Q3 2019 Earnings Call
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I'd now like to hand, the conference over to your Speaker today, Karen Hannity director of corporate Communications and Investor Relations. Thank you. Please go ahead Madame.
You did mentioned I guaranteed annuity director of corporate Communications and Investor Relations for Athersys. Thank you for joining today's call.
If you did not have a copy of the press release issued at the close of market. It is available on the Athersys website Athersys Dot com.
Dr. Gil Van Bokkelen, our chairman and Chief Executive Officer, and Laura Campbell Senior Vice President Finance will host today's call.
The call it's expected to last approximately 30 minutes and what has to be audio will be available two hours. After cost conclusion on our website under the events section the access information for the replay is daqo in today's press release.
Any remarks, let me 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 Form 10-Q , 10-K, and other public ASCII filings.
We anticipate that subsequent events and developments may cause our outlook to change while we may elect to update these forward looking statement at some point in the future, we specifically disclaim any obligation to do so.
For the benefit of those who maybe listening to the replay. This call was held and recorded on November six 2019.
Since then we may have made announcements related to the topics discussed. So please reference our most recent press releases and I T SEC filings.
With that I'd like to turn the call over to Laura Campbell Laura.
Thank you Karen.
Good afternoon, and welcome everyone I'm, Laura Campbell Senior Vice President Finance at Apus Oh.
Oh really briefly review our third quarter 2019 financial results and then turn the call over to go for a corporate update followed by a question and answer period.
[noise] during the third quarter 2019 revenues were negative 400000, compared to two point Threemillion and third quarter 2018.
And related primarily to our collaboration with Healios in Japan.
The reduction in 2019 was impacted by our evaluation of variables consideration under the Healios product supply arrangement and changes that occurred during the quarter resulted in a decrease to the transaction price.
Overall, our revenues are derived from license fees other contract revenue manufacturing related services and grant revenue.
Our research and development expenses decreased to 8.9 million for the third quarter 2019 from 9.5 million for the <unk> comparable period in 2018.
The 600000 dollar decrease is associated with reductions in clinical trials Hawk process development costs and license fees.
Partially offset by increases and personnel costs outside services stock compensation expense and consulting fees.
Included in our clinical expenses, our costs associated with manufacturing services that we provide the healios, which are invoice to healios in accordance with our contractual arrangements.
General and administrative expenses increased to 3 million for the quarter ended September Thirtyth 2019 compare to $2.6 million for the same period 2018.
The 400000 dollar increase was due to increased legal and professional fees.
Outside services and stock compensation costs.
We incurred a net loss for the three months ended September Thirtyth 2019 of $12 million compared to a net loss of $9.7 million for the 2018 period.
Our net loss per share was eight cents per share for the third quarter 2019.
During the three months ended September Thirtyth 2019, we used to $8.2 million that net cash from operating activities.
Compared to net cash use of $7.5 million in the third quarter 2018.
As of September Thirtyth 2019, we had 40.4 million in cash and cash equivalents compared to 51.1 million at December 31st 2018.
With that I'd like to turn the call over to go for corporate update Gill.
Thanks, Laura Thanks also to everyone listening in today.
During the call today I will first provide a brief operational update which will be followed by a strategic overview related to our portfolio development priorities partnering objectives and preparation for commercialization.
I'll then address a few shareholder questions followed by the analyst Q1 I.
Operationally, we continue to maintain a focus on our most important clinical development priorities, including our ongoing support of Healios and their treasure trial for treating ischemic stroke, leading cause of death and disability in Japan, and the one bridge trial for treating pneumonia and do start.
While we're not actively engaged in the operational oversight or conduct to these trials, we do provide input and regulatory support where appropriate.
Our most important role however has been to oversee manufacturing clinical material for these studies overseeing production of material for the completion of the studies at the designated contract manufacturing organizations were Cmos that we work with.
As we've described in the past we work with several CMO organizations that specific sites in the U.S. Europe and Asia.
As noted previously the manufacturing runs for trader were completed earlier this year and have now been completed for the one bridge study as well.
