Q3 2020 Athersys Inc Earnings Call
I don't know.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Athersys third quarter 2020 results conference call. At this time all participants are in a listen only mode. After the speakers presentation, there will be a question and answer session.
Good question during the session you want me to press Star one on your telephone keypad. Thank.
Thank you I'll now turn the conference over to Kelly Kitty you maybe Dan.
Thank you and good afternoon, everyone I'm here in holiday director of corporate Communications and Investor Relations for Athersys.
Thank you for joining todays call. If you do not have a copy of the press release issued at the close of market. It is available on their website at <unk> Dot com.
I heard Mcleod Chief Financial Officer is your guidance with the financial update and Gil Van Bokkelen, Chairman and Chief Executive Officer will be providing a corporate update.
Todays call is expected to last 30 to 45 minutes and the webcast and the audio will be available three hours. After the call inclusion on our website under the events section the access information for the replay is also in today's press release.
Any remarks that we may make about future expectations plans and prospects.
Forward looking statements for purposes of the Safe Harbor provision under the private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by the forward looking statements as a result of various important factors, including those discussed in our forms 10-Q, 10-K and other public SEC filings.
We anticipate that subsequent events and developments may cause our outlook to change while may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so.
For the money so that those who may be listening to the replay. This call was held and recorded on November nine of 2020.
Since then we may have made announcements related to the topics discussed. So please reference our most recent press releases and SEC filings.
With that I'd like to turn the call over to Ivor Huh.
Thank you Karen.
Good afternoon, everybody and once again, thank you for joining todays call.
Hi, Michael Klein, our Chief financial Officer of emphasis and it is my pleasure to give you an overview of the financial results for the third quarter of 2012.
For the three months ended September Thirtyth Twentytwenty, we recognized $86000 in revenues compared to negative revenues of $361000 for the three months ended September 32 29 proceed from.
Primarily related to our collaboration with seniors.
June or the valuation of the variable consideration in the third quarter of 2019, we.
We determined that the estimated transaction price certain product supply for vyvanse interiors decreased due to a reduction in the underlying cost the dose of the product supply occurring during the course.
In addition, the number of doses of clinical product. The question you asked.
It was amended further reducing our revenues during the period.
Our collaboration revenues may fluctuate over time, as we contract with Cvs to perform manufacturing or other services and actually potentially into into new collaborations.
Research and development expenses were facing and a half million for the third quarter 2020.
$8.9 million for the comparable period in 2019.
The 9.6 million dollar increase is primarily associated with increases in clinical trial and manufacturing process development costs were $6.9 million.
As well as increases research supplies personnel costs stock compensation costs.
Research and development goals.
Our clinical development clinical manufacturing and manufacturing process development expenses vary over time based on the timing and stage of clinical trials underway.
Manufacturing campaigns for clinical trials and manufacturing process development projects.
We expect our annual Twentytwenty research and development expenses to increase compared to 2019.
General and administrative expenses were $3.7 million for the three months ended September Thirtyth Twentytwenty. This.
This represents an increase of $700000 when compared to expenses of $3 million in the comparable period in 2019.
This increase was primarily due to increased personnel costs.
Hi services professional fees and stock compensation guidance.
The net loss for the third quarter, Twentytwenty was 22, and a half million dollars compared to a net loss of $12 million in the third quarter of 2019.
The difference is primarily a consequence of the previously mentioned variances.
During the nine months ended September Thirtyth Twentytwenty net cash used in operating activities was $44 million compared.
Compared to 25.2 million in the nine months ended September 30% to 19.
Net cash used in operating activities may fluctuate significantly on a quarter to quarter basis.
Over the past several years.
Hey, what's the timing of receipts of fees from our collaborators and payments of clinical trial costs, such as clinical manufacturing campaigns contract research organization costs and metric manufacturing process development projects.
At September 30th Twentytwenty, we had $61.7 million in cash and cash equivalents.
Compared to $35 million at December 31st 2019.
With that I will turn the call over to given Carphone for the corporate update Gil.
Thanks, Michael and good afternoon, everyone.
Our last earnings call was held on August 10th just about three months ago.
During that time, we've made steady progress on a number of important activities and initiatives.
This reflects our focus on and commitment to completing clinical trials supporting our partnered programs and implementing new high value alliances as well as establishing commercial readiness in multiple areas in preparation for becoming a commercial company.
On the clinical trial front, we've been actively supporting the efforts of our partner in Japan Healios.
As Healios has indicated previously.
They are approaching completion of enrollment in two clinical trials.
