ThermoGenesis Holdings, Inc.
Q1 2015 Earnings Call Transcript

Published: 15 Nov 2014

[Operator:]

Good day and welcome to the Cesca Therapeutics Incorporated First Quarter Fiscal Year 2015 Financial Results Conference Call. All sides are currently in a listen-only mode. But please note there will be a question-and-answer session later on in the call. Also note today’s conference will be recorded and will be accessible both by phone and internet. Please refer to the press release about this conference call on the company’s website, cescathearapeutics.com for further detail. The company has asked that I read the following statement. Management will make comments today that contain forward-looking statements. Forward-looking statements are any statements that are made that are not historical facts. These forward-looking statements are based on current expectations of the management team and there could be no assurance that such expectations will come to fruition. Because forward-looking statements involve risks and uncertainties Cesca’s actual results could differ materially from management’s current expectations. Please refer to the press release, the company’s Forms 10-K, 10-Q and other periodic SEC filings for information about factors that could cause different outcomes. The information presented today is time sensitive and is current at this time. If any portion of this call is rebroadcast, retransmitted or redistributed at later date Cesca will not be reviewing nor updating this material. I would now like to turn the call over to Mr. Robin Stracey, Chief Executive Officer of Cesca Therapeutics Incorporated. Please go ahead, sir.

[Robin Stracey:]

Thank you, operator and a warm welcome to everyone on the call. I’m joined by our President; Ken Harris who as you know is the formal CEO of TotipotentRX and now oversees all of Cesca’s clinical programs and our CFO, Dan Bessey. Also with me is Mahendra Rao, who happens to be visiting our [indiscernible] facility today. For those of you who may not be aware Mahendra is the former Director of the NIH Center for Regenerative Medicine and a member of Cesca’s Board of Directors. I will make a few opening remarks including a quick refresh on our overall strategy. A few comments on recent events including last week’s CEO transition and the expansion of my role and highlight notable accomplishments since the last time we talked which was just six or seven weeks ago. I’ll then hand of to Ken for a deeper dive into progress with our clinical programs and Ken will be followed by Dan who will give you a quick update on our financials. I’ll be back for a few wrap up comments after Dan and then we’ll open the call up for Q&A. So a quick refresh on our overall strategy. We are on our way to becoming a market leading fully integrated regenerative medicine company with unique and highly differentiated cell therapy offerings that address significant unmet medical needs, including vascular orthopedic, hematology, and oncology indications. Our initial platform targeting Critical Limb Ischemia and acute myocardial infarction is SurgWerks. It’s a platform that is being designed around the few scientific and clinical fundamentals that we anticipate will be critical for commercial success for any player in this space. First, there is safety; we use the patient’s own stem cells. We therefore consider our therapies to be naturally safe and importantly, anticipate that view being shared by regulators such as the FDA. Second is process control; stem cells are fragile and must be handled with great care for maximum curative potential. Our protocol tightly controls handling steps and environmental exposure during cell harvesting, processing and we have mission back into the patient. And we incorporate real time diagnostics to ensure delivery of a therapeutic dose regardless of patient to patient variability. And third, there is practicality for adoption. Our protocol is typically conducted in a single 90 minute procedure with a single use disposable kit inside the operating room or the patients’ bed side and under the direct and continuous control of the treating physician. These three fundamental characteristics put us on a pathway to commercialization of a product offering that we expect to be not only highly effective but also very cost competitive. It also puts us on a regulatory pathway that we anticipate being much shorter than most other cell therapies under development elsewhere. Now turning to recent events. Last week we announced that we will begin a nation-wide search for a commercially oriented CEO with specific experience in the development and commercialization of clinically demanding and highly regulated therapeutic products and that I would assume the role of interim CEO. As many of you may know I’ve been on the board of Cesca since inception and I was on the board of ThermoGenesis for a couple of years prior to that. As such I have been fully engaged in the development to Cesca’s current strategy and feel very comfortable assuming this interim role. So far the transition has been seamless and with the heavy lifting of the merger and the integration of the two companies largely behind us. The focus now is on hitting key value creation milestones and accelerating our transformation into a world class fully integrated and commercially oriented regenerative medicine company. Ken will elaborate on progress with our clinical program shortly. Suffice it for me to say now that we continue to make very good progress and remain on track for an anticipated FDA approval about pivotal Phase III trial treating Critical Limb Ischemia. I had hopes to be able to announce today that our IDE application has been submitted, it hasn’t. We continue to fine-tune a couple of elements based on last minute feedback from our advisors but I can say that we feel very good about the quality of our clinical trial design and that the IDE submission is eminent. As for our base business it is tracking more or less in line with our expectations. The cord blood market is somewhat limited in terms of growth opportunities but we continue to maintain a solid position and the business contributes to the fixed cost infrastructure we depend upon to support our strategic transformation. At this point, I’d like to turn the call over to Ken for a more detailed update on progress against our clinical milestones. Ken?