As we in Helios had discussed previously these gimmick stroke program in Japan has received sakigake designation from PMD yet.
Which provides the opportunity for expedited regulatory review under the accelerated development framework for eligible regenerative medicine therapies in Japan.
We've also received fast track and Ormat designations for our store program here in the U.S.
And our ongoing phase three clinical trial is being conducted under special protocol assessment.
As a result of the fast track and Sakigake designation.
These programs are eligible for both rolling submission and priority review, which are specifically designed to make the regulatory review process and path to approval faster and more efficient.
Earlier this year, we retained a leading CRM to assist us in our efforts to prepare the information and materials for this process.
Which will ultimately support regulatory submission efforts for Japan, the U.S. Europe and other relevant jurisdictions.
Several months ago, we held to kick off meeting here in Cleveland with members of the Helios regulatory team and the CRL to initiate the planning and commencement of the process.
These efforts have continued to progress over the most recent quarter.
In parallel with this work we're focused on ongoing activities in support of our phase three clinical trial for stroke referred to as Masters too.
We continue to make progress in the conduct of the trial, while we work with our CMO network to complete manufacturing operations for the study.
As we've described previously this is a randomized double blind placebo controlled pivotal study will enroll 300 patients that more than 50, leading stroke centers in North America, Europe , and other international locations and it represents our most important internal clinical development priority.
While enrollment at the operational sites has been very good our current focus is on bringing additional sites online and we have done substantial work over the past few months and supported that objective.
While healios focus is on completing the one bridge and Treasurer studies in Japan, and we focused on advancing and completing masters too.
We're pleased to announce that the one year follow up visits for our exploratory our clinical trial referred to as the must hard study have been conducted.
The primary results from this double blind randomized placebo controlled trial, which were presented at the annual American Thoracic Society meeting in May.
Demonstrated a consistent safety and Tolerability profile and the results suggest meaningful improvements in mortality ventilator free days and I see you free days among the patients treated with Multistem at the primary clinical assessment approximately one month after treatment.
We anticipate having to one year results in the form of the final clinical study report around the end of the year. We're early in 2020.
In advance of that however, we have had the opportunity to preliminarily assess certain metrics, which appear to provide strong support that multistem administration to patients in the trial correlates with meaningful improvement in the one year quality of life of valuation.
As evidenced by patient reported assessments using DQ five <expletive> .
This improvement in quality of life outcomes appears to be particularly robust among more severely ill arts patients, where we had previously also observed the most meaningful differences in mortality ventilator free days and I see you free days at the primary clinical assessment.
We believe this provides additional evidence that we can not only impact clinically relevant outcomes, but also impact things that matter to the patients and their families including their quality of life in the aftermath of art.
Once we have the final results and completed our corresponding analysis, we will provide a further update.
But in the meantime, we're grateful to the patients and families that participated in the study and once again to the FDA for their bestowing fast track designation on this program, which represents the third such designation that we have received.
We have already initiated planning for the next phase of development and we'll provide more specific information once we're further along in that process.
In the meantime, we're also focused on completing preparations for our planned phase two study in trial. The matrix one trial, which is being supported by a grant from amtech through the department of defense.
As we've described previously this trial will be conducted in collaboration with one of the leading tier one trauma centers here in the U.S. at the Herman Memorial Trauma Center in Houston, Texas.
Although our preparations for the study of taking a bit longer than we had planned as we have engaged unhelpful discussions with the FDA and others on how best to approach certain issues and proceed.
We believe that we're now nearing the end of the process and are excited about getting the study underway as soon as possible.
In parallel we continue to advance other critical care programs, including additional preclinical work in the hemorrhagic stroke area, where we believe that multistem can provide a meaningful benefit.
This represents another area of significant unmet clinical need and also a substantial potential commercial opportunity.
As it relates to the current status of our phase two am I study. Unfortunately as we've described previously participating sites have struggled with enrollment in this trial, primarily due to changes in standard of care during the past several years and while we have implemented a number of things in an effort to address this we've been unable to do.
