Q4 2019 Earnings Call
This time, all participants are in they listen only mode.
After the speaker presentation, there will be a question and answer session.
I ask the question during the session you do need to press star one on your telephone.
Please be advised that today's conference is being recorded and if you need any further assistance. Please press star zero.
I'd now like they had the conference over to Karen and good evening. Thank you. Please go ahead.
Thank you Chris some good afternoon, everyone.
Hearing on any director of corporate Communications and Investor Relations for Athersys. Thank you for joining today's call.
If you do not have a copy of the press release issued at the close of market. It is available on the other sits web site at Athersys dotcom.
We have several members of our leadership team on our call today, Gildan, Bokkelen, Chairman and Chief Executive Officer will be providing our corporate update and I ever be cloud, our newly appointed Chief Financial Officer, and Laura Campbell Senior Vice President of Finance are here to provide us with the financial update.
Today's call is expected to last approximately 45 minutes and a webcast of the audio will be available two hours. After the call's conclusion on our website under the events section. They access information for the replay is also in today's press release.
And your remarks that we may make about future expectations plans and prospects constitute forward looking statements for the purposes. 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 FCC filing.
We anticipate the subsequent events and developments may cause our outlook could change.
Well, we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so.
For the benefit if those who maybe listening to the replay this call, which held and recorded on March 16th of 2020.
Since then we may have made announcements related to the topics discussed. So please reference our most recent press releases and I see see filings.
With that I'd like to turn the call over to Gil Van Bokkelen Gil. Thanks.
Thanks, Karen.
I'm very pleased to introduce eyeball Mcleod all what do you.
Hi brings tremendous leadership in commercialization experience to the company, which is important as we continue on our journey at building a leading regenerative medicine company that is focused on the development of innovative therapies that have the potential to advance the boundaries of critical care medicine.
I've asked him to first provide a summary and bit of background on his experience before turning to our financial results.
So with that I'd like to turn it over to fiber.
Thank you good.
Good afternoon everybody.
I don't Mcloughlin, Chief financial Officer emphasis.
I'd like to thank all of you for joining todays call.
As most of you know I joined emphasis at the end of January this year and I'm looking forward to making a significant contribution to the company as we continue down the path to potential approval and subsequent commercialization of the multi send product.
Before I give you the 2019 financial results that skill requested I will take a few minutes to talk about my background.
I hope the Bachelor of Science degree from the University of some Andrew's in Scotland.
NB from the University of Arizona, and I'm, a certified public accounts and license in Virginia.
Hi up into the pharmaceutical industry for the better part of three decades, working both in Europe, and the United States.
I have experienced working in all areas of the pharmaceutical value chain from basic research to commercialization.
Held executive financial and leadership roles, but some of the world's leading companies.
Well originally from the UK I began my pharmaceutical career with a private German company bearing in mind.
Firstly, leading their financial function in the Washington, DC area, but then in Mannheim journey as Chief Financial Officer for this Therapeutics Division.
A major parts of my responsibility in Germany was negotiating with major pharmaceutical companies for a global alliance, whereby we could achieve global geographic reach for all brands I realize a meaningful returns on our overall invest.
The 1997, we were purchased by upon launch based in Basel, Switzerland.
Hi moved to Switzerland, as the Vice President Finance for research.
Primary responsibility my new role was working on the integration of the research sites during the Manheim and Ross.
After two years in Switzerland Rush transferred need to New Jersey, where I was the Chief Financial Officer for North America for the next 10 years.
It's not capacity I participated in the launches of many successful compounds in multiple different therapeutic areas.
These included hepatitis C oncology, HIV AIDS rheumatoid arthritis osteoporosis weight loss.
Lanza among others.
In 2009 Rush merged with the San Francisco based biotech company Genentech.
Genetic remains rushes U.S. commercial today.
After participating in the integration of the two companies I became general manager of Rochus East Coast campus until my departure at the end of 2011.
After leaving rush I joined Merck as Vice President of Finance from Merck Research departures their research and development Division.
Well Mark the highlight for me was being part of the team responsible for the development and subsequent approval and commercialization of Keytruda.
Pembrolizumab the first PD one inhibitors.
I left Merck in 2015 join Ace I think the North American subsidiary of the Japanese Company limited based in Tokyo.
As Chief Financial Officer, and Chief compliance Officer days I.
Several strategic projects addressing their go to market strategy in both neurology and oncology.