They are ongoing pivotal study focused on treating patients that have suffered a serious and debilitating ischemic stroke. The 220 patient treasure trial and the smaller one free trial that is focused on the treatment of patients suffering from acute respiratory distress syndrome or art.
Helios has previously indicated that they are focused on trying to complete enrolment for both trials around the end of this year.
Good they achieved that goal it should mean that they have seen topline results for both studies in the first half of 2021.
Specifically the primary clinical assessment for one bridge is designed to occur 28 days or approximately one month after enrollment and after all patients had been enrolled for the trial is followed by inspection verification and analysis of the clinical data for the study, which typically takes a few weeks.
This means that if enrollment of the last patient is completed by the end of the year or sometime in early January they should be on track to have topline results for one bridge before the end of the first quarter.
The primary clinical assessment for the treasure trial occurs at 90 days after each patients enrolled so.
So depending on when the last patient has evaluated.
Healios could be on track to have topline results sometime in the second quarter of 2021.
Once again after enrollment is complete inspection verification and analysis of the clinical data for the trial will likely take a few weeks to finalize.
As we previously announced we completed the production and delivery of the material to Healios to complete both of these trials last year.
In recent months, our focus has been on providing regulatory and other assistance the helios as they prepare for the rolling submission for potential approval in Japan.
In the meantime, we've continued to work with Nick on cell innovation as well as other contract service providers and manufacturing organizations.
In anticipation of product launch following successful clinical trials in subsequent approval.
In parallel we've advanced our own clinical programs and negotiations with other potential partners.
On the clinical front, despite the chaos created by the COVID-19, pandemic, which has had a significant impact on hospitals and clinical trials around the world.
We have forged ahead in the face of quality obstacles and uncertainty.
Our most advanced program as our 300 patients Masters two clinical trial evaluating administration of Multistem for the treatment of ischemic stroke.
This is a randomized double blind placebo controlled pivotal trial that is received multiple important regulatory designation from the FDA, including both fast track and Ormat designations.
As we reported previously beginning in the late spring and throughout the summer like many other companies, we experienced significant operational issues that a meaningful number of clinical sites.
Some of these disruptions included hospital suspending enrollment activity in clinical trial in these institutions were off line for a period ranging from weeks to months.
In Europe, and other international territories significant travel restrictions were put in place in many remain in effect.
Which is the latest sites in those geographies from coming online.
Accordingly, we've had to adjust our expectations and timetable for the study.
Today. However, we are pleased to announce that all the masters two clinical sites in the US that had previously been taken off line as a result of COVID-19 associated operational restrictions are now back online.
And we've been adding new sites at a meaningful pace.
We've also qualified a large number of additional sites for inclusion in the study.
Beyond our initial goal of 50 sites.
Importantly, our aggregate enrollment rates at active sites has exceeded our initial expectations and projections for the study.
Which we believe reflects strong clinical investigator and staff enthusiasm for the trial.
We also believe this illustrates investigator confidence that this treatment approach has the potential to substantially improve the standard of care for patients that have suffered a debilitating stroke and who are facing potential extensive disability and complications in the aftermath due to limitations in current standard of care.
While we cannot control the course of the pandemic, how effectively is being dealt with the impact that might have hospitals. We are working with four intend to work with.
International travel restrictions or other obstacles, we continue to forge ahead.
As we described on our last earnings call. Our goal is to complete enrollment of the Masters two trial by the end of next year.
This will of course depend on a number of different factors, including the potential for new for recurrent operational disruptions at clinical sites in light of the recent spike in new COVID-19 cases.
And the corresponding increase in the number of patients that have subsequently become seriously are critically ill.
Significant clinical resources have to be devoted to caring for these patients and this increase in the number of cases means that clinical institutions and hospital staff may be forced to divert their resources were closed impose restrictions designed to reduce the further spread of the virus nearby.
Thereby impacting operations and clinical trial activity even for unrelated areas.
And 5.2 million cumulative confirmed cases had occurred.
As of this weekend however.
There are more than 3.5 million active cases with more than 10.2 million confirm COVID-19 cases, having occurred here in the U.S.
Disturbingly in recent weeks the seven day Rolling average of new cases occurring here in the U.S. has surged upward and last week exceeded more than a 132000, new cases per day for the first time.
With a seven day rolling average of more than 100000 cases both.
Both well above the observed rates and highlights from this summer, which at their peak topped out at about 70000, new cases per day and at their low were approximately 35000 cases.
It's somewhat tempting to attribute the recent rise in cases to an increased frequency of testing.
However, the data suggest that things are not that simple.
While the mortality rate has come down appreciably since the early phase of the pandemic. It's important to recognize that this too was increased in the fall and recently exceeded 1200 reported deaths in a single day here in the US with a seven day Rolling average that has risen from a low of about 520 per day in July to the current level of approaching a thousand.