So.
Accordingly, we have made the decision to suspend further enrollment in the trial and complete the follow up visits for the patients already enrolled.
We anticipate completing those follow up visits in the first half of next year and providing further update at that time.
While we remain confident that multistem has relevance in the cardiovascular area. We believe it is more appropriate to focus our efforts on the other areas we are actively pursuing.
On the business development front, we're engaged in discussions with several companies exploring a range of opportunities and we are particularly focused on potential alliances for development and commercialization of our critical care portfolio portfolio programs in Europe .
We are specifically focused on companies that we view is logical and highly qualified partners for commercialization in the critical care segment.
And that we believe can help us maximize the impact and value of these programs.
We also continue to explore partnering and collaboration opportunities in other relevant territories, including here in North America and other regions of interest.
However, while we explore these possibilities we continue our preparations for potential independent commercialization here in the U.S.
There are several reasons why we believe this strategy makes sense.
First by preparing for independent commercialization in the U.S., we strengthened our position in partnering discussions by helping us by establishing a greater depth of knowledge about the critical care market.
It also helps us better assess what we should be looking foreign expecting from potential partners. If we decided that was the most appropriate way forward.
Second by analyzing the clinical landscape for the critical care indications we are focused on.
Development better understanding about how to effectively approach the critical care market in commercialization.
Third it helps us map out and precisely define our domestic logistics capability requirements and identify areas, where there are potential operational efficiencies.
Excuse me.
As an example of this during our work over the past couple of years, we've developed a deeper understanding of key aspects of the critical care market and where potential clinical and commercialization synergies may exist.
For example, we understand the geographic distribution of the approximately 6200 hospitals across the United States and have a good understanding of stroke centers certifications and corresponding institutional capabilities.
We know all the tier one comprehensive stroke centers, where they're located and already have relationships with many it.
We also know the top tier two certified stroke centers and where they're located.
Collectively these institutions treated disproportionate share of the stroke patients that we believe might benefit most from treatment with multistem.
And we know there also geographically concentrated in specific areas.
Furthermore, we have developed an understanding as to where there are potential clinical and geographic synergies, which with the other critical care indications we're focused on.
Including institutional or geographical localization of advanced stroke centers with leading promise centers and the most advanced pulmonary critical care centers.
Based on this work, we're confident that we're well positioned to efficiently develop an effective marketing and distribution capability to serve the critical care market in the indications that we're prioritizing when the time comps.
It's worth reiterating that we're focused on these critical care indications for several very specific reasons.
First years of evidence from clinical and preclinical research conducted in collaboration with outside independent key opinion leaders and translational researchers tells US that this is where our technology appears to have some of the greatest therapeutic potential.
Second these critical care indications represent some of the most significant areas of unmet medical need. We're standard of care is limited we're simply unavailable to many patients cost of care is typically very high and the adverse impact on patient quality of life tends to be greatest.
By delivering more effective treatment options in these areas. We believe that we can not only improve clinical outcomes and patient quality of life.
We can deliver substantial value to patients their families and the healthcare system as a whole.
And in the process create substantial value for our shareholders.
It's also worth noting that the indications we are focused on don't just have an impact on patient quality of life. They frequently impact family quality of life by forcing family members to become caregivers at home where by putting them in a position where they may have to financially cover the institutional care costs of an individual that has meaningful disability.
Third clinical development for these types of indications can be efficiently conducted.
Whereas clinical trials for certain conditions may require very large studies involving thousands of patients and may further require patient to participate in the clinical trial for several years in order to determine a treatment effect.
Based on our prior results. We believe we can conduct moderately sized highly efficient cost effective studies.
With relatively rapid assessments regarding whether a therapeutic benefit as being achieved.
Our work in his scheming stroking Hearts irrelevant examples of this with moderately sized trials and primary clinical assessments being conducted at 90 in 28 days, respectively with one year follow ups.