I also participated in the negotiations of the global oncology Alliance with Merck, combining merck's Keytruda, an ace Iceland bema.
Baton to in several different tumor types.
That brings me to emphasis.
Since joining I've become fully integrated into the team is athersys and it has been an incredibly rewarding experience so far.
I'm impressed with the knowledge and expertise as a management team and the hard working employees here.
The culture here is unique and it is exciting being part of a small company that works in a fast paced environment.
Just a privilege to join a company with compelling science in the regenerative medicine stays focused upon the critical care segment of health care, where we can make a meaningful contribution in an area of high unmet medical need and improves the quality of human lives.
With that I'll move on to the 2019 financial results and then turn the call back over to go for the corporate update followed by a question.
Yes.
First I will give an overview of the fourth quarter 29 C and follow it with the financial results for the full year.
Revenues were $300000 for the three months ended December 31st 29 team.
Compared to 1.5 million for the same period in 28.
The reduction in our fourth quarter revenues from year to year reflects the conclusion certain services related to our Healios collaboration in Japan.
Such as clinical product supply.
Research and development expenses was seven point Sixmillion for three months ended December 31st 20 Tonineteen.
A reduction of $2.6 million compared to 10.2 million in expenses for the comparable period in 28.
The decrease between the two courses is associated with the conclusion of the manufacturing campaign to supply Healios clinical products.
Well, that's a reduction in technology transfer services and reagent purchases for arc internal process development activities in the fourth quarter two inch Nancy.
General and administrative expenses decreased 2.4 million for the three months ended December 31st 29 team.
From 2.8 million in the comparable period in 2018.
The 400000 dollar decrease in the fourth quarter 2090 was due primarily to lower professional service fees and personnel costs.
The net loss for the fourth quarter was $9.9 million in 2019 compared to a net loss of 11.3 million in the fourth quarter of 28.
The difference of $1.4 million is reflective of the previously described variances as well as a decrease of $400000 in other income license.
Turning now to the results for the full year.
Revenues were $5.6 million in 29 to compared to 20 point 4.3 million in 28.
Lets contract revenues from our collaboration Ceos decreased 16.8 million year over year.
So I had 2018 revenue reflects the monies received for the expansion of our collaboration in June 2082 include additional licensed indications.
In 29 team, we also experienced the reduction in certain here is funded services.
Certain projects were concluded.
Our 2018 revenues also included royalties and other contract revenues of $1.5 million, primarily related to our collaboration with Archie I surgical which has since been terminated.
We expect our collaboration revenues to continue to vary over time, that's we contract with T. goes to perform future manufacturing services as well as to reflect the impact of potential new collaborations.
Research and development expenses were $39 million than 2090 compared to 38.7 million in 28.
The small net increase of $300000 is related to a combination of variances, including increased personnel and stock compensation costs of $1.5 million consulting costs of $600000 and other costs of 100000 those.
These increases were partially offset by decreases in clinical trial and manufacturing process development costs of $1.1 million and license fees of 800000 doors.
Based on current plans, we expect talked Twentytwenty research and development expenses to be higher than 2090.
Such costs will continue to vary over time based on clinical trials underway manufacturing campaigns I process development activities as well as other initiatives.
General and administrative expenses were $11.4 million and 29 team compared to 10.4 million in 28.
The 1 million dollar variances related to increased legal and professional services outside services and stock compensation expense.
General and administrative expenses may increase in Twentytwenty, primarily related to personnel costs.
Our net loss was $44.6 million in 29 team.
Compared to a net loss of 24.3 million in 2018.
The 20.3 million difference reflects the aforementioned variances as well as an increase of $300000 in other net expenses.
During the year ended December 31st 29, see net cash used in operating activities was $35.3 million.
That's a $13.4 million in the prior year.
The prior year number reflects the monies received related to the June 2018 Helios expansion.
With the 2019 number reflecting overall uses of cash to fund our clinical development activity.
We ended 2019 with $35 million in cash and cash equivalents.
With that I'd like to turn the call back over to skills to the corporate update.
Gill.
Thanks, Ivor [laughter] I want to begin by addressing several important topics, including where we have been inundated with questions recently related to the ongoing cobot 19 pandemic and the potential relevance of Multistem.
As most people are already aware the recent outbreak began and we'll have China in November of last year.
According to public health statistics, while there was concern regarding the spread and progression over the first few weeks of the outbreak.