[Ken Harris:]

Thank Robin. I am pleased to provide an update today on the progress we’ve made on the clinical programs. During the month and half since our last investor conference call, we’ve had to continue to make important progress in advancing our clinical programs with the particular focus on our forthcoming clinical trial treatment critical limb ischemia. Before I get into the detailed update, I would like to briefly comment on developments in the regulatory arena for stem cell therapies. Last month, the FDA issued a new draft guidance document titled same surgical procedure exception under 21CFR and Part 1271, questions and answers regarding the scope of the exception typically applied in defining the rules for hospitals and companies using and promoting autologous cells for use in the operating room. Historically an exemption to compliance with good tissue practices and intensive set of challenging quality regulations has existed for an establishment like a hospital, when they; A, remove a human cell therapy product; B, implant the cells within the same surgical procedure back into the same patient; and C, the cells are minimally manipulated. However, under the new proposed FDA guidelines that exemption will only be available if the tissues and I am quoting, rinsed, cut or resized or processed with certain manufacturing steps. We believe this draft guidance impacts Cesca in the following ways; it further clarifies that our orthopedic indications and target use of bone marrow minimally manipulated cells remain under this exemption for our customers, i.e. the user of the hospital; but the FDA is signaling that non-homologous use of cells even if autologous in nature are likely going to subject the manufacturer and the hospital to further regulation; and three, with certain manufacturing steps limitation as outlined in the ruling appear design to eliminate the transfer of the cells back to a lab or intra-OR handling steps beyond rinsing, cleansing or sizing or certain additional undefined manufacturing step procedures. The FDA obviously well aware of these pending changes still designated our SurgWerks and bedside cell processing on the simpler IDE pathway just a few months ago. So we remain confident in Cesca’s platform and the use of bone marrow minimally manipulated cells as processed in the SurgWerks in the AXP system give us advantages over competitors. As the pending rules are drafted today, SurgWerks should not trigger the need for our hospital customers to become GTP compliant, which is likely not the case for use of autologous cells requiring chemical and/or biological processing steps inside or outside the operating room. All in all given these new proposed rules tightening, it still leaves Cesca’s regulatory and commercial pathway unchanged. The IDE regulatory pathway is an important differentiator for Cesca as it typically involves only a feasibility study and then a final pivotal study statistically designed to evaluate both safety and efficacy leading to a premarket application otherwise known as a PMA for final marketing authorization. More than likely our competitors using more than rinsing, cleansing or sizing, or certain yet to be defined minimally manipulated manufacturing steps will fall under BLA approval pathway, a three phased clinical development process and trigger their hospital customers' need to comply with good tissue practices part 1271 law. All in all being an IDE significantly reduces our time to market for each of our indications and our cost of clinical development compared to an IND or BLA studies of which most other autologous companies will likely be required to follow should translate to sustainable advantages for Cesca. Now, turning specifically to the CLI IDE application. We’ve been actively seeking a principle investigator with the right experience in the disease management for late stage CLI, a thought leader in influencing standard of care practice and one who has significant experience in recently concluded CLI studies. This is important to us as significant experience in running CLI trails