In short by focusing on relevant critical care indications first we believe we optimize our likelihood of clinical and ultimately commercialization success.
Reduced development costs and maximize our clinical development efficiency.
In terms of commercialization in Europe . However, we believe it makes sense for us to work with a well established an experienced commercialization partner because while the you has a centralized regulatory system.
Market access marketing and distribution in Europe are more complicated and should be approaching a country by country basis.
Establishing an alliance with the right partner is a top priority for us and for our shareholders and we believe that represents a major step towards the creation of substantial shareholder value.
In the meantime, we're committed to being financially efficient to maintaining a stable financial position as Lord described.
And as we once again illustrated this quarter.
By proactively putting in place another equity facility to replace the current facility as described in our quarterly filing we ensure access to more moderate amounts of capital in a cost effective and efficient manner.
While we continue to focus on achieving key clinical development in partnering milestones.
In summary, we are committed to doing all the things we need to do over time to ultimately establish athersys is a leading commercial biotechnology and regenerative medicine company.
This will include adding new members to the leadership team and organization over time.
Further strengthening our capabilities and taking other actions that we in the board believed to be appropriate.
And with that I'm happy to address several questions from shareholders before we open it up for additional QNX.
One question, we get from a lot of shareholders relates to the projected timeline for the ongoing trials in Japan.
We refer people to Healios public statements and filings on this however, we also note that they've stated publicly that they are focused on completing enrollment of the treasure trial around mid next year and we believe they remain committed to achieving that goal and to finishing the study as soon as possible.
Regarding the one bitch trial recall that it is this is a 30 patient study focused on ammonia and do start.
Even though the initiated the trial in April which is a tail end of last year's flu season. They have made very good progress so far.
We believe that their enrollment rate over the fall winter and spring in Japan will depend somewhat on the severity of this year's flu season, given that the flu is a common causes pneumonia.
And directly impacts the occurrence of art.
We know the Healios is placing a high priority on the efficient completion of enrollment for this trial.
Another question, we frequently get relates to the estimated timetable for masters too.
As we've stated previously our goal is to complete enrollment of the trial by around the end of next year.
We believe our activities over the next few months, we'll have a big impact on our ability to successfully achieved this goal and we will provide further updates as appropriate.
Some shareholders have asked about the number in location of sites and masters two or how many patients enrolled.
As a standard practice in the industry and as we've stated previously we do not disclose this type of information while a trial is ongoing.
We've seen unfortunate cases in the past where people tried to contact study sites investigators were staff at sites to obtain sensitive information about the trial.
To protect the integrity of the study the patients and their families medical staff involved in the trial as well as the company and our shareholders. We minimize the detailed provide while laying out a clear high level plan for what we're committed to doing.
Finally, we frequently good questions about the commercial potential for multi stem in the core critical care indications. We're currently focused on.
People ask about the estimated market size and what that might mean from a shareholder perspective.
These are actually pretty complicated questions and the answers depend on a number of factors and assumptions, but here's how we think about this issue.
First we have a good understanding of the estimated annual incidents for scheming stroke, Ards trauma, and hemorrhagic stroke and the relevant geographies, we're focused on including North America, Europe and Japan.
Well these critical care indications aren't the only areas, where we believe multistem, maybe relevant and aren't the only things. We are focused on we can use them as relevant examples to illustrate a couple of key points.
We know that stroke affects about 17 million people globally, each year and it's impacted by the rapid global expansion of the elderly segment of the population, which is more susceptible to stroke and other aging related diseases and conditions.
Let's assume that the core addressable market in North America, Europe , and Japan is approximately 1 million patients per year.
Which actually represents a minority of the annual stroke incidents.
A number of years ago, leading health care economists and MD Phd from you CSF in California assess the value in pricing for thrombolytic and concluded that pricing of approximately $46000 per dose would be fair and makes sense using $2004.
Based on our analysis using results from Masters one other relevant data, we believe the clinical impact and value of treatment with Multistem would deliver substantially greater value to the health care system and could justify substantially higher price point.
