Q3 2021 Athersys Inc Earnings Call
As for the program, we provided a thorough update in our last quarterly call, which followed shortly after the release of data from Helios is one bridge study.
To summarize the results from the one bridge study appear to be consistent with results from our must Ards study.
With Helios reporting higher ventilator free days are BFD over 28 day period, and lower mortality in the Multistem treated group compared to standard therapy.
Last week Helios reported its third quarter financial results update presentation that it plans to file in either Q4 of 2021, our Q1 of 2022, a J NDA for the <unk> program, which is designated as an orphan regenerative medicine product.
Further preliminary analysis of the data pool from both the must Ards and one bridge studies suggest a strong signal of potential impact.
This pool data set includes 40, non COVID-19 ards patients treated with Multistem cell therapy and.
In 2000, and <unk> patients treated with placebo or receiving standard of care.
According to this analysis average FTE was higher than the Multistem treated group compared to non treatment group $13 nine days compared to $10 one days.
With a P value of <unk> <unk> seven when adjusting for baseline differences in condition severity and age and using a two tailed statistical test.
Median DFT was also substantially higher.
Based on this data there was also a trend to lower mortality in the Multistem treatment group.
These data are provided in our corporate and our updated corporate presentation deck, which is available on our website.
We are also pleased to announce that the manuscript describing the must Ards study results has been accepted for publication shortly.
Further details will be forthcoming.
We look forward to continued progress in our <unk> study treating patients with ards induced by Covid and other pathogens.
Our intention is to continue and complete enrollment of the study is cohort two and reflect on the evolving standard of care as a result of the Covid pandemic before proceeding with cohort three the phase III efficacy cohort.
It is possible that we would make changes to the design of the phase III efficacy cohort to improve our chances to help patients.
And have a successful clinical trial.
Separately in our Q&A section I will address some recent questions about BARDA and the recent amendment to their broad agency announcement reinstating a revised version of area of interest nine three.
To conclude we remain very enthusiastic about the potential for multistem or in the master cell therapy to help <unk> patients.
And we will continue to actively support efforts in Japan to advance the program to J&J A&D, a submission and if approved into commercialization.
Next we turn to our stroke program.
As we noted in our press release on Friday Helios has provided further clarity about the timing of the disclosure of topline data from its treasure study evaluating Multistem administration to Japanese stroke patients.
Simply put the treasure study has not been delayed enrollment completion was announced several months ago. However, based on advice received from the <unk> in conjunction with recent regulatory interactions.
Helios now plans to disclose top line results from the Japanese study after data from the one year follow up visit of the last patient has been collected.
Helios expects this last follow up visit late in March 2022.
Top line data disclosure to be made as soon as possible thereafter.
To be clear.
Available data set has not been unblinded and would not be unblinded for analysis until after the last patient last visit.
We would expect the pre specified analysis to be completed expeditiously once the data set is unblinded.
This approach advised by the PM da is intended to preserve the integrity of the data collected from the last patients in this study during the one year follow up visit.
Our conservative approach given the number of subjects, who has one year data could be affected by disclosure is very small and other less restrictive measures protecting study data integrity are available.
As we used in our own Masters one study for example.
This outcome is additionally, frustrating given that the analysis and disclosure of 90 day data was included in the submitted treasure study protocol approved for the study.
We are optimistic that the treasure study will show therapeutic impact from administration to patients shortly following an ischemic stroke.
Our conviction is founded on a number of important factors, including a study design, including the targeted subjects screening guidelines and evaluation metrics.
That replicates the core design elements of our Masters one study.
Early administration of Multistem therapy during 18 to 36 hours post stroke and within this window than expected shift to earlier administration compared to Masters, one which appears to be associated with better outcomes based on statistical analyses.
And see evidence from the Masters one study that Multistem is greater relative benefit in older patients.
That said there are some risk such as limited prior data from Japanese or Asian, ischemic stroke patients and very old patients and some differences in the standard of care compared to our Masters one study.
Additionally, this approach would make available 90 day and one year results likely both during the second quarter of 2022.
Note that in the Masters one study patients who received multistem treatment within 36 hours of a stroke continued to improve after 90 days as shown in several outcome measures, including excellent outcome in the MRI shift analysis.
The primary outcome measures for the treasure and Masters two studies respectively.
For example, the proportion of Multistem treated patients achieving excellent outcome increased from 16% to three months, 29% at one year.
Translation <unk>.