It's important to recognize that as of January 20 Threerd.
There were still left in a thousand confirmed cases globally and only 25 depth said occur.
With essentially all of those cases occurring in China at that point.
Less than two weeks later.
As of February Onest, there were more than 14500 cases.
With several thousand additional cases being announced per day and more than 300 debts.
As of today less than two months later there are now more than 179000 confirmed cases of patients with cobot 19 infection globally and more than 7000 deaths.
In the United States are incidents has been far lower than for many other countries with confirmed cases occurring at a frequency of about 12 cases per million individuals.
However, given the recent evidence of community spread in various parts of the country that incidents number has been increasing and may rise substantially in the days and weeks ahead.
At the beginning of March just a little over two weeks ago.
Public health authorities observed a meaningful and disturbing increase in the incidence in mortality trends outside of China.
Particularly in certain European countries and other parts of the world.
Unfortunately, many individuals that have contracted cobot 19 have subsequently becomes seriously are critically ill.
Prior to the recent surgeon incidents that became evident the beginning of March approximately 15% to 18% of cobot 19 patients had become seriously are critically ill.
In the mortality rate among fully resolved cases was fairly consistent at around 6%.
[noise] fully resolved cases, essentially have to outcomes I do the patient recovers and is determined to be cobot, 19, freight which has happened well over 90% of the time.
Or unfortunately, the patient dots.
The global mortality rate and fully resolved cases is currently approximately 8% based on observed outcomes for more than 85000 cases.
It's important to understand that the primary caused obese patients becoming seriously are critically ill and subsequently die.
It's because cobot 19, like a range of other viruses and pathogens, including Sars Mers variant influenza strains like H, one N one and others, we have seen in recent years.
His inducing acute respiratory distress syndrome core hearts.
A recent world Health organization assessment, and other clinical observations and epidemiological data indicates that the primary cause of death for these cobot 19 patients is art.
As we've described previously other than placing patients on a ventilator currently there is no effective treatment for arts.
And the mortality rate and morbidity is high, especially among older patients and or individuals with certain underlying health conditions were co morbidities.
Public health authorities have stated that there are currently approximately 63000 ventilators in the United States.
With a modest additional supply in the national stockpile.
There is concerned that if the number of patients that become seriously are critically ill from cobot 19 begins to rise substantially there won't be enough ventilators to go around.
In response to the Cobot 19 pandemic the federal government working in close coordination with various states and public health agencies have taken multiple important steps.
First the mobilized in an unprecedented manner in terms of speed and scale with the imposition of temporary travel restrictions school closures were mandates to continue education remotely and implementing prudent restrictions on public assembly and events, including sporting events concerts in a range of other activities.
As of yesterday, the government here in Ohio, temporary CLO temporarily closed all restaurants and bars and that is now happening in other parts of the country as well.
These steps are all designed to slow and ultimately stop the community spread as the virus.
It's a bit too early to say, what the ultimate impact will be but many of US believe that these actions will be effective at blunting the spread of the Kobin 19 virus and we completely support the steps that have been taken.
Some have criticized the government or government agencies for acting to slowly or too quickly and imposing these restrictions or taking other actions I'd like to address step for just a moment because in our view that as a serious misconception.
In January and January when there were only a small number of cobot 19 cases globally and no confirmed cases in the United States. We were approached by the biomedical advanced research and development authority or BARDA.
As many people listening on the call today are aware Bardas mission as part of health and human services is to protect the nation against chemical biological radiological nuclear threat as well as against pandemic influenza and other emerging infectious diseases like cobot 19.
[noise] various members of BARDA, including leadership, we're already aware of our company NR technology based on some prior interactions and collaborative work we have conducted.
They had seen our recent announcements and presentations regarding the primary trial results and subsequent one your follow up results from our now completed clinical trial evaluating the administration of Multistem The arts patients.
They realized that while there is no treatment for arch currently available our technology might play an important role in helping to establish and provide more effective intervention for patients that have become seriously are critically ill following viral pathogen and do starts.
In the days and weeks that follow up we were invited to be part of an intensive process that included multiple meetings discussions and presentations with BARDA leadership and others, including the Inter agency Corona Watch Task Force there was established to evaluate diagnostics vaccines anti viral.
And potential therapeutic treatment as well as other technologies or capabilities.
This task force included representation from BARDA.