For the sake of discussion, let's use this as a reference point.
To be totally clear I am not providing guidance on a reimbursement strategy, we're indicating what I think the appropriate price point for multistem might be I am simply using this for the purposes illustrating a very important point.
At an estimated $46000 per treatment and addressable market of 500000 to 1 million patients per year would represent a potential annual market opportunity of somewhere between 23 billion and $46 billion.
Logically this makes sense given that is scheming stroke is the leading causes serious disability in many developed countries in the world and the leading cause of death.
It also carries a huge cost as well as quality of life and social Bert.
As I've described previously the average cost per full time institutional care for stroke patients that are substantially disable is now more than $100000 per year and this does not include treatment or hospitalization cost rehabilitative therapy cost loss earnings potential or quality of life impact.
The similar analysis can be ducted can be conducted for the other indications we are focused on.
For example, the annual incidents for our it's across these core geographic markets is estimated at approximately 500000 patients per year.
The addressable market is estimated at only half. This number say 250000 patients for year end use the same price point, you would translate to an annual potential market opportunity of more than $11 billion per year.
Trauma represents another meaningful opportunity where current standard of care is limited and in the U.S. and Europe trauma from vehicular transfer late transportation related injuries and falls alone resulted in the hospitalization of more than 3 million people year.
Most people don't realize that in the US trauma represents the leading cause of death among individuals up to the Asia 45.
And as a leading cause of disability, both among young people in the elderly alike.
It also represents another massive opportunity to improve clinical care and patient quality of life.
The point on making is simply this.
These are each very large areas of unmet medical need and corresponding market opportunities and we believe we're well positioned to address.
We are committed to advancing our portfolio programs in these areas because we believe we can meaningfully help patients and generate substantial value for our shareholders in the process.
And with that we'd like to open it up for a few more questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound or hash key please standby, while we compile the Q and a roster.
Again, if you would like to ask a question press star one on your telephone.
Your first question comes from the line, Jason Kolbert with Dawson James. Please go ahead. Your line is open.
Yes, I don't know if you realize that but for the first time I'm hearing you talking really aggressively with an eye towards commercialization and I love the notion.
That you feel like you could market. This yourself in the U.S. So can you talk just a little bit about more about what that means you talked about the kind of the size of the U.S. market.
And how that impacts partnering discussions.
Obviously, I'd love to talk about trial enrollment and get specific on us in Japan timelines, but I think you've done that already so I'd like to think a little bit more about what you're going to do over the next year as you work through your cash runway with an eye towards commercialization or be day, because I see the folks.
As of the company shifting thanks.
Yes, Thanks, Jason So let me talk about the BD front first we're spending a lot of time on this right now in fact, BJ, they're going to be back in Europe next week for a series of meetings in active discussions that we're engaged in with a few different companies that we believe could make really good partners in terms of the things that we're focused on.
So we'll provide updates on that front, but we do believe that business development activities going to provide a huge catalytic impact on the company as we enter into additional partnerships and it strengthens us financially and also gives us other capabilities at the partner can bring to bear with respect to commercialization in areas like Europe or others.
Jurisdictions that we might be focused on.
In terms of commercialization in North America, I know, it's tempting for a lot of people to say Hey, just go find a partner, but as I talked about at our Investor day event in May.
I've talked about at various.
Events and presentations since then.
The more we learned that more we become convinced that commercialization in the United States is very real possibility for us and the good news is that we have a very experienced board of directors guys that have overseeing commercialization activities at major pharma companies and other organizations that they've been part of and they can provide very valuable perspective on this.
As we think about commercialization.
You have to spend a lot of time thinking about the market structure that you are trying to.
You are trying to attack if you will.
The nice thing about the critical care market. So first of all the indications that we're currently focused on concentrate on a common hospital environment. These are patients that are very sick. They are typically in the IC, you and they're being treated in intensive care environments for things like stroke trauma cards hemorrhagic stroke.
Other conditions that actually fall into this into this category as well.
Geographically one of the things that we know is is that these.