is essential in helping us traverse the complexities of running a CLI trial. Given certain previous bumps in the road our predecessors have experienced such as recruitment of subjects and unusually low rates of amputation in study control arms require significant intelligent input and guidance on what works and what doesn’t work practically. Therefore, we’re very pleased to announce the appointment of Dr. Richard Powell as our national PI for a CLI pivotal trial. Dr. Powell is the Chief of Vascular Surgery and professor of surgery and radiology at the Geisel School of Medicine at Dartmouth College of Medicine. Dr. Powell also served as a principal investigator for the Phase II [indiscernible] CLI trial, served as the lead author on that study's results, a study that was successfully executed I might comment and is a leading author and contributor in the Society of Vascular Surgeons committees on the management of CLI patients. Dr. Powell was also the first academic to publish on the newly observed phenomenon of unexpected CLI trial bias where it appears both patients and surgeons are failing to elect amputation for greater than 90% of late stage CLI study patients. What this means is that patient amputation rates in these late state studies has fallen to a surprisingly low level in the recent blinded protocols. However, when subject to attract beyond the close of the study the amputation rates pop back to a normal population base statistic level within the few months of the study closure. With Dr. Powell insight and our discussion with the FDA in our pre-submission meeting we are confident that our pivotal trial design is now optimized to positively impact enrollment and to overcome the emerging CLI trail failures, which unfortunately observe no difference in amputation rates and neither the control of the treatment arms. As you may be aware a recent Phase II trial conducted by [indiscernible] and announced last month was the latest trial to observe this bias and previously discovered and publish by academics like Dr. Powell. So in light of these learnings we did delay the finalization of our IDE pivotal submission specifically to address certain protocol changes in the recently published what I will call the [indiscernible] trial bias effect. And to further consider options for maximizing our enrollment rates. I would like to highlight a few of the changes we have made to the trial design and describe them for you now. The first optimization which already existed as you recall we operate our own CRO team and we do this for two specific reasons. Reason one, is they will ensure a more precise and protocol inherit trial is conducted in the operating room since the clinical expertise of doing point of care bone marrow treatments is new to the field and most of the clinical investigators will likely only enroll and gain experience from a few patients. And two, our Cesca CRO staff will keep the trial front and center to maximize the lion's share of the clinical investigators which we understand a failure to do has contributed to prior study's slow enrollments. Second, optimization, the introduction of the blinded review committee process, to actually make the determination of an amputation or salvage end point on a pre-defined criteria irrespective of the investigator or patients' influence and thus overcoming the [indiscernible] effect. And the third optimization, the decision to change the trial design from an active control to a placebo control. The later change was made to balance the desired enrollment advantages of the active control which I’ve been a strong advocate of with the absolute necessity to increase patient retention. Although we believe in active control is still a fundamentally sound scientific approach the potentially competitive studies which enrolled patients may seek in an open label study upon being informed that they did not receive the SurgWerks treatment is a threat we would prefer to manage upfront versus retroactively with high patient dropout. We will be presenting this design for 224 patients in the 3

[Dan Bessey:]