HHS F.D.A., NIH, CDC and DLD among others.
Part is mission is to expedite the development and delivery a promising technologies by providing funding and other support and they and other relevant agencies move rapidly and efficiently to take action.
We're pleased to announce today that following this intensive evaluation our technology was designated as highly relevant which has the highest classification possible.
This designation was based on a rigorous assessment clinical data and other evidence and information and it's supported and reinforced by the fast track designation, we would receive previously from the FDA specifically for the treatment of art.
This represents our third fast track designation for our multi stem programs. In addition to the other important designations, we have received including our about designation and others.
At the FDA has previously indicated the Ormat designation is equivalent to breakthrough therapy designation for cell therapy, and other regenerative medicine technologists.
Each of these designations is designed to expedite the development of and regulatory process for promising therapies that have shown the potential to address areas, where there is significant unmet medical need and limitations in standard of care.
There are several aspects of our technology and approach that BARDA and other institutions have recognized as being important.
In particular multi stem acts in a pathogen independent manner, which is relevant such we've seen in recent years that ards can be induced by a range of pathogens, including cobot 19, Sars Mers virulence range of influenza such as H, one N one and other viruses and pathogens.
Unfortunately, traditional approaches including vaccines certain anti viral than other treatments.
Typically dependent on the isolation and characterization of the specific pathogens.
Which means that public health officials clinicians and researchers are frequently chasing the threat after it as emerge so to speak.
In contrast, multistem could be broadly relevant to treating ours arts caused by a range of pathogens that induced severe long inflammation in pulmonary dysfunction.
Since it is not acting to pathogen specific manner, multistem could complement and be deployed much more efficiently than conventional approaches.
Since it focuses on addressing the underlying condition, which is severe lung inflammation and art that is induced by the virus or pathogen.
And the causes some patients to experience prolong critical illness, and unfortunately results in the death of some individuals.
As we've described previously Multistem is also highly scalable easy to administer and can be state we maintained in frozen form for years if needed.
Furthermore, we have a clear plan for how we intend to make multi stem broadly available and how we can deliver on that plan.
We believe that Multistem will ultimately be approved for one or more indications and we also believe that we are well positioned to work with BARDA and or potentially other health agencies to establish and maintain an appropriate inventory buffer that could be rapidly deployed in the event of an outbreak or other scenario, where our technology has demonstrated.
Elements.
The treatment of Arts has long been a challenging area for clinical medicine.
As noted previously no effective medicine is currently available and no treatment other than ventilation, but even with ventilation. There is there a significant morbidity and mortality.
Amongst surviving patients there are frequently complications and meaningful quality of life issues.
To our knowledge, we're the only company that has an active program that is received fast track designation for the treatment of art.
We and our collaborators are confident that multistem can and will play an important role in treating patients with art and I would briefly like to summarize some of the clinical observations from our recently completed randomized double blind placebo controlled study that support that view.
As we've described for the entire study population, we observed a meaningful reduction in mortality improvement in pulmonary function as well as an increase in ventilator free days and a nice you free days during the 28 day clinical assessment period.
More relevant to the current situation is that study investigators also observed even stronger effects for patients suffering from pneumonia and do starts.
Specifically mortality among patients with severe and ammonia and do start was 50% among patients receiving best available standard of care.
Whereas when patients received a single dose of multi stem within four days, a being diagnosed with arts and placed on the ventilator mortality was only 20%.
Rapid improvement in pulmonary function was also observed among patients in the study as evidenced by defining that 45% of multistem treated patients we're off to ventilator within seven days or less.
Whereas only 20% of patients treated under best available standard of care, we're able to achieve ventilator independence in that same timeframe.
This is relevant because the odds of full recovery our increased when patients are liberated from ventilator dependent earlier and this could also help address a potential shortage of ventilators should they become limited due to a surge in the number of patients that needs.
It treatment can help patients become ventilator free faster it will in essence free up capacity to provide more patients with access to the limited number of ventilator units available.
Mean ventilator free days amongst the beer and ammonia into starts patients were 14.8 for multistem treated patients versus only 7.5 for placebo patients.
Median ventilator free days were 18 for the corresponding Multiday multistem treated patients and only three days for the patients receiving placebo and being treated under best available standard of care.
I mean, I see you free days for these patients during the 28 day clinical assessment period were 12 for Multistem treated patients versus only five for placebo patients.