These treatment centers are distributed across approximately 40 core geographic regions in the United States.
Now if I actually ask this question of people, both institutions and analysts and other people how big of in marketing and distribution capability. You think we would need to attack an indication like stroke, if the core leading institutions.
Our located in approximately 40 geographic regions across the west, which not surprisingly are located in the more densely populated regions of the country and they see a disproportionate number of the stroke patients that are out there that we think fall into our sweet spot. If you will terms of.
Patient that could really benefit from treat with multistem.
And most people come up with a number that somewhere between 25 and 50 people.
And I think thats, a very reasonable and realistic range. The reality of it is that there are additional synergies in terms of what we think we could realize looking at the other critical care indications that we're focused on this scheme extra patients and hemorrhagic stroke patients are treated by the same clinical institutions. The same types of teams in the very same part of the hospital.
Trauma centers in pulmonary critical care centers tend to be co located with those types of institutions again in the same geographic areas and in many cases in the very same institutions.
And the critical care capabilities in each of these areas or a range like a pyramid you've got the top tier institutions at the very top of the pyramid.
I see a disproportionate share of the patients for each of those indication areas.
And again they tend to be highly concentrated so as we have looked at this and thought about it it really generates the benefits that I mentioned in my comments not only does that help us better understand what types of questions to ask among companies that were in discussions with that would like to be our partner in terms of understanding what are their capability.
Yes, and distribution, but distribution capabilities, if you will.
But it also helps us down that path of independent commercialization. We've always said adjacent you've heard me talk about this and you and I had numerous conversations.
About this this subject over time, we are committed to becoming one of the leading companies in the world in the bio technology area and specifically in the regenerative medicine area. If were successful in any of the indications that I'm talking about today, we can achieved that goal.
There are no promises they are no guarantees there's no assurance that we're going to be able to to accomplish that.
However, we're doing all the things that we think we need to be doing to make that goal come true.
So.
I appreciate the questions and and hopefully I've effectively address.
Yes, Thank you Gail and I appreciate your traveling a lot. So thank you so much for taking time out the kind of presented our conference. It was great thing. Thanks, Yes. It was great being there Jason Thanks again for the invitation.
Again, if he would like to ask a question press star one on your telephone.
Next question comes from the line of Chad Messer with Needham and company. Please go ahead. Your line is open.
Great Good evening and thanks for taking my question.
Yes.
In your view on the sort of regulatory reimbursement environment in Europe . So thats one of your your focuses for partnering obviously have a lot of experience in Japan and things are quite favorable there.
Discussed but.
My topline impression of Europe is it.
Maybe it's a little tougher, but I'm interested in your opinion on that.
How that affects the way you approach looking for a partner over there.
Yes, that's a great question. So Europe is complicated by virtue of the fact that it's not one big common market. The way people tend to think about the EU. It's actually 30 different jurisdictions. That's if you include places like Switzerland in Norway, which most people kind of mental include in the EU, if even if they're not actually you members.
And of course, where you put the UK.
Let's just considered as part of the Europe European landscape as a whole even if it's not going to be part of the EU for very much water.
For the point is that regulatory from a regulatory perspective in Europe , It's one comment central framework, but from a market access reimbursement and logistical perspective, it's 30 different countries that kind of a big thing to bite off for a company.
In that type of the complicated landscape and Thats why we concluded sometime ago that we really need to work with a partner that already has those types of capabilities in place, particularly in the hospital environment than ideally in the critical care environment that we're focused on by working with somebody that already knows the landscape. It is already gotten products approved through that type.
Of complex.
Process, if you will and already has the distribution capabilities and clinical capabilities and relationships with the key institutions across Europe , we would put ourselves in a much better position and frankly in a much better positioned to not only realize value, but deliver value to our shareholders as well.
So that's why we're focused on that you touched on another point related to reimbursement.
So you're absolutely right in fact, Japan has in many ways led the way for reimbursement for regenerative medicine therapies that are being approved under their new accelerated regulatory framework and we've seen a number of products that have gotten reimbursement rates between a $100000 at $150000 per patient.