<unk> out of 100 series stroke patients, where essentially back to normal by 90 days and another 13 back to normal by one year compared to non treatment, where just seven of 100 patients were back to normal at 90 days and only one more had achieved this degree of improvement by one year.
We also observed continuing improvement for multistem treatment across the severity spectrum.
As is evident improvements and mris distribution through one year.
Which is shown in our corporate presentation.
We eagerly await the treasure data and we are planning for a positive outcome that would enable helios to move forward with the J NDA by making preparations in the regulatory and manufacturing areas in particular.
We are making progress in our Masters two study as we have noted in previous communications and calls we've had challenges over the past 18 months tied to COVID-19 and supply constraints.
However over the past quarters, we have focused heavily on site level operations to enable us to meet our development objectives.
We have recently initiated sites outside of the United States as we continue to add more sites to the study.
Increasing the number of sites, including outside of the U S will be an important element to accelerating our monthly enrollment figures.
We've also been investing meaningfully in site level support supplement local clinical research operations and.
And increase the pool of patients available eligible for the study.
This includes increased clinical research personnel deployment and site investigator personnel engagement and problem solving through meetings and other communications.
Based on our current plans and assumptions regarding our site network and site level activity, we hope to complete planned enrollment before the end of 2022.
However, regional Covid searches or other unanticipated factors may impact site initiation operations and enrollment activity.
Or even the product supply chain.
With impact on enrollment timelines.
To summarize we believe that both the treasure and Masters two studies are well designed and well powered to show positive impact for multistem treatment of moderate to moderate severe stroke patients.
We remain confident in our cell therapies potential to change treatment and outcomes for a significant proportion of ischemic stroke patients.
A major area of focus for the company as.
As we have discussed in the past.
He is planning and preparing for manufacturing and supply of product for commercialization. If the product is approved for marketing.
This is a multi year effort with emphasis on making products that scale and reasonable cost.
Supply chain security and redundancy.
And distribution of the product into hospitals.
We continue to make progress with establishing our larger scale bioreactor based production process working internally and with outside experts and commercial manufacturers to build capacity in a stepwise fashion to align with our regulatory and commercial needs.
We have made substantial progress in solidifying our supply relationships with long term continuity and redundancy in mind.
And we continue to advance our thinking and technologies for localized product distribution.
Recently, we have completed our alpha prototype for the secured integrated freezer unit or seafood.
Demonstrating haven't seafood would work in practice.
As we have discussed previously generally speaking 2021 has been focused on advancing the development of our platform and programs with a focus on manufacturing supply chain clinical development and initial planning and preparations for commercialization.
We resolved open issues with our Japan partner Helios to set the stage for the completion of development and commercialization in Japan.
And we have made substantial progress in the area of manufacturing supply chain and distribution as noted above.
We have fallen short of our clinical development objectives in particular, our progress and our Masters two study.
However, as discussed above we have taken several actions to execute a strategy that will improve our trajectory and progress.
As we look forward to 2022, several important themes would be reflected in our objectives and actions.
As we await data from the important treasure study.
We will be devoting our intention and substantial efforts to enabling and supporting our clinical development.
Particularly the completion of enrollment of our Masters two study as soon as possible.
We plan to continue preparing for manufacturing and supply of product in a commercial setting.
Which as noted is a multiyear effort.
Also we plan to further ramp up of our other efforts to support commercialization provide.
Providing support to our partner in Japan.
Further developing internal commercial capability and personnel.
And building out our market access and reimbursement strategy.
In addition, we will continue efforts focused on securing the best possible partner to develop and commercialize the European markets with us for one or more of the Multistem critical care indications.
Okay.
We believe our platform has.
His broad applicability and potential beyond our current activities.
We plan to remain focused on the critical value drivers in the near term.
With that I will turn it over to <unk> for an update on the financial results.
Thank you Vijay and good afternoon, everybody and once again, thank you for joining today's call.
I am Ivor Macleod, Chief financial officer of emphasis.
It's my pleasure to give you an overview of the financial results for the third quarter of 2021.
For the three months ended September 30 of 2021, we recognized $4 $8 million in revenues.
Compared to $86000 for the three months ended September 30 of 2020.
Related to our collaboration with Helios.
Our collaboration revenue is currently fluctuate from period to period based on the delivery of goods and services under our arrangement with Helios.
Research and development expenses decreased by $1 3 million to $17 2 million for the third quarter of 2021.
Compared to $18 5 million for the comparable period in 2020.
The $1 $3 million decrease is primarily associated with decreases in clinical trial and manufacturing process development costs of $2 million in.
And internal research supplies was 600000.