Whereas median IC free days were 15 for the Multistem treated patients and only one day for the patients receiving placebo and being treated under the best available standard of care.
These and other data, including evidence of a consistent safety and Tolerability profile as we have observed and other studies substantial improvement in patient self care and independents.
Quality of life improvement over the one your follow up and biomarker evidence showing down regulation of key inflammatory cytokine among multistem treated patients.
And that also had been shown to be important not in cobot 19 patients.
Provide clear and compelling evidence of therapeutic benefit.
Working with outside clinical experts biased statisticians and other collaborators we have already conducted extensive modeling and planning for a phase three registrational trial involving administration of Multistem for the treatment of Arts.
We intend to present this plan to the FDA and other regulators soon after we've completed some additional preparations.
It's worth noting that this study could potentially involve an arm that specifically evaluates cobot 19 patients that have developed superior severe pulmonary inflammation or arts and that is something we intend to discuss and coordinate with the FDA BARDA and others as appropriate.
In addition, we're continuing our efforts in other areas, where there is potential relevant the BARDA is mission in scope of interest.
While we are not addressing those activities in today's call. We would just like to point out that BARDA recognizes the importance of these additional activities and is also participated in our recent meetings with the NIH and other institutions focused on the design and execution of relevant studies.
We continue to make good progress in our other clinical programs as healios as can be publicly the anticipating they anticipate completion of enrollment for both treasurer in one bridge and the coming months and we've seen strong enrollment progress at the active clinical sites in our masters tune trial.
However, it is difficult to precisely predict what the impact of travel restrictions and other limitations that have recently been implemented and are currently in effect will be on the addition of new sites for a masters too, particularly in Europe and other sites outside the U.S.
We will have a better idea of the impact by our next earnings call in May, but we are anticipating that there will be an impact.
For now we're committed to moving ahead as quickly and prudently as circumstances allow.
I'd also like to briefly comment on the status of our pending trauma trial matrix one study.
We are fully committed to conducting the study and we are working hard to address several outstanding points related to the trial with the up yet.
Some people at question why it is taking so long and I just want to make two points in response.
First as we've stated repeatedly our philosophy is to work in a collaborative and collegial manner with the FDA and other regulators and sometimes the issue we consider and discuss with them are complicated and take time to work out.
Second I'd like to describe one specific issue that we've been working on with the FDA that provides a relevant example of the point I just may.
Timely enrollment of patients will be important for the efficient conduct of the study and given the acute nature of trauma.
That means that the process for obtaining consent is extremely important.
As in our other critical care trials and programs patients themselves will not ordinarily be in a position to provide informed consent and therefore, it will require consent from an authorized family member or other representative which complicates the process.
There are ways to address the consent process to make it as efficient as possible, which has a very important issue for study where timely administration will be essential or even critical.
We've been working with the FDA and our clinical collaborators to ensure that we addressed this in an appropriate manner and I'm confident that we're doing everything necessary to achieve that call and doing so in a manner that is consistent with FDA priorities policies and procedures.
This is taking a bit longer than we would like but as I've said previously the most important thing is to ensure that we get it right and that everyone involved in this study is on the same page.
I'm confident that we will accomplish our objectives and are getting close to resolving outstanding issues, but in the meantime, it will require a bit of additional patients.
Finally, I'd like to briefly comment on our ongoing discussions with potential partners.
We remain very actively engaged on the business development front and it made solid progress and some of our discussions.
Delivering a high value partnership with the right partner is a priority for us and I believe we're in a strong position to achieve that objective.
Our recent progress in current events, both illustrate why our programs are so important and it's clear that other organizations recognize that.
In summary, we believe that we are at a unique time in the history and evolution of the company and we remain fully committed to the advancement successful development and delivery of our technologies to help patients in need and their families and to fulfilling our goals and objectives on behalf of our shareholders and other stakeholders.
And with that we would first like to address a few questions that were submitted by shareholders and others before we open it up for questions from analysts and other institutions.
The first question is multi stem potentially relevant to patients to develop arts from cobot 19.
Address this question in my comments. So we got this question from quite a few people and yes, we do believe that multi stem has relevance to covert 19, and do start as well as other viruses are pathogens that can induce severe pulmonary distress and acute respiratory distress syndrome.
To reiterate to our knowledge, we are the only company with a fast track designation from the FDA for a therapy for the treatment of art that has an active clinical development and we believe that puts us in a very unique position.