Patient deaths per debt.
Globally, the increase incidents of confirmed cases in mortality levels have risen substantially in recent weeks both.
Both the new highs.
The mortality rate from fully resolved cases globally is currently approximately 3.4%.
Whereas the mortality rate from fully resolved cases here in the U app is more than 3.6%.
Even with the US having one of the highest per capita testing rates in the world.
So clearly the increased number of confirmed cases is also correlated with elevated rates of patients that are subsequently becoming seriously are critically hill, many of whom are die.
In total there have been more than 243000, COVID-19 associated patient desk here in the U.S.
So the evidence seems clear that despite the best efforts and advice the politicians and public health officials enhanced public awareness increased testing and the imposition of operational restrictions at schools businesses and many other establishments.
The pandemic hasn't resolve and things are currently moving in the wrong direction.
While we are encouraged by the announcement earlier today regarding one of the candidate vaccines in development Intel.
Syntel ended last effective vaccines are develop demonstrated to be safe and effective through properly designed and executed clinical trials with data appropriately reviewed by the FDA and other regulators and appropriately qualified vaccines are subsequently approved and made available on a large scale with people being vaccinated we've.
We may continue to experience additional chaos uncertainty for some time now while the pandemic continues.
However that scenario also provides us with an opportunity to make a difference for patients that are becoming seriously are critically ill as a result of COVID-19 or other pathogens that can arise and have a similar effect.
As I believe everyone listening in today is aware in addition to our ongoing Masters two clinical trial. We are also conducting a clinical trial to evaluate administration of multistem to treat patients with ours.
This program was designed as a pivotal trial and has received both fast track and more recently the ormat designation from the FDA.
Based on the strength of our prior result in clinical data.
In response to outreach from BARDA earlier. This year, we worked closely with the FDA to design and initiate clinical trial focused on the treatment of patients with COVID-19 to do starts.
Which remains the leading cause of death in patients that are becoming seriously are critical yield from the virus.
Unfortunately, we have now surpassed 1.26 billion COVID-19 associated patient death globally.
And there are now more than 13.7 million active cases more than double the number from three months ago.
This year, we have witnessed a major mobilization of innovative technology and organizations that are focused on the expedited development and delivery of personal protective equipment diagnostics vaccine anti viral and treatments for patients suffering from COVID-19.
There's been tremendous progress on multiple fronts, but there's been one area that isn't glaringly under emphasized fund.
Funding to expedite development to delivery of treatments for patients that are seriously are critically hill and on a ventilator because they have COVID-19 into starts.
The number of innovative approaches have been tried including anti viral than others, but none of them have provided highly meaningful or effective relief for these patients as evidenced by the mounting number of patient deaths occurring here in the U.S and around the world.
The focus of our program has always been on treating patients that are becoming seriously are critically deal with ours, because our data strongly suggests that we can help them.
The strength of our results for why we have received both fast track and Ormat designation from the FDA for this program.
However, while politicians and bureaucrats struggled to find common ground on what approaches to prioritize whether and how to fund key programs and what institutions groups or individuals should be in charge of such an effort.
Our focus and priority objectives have never waiver.
In response to the interest from BARDA leadership, who reached out to US early in the year before the pandemic was even declared a national health emergency by health and human services.
We have prioritized the advancement of Multistem for the treatment of COVID-19 into starts and that led to the design and expedited authorization and initiation of our 400 patient mcrobie to trial.
As we stated in the prior earnings call. We are focused on trying to complete enrollment of the trial sometime next year.
However, we have watched with mounting frustration as BARDA funding authorized by Congress in February was commandeered and redirected to other initiatives and key personnel were transferred out of court left the agency.
In our view, while the administration is appropriately emphasize efforts and advancement in certain areas, including expediting development of personal protective equipment for healthcare workers and expediting development of diagnostics vaccines and anti viral.
Sales to recognize our address other key issues, including emphasizing the advancement of treatments that have shown clinical promise for these seriously and critically ill patients.
Despite our best efforts, we've been unable to find common ground with BARDA, while the current leadership remains in place.
However, following the ultimate resolution of the election. It now appears that there may be a change in leadership and a key institutions, creating opportunities for the new administration to focus on things that have been neglected or ignored.
Specifically, putting greater emphasis on expedited development and delivery of treatments for patients that are seriously are critically ill and that are at risk of dying.
We look forward to seeing how the new leadership team approaches the challenges of the pandemic and to working with them where possible.
As recognized by BARDA early on one of the strengths of our approach does it multifamily not capacity and specific treatment.