And they're doing that intentionally because they want Japan to be a destination of choice a priority destination for development and commercialization in fact, the sakigake designation, specifically says you get that priority designation provided your intention is to actually watch product in Japan before anywhere else.
So it's a very big care at that Theyre offering up to try and incentivize people to focus on development in Japan. The reasons for that are pretty obvious for long time, Japan experienced something called the drug labs, where innovative medicines might be developed here in the United States It states or other parts of the world, but they would only make their way over to Japan five.
Two years later I mean, there was literally a five year on average gap between innovative medicines being introduced in the US and then there corresponding introduction in Japan.
Well, thanks to the innovative regulatory framework that was that was established in Japan over the past few years under the fantastic leadership of Docker condo, who recently retired as they had a PMD yet.
He he basically put in place state system of initiatives that has eliminated that reflect and now for many drugs, they're being introduced in Japan, either about the same time or approximately commensurate with their introduction in the United States or other parts of the world and I've already talked about the reimbursement piece of it so I think thats very attractive.
The reimbursement landscape in Europe is complicated because every country does their own thing.
We have a very clear Pan plan for how we want to approach reimbursement here in the United States and actually there was a fantastic hurdle. The article there was written just a couple of days ago on in the Wall Street Journal that talked about the use of healthcare economic metrics and the role that Icer and other institutions are playing in a value.
Waiting the value that innovative therapies can bring to the healthcare market.
Now I wouldn't say that I agree with everything I sure does or how they do it in fact I've got a meaningful difference of opinion on a number different fronts, but I think that article and I encourage everybody to read it.
Actually explains an understandable terms some of the concepts that they talk about like for example, how do you value a quality adjusted life here, how do you value a year of good health for patients that are effectively treated with an innovative medicines.
And there's been a lot of evolution in the thinking on this that has taken place over the past decade, even a little bit beyond that these days healthcare economists, including the folks that icer.
Placed the value of about $150000 on what they refer to as a quality.
And I think the point here is that we've done a not a lot of analysis already on what we believe the value of Multistem is and just based on the data that we generated from the Masters. One study, we can demonstrate very substantial impact and value being delivered to patients in the healthcare system as a whole.
And I think that that puts us in a very strong position from a reimbursement perspective.
But one of the things that we want people to understand is you have to walk the line between pricing maximum pricing maximization and value delivery to the healthcare system as a whole we don't live in an era of completely unlimited healthcare resources anymore. So we believe that it is incumbent on companies like us to.
Make a compelling value argument for the innovative therapies that we're developing and ultimately delivering into the clinical landscape. The good news is is that we think we're going to be able to make that argument with multi stem in space and I think that that is a and we intend to price. This in a way where we think it will drive rapid uptick that.
That is very very key.
So hopefully I've I've addressed the points.
You asked about jab if you have any other questions were happy to address.
No that's that was very helpful.
Congrats on all the great progress.
Thanks, a lot I appreciate it.
Your next question comes from the line Kyle files with Dougherty. Please go ahead. Your line is open.
Nick Thanks, Rollup that here.
And.
Just one quick question I apologize ahead of time, if you've already kind of address has just been jumping between calls.
Did appreciate kind of your comments around the synergies of kind of the same call points. If you will evolve the key opportunities, which even one of those would be I think.
A massive Tam.
So given the positive signals in the data for multi stand in the compelling value proposition that seafood command can you kind of speak to the level of interest you're receiving from potential partners in geographies outside the us.
Outside of Japan can you sort of update here thats on how you're thinking about other business partners.
Yes, so great question, it's great to heavy on the call Kyle and I know you had to join Lake is yet another activity that you were focused on but we appreciate you joining in and and asking a question.
So.
We are actively evaluating opportunities in multiple different dimensions, right now and that includes multiple different geography. So we'll we'll refer to Europe is basically being a primary geographic focus for us and it's Bob just understand why I mean, Europe . If you think about it ballistic Lee it represents perhaps one of the largest healthcare markets in the world without question and.