It's.
Question is athersys treating cobot 19 patients under compassionate use.
Our current policy precludes the treatment to patients under compassionate use for any indication and their specific reasons for that.
We reserve the right to modify this policy in the future, we're committed to designing and executing an appropriate clinical trial to further evaluate the safety and efficacy of multistem for patients with art and to advance that program as fast as we can.
This trial could include evaluation of Cobot, 19, and do starts patients and such an evaluation could be conducted separately or in parallel that we'll have to be definitively established in coordination with the FDA other relevant agencies.
Unfortunately in prior instances of compassionate use expanded access are right to try where companies engaged in limited the discretionary application of non approved therapeutics for certain patients.
Other groups complain, but the access was not broad enough and tried to four simply broaden access to include everyone that want to treatment.
People need to realize the under compassionate use treatment the company bears the entire cost to providing the therapy to patients.
Obviously in the current situation, we couldn't afford to do that so our current policy remains in effect.
We are prioritizing appropriate and FDA authorize development in order to ultimately provide the broadest access possible following regulatory approval of the therapy.
The next question is have there been any conversations between athersys in any authorities regarding the use of multistem in connection with cobot 19, and if so what information can be shared about.
Well, yes, I addressed this in my comments, we have had ongoing discussions and as I mentioned, we've been involved in an intensive evaluation process, which is involve BARDA and other agencies that have also been part of that process.
Why hasn't half versus previously commented publicly on the potential relevance of multi stem to treating cobot 19 patients.
In the past few weeks there has been a lot of speculation on message boards and other forms regarding the potential relevance of multistem to two patients with Covance 19, and do starts.
However, just as we don't name or comment on specific companies that we are engaged in partnering discussions or negotiations with.
We don't comment on discussions we may be having with governmental or public health agencies until it is appropriate to do so.
Nor do we respond to speculation.
We are providing the update today because it is because it is directly relevant to how we intend to move forward, but it would have been inappropriate to comment prior to today.
We have received other similar questions from people in recent days and over the past few weeks, but for now we'd like to open it up for a few additional questions from analysts and institutions that are dial that.
Certainly ladies and gentlemen in order to ask a question you do need to press star one on your telephone.
Please standby and well be compiled couponing roster.
Your first question comes from Chad Messer with Needham and company. Your line is open.
Great. Thanks, good afternoon.
Taking my questions in a.
Welcome to take.
Impressive background.
You will be in an asset to the team.
Just wondering if you could sort of layout.
Damages bolt and might have in treating ards specifically.
For some other sort of.
Inventory type approaches and specifically here today.
An announcement that Regenerons kevzara there.
Is it.
Eminently going to be tested in.
In a kobe trial and at a very high level.
Kind of.
Generally inflammatory and it's true for Ari.
What do you think multi stem potentially do better than.
And approaches.
Yes, that's a great question well. Unfortunately, there is a long history of people trying to administer anti inflammatories in patients with ours or severe pulmonary inflammation.
And they really Havent worked out well I think that.
The the gap that exists in clinical medicine today is that once the patient has progressed to severe pulmonary inflammation and their pulmonary function has been so compromise that they are.
The date technically have ards or acute respiratory distress syndrome, their oxygenation or pulmonary function capacity is falling below a critical critical threshold and the only thing you can do for them at that point is to put them on a ventilator to force auction in the long, but that has long term consequences. So an answer your question.
I don't I don't really see it necessarily as an either or what I think people should be thinking about is there's going to be a spectrum of things that people are doing it starts with the accelerated development of the anti viral as to kind of blunt the broader exposure or impacted the virus, but as we know from a long history with vaccines.
That isn't going to protect everybody. So if you look at people to get the flu vaccine every year some years that works better than others and other years. It doesn't work as well it leaves a lot of people exposed and many of those patients even though they've been vaccinated go on to develop severe complications I think the recent health statistics that people refer to is that every year. Despite our best efforts there.
Still about 30 to 40000 people on it on an average year that are typically dying from the flow and the.
Again, I think I'm not going to comment specifically on on Regenerons approach or any other specific anti inflammatory approach, but I think that really what people are trying for is developing vaccines hopefully some of those will prove to be highly effective against Kobin 19.
The next as the basically develop anti virus or even potentially anti inflammatory that can be administered relatively early to stop the progression in the cascade that intense pulmonary inflammation that is pushing the patients into severe critical illness, and then there is the spectrum on the more severe end of things, which is really where we think.