Our mechanistic and clinical data it gives us give us confidence that it has the potential to be broadly relevant to the treatment of arts, whether that condition has been reduced from a variable in corona virus influenza bacterial pathogens or a range of other scenarios.
As we noted in our earnings release today, we are in the process of modifying our clinical study to broaden patient eligibility for the trial and to accommodate enrollment of patients with Noncovered 19 into starts.
Once these proposed modifications are finalized the must be reviewed and authorized by the FDA and eventually other regulators as we move toward potential inclusion of clinical sites in Europe, which we intend to do in coordination with the partner.
Our goal remains to complete enrollment of this trial by the end of next year.
Importantly companies that we have been actively engaged in partnering negotiations with in recent months also recognize the breadth of potential relevance of multistem for treating arts.
This quarter, we have moved closer towards establishing alliance that we focus on expediting development and commercialization of multiple programs in our critical care portfolio.
With an emphasis initially on development in commercialization in Europe.
While enabling us to focus in parallel on development and subsequent commercialization here in the U.S.
This also provides us with an opportunity to achieve several important goals.
The first goal is to finalize and implement the transformational alliance with a major multinational partner that has the essential capabilities expertise resources and commitment to work with us to efficiently and successfully advance as well as ultimately commercialize our critical care programs in Europe with.
With the additional potential to work together to expand the reach of the alliance to deliver safer and more effective therapies into other parts of the world as well.
The second objective is to work with the partner to accelerate and successfully complete ongoing and planned development efforts in multiple high value indication areas, where our technology has shown promise.
Further a substantial unmet clinical need and where we both believe there is a strong value proposition for our innovative treatments.
Third is to provide us with a substantial financial resources to help accelerate our evolution and grow as we work toward completing the transition to becoming a fully commercial company.
Throughout this year, we've been working methodically with prospective partners to define and ultimately finalized an alliance that meets our strategic financial operational and commercial objectives, and we have made steady progress in that regard.
We are highly focused on achieving this very important near term goal with a world class organization.
And doing so in a manner, where there is genuine alignment and a solid commitment to achieving success together.
Once we accomplish this we believe it will be a transformational moment for the company and our shareholders.
While we approach that important event in parallel we continue to advance our other clinical programs and our efforts directed towards achieving commercial readiness.
As one example, we are pleased to announce that the University of Texas, Texas Health Science Center or UTI health.
Has finished required institutional reviews and are now commencing patient screening for the patients for the phase two clinical trial evaluating administration of Multistem for trauma related inflammation and complications or matrix, while inpatient sits at memorial Hermann Texas Medical Center, a leading level one common stock.
This study represents another important application of Multistem for the critical care area targeting the severe inflammatory responses and other complications associated with poor outcomes following trial.
As we've indicated previously this trial is being supported by the department of Defense defense through Amtech, UTI help and emphasis.
In terms of establishing commercial readiness, we remain focused on our process development efforts to establish manufacturing processes and procedures for large scale manufacturing of the product and commercialization following approval.
Conducting planning and facility design work for commercial scale manufacturing facility defining requirements in establishing supply chain integrity, the central for large scale commercial operations.
And implementing an enterprise resource and enterprise resource planning or ERP system suitable to support commercialization a process that we first initiated in 2018.
We've also continued to map out our vision commercialization approach here in North America.
In addition to these activities we are focused on many other important objectives all of which are in direct support of achieving our goals to develop and ultimately deliver innovative and more effective treatments to patients in areas of unmet clinical need.
And deliver substantial value to our shareholders.
Some of those objectives include strengthening the organization through key hires which we've done throughout the course of this year.
It also means taking proactive steps to strengthen and diversify the board, which we were also in the process of doing.
All of this is intended to help the company and serve the interests of our shareholders.
And we look forward to updating you on these and other activity soon.
With that I'd like to address a few questions submitted by some of our shareholders.
One question that many people have asked since the election is what impact do you think the election results will have on our program to treat COVID-19 and do start.
The answer is this remains to be seen and it depends a lot on what the new administration's priorities are and how willing Congress is to support that agenda.
At this point, it's too soon to say that especially since the election results have been certified yet, but we are encouraged by some of the things that we are seeing.
I want to emphasize that our priority is to pursue development of multistem for the broader clinical need including for use against influenza and do starts as well as from other viral or bacterial pathogens or.
Or other causes and to find the right partner to help us in that effort.
We're confident that we're on a path to do just that.
Another question people have asked is whether the development approval and delivery of one or more vaccines against COVID-19 will impact our program our interest in the area.
The answer is no.
