before we get any comments.

[Tanushree Jain:]

And just with the commercial plans around this product, you mentioned you are going to use a lot real-world data from TEMCELL. Obviously, we know that TEMCELL being reinvest in Japan for quite a significant dollar value and U.S. is expected to be higher. Would you be able to talk a little bit about what your expectations offer reinvestment in that market?

[Dr. Silviu Itescu:]

Yes, I mean look there is two ways of looking at this. So, one is a bottom up approach which is the way the Japanese typically see reimbursement. And the other, one is based on some of economic which is typically the way the U.S. seems reimbursement. And so, we know that in the U.S. what the potential impact of the therapy is going to be based on the cost of intensive care et cetera and keeping children out of intensive care. And if we use the real world data in Japan, we will be able to apply the savings according to U.S. numbers for example. And -- so, obviously, we have our internal projections on pricing reinvestment in the U.S. But I think as a very different rule of thumb, most medicines in Japan where there is a centralized reinvestment agency typically discounted by factor of 50% or so from the U.S. counterpart. So, you can look at this from a number of different ways and conclude what's the likely pricing for therapeutic cause, is likely to be in the U.S. given that this is an ultra orphan indication and potentially highly lethal disease.

[Operator:]

Our next question comes from Chris Kallos from Morningstar. Please go ahead.

[Chris Kallos:]

Silviu, I just got a couple of questions on the partnering side. You haven't mentioned anything about that going forward. In terms of the MSC-100-IV product, the need to opportunity, are we in discussions with potential partner at this stage?

[Dr. Silviu Itescu:]

Well, MSC-100-IV is a product that underpins the value of Mesoblast today. We have specifically sort out financial transactions to allow us to put in place the kind of relatively inexpensive sales and marketing commercial team in order to retain full value for the asset. So, we don’t see any short term needs for a partnership unless somebody, were to consider this as a multiproduct relationship together with some of our lead assets. But as a standalone assets, this is a clearly underpins the pros and the value drive for Mesoblast today in the near-term. With respect to other partly discussions, I think we’re very pleased by the transaction we just entered into the Tasly. Tasly, the major cardiovascular force, they're number one or number two in China in the space. I think the diligence that they performed in assessing the technology platform, the specific cardiovascular results generate to-date, I can speak to the strength of where Mesoblast has poised. And you know you would expect that we’re in very significant discussions with a number of partners for cardiovascular rights in the U.S. and in Europe where the market is substantial. But having completed the end-stage heart failure program, it is obviously pertinent and most prudent from Mesoblast perspective to readout those results. And the fact that we’ve got a strengthened balance sheet, allows us to be in the appropriate selection process with the right strategic partners in the cardiovascular space.

[Chris Kallos:]

Correct. And I guess the strength of the abstract that we expect to see in this conference coming up. could be a catalyst for any negotiations that are coming up?

[Dr. Silviu Itescu:]

Well, you would certainly assume that net positive results are going to be a major value driver for the asset. And similarly, a back pain program is having completed the Phase 3 enrollment. And given the serious nature of the opioid crisis and the lack of alternatives is the other major program that I think you’re likely to see significant partnering activity with it.

[Chris Kallos:]

And just lastly, just to clarify, I think Josh mentioned a 12-month run rate based on the cash on hand at the moment?

[Dr. Silviu Itescu:]

No, I think what we’re saying is that we have at least 12 months of cash. We don’t -- we have at least 12 months of cash and we’re very comfortable.

[Operator:]

Your next question comes from Michael Gerges from Blue Ocean Equities. Please go ahead.

[Michael Gerges:]

Just firstly on GVHD, it seems logical to me that the opportunity for label extension for MSC-100 to the chronic and adult market. I’m just wondering if that's something you’re considering and whether there’s a similar market opportunity that exists there, and then perhaps a little bit difficulty into penetrating that market?

[Dr. Silviu Itescu:]

Look, I think you’re absolutely correct. And I think that’s part of our discussions with the FDA. How to think about a post-marketing study in adults that will allows appropriate label extension and generate the kind of data that both the FDA and payers as we want to see an adult. That also applies to much of the U.S. but to Europe.

[Michael Gerges:]

In terms of the market opportunity that exists, but from perhaps on an economic standpoints in a therapeutic offering standpoint, is it the same as what we see in the pediatric market?

[Dr. Silviu Itescu:]

Developed market is probably three times the size of the pediatric. Pricing per patient, again, when I say three times of size, we would be targeting again the most server form of the adult disease, right. So, it will be patients who are otherwise refractory and who have no alternative. So, it's a same sort of logic, but the market opportunity is threefold.

[Michael Gerges:]

Right that’s good. So I mean second question is just in regards to what's happening with Tasly. Could you just provide a bit of color in terms of the sequences of events and just an understanding as the timeline related with the progress in the China market? And what degree can you leverage data in the U.S. to facilitate progress over there?

[Dr. Silviu Itescu:]

We’re establishing a very, very close working relationship with Tasly Group, at multiple levels, all the way into operations and manufacturing and regulatory. And over the next couple of months, we will have multiple workgroups that will allow us to map out, the regulatory requirements for approval in China. How they can leverage our existing Phase 3 data and how we establish trials in China that allowed both parties to leverage the trust for regulatory purposes. So that really the objective will be to have complementary trials with similar patient populations with similar endpoints with similar statistics and similar manufacturing and regulatory criteria, so that the data are ultimately usable across jurisdictions.

[Michael Gerges:]

And just finally, there has been quite of few questions in regards to regulatory and clinical related questions. So I might perhaps historic to question to the manufacturing process. Manufacturing in the context of batch consists to batch consistency and [indiscernible] have obviously been an issue in the past. In the past in the space and may or may not have contributed to the successful progress of Osiris. You mentioned on Page 4 that you have industrial scale manufacturing. Could you perhaps talk at a high level as to how that might have become those historical issues?

[Dr. Silviu Itescu:]

Yes, absolutely. Look, I think the results in that pediatric GVHD trials speak for themselves. The reason that we were successful in that trial, given that the technology was very similar to the old Osiris technology, was in the next generation manufacturing processing that we put in place. So, we are able to scalable and reproducibility generate batch to batch consistent product that meets release criteria that are very stringent and helps very high standards. And I think the reproducibility from batch to batch is a major a reason why our Phase 3 was positive and the prior data failed. Having said that, we've got proprietary media, serum-free media, we have proprietary technology for use in three-dimensional bioreactor that allows us to now scale up to an even greater level with reproducibility and consistency, and make the large yields of product necessary for commercial quantities and the kind of penetration that we needed for clinical use more broadly. And I think, we are very well aware of problems that others have with some essence than with poor quality of cells. We don’t see that in our manufacturing process precisely because we focus very much on optimizing manufacturing. So, the zeno-free media formulations, the bioreactors, the rigor with which we test and have potency assays, all go towards a quality of manufacturing that I think underpins the clinical results that we seem to be delivering in each of our product.

[Operator:]

Thank you. Your next question comes from Kevin Geeter from Ladenburg Thalmann & Co. Please go ahead.

[Kevin Geeter:]

Just maybe two, if I may. Silviu as we think about the upcoming heart failure data readout, can you talk in more granularity with regard to the importance of GI bleeding in these patients? And as we think about a potential accelerated regulatory review under our math in the U.S, do you think GI bleed is a potential target endpoint that would be robust enough for further surrogate under RMAT? Or do you think more traditional cardiovascular endpoints that are still appropriate in this LVAD population?

[Dr. Silviu Itescu:]

Thanks for that Kevin. Well, first and foremost, this is a ultra orphan disease. It's an LVAD related morbidity and mortality. It is a complication of the LVAD itself, meaning putting an LVAD into patient results in various complications such as GI bleeding. And in fact GI bleeding is seen in as many as 40% of LVAD treated patient due to severe systemic inflammation that aggravates the underlying inflammation that is already present in the heart. And what happens is, there are abnormal leaky blood vessels in gut that on top of the requirement for anticoagulation results in very severe bleeding that can be life threatening. In our pilot study, we saw a significant reduction in GI bleeding in these patients. So, we are -- as part of the safety review, we are certainly hopeful that we could see a significant reduction in GI bleeding. And if so, that would be a very, very important movement forward in management of these patients. It’s a very clinically meaningful endpoint in these patients population specifically. In terms of cardiac related endpoint, those are more difficult to ascertain in these patients population because of course they're on LVADs. And so, we’re focusing on measuring endpoints related to strengthening of the native myocardium when the LVAD is switched off, the only way you can actually measure them. And those are important and they are important in the sense that they will inform on the efficacy of cell and potentially, the reversibility of end stage heart failure back towards an earlier heart failure successful. But I think the point is a very good one that, if we were successfully in reducing the frequency of GI bleeding or the proportion of patients who undergo GI bleeding as a result of our immunomodulatory effect of the cells, that is a very important clinical outcome endpoint that we'd be measuring in this patient population.

[Kevin Geeter:]

And then maybe one more for me then I will get back in the queue. With regard to the 180 day pediatric acute graft versus host disease data, do you anticipate publicly disclosing that data? Or is perhaps more prudent way of thinking about that data and update on decision to move forward from a regulatory filing and perhaps saving more of the details of that data for publication or another format that may for commercial launch?

[Dr. Silviu Itescu:]

Well, Day 180 survival data are particularly important. They’re important from the point of view that many other drugs and agent, which have shown early survival benefits, have fallen out of about Day 180 because of unanticipated safety concerns such as emergence of viral infections, recurrent bacterial infections or even tumor relapse. And so from the FDA point of view, Day 180 is a very important endpoint to demonstrate sustainability all affect without any safety compromise between Day 100 and Day 180. So, it an important -- and we are measuring it, and we of course expect to disclose it publicly because it is material.

[Operator:]

Your next question comes from Dennis Hulme from Edison. Please go ahead.

[Dennis Hulme:]

Can you talk to us about your plans for graft versus host disease media?

[Dr. Silviu Itescu:]

Sure, as you know, Europe has similar but not necessarily the same regulatory environment as the U.S. for regenerative medicine and we’ve had multiple discussions with EMA prior to initiating this study. We will be coming back and having discussions of EMA in parallel with the FDA and we will be presenting not just EAP data, which previously was well known to European agencies but now this new pediatric data. And we would expect to fully outline to the market over the next couple of months European strategy.

[Dennis Hulme:]

Do you anticipate you could be able to file [indiscernible] in 2019 in U.S.? Or is it still uncertain?

[Dr. Silviu Itescu:]

Sorry. Can you repeat that please?

[Dennis Hulme:]

Do you anticipate being able to file for approval in Europe in 2019 or is that still up in the air?

[Dr. Silviu Itescu:]

I think that -- again the European strategy will become clear [indiscernible] with completed that Day 180, we're able to have more detailed discussions with EMA and we’ll make this publicly available to the market.

[Operator:]

Thank you. That brings us to the end of today’s call. I’ll now hand back to Dr. Itescu for closing remarks.

[Dr. Silviu Itescu:]

Thank you, all very much for participating on this call. We’re very excited. It’s been a good year for us. We recently delivered on a number of important commercial and strategic transactions, and we expect the rest of the year is going to be as busy as well as in some very important clinical inflection points. Thank you very much.