We can have a role look we love it if if if things are being developed they launched the progression of many of these patients into severe pulmonary distress or art that would be a victory for everybody.
However, history teaches us that there's probably still going to be a meaningful gap in some cases patients are going to progress and unfortunately, a lot of these patients might be individuals that have other conditions or co morbidities or things that make them highly susceptible to this type of pulmonary infection.
And they're going to be very susceptible to progressing to severe pulmonary inflammation that art and I think that again, it's about creating a line of defenses and therapeutic interventions or other things that can really put us in the best positioned to minimize it ultimately if if multistem were used in conjunction with something else, where we could drive.
That mortality rate down to zero and offer up the potential for everybody to be able to recover that would be a fantastic outcome for all of us.
But anyway, I hope that I hope that answers your question and kind of makes the point.
No no definitely.
Okay.
And obviously a highly important work you guys are engaging in there.
I apologize.
Question and I know you did talk about this a little bit, but I've never come across as highly relevant classification that you were saying you received could you maybe just.
Try to repeat in dumbed down a little bit more what that means formal piece.
Dick lead.
Moving toward some sort of approval or recognition regulatorily.
Yes, so it's not so thats not a regulatory designation that is a de designation that was used as part of the classification process by BARDA and the other agencies that are part of the the Corona watch taskforce and so as they've done in Tech watch, which is kind of the historical nomenclature that they used for evaluating technology service.
Yes different areas of interest irrelevant for BARDA and some of the other agencies are involved essentially should just think about is the following there are things that.
So they undertook a structured series of presentations and that took place over a number weeks, where one section was focused on diagnostics and another was focused on vaccines and another was focused on anti virus and another was focused on therapeutics and other sections or sessions that we're focused on development of other technologies that might have relevance and of course.
Some of these technologies are being talked about in terms of how do we scale it up to provide support in some of the areas where the public health agencies kind of feel like we're undersupplied or maybe we don't have adequate solutions for some of the things that are being done.
So the basic classification system, essentially ranges from little or no relevance to moderate relevance to all the way up to the category that we were recognized in which is highly relevant and again, that's the highest classification you can get.
Basically this is just a step into process, but I think it possessing positions us very well for what we intend that are committed to doing with BARDA, which is to see this all the way through to the I'm going to work with than worked with them and other health agencies to make sure that we can be it a position a strong position to advance our technologies in an efficient way.
And ultimately make them available on deliver them to patients patients ultimately, but also agencies that are responsible for helping to expedite that in the event that there is a widespread outbreak or an occurrence of another event, where they need something like this okay. So again it theres no regulatory conversations associated with that the right.
Dilatory conversation that I think is the most relevant is our fast track designation, which we had received from the FDA a few months ago. It's more about it's more of a systems in a process determination, which I think puts us in a good position.
Alright, well again.
That's the largest that important work.
Yes, good clarification.
Yes, Thanks Chad.
Your next question is from Jason Kolbert Dawson James Your line is open.
Hi Guild God Bless America.
Sorry, trying times I wonder that if the number of people get in fact, it that could get infected and the system.
Does get quote unquote overrun what would it take for BARDA or the U.S. government to initiate a request to start working with athersys in multi stem miles there must be some.
Kind of plan.
In the works is that possible.
Well I can look it's a great question and I think it's important for people to take a step back and see how much has already happened at the federal level just in the past few weeks.
Again, I want to kind of the timeline and how quickly things have progressed, but one of the misconceptions, which I felt was really important for us to address is I've heard some of the media and other folks out there that have said well, we didnt move fast enough and some of the agencies didnt actually they weren't on top of it I can tell you indicate the BARDA in particular, but also some of the other agencies that have been involved in this.
Nothing could be further from the trip they were on top of this from the very very early days, reaching out not only to us but other companies that they thought might have technologies that could play a role in helping bolster the national strategy in the national defense against the types of other that and I think that does it look there's a process that they go through.
I can honestly say it was it was not even two weeks ago. It was only about a week and a half ago in the federal government Pat an unprecedented amount of funding are authorized an impressive amount of funding $8.3 billion to basically support the accelerated development of a range of things and capabilities and and I think that they're moving very quickly on that front.
In addition to all the other things that they're doing so we're basically Jason and I know you I knew you recognize this we're kind of in in terms of waters right now.