Because as we've stated numerous times in a typical year, even without COVID-19, there are more than 200000 or patients in the us alone and many more around the globe.
Many of these are caused by or associated with influenza. Despite the fact that every year. Many people receive the annual flu vaccine.
It's estimated by the CDC, the typically less than half the population in the U.S receives the flu vaccine use.
Usually it's between a quarter to a half of the population with a much higher rate of vaccinations in children.
In contrast to covert making specific vaccines are anti viral our approach is pathogen independent and we believe has much broader relevance against a range of things that could cause or contribute to ours.
In the past 20 years, we've seen repeated instances of the emergence of novel viruses that can induce ours and cause patients to become seriously are critically ill it.
It seems pretty likely that that will continue to happen again in the future.
Finally, many people ask about the status of our ongoing partnering negotiations and discussions.
For obvious reasons, we can't provide detailed comments on this other than to say that one it's a near term priority and we've made good progress.
Two we are in negotiations and discussions with very high quality multinational companies that have the types of capabilities, we require in a park and three choosing the right partner in negotiating the REIT deal structure are the most important objectives and people should be patient, while we complete the process.
And with that we'd like to open it up to a few additional questions.
At this time I would like to remind everyone. Thanks, Alexia asking question.
In the mobile.
Yes listen keep loans.
Well pause for just a moment.
Roster.
And your first question comes from Greg Harrison with Bank of America.
Hey, guys. Thanks for taking our questions.
Just wondering on the previous study.
How are you thinking about the hurdle for success.
Or good data when it comes to coated patients.
Relative to your previous data in patients with large from other causes.
Is there any reason to think that the coated patients could have better or worse outcomes and how does that kind of.
Impact your strategy.
Expanding the study.
To other ards patients and then.
When it takes ultimately for approval.
Yes, that's a really good question and it's one of the typical things as it relates to evaluating koby 19 patients with our Theres also the good news is that there is a lot of data out there that has emerged over the past.
Few months actually that give us some insight into how those patients are faring and some of the complications that are now its absolutely true that some of the patients that I would say on average patients with Coty 19 in new starts tend to be a bit sicker and experienced a higher mortality rate than patients with.
Let's just call it traditional arch, whether it be from influenza or other types of pathogens or other events that can that can.
That could cause arts in these patients.
But we recognize that very early on we were designing the study and so we actually designed it very conservatively. So we did not anticipate the same type of response rate than we saw in our prior clinical trial, we were actually much much more conservative than that and we also built into it the end of the study design the opera.
Affinity to do a recycling analysis partway through the trial, so that the data safety monitoring board or the D. SNP could actually look at the data and then come back and say we recommend so one scenario is dead. Our data is tracking closer to what we saw from the last study and they come back and say you know what you don't need to run a study as big as you guys thought you were going to you can actually downsized.
The the number of patients that you include in the trial.
The another possibility is that were close to our somewhat more concerned more conservative expectations and they say no 400 patients is about right. We just recommend that you continue with the path and you continue moving on that or they could come back with something it's in between those two which is to say hey, you're you don't need to go quite as far as you thought you were going to go you can you can do something thats been flat.
Or Conversely, they can say no. We recommend that you increase aside your study by some amount just based on the emerging data set that we see partway through the trial. So all of those are possibilities and I think that we tried to design. This approach such that we don't need to make hard and fast.
Assumptions or predictions, it's basically designed with some flexibility and also appropriately leveraging the data that we generated from the apply prior clinical trial in terms of how we determine success. The primary endpoint of the study we don't think it's going to change as we go through this exercise right. It's really about how large the study might be and then modifying.
Inclusion criteria.
That that we allow for patients in the study modifying the inclusion criteria is a reasonably straightforward exercise, but there is still a process that you have to go through with the FDA in order to get them to sign off on that and we don't think there's going to be the profit on that front for us. It was simply a finally, reaching the conclusion that you know what it's time to basically initiate that process move forward.
Yes, and advocate for broadening of the study.
But again, we will take a look at the data in terms of making that will take a look at the Cobi 19 patient data. It will take a look at the other noncovered 19 to do start patient data and we will evaluate all the patients in the trial Holistically and Thats something that we look forward to discussing with the FDA in the not too distant future.
So our belief is that if we see a reduction in mortality and we see an improvement in ventilator free days in the clinical metrics at the FDA has signed off on in terms of.
In terms of the things that are built into the study design.
But that is going to remain intact and it's really just about modifying again the types of patients that we included in the study and then moving forward on that basis, and it's also fair to say that our potential partners or partner may actually have insight into that into how they would like to think about the trial as it relates to for example clinical sites in Europe.
Okay. That's helpful. And then I guess just to follow up on that.