And there are the good news is is that there are a number of qualified entities out there that understand that landscape, particularly in the hospital segment in the critical care segment that we're focused on that we think could make for highly qualified partners, where we can work together now. The interesting thing is is that these companies also look at us in terms of what we're doing our depth of expertise.
Not only as it relates to the product itself, but as it relates to things like process development and manufacturing and other things that are central to this and they want to work with us it traditionally a lot of relationships.
Particularly among some of the bigger companies as they kind of view it as a hand up right. We give it to them and then they take it from there and then they run with it and then we just sit back and cash cash objects from time to time. Those are subtypes of relationships that were interested in nor are we interested in relationships that focus on a specific series of kind of one off transactions and we're really focused.
On patients that understand the potential impact of multi stem across the critical care spectrum and that are very excited by that and want to pursue it aggressively with us in the context of understanding the synergies and efficiencies that also exist in Europe by the way because a lot of the dynamics that I referred to in the United States also exists in Europe , you have you see it.
Tendency to have the critical care institutions and the.
The leading stroke centers and others co locating in the highly populated more densely populated areas there as well, but we just don't know that landscape. We we know the clinical institutions them at the leading stroke centers in Europe . If you will but we've never been through the process of thinking about okay. How are we going to manage reimbursement in 30 different territories or 30 different countries and.
Europe .
In contrast to what we would need to do here in the United States or what Healios would need to do.
With our support in Japan, Japan is probably the best possible location, because they have a centralized system and it basically it's one point of entry and then once your reimbursement rate is established everybody accepts it without question and it's embraced nationally by all the different payer groups, which is a reflection of the national healthcare system that they have there I don't think that approach would work here.
For for a lot of different reasons, but the point is that we have a very good strategy and we're spending a lot of time and effort on our medical affairs and related activities working with outside independent firms that have deep expertise in this area preparing for for those activities building, our case evaluating our data and making sure. We're in a physician to really make sure that.
We end up in the right spot at the end of the debt.
We're also and we have done work in Europe looking at this as well, but I'm I'm convinced that we're going to be in a very good position both in Europe and in the United States and on the other markets that we're focused on that you asked about some of the other geographies, we're still looking at China, but China and in fact, we've had a number of companies that have approach us since we made the decision to do.
Continue the dialogue with Healios about the option that they had to to pursue China. We've been approached by a number of leading Chinese companies. The reality of it is though is that China is still a highly uncertain and chaotic environment.
And it's one of those things that until that gets resolved is going to be difficult to make any definitive decisions about how we want to approach that.
The good news is is that we have other dimensions of opportunity, which I'm not going to go into today, we're actively exploring it and that had been evaluating and discussions and negotiations with other edits and so I feel very good about the physician were end I also see other dimensions of opportunity that may be of interest.
Organizations like the department of defense or other things based on work that we've done in collaboration with outside groups. So.
I feel very good about where we're at I understand that people arent patient they want us to get it all done as soon as possible. We're focused on that we get lots of questions and in fact, Karen feels a lot of question lot of inquiries from people to call in and say where are we what's going on there any news that we can announced this week.
We I get it but the reality of it is that we're trying to we've committed ourselves to completing a marathon we're deep into the race I feel good about where we're at and we're excited about we're going to end up.
And I think that that we're getting closer and closer to the finish line.
So I don't know if that effectively answered your question, but I'm happy to happy to answer any other comments or questions. You may want opera now that that's helpful. I appreciate that I'll jump back in queue here. Thanks for the updates.
Okay. Thanks, Scott.
Thank you that concludes our QNX session and now I'd like to turn it over to Gil van Bokkelen for closing comments.
Well once again I'd just like to thank everybody for participating in the call today I know that Theres a bunch people dial then there's a bunch people listening to the webcast. We appreciate your taking the time to hear about our progress and and listen to a talk about where we're going and how we intend to get there. It means a lot to us. So thanks again for your time and we'll update you again soon.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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