Thank you, Ken and good afternoon everyone. In the way of a brief overview of our financial operations, we have a base set of product lines that derive their revenues primarily from the sale of our automated and manual cell processing and storage systems to cord blood banks and hospitals throughout the world. These cell processing product lines generated approximately $5.9 million in gross profit last year, which we use to partially fund our clinical trial programs and our overhead. In addition to the gross profit generated by these product lines, they also support the technical engineering, manufacturing and quality systems and functions necessary to pursue our cell based clinical trial programs in vascular, orthopedic and oncological indications. As noted earlier by both Robin and Ken, our primary focus is to develop autologous stem cell therapy using our proprietary SurgWerks kit to address unmet medical needs in large patient populations. Moving now to our financial results for the first quarter of our fiscal year. Net revenues for the quarter ended September 30, 2014 were 3.7 million compared to 3.6 million for the same period in 2013. The slight increase in revenues was due to an increase in sales of bio archive devices as we sold five devices in the current quarter compared to two in the same period in the prior year. This increase was offset by a decrease in sales of AXP disposables in Asia resulting from a delay in the full implementation of our automated AXP platform by one of our cord blood banking customers. Operating expenses for the quarter ended September 30, 2014 were 4.5 million compared to 3.7 million for the same period in 2013. The increase in operating expenses of 783,000 was primarily attributable to the development of our cell therapy clinical programs including cost associated with additional bench testing requested by the FDA for a pivotal IDE application treating CLI. Also contributing to the increase in operating expenses were legal costs associated with defending certain claims against our Res-Q product line. These cost increases were partially offset by the absence of legal and advisory fees associated with consummating the merger with TotipotentRX. Adjusted EBITDA loss was 2.7 million for the quarter ended September 30, 2014 compared to 2 million for the same period in the prior year. Net loss for the quarter ended September 30, 2014 was 3.3 million compared to 2.3 million for the same prior year period. The increase in the adjusted EBITDA loss of 716,000 and the increase in the net loss of 997,000 were due to our investments in developing and advancing our clinical programs including preparation of our IDE application to the FDA for our forthcoming pivotal trial treating CLI. We ended the first quarter with 10.7 million in cash compared to 14.8 million at the end of fiscal 2014. Regarding cash burn, our cost structure and cash outflows will largely be influenced by the development and advancement of our clinical programs as well as cost associated with planning for commercialization. We expect future clinical operating expenses were increased over historical levels as we commenced our CLI pivotal trial. As we approach this commencement of the trial we will provide further updates on our expectations of cost structure and cash expensive levels. Regarding future potential funding mechanisms we remain active in monitoring the capital markets and we’ll fortify our balance sheet when the conditions are optimal by considering all forms of financing including non-diluted capital, equity capital and debt structures. I’ll now turn the call back to Robin for his closing remarks.

[Robin Stracey:]

Thanks Dan. A few summary points before turning the call over for questions. Fiscal 2015 was a year of major change for us. We completed the merger of ThermoGenesis and Totipotent to create Cesca Therapeutics and set the new company on a trajectory that position after success in arenas for the substantially larger and our historical cord blood market. In doing so we establish the potential for value creation for our stockholders well beyond what may have been possible earlier. We develop what we believe to be a compelling strategy for the company a strategy that we continue to refine that includes robust clinical programs for Critical Limb Ischemia, acute myocardial infarction and bone marrow transplantation. As we reflect back on the last quarter the best of our 2015 fiscal year our base business in cord blood continues to perform in line with our expectations as we make strategic shift towards what we view as a tremendously exciting growth opportunity in therapeutics. As we’re on the cast for submitting our IDE application seeking FDA approval for our first major clinical trial, the pivotal Phase III trial treating CLI. It’s been a herculean effort on the part of Ken and his team to get at this point, but we feel very good about the quality of our trial design and look forward to beginning this study itself. With that I’d like to thank you for your attention and turn the call over to the operator who will open it up for questions.

[Operator:]

We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Jason Kolbert with Maxim Group. Please go ahead.

[Jason Kolbert:]

Hi guys. Rob and Ken thanks for the update. I have a couple of questions. I didn’t quite understand what is the [gingivitis] [ph] effect and I’m familiar with the company, but help me understand exactly what you’re referring to?