How are you thinking about your.
Enrollment speed assumptions.
In light of the increase we've seen and the pace of infection.
Is that kind of assumed already in your guidance that you and try and.
Fully enrolled the study by the end of next year or.
Could that be sooner.
Based on the increase were seeing lately.
If we think it's going to happen sooner sooner than we'll give guidance that effect once we finalize our strategy for Europe for example, but the two big things that we are currently focused on right now we're number one.
Actually broadening out the inclusion for for other knocked over 19, Ards patients and then number two the potential for more countries in more clinical institutions that are seeing a meaningful number of patients, but right now our goal is to try and get it done sometime next year and will provide further updates as we get a little bit further along and and.
And closer to provide some more granular perspective on that.
Got it thanks.
Thanks very much.
And your next question comes from David rank well.
Okay Securities.
Hey, guys. Congrats on the progress this quarter just kind of your questions.
So first just on.
The regulatory path or.
You just remind us.
Are you looking to file an NDA.
The timeframe.
The law.
Okay, and then has there been any.
In the.
Yes, hi feedback revising guidance in.
Today versus at EEI of.
What you agencies are looking for in terms of.
Results outcomes.
From a store profit that typically.
Yes, yes.
No actually the feedback has been pretty consistent and very much alliance between Europe and the FDA here in the U.S. It's.
It's been that way from the beginning there was only a slight difference between the perspective that the feedback that we got from PMDA in Japan, when we engage in our initial discussions with that very early on in the process.
But but EMEA and again, the FDA has been pretty aligned in terms of how they do thanks.
Yes, ultimately in terms of the filing strategy and in part that's also going to depend on the preferences and.
And kind of the orientation of our partner in Europe.
And Mike and my expectation is that that's going to be done in parallel and may even be done.
At around the same time as both our jurisdictions, but some of that actually comes down to.
Things that haven't been decided yet which I think will.
Once we're a little further down the road and that we'll be able to make that determination on that.
Got it.
And I guess on the topic of the partnership or what.
What limited in what you can disclose given you the compensations me ongoing but.
End of <unk>.
The deal is that.
Yes by Abbvie.
Yes, and from ours and growth.
And then in terms of sort of the priority how do you think about the capabilities of the partner versus.
For example, the ability to provide a a upfront payment.
Yes.
Well, obviously, a meaningful upfront payment is mandatory for us to do a partnership I mean that in fact were I think it's fair to say that we're not looking for something incremental we're looking for something that is very substantial that I think our shareholders look at that and say yeah. This this represents a transfer the transformational type of alliance between the company and the partner.
I didn't quite understand the first question that you were asking so maybe you could just re restate that.
Yes, I would.
Wondering if.
Waiting until post the Healios readout, adding that data in hand, it's something that you would help you in terms of negotiated they're bringing on.
Some additional data points repeatable.
Yes interesting question.
So again, we're more focused on this alliance is a near term priority and.
So I guess I want to get too granular in terms of our response to that other than to say that.
This is something that we're actively working on it's something that we really regarded the near term objective and the companies that were in discussions with no that.
As it relates to I think the second question related to kind of the portfolio structure of the portfolio nature. We are very much focused on.
And the capabilities of the partners that is one of the things that we've been asking David what are the capabilities of the partners and the therapeutic areas that we're going after that's actually critically important for us and.
And it's something that we strongly emphasize and has spent a lot of time doing due diligence on the company that we're in negotiations and discussions with the kind of evaluate what might make them a good partner.
Because as you can imagine obviously the financial elements of this and the overall structure is very very important but what you really also want to do is you want to make sure they're aligned with somebody that understands the market. The critical care indications that we're focused on behalf of Monster Bowl capabilities and expertise in those areas and they bought.
Strategically and commercially about how to go after and so that is something that the team has really been emphasizing in our conversations with prospective partners.
And I think that they feel really good about the information the things that weve work.
Obviously, some some entities profile better than others, but I will say that were all of the companies that were in discussions with other serious contenders are all serious players.
Okay, great. Thanks for the color on that.
Thank you.
And your next question comes from Nelson with Needham <unk> Company.
Great. Good evening, Thanks for taking my question.
So.
It's pretty exciting the next.
David we're going to get here is going to be.
From Healios in there.
Hum.
Pretty quickly in 2021.
[music].
The treasure obviously.
Talked about that's a good size.
Trial, there Im a little more interested in your perspective on what we might expect down a one bridge, it's it's smaller and it has.
We'll bid.
Cohort there on.
Just wondering if you have any perspective on what you think that might be healios.
In terms of the label or inability to this with PMDA.