These decreases were partially offset by increases in personnel costs of 500000.
The associated costs of 400000 and outside service costs of 400000.
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.
Our general and administrative expenses remained consistent at $3 $6 million for the three months ended September 32021.
In the comparable periods in 2020.
The net loss for the third quarter of 2021 was $16 $2 million.
A decrease of $6 3 million compared to the net loss of $22 5 million in the third quarter of 2020.
The difference is primarily a consequence of the previously mentioned variances.
During the nine months ended September 30 of 2021 net cash used in operating activities was $56 9 million.
Compared to $44 5 million in the nine months ended September 30th 2020.
At September 30 of 2021, we had $49 7 million in cash and cash equivalents.
Compared to $51 5 million at December 31, 2020.
During the third quarter of 2021, we raised $13 2 million through our equity purchase agreement with aspire.
We have not utilized the aspire equity purchase agreement in the fourth quarter of 2021.
Our burn rate this year has averaged between 17 and $20 million per quarter.
Which includes some significant one time expenses.
These onetime expenses related to executive severance as well as professional fees associated with the past litigation with Helios.
And the subsequent consummation of a comprehensive framework agreement.
In aggregate these onetime expenses during the three and a half to $4 million range.
Moving forward, we continue to have the ability to dial up or dial down our burn rate based on our priorities and capital availability.
With a cash balance of $50 million and access to our equity line of up to $100 million.
We feel we have adequate cash to fund our near term priorities through and beyond the publication of Helios is topline stroke data.
On a non financial note.
Front of mind with both current and prospective investors.
We recently received received our ESG corporate rating from ISS, the proxy advisory firm.
ESG stones for environmental social and governance.
Score is a measure of the company's collective consciousness for social and environmental factors.
As an important benchmark practices.
We received a grade in the top 20% of our peer group of companies and Consequentially were awarded Prime stasis.
This will resonate well with all investors, particularly institutional with whom we will be engaging in the coming months.
With that I will turn the call back over to BJ for Q&A Vijay.
Thanks Tyler.
As we have done in the past, we'd like to start by addressing some questions submitted by our shareholders over the past days and weeks.
Before I begin I want to thank all of you for these questions near input over this period.
We've recently received many questions about Florida, and our Arts program. So we wanted to address that here.
As some of you know BARDA has recently upgraded its guidance with respect to programs eligible for funding.
Specifically as it relates to activities in our area of BARDA has amended its broad agency announcement reinstating and updated area of interest nine three.
Directed to <unk> modulators or therapeutics targeting lung repair.
Given our past interactions with BARDA. It is useful to provide some context regarding section nine three in our Paas proposals.
In early 2020 at the request of BARDA, we submitted our first proposal under broad agency announcement.
Amendment 15 area of interest $9, three which calls for the development of therapies targeting lung injury caused by Covid.
BARDA noted that it would prioritize candidates against Covid.
<unk> study was designed originally with this in mind.
In response to questions and requests to BARDA, we have submitted an updated proposal in may of last year.
In the meantime, however, BARDA amended the VA modify nine three to prioritize submissions demonstrating the availability of 10000 treatment courses or doses in our case within six months.
And about six weeks later BARDA suspended area of interest nine three altogether.
Even that we applied under amendment 15, with the advice of council and other outside experts, we continue to pursue possible BARDA funding to support our <unk> study and manufacturing preparations.
Ultimately to no avail.
B a amendment 29 issued on October 26, 2021, Reinstates and revises area of interest nine three.
Importantly, the revised nine three specifically mentioned <unk> for the first time.
And no longer prioritizing candidates for Covid.
And the requirement for 10000 treatment doses in six months has been dropped.
It is possible that a revised <unk> program and our development strategy.
Together with our planned strategic build out of manufacturing.
May be consistent with the revised agency call. However.
However.
And it's too early to determine if there would be a fit.
Naturally we will take a close look at the opportunity to evaluate our eligibility and the potential for funding to support Arts program.
Which would likely be based on a cost sharing mechanism.
And if it makes sense proceed with preliminary inquiries and submissions as appropriate.
To the extent. We proceed we would expect the application process to take at least four to six months to play out given guidance in the new issuance.
Furthermore, given our recent R&D focus and the Orange area.
Given COVID-19, we would expect a competitive application process.
Several of you have asked about the status of our CEO search.
As we have said from the beginning our focus is on recruiting the best leader for offices.
In a very competitive biotech hiring environment.
And the board continues to seek out candidates, who skills knowledge and career experiences would add substantial value to atlas's at this stage in the company's evolution.