[Robin Stracey:]

It’s a good pick, because over the last couple of years we have started to see in clinical trial a rise amputation or limb salvage rates in the control arms and historically a late stage CLI patient has an amputation rate of around 60% in the U.S. We’re now seeing limb salvage rates being up in the 60% to 80% in studies but in the general population the limb salvage rates are still in the 40% to 60% rate. So there is something happening in blinded trials and one would be hope so as long as they can keep their limb I think they were treated, they will hold up on an amputation. And as Dr. Powell published immediately after the trial ends those patients proceed on the amputation very quickly. [Gingivitis] [ph] which I think had a very well designed study a Phase II CLI study with a gene insert product based off the same limb salvage rate in the control arm as in the treatment arm and had exceeded over 90% of the late stage patients kept their leg all the way through the study. So that's concerning to all of us, because it essentially means that you don’t have a control. It’s very hard to understand how to major this disease. So we went back and address two things, one, we’re taking the decision for amputating both in the control arm and the treatment arm out of the potential bias the patient may have or the physician may have and giving that over to adjudicated third-party who will have a pre-defined number of parameters and they will call the amputation rate based on those parameters, regardless of whether the amputation happens or not in the real world.

[Jason Kolbert:]

Okay. So I'll just stop -- do me a favor and just stop right there. I want to understand what that means. So if I’m a patient and I say, hey, my legs' fine, I can keep it, but the independent board kind of adjudicates and said in any other real world setting we would have amputated this leg therefore we’re going to call it and say that it’s amputated even though it’s not. I just want to make sure that that’s what you’re saying.

[Robin Stracey:]

That’s what I’m saying, yes. So it’s using regulatory…

[Jason Kolbert:]

And so my problem there is if we’re dealing with an AFS end point you got to help me with this, right. So, I mean I agree with you it's a major problem, if you having a controlled clinical trial setting, people were able to keep their limbs beyond the point that let’s say they’re healthy or it’s safe to do so. I guess that’s what you’re really saying, maybe an it’s an ulceration or maybe even gangrene and they are still insisting to keep the limbs.

[Robin Stracey:]

Correct. So I mean and I think this is the issue with the blinded trials because they think they’ve been treated and they continue with that hope and then at the end of the trial when they find out they weren’t treated they say okay, amputate me, because I am not going to get better.

[Jason Kolbert:]

So, no, I got it. Thank you. I mean that’s really interesting and we’re going to have to talk more about this. Because I think really understanding what kind of bias was seen in the Phase I trial that you guys ran in terms of the control group. What was the AFS like in that study? Because there wasn’t anything like this so why was your experience so different?

[Robin Stracey:]

Okay, so we didn’t have a control arm. We did a single arm open label study.

[Jason Kolbert:]

Okay, thank you. That answers that.

[Robin Stracey:]

Yes.

[Jason Kolbert:]

So I am just thinking a little bit about can you talk a little bit about what it’s going to take to actually start this trial? What are the next steps following the IND, enrolling the first patient and tell me a little bit about the investigator, he is clearly experienced in CLI and tell me a little bit about has the FDA kind of signed off on this adjudicated approach for the end point in the -- and boy I hate -- it gets so confusing when we call it a Phase III pivotal trial. I think of it as a well powered well designed Phase II/III trial that’s approvable under the IDE pathway.

[Robin Stracey:]

Right. It is confusing to try to use IND terms on an IDE where there is only a two page process. But I think your question Jason on the PIs background; well let me go to the FDA the blinded adjudicated question first. This was suggested by the FDA. We had extensive discussion with them about what has been observed in prior CLI trials, how to run a clean study in a very complicated disease and how to minimize as much bias as possible. And they came back and recommended this blinded adjudicated approach. And it is a more expensive approach but from an academic level it’s much cleaner. And the rules are followed and they’re interpreted on an unbiased basis. And then appointment of Dr. Powell his experienced as well, he has commented that he tried to do in other studies that weren’t stem cell related but had other therapies for CLI where they would do unblended arms like we had proposed in the active control that they also experienced significant bias in the other direction. So, with his input and our student committees and the FDA we really came to the level that this is the right way to run a good clean predictable trial.