In the sense that I don't think there's never been a time in the history other than maybe during.
For two or something like that where we had such a sweeping restrictions in terms of travel restrictions or other things that we're limiting people's ability to do a lot of the things that we ordinarily take for granted.
So I think that the analogy that was used in the briefing. The other night, which is this is the early innings of this thing and and people have to when I'm actually quite gratified like a lot of people to see that our government is capable of working together in a bipartisan manner and take steps to really focus on putting in place a number of different capabilities.
And.
And accelerating.
Things so that we can addressed this in the most effective way possible, it's going to be uncomfortable at least for the next few weeks and it'll probably still be a little bit of it'll be a little uncomfortable beyond that but I'm I'm actually.
Like a lot of people I think we're doing the right. Thanks, and we're doing a pretty rapidly and we just have to continue to work together and I'm confident that we and other groups that interact with BARDA and some of the other agencies involved in that are going to be in a position to maximize the impact no matter what the tactics are or what the ultimate specifics are of how we do that.
Gil I just want to put this a little bit more which is when I look at what's going on in Italy, and when I see some of the very very early experimental trials going on in China, and I know you've been very heavily involved in China.
I also know as you know for many personal reasons that theres a lot more going on in Japan, and the Japanese government is saying and I know you and Helios are very connected there is there is the opportunities the wrong word but.
I mean, clearly those countries and others around the globe are going to need help it's not just the U.S. problem. So I'm just wondering whether you've had any talks outside of this country, even in Israel, let's say or what is the international interest look like.
Yes, so I'm not really going to comment on that today, but I think your line of thinking it's absolutely correct, which is what this isn't just a problem here in the United States were Frank frankly, the impact here has been less than it's been in other countries that are that are scrambling under a bit desperate.
I do think that we're going to see some unprecedented mobilization and activities that are focused on trying to address this and and it's going to happen internationally and I think thats a good thing look one of the things that we should be proud of is the as a country and scientific and medical community here is.
A lot of the medical innovation in the technological innovation that is going to have a major impact not only here in North America, but in other places around the World has has come from things that have started here in the United States, We still leads the world and biotechnology and biotechnological innovation on many different it's not that other countries aren't doing.
Any aren't doing things or doing things that are important they clearly are but the reality of it is is that companies and researchers here in the United States. I think are going to have a lot to offer and and we will have a meaningful impact as we all work together to try and get things under control and it's.
Dressed this in the most effective way possible the specifics of that will become visible to everybody over time, it's going to take a lot of additional work and there's a lot of agencies and people in organizations that are working together. We're in discussions about how we might be able to do that and so I think its people should should be paying attention to it and it's good that a lot of people are but the reality of.
It is that it will become more transparent when it's appropriate for that to happen.
Well I've been talking a lot about the yard stayed about the value proposition, which is that there is in my opinion know very few adverse events side effects of very de Minimis risk. When we talk about regenerative medicine and specifically this type of cell therapy. So it's very clear to me when I see kind of vaccine company.
Isn't there valuation spike in its unlikely they'll have a product for a long long time, a year out of the time window of this pandemic and I see the value disconnect and regenerative medicine and I just find it baffling and I can tell you as someone who studied the science and who is really evaluated your data.
See a dramatic valuation disconnect right now and I want you to know personally I really appreciate the work you're doing and just keep going.
Well, thank you very much and speaking on behalf of the entire team here. We really appreciate your support in the supportive other people that are listening in on the call today or that may be listening to the the webcast either live or a bit later it means a lot to us we received a lot of.
Fossil emails and in addition to the questions that we've been inundated with but we've received a lot of really positive feedback and people understand why our commitment to doing the things that we are doing it so import and I think it's it's really illustrated by the current situation that we all find ourselves in but I think it's going to become even clearer as we continue to.
Forward why that's so relevant and why it's so important.
I will do everything I can to help people understand the value proposition here. Thank you.
Thank you.
Thank you that concludes our couponing session I would now like to turn the call over to Dr. been boxes for closing remarks.
Thanks, Chris I appreciate that I'd like to thank everybody for listening into the call today and for your continued support as I mentioned, we remain fully committed to achieving our goals and we look forward to making additional announcements and providing additional updates as we move forward. Thanks again.
Ladies and gentlemen, this does conclude todays conference call. Thank you for your participation and you may now disconnect.
[music].