We will provide additional information and updates as things further progressed and developed in the CEO search and with other <unk>.
<unk> important to our preparations for commercialization.
Some of our investors have asked about how we are.
Raising awareness or planning to raise awareness in the medical community and the investment community.
First let me say, we are constantly working to raise awareness in the medical investment communities.
On the investment side for example, we continue to present at high profile healthcare conferences. Most recently, the 2021 cell and gene therapy meeting on the Mesa.
And we plan to attend the Jpmorgan conference this coming January.
We keep our analysts and bankers updated with regard to our progress proactively reach out to both existing and potential new investors to update them on our introduce them to our story.
We remain active on social media and with the help of our outside advisers. We are always looking for opportunities for media coverage.
For the company for our technologies.
And other topics as well.
Specifically on the medical side. In addition to the activities already mentioned and continuing with scientific and medical publications.
We have recently focused on increasing awareness of our ongoing masters two study.
Suing media opportunities in the geographic areas some of our clinical sites.
Recently it has included television slots in Chicago and Miami.
As well as an article.
Augusta Chronicle.
All of these pieces are available for viewing on our website.
In addition to our updated corporate presentation.
Looking forward this will be an increasing area of emphasis as we approach commercialization.
And we'll include efforts specific to.
Two ultimately building interest in the treatment and influencing uptake of the therapy.
And are supporting reimbursement coverage and pricing.
So with that we will now take some additional questions from todays participants.
And as a reminder to ask a question you will need to Paas far along.
Our next telephone question.
Question back the bonds.
Yes.
Steven Barlow the compile the Q&A roster.
Again to ask a question.
What are your thoughts on.
Our first question comes from the line of Greg Harrison with Bank of America. Your line is now open.
Good afternoon, and thanks for taking our questions.
First one is just on the status of the <unk> trial.
Can you give us an update on maybe where.
Enrollment stands and.
I know, it's a little bit of a fluid situation.
Focus between Covid based are then.
From other pathogens, but.
Maybe you could give an update there on an enrollment and then.
Would there be an interim look at any point.
To give investors a sense of how the data look and without having to wait for the entire trial to finish.
Thanks, Greg.
Those are good questions.
So update on enrollment and then the potential for an interim look so I address this briefly in the discussion, but I think the current plan is to.
Work to wrap up our quote unquote cohort two.
For some time.
As early as possible next year I don't want to give any more specific guidance than that as you remember.
There are three cohorts to this study a cohort one cohort two and.
Cohort three cohort one is really focus to.
Introducing these patients through the product ensure safety cohort two is to develop some perspectives on feasibility.
And potential for the therapy in cohort three is really the larger efficacy cohort.
That was originally targeted for Covid induced ards patients because as you know we've expanded that to include other non COVID-19 pathogen, which is consistent with our long term strategy at the end of the day, we want to treat bars.
Irrespective of the underlying costs.
So again, our enrollment objectives.
Move through a complete enrollment of cohort two as soon as possible.
2022 at.
At this point our expectation is we would take an opportunity to take a look at.
The results through cohort two we haven't made a final decision on that.
Driven.
Give you information investment investors per se, it's really more focused on allowing us to confirm that the design for cohort three.
As is appropriate.
Given what has happened.
With respect to standard of care for treating these patients.
As we've talked about in the past and as you know.
There has been.
Fair degree.
Movement, I'd say the standard of care introduction new therapies.
It has some different approaches for treatment or pre treatment of <unk> patients. So noninvasive methods of treatment et cetera, some of which have had some success and we expect will impact treatment of <unk> patients more generally over time.
So I expect at this point.
We would take a look at the.
The experiences we've had in cohort two and reflect on that to be sure that we're set up for a successful efficacy part of this study and maybe we create.
True phase III.
Study.
Or it is we make amendments to the current study with cohort three so we haven't made that determination yet that's the current plan. We remain excited about the area I mean, the data from Helios is very very encouraging.
We believe that.
The upcoming.
Opportunity for them too.
Ply make an application.
Two the <unk> would be a very important milestone.
Demonstrating that the platform in this particular.
Application has got real potential.
<unk> approval and commercialization.
So we're very encouraged about the potential for the area, but we want to make sure that when we go into the larger efficacy cohort.
We're set up for success.
Okay. That's helpful.
One more if I could real clear.
How you mentioned.
Cash burn earlier in the call.
Just wanted to.
Get a sense of what is the urgency right now too.
Maybe enter a partnership.
To secure some non dilutive capital.
And.