Particularly given that they are leaning towards regenerative medicine and that also into consideration to the fact, there is potentially some positive.
Root data from a larger study being behind that.
Yes.
So so as it relates to the VR trial.
Yes.
It's interesting it's a smaller study, but theres actually several relevant examples are that we and Healios believe a relevant examples where companies have received approval under the regulatory framework in Japan that first went into effect just to several years ago.
And.
And so the the two studies that we're talking about here. The 220 patients treasure trial, that's a larger more robustly powered study of course, our studies, even larger 300 patients, but as you get more robustly power. So.
So I think we're going to learn a lot on the on the stroke landscape in both of those trials.
In terms of the smaller studies in some ways. It was reflective of the approach we took in our sales which was about 30 patients in which actually showed pretty substantial data. If we were having a positive impact and benefiting a lot of patients that were enrolled in the trial now of course. The one difference is that ours is a double blind randomized placebo controlled trial.
And there are studies, an open label trial, but nonetheless, there are examples in Japan that based on open label or even small or modest datasets that PVH review that data and said Hey, This represents an area of substantial unmet medical need and we're willing to provide conditional approval for an investigational therapy or our product on that basis.
Approval using a conditional approval pathway in Japan feature on the market for seven years and you're eligible for full reimbursement. So you'll you'll get a full reimbursement for your products for a period of up to seven years, but then during that timeframe you have to run confirmatory studies.
PMTA half sign on to demonstrate that your product isn't back safe well tolerated and shows meaningful therapeutic benefit.
But the first hurdle in terms of conditional approval, which I think is really being emphasized for ore reserve. If you will for things that are targeted at patients or indications, where there substantial unmet medical need and there's really limitations meaningful limitations in standard of care.
That's really what that by same store way is is best suited for.
And Healios decided that they were going to run the study that they're running at the end.
That that might provide them with the basis for pursuing that has the potential central option hurdle, but at the end of the day. They are going to look at the data secret they've learned have a conversation with us obviously first with us but have occurred subsequent conversation with the FDA.
And make a determination about how they think they should proceed.
I think thats, a very reasonable thing to do and of course, they are going to have the opportunity to warn from from our larger trial that we're running when we have data results from that just like we are going to have the opportunity to learn from their treasure trial.
On top of what bridge.
And then they're going to have the opportunity to learn from our.
From our Masters two trial as well for both learning from each other and benefiting from the investments that were each making in conducting clinical trials and building additional information.
So I'm not sure if that fully answers. The question that you had but happy to answer follow up for a while.
Okay.
Well done.
Barrett cited.
But.
[music].
Yes, I think thats exactly right its going to be very exciting next few months in the first couple of quarters of the year and I think you've been out beyond that so were looking forward curve and entertainers pretty fired up about it I mean, there's obviously a lot of a lot of stuff going on around us, but I can honestly say I'm incredibly proud of the team and I knew Iraq and remarks wall.
For how the team has navigated through this stuff is dealt with all the operational obstacles or logistical things that people have had to deal with and they just never lost focus and it continued to move ahead and it's it's I think it's a testament to the strength of our team and how excited and committed there.
No yes.
Okay looking forward to the progress.
Thanks, Ed.
Your next question comes from Jason Cooper Thompson.
Hi, Gail.
Want to ask a question kind of picking up on where the question started with is.
When you're pursuing a disease like stroke or disease, like ards or even cove. It or there are a lot of variability is theres a lot of noise there competition.
Nearly one thing that athersys.
Understand that given your experiences is how you zero out that noise and the assumptions that you're making about power that leads you to clinical trial size. So I wonder if you could try to be a little bit specific on.
You know what those assumptions are whether it's the cove it based or study that you're working on now and just remind us kind of where we are in terms of power on both the chap Pan and the global stroke trial. Thank you.
Okay.
[music].
So.
It's interesting when you're making a bunch of assumptions as you move into a clinical trial. We are we think it's a prudent thing to do is take what you've learned and major highly confident in it. So in this case are the the our knowledge about what the historical landscape looks like for patients that suffer from Mark and we know historically the mortality.
Great for patients and the Ards Ariad has typically been around 40% plus or minus right. There are some if you focus on slightly less severe hard cases mortality rate can be somewhat lower than that basic.
Basically we tried to work from a lot of the data that was out there. When we were designing our initial studies in terms of the types of patients that we wanted to enroll in the trial and how we want to analyze the data you'll recall that when we set that profit Rob we prospectively defined to populate it when the entire group of populations in sales.
And then more specifically the more severely ill patients with ours.