[Jason Kolbert:]

So, I promise so I am going to -- these are my two last questions and I know there is other people that want to ask questions. Help me understand kind of just in broad strokes the thinking in terms of the powering assumptions because now the design of the trial has shifted. Does that put you in a situation where you’re now thinking you’d like to enroll a larger end value just to make sure that you’re going to achieve a delta? And what delta becomes approvable between active and control?

[Robin Stracey:]

So good question, the trial design it does change the subject number by roughly eight patients so we’re going from 216 to 224 patient subjects. We are staying with our 3

[Jason Kolbert:]

Got it. And my last question and this is where you kind of started out talking about 1271.15b CFR 21 and just help me understand in kind of layman's terms the fact that this is nothing external added point of care processing, that kind of really solidifies your position in this space and that homologous doesn’t really come into it if we’re taking marrow cells and putting them in the leg that's still consider homologous use. So you feel 1271 really strengthens your position?

[Robin Stracey:]

So two different points to your question there. The first one is the homologous use which we are not and that’s been confirmed by FDA which is why we have to go down the IDE path. But the difference is whether our hospital our customer is required to implement good tissue practices which in an SEC term would be like putting Sarbanes Oxley on top of a hospital. Under using our technology and this new rule, proposed rule, they will not be required to be GTP compliant. However, if they took an autologous cell regardless of whether it was homologous or non-homologous and added something to it beyond rinsing, washing, cutting, it’s proposed through this rule that the hospital would then need to be GTP compliant. And so there will be a barrier to the administration of these technologies with that kind of a result and we stay outside of that.

[Jason Kolbert:]

And you are not -- are you centrifuging I mean the one question in all of this is where does centrifuging fall?

[Robin Stracey:]

Yes, I mean centrifuging and running bone marrow transplant units back to the lab to change it back and then bringing them back in, all of these questions are yet to be answered. I have been pulled unofficially that minimally manipulated draft guidance will be issued before the holidays to better define that.

[Operator:]

The next question is from Ren Benjamin with H.C. Wainwright. Please go ahead.

[Ren Benjamin:]

Good afternoon and thanks for taking the questions. Just to build on Jason’s, you mentioned I guess to starting up with the FDA guidelines you mentioned that by the end of the year we might see the draft guidance, when does that drafts guidance becoming officially accepted or permanent guidance. And is there a chance or possible that your designation as an IDE could change?

[Robin Stracey:]

The first part was specific to the hospital exemption that is already the draft guidance is already issued. The public comment period ends I think December 14th or 16th and FDA’s conversion and use of those public comments to changing it from draft guidance to a publish guidance document I don’t know that, that’s I’m speculating, 18 months or 2 years Mahendra is saying. So I think that’s sort of the time line we’re looking and I don’t believe we have rechecked this with as many experts as we can that we’re confident we remain an IDE regardless and they've come back and said yes. That is the ruling and that’s what we’ll stay under.

[Ren Benjamin:]

Okay, all right, great. And then just going to the first three trial, I also want to just dig a little bit deeper into this independent group, can you talk a little about -- maybe a little bit more color on what the pre-defined criteria is and at what point during the process, is at every month, every two weeks those -- the independent group meet and take a look at these criteria. And would it make sense to talk with the regulatory agency about securing an SPA given this more novel type of trial design.

[Robin Stracey:]

Right. So let start with that part and move backwards, the SPA approach and this was brought up in our pre-submission meeting, [indiscernible] went down that path and I think they had an excellent trial design in their Phase I and Phase II. And I have heard from principle investigators and I’m not privy to their study design or those discussions. But I heard from principal investigators that potentially the SPA approach boxes them in a bit. So I would say with having the discussion with the FDA in the pre-submission meeting and then putting it back to us in their written comments that they recommended this blinded adjudicated committee which is becoming much more standard today even in oncology studies, I feel we’re on very solid ground that that is a good principled approach they will accept. Second of all too, when does the blinded committee get involved and what characteristics do they use to call an amputation. Our protocol calls for them to be involved on the enrollment so they determine the no option of the patient. And they then follow the patient only through cursory looks until; A, either the interim analysis was in data 50% of the patients are 100% completed or done; or B, a patient is recommended for an amputation by the treating physician. And at that point they will look at the data on that particular patient. If the patient hasn’t triggered either one of those look-ins then they will evaluate it and make the call at the end of the study.

[Ren Benjamin:]

So let me take the flip side of Jason’s argument which was if the adjudication group or committee comes back and says oh no you amputated too late, it should have been amputated I don’t know a month earlier. The flip side of that argument is you should not have amputated at all but now you’ve gone through an amputation. Is that something that could happen? Or do you need the buying of the independent group before the amputation could occur?

[Robin Stracey:]

No. So in the discussion with the FDA, it was very clear that the blinded committee does not practice medicine on patient. The treating physician always has the final call. However, our protocol is written such that unless there is a septic condition or something that drive an immediate need for amputation. There will be time for the blinded committee to receive the data from the clinical investigator before whether that’s 24 hours or 48 hours before the amputation proceeds. And there would be a ruling from the committee that the clinical investigator could evaluate.

[Ren Benjamin:]

Okay. So they could evaluate however they don’t have to adhere to that ruling at all?

[Robin Stracey:]

No. And if they do amputate and it’s considered a non-amputation ruling by the adjudicated committee then we use a regression analysis and there is a whole statistical process around how to fill in the rest of the missing data on an amputated patient that should not have been.

[Ren Benjamin:]

Okay. Do you have, I mean, I am assuming that when the FDA suggested this type of an approach that maybe they had seen this before. Has this even been tried before in any other trials? And do you know what the discordance rate could be?

[Robin Stracey:]

Yes. It used very often in oncology studies. And so they do well understand it. We have hired a well-established experienced team out of mass general who run these for oncology program. They’ve appointed three well known vascular surgeons to be the adjudicators. And so it was easy for us to design and implement with their expertise.

[Ren Benjamin:]

Okay. And just two other questions, one regarding the active control, and I just want to make sure I heard it right. In this trial you will be running with an active control?

[Robin Stracey:]

No, we will be running with a placebo double blinded so we switched from that. And the reason we switched which only impacted the number of subjects by eight. We changed because of the retention rate. And the advisory panels of ours felt that our dropout rate would be pretty high in an open label active control and we thought that was something that we should try to avoid even if it slows down enrollment of this.

[Ren Benjamin:]

Okay. And so when we’re talking about the placebo will you be injecting unisolated cells or just saline or how would you be doing so?

[Robin Stracey:]

Yes. It’s a full bone marrow aspiration. So whole process and the patient will receive and I don’t want to go too far out in this limb because we’re waiting for FDA feedback on this but the patient will receive a combination of red solution of some type with saline.

[Ren Benjamin:]

Okay. And then just one final question the Indian regulatory timeline, you mentioned of course that the authorities are getting back on line in terms of approving clinical trials and become a worldwide leader again. But do you have a sense as to how long once you filed this review could take?

[Robin Stracey:]

Well, we have very encouraging news out of India. The new government there has streamlined the process significantly and we’re seeing trials now being approved in four to six months. And their goal is to get to three. So, that in and of itself is a huge change from the prior governments' process. So I think we’re looking at about the same amount four to six months.

[Operator:]

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Robin Stracey for any closing remarks.

[Robin Stracey:]

Thank you. Thank you all once again for joining us today and for your continued interest and support of the company. Ken, Dan and I look forward to talking with you further and keeping you posted on our progress as we build a great and valuable company together. So with that I wish you all a very good evening and thanks again.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.