And how does Helios decision to push back the stroke readout effect that I think previously.
That may have been considered.
A catalyst.
That you would want to have.
Kind of under your belt before you entered a partnership.
Yes. Another good question I think youre quite right. We've talked about this in the context of partnerships in the past and I think it's been our view.
For some time that our ability to get very high value deal done.
Would be greatly facilitated by positive results from the treasure study and ultimately from the Masters two study if we wanted to wait that long.
So in a sense, it's disappointing weighted this has been pushed off because its.
Pushed off our efforts to really drive for the highest value potential partnership we could.
Critical care it around stroke, I guess more specifically.
That said.
Your question about urgency.
The need to drive faster I guess too.
<unk> eight perceived need for cash in here. So first let me say.
I think we believe as <unk> said that from a cash position perspective, now that we have fairly specific clarity around the timing.
For the Helios disclosures, we feel very comfortable about where we're positioned from a cash perspective.
We have the bank, our access to capital et cetera.
That said, we're going to continue our discussions on the business development side and if there is an opportunity for us to do something earlier, we're going to take a look at it.
And of course, we'll be balancing our whole set of things as we said in the past.
This is a key priority in finding a partner for Europe is to find a partner who is going to create the best chances for commercial success and thats driven by commitment and it's driven by capabilities.
It's driven by plan.
And we're going to be looking at that.
Obviously, we want to get fair value.
But if we can find such a partner.
In the near term, we're going to we're going to explore opportunities to get something done earlier than we had originally planned but I still remain.
That we would get the best possible financial terms.
With positive data in hand.
So we're going to keep all of our options open we're going to continue to press ahead and continue with our discussions.
And if there is an opportunity before the data.
We're going to consider it.
But there is.
I wouldn't say there is urgency we're a critical need to get something done before that data to answer your question.
Got it thanks again for taking the question.
No problem. Thank you.
Our next question comes from the line of David Wang with Smbs.
Your line is now open.
Hi, Thanks for taking the question.
I just had a few maybe.
Maybe the first one continuing on the line of questioning around.
Youre Africa partnership you talked a lot I think about Europe really being the focus already.
Your partnerships and so I'm just curious why why is the focus on Europe is the geography that you consider.
Worldwide, Alright partnership where you would also VDI.
Okay.
Giving up on it but you're right in the U S.
For development and commercialization, but maybe.
Yes.
Quarter to quarter.
Yes.
Yes, Thats good question as well I think.
Our strategy has been clear for some time.
That is to prepare for commercialization of our critical care portfolio in the United States and to partner with strong partners ex U S with a focus on Japan, and a focus on Europe as the leading geographies certainly there are opportunities beyond that we've talked with folks.
About potential opportunities well beyond this kind of is limited geographic context.
Quite clearly many of them.
Companies, we talk to and continue to talk to have global aspiration.
And the discussion around the potential for them to be involved in a broader partnership with a broader global dimension.
As part of these dialogues for sure.
But we would like to preserve the U S markets. We think we can be effective there.
With the right capabilities added to the company over the next couple of years.
We think that preserves.
And allows us to build the greatest value for our shareholders.
If there is an opportunity that comes along perhaps as part of the discussions.
Around Europe that would include the U S. We will we will hear that out.
And of course, if it makes sense, we will consider seriously.
Okay. Thanks for the perspective, there I had.
The other question on.
In terms.
The feedback that youll get into Japan regulator.
Asking for a look at the 365 day data keeping 90 day blinded until that was eight.
Does that does that.
Looking at all in terms of your interactions with FDA would it make sense to have a conversation with FDA as to whether he may answer.
Thank you.
Similar course of action in reviewing Masters two readout down the line.
We have a strategy there we do believe that we'll be able to announce or disclose their 90 day interim data.
We do have that discussion with the FDA about that overtime.
I would say that the ultimate outcome in Japan was.
Not expected for Helios it wasn't expected for us I think as I noted.
The approach that was taken as.
Very reasonable.
The plan approach.
Very reasonable.
As laid out in the original protocol submitted with the NDA.
And it's defensible in terms of protecting the integrity of data.
Does the same margin in supply in the United States I think the <unk> is.
And my view is being conservative here and in the end I don't think it's a bad idea for them to be conservative I don't think what we're doing here is going to have a profound impact on the outcome of the data.
But I look forward to the data.
The fact that it's delayed a quarter.
Disappoints us in the sense that we'd like to.
Get that positive data out and move forward with a lot of the things we have ahead of us but.
It's also going to give us the opportunity to look at the