And sure enough it turned out to the mortality rate for that trial as a whole was about 40%, which is very much in line with historical expectations and them attract mortality rate for patients with more severe arts was about 50%, which is also more aligned in.
Line with historical expectations.
Despite the fact, there was a fairly modest data.
But when we analyze the data that those are some of the things along with the biomarker data that we got the obvious clinical improvement and things like that getting to 45% of the patients off of ventilator within seven days you lap it contracts only 20% of the patients who are being treated under best available standard of care.
The IC you free days generally to create and everything else.
We believe that it wouldnt be the best things to take your data even though it.
Just really.
I want to say it exceeded our expectations, but it came back as a very strong pattern that we were helping these patients.
And particularly in light of the fact, the COVID-19 is something that nobody ever seen or dealt with before in the early data that was coming out suggested that the mortality rate and the impact on these patients was pretty dramatic increase pretty.
Pretty negative.
So we made the decision, particularly when we were in discussions with the FDA going back and forth that we were going to make a conservative set of assumptions.
About the clinical effect that we would see that were meaningfully below what we saw in our last study.
And so.
In a way that's the philosophy that we tried to deploy and other things. So for example, we also did the same type of thing in our in our Masters two trial.
We for example, the study in Japan is 80% or better power to meet the endpoint for that study.
Our trials actually power well over 90% to achieve statistical robustness and that we designed it that way intentionally. So we were trying to be conservative and if you will kind of overbuild bid in terms of what people would normally do.
Just because we know that when you run a trial sometime your patient population might be slightly different than you had in the prior study and so we really want to make sure that we were being conservative about how to design. The study and can dotcom. So that we maximize our probability of being able to achieve success at the end of the day in the Treasury.
We also just things like we knew that we were going to be able to move our window treatment earlier than in Alaska, which we felt would meaningfully move the odd further in our favor because the last trial told us that the earlier, we were treating patients within that 24 to 36 hour window last time around the better the patients were.
So this time by moving the trial the treatment window to 18 to 36 hours and emphasizing early treatment. In this study we felt like we might be able to further maximize our chances of success and moving in the right direction and there is a number of things that we did a really try and leverage what we learned from the last study that we ran both in Hearts and also.
In in Masters water Schroeder.
And apply them in the current large studies that were currently running but making conservative assumptions about the mortality rate. So for example.
When we saw a difference into seriously ill patients so mortality rate of 25% in multi sentry to patients and 50% in the more severely ill patients. We didnt assume that we were going to see that big of an effect in the coatings side.
And just seeing same thing when we looked at other parameters, we didnt assume.
That it was going to line up perfectly we back off that with the clinical parameters. So that we could design study in a way that we think was more conservator.
But the other thing that we did as I mentioned is it in the in the previous study is building in the opportunity for doing a re sizing analysis by the DSMB be partly to the study to vacate.
Valuate that data reflect on it and then just reflect on it and give us some feedback about okay, where do we think that once the appropriate sizing of the study given the company's objectives based on the data set partway through the trial and and we thought that was a reasonable and prudent thing to do and we sold it.
So just as we thought was a reasonable and prudent thing to make conservative assumptions about what we might see in.
In in matters too.
You kind of overpowered out if you will.
Those things don't get sorry go ahead.
How close are we in terms of.
He is the phrase confidence level, but how.
How good do you feel about where you are in terms of the board study now or I guess, you just have to wait to kind of get feedback from the SMB.
Yes, we just we just have to wait until we get that feedback credit so first off.
Our policy is that we don't want to talk about what's going on so we're not expecting the data as it rolls in I mean, obviously, there's a team of people that are responsible for doing that kind of thing, but for example, I was struck by the data when it comes in in order to other members of the leadership team we focused on the execution of the trial data as quickly as we can so it would be I think.
Falling into trying to prognosticate blinded data or interpret it and make a determination about what it might mean or what it might not.
We believe that if we designed the trial the right way if you select the endpoints properly if we've got full support and buying from the FDA and other regulators and we execute the study properly and we're working with good sites and understand exactly how they're supposed to valuations both in terms of enrolling them. But then also during the course of the conduct of the trial that thats, how we optimize that plus the design.
It's obviously, which are critical that's how we optimize our chances of success and that's really what we're focused on them.
Thank you Gail appreciate the update yes.
Yes, thanks, Thank you Jason.
Well we.
I will now turn the call back over to you.
Telephone lines for.
Great.
Thanks.
Well once again just in closing I would like to thank everybody for listening in on the call today are the webcast and for your faith in your confidence we remain fully committed to advancing our programs that achieving our goals and we look forward to making additional announcements and providing further updates as we move forward.
Ladies and gentlemen.
Todays conference call you may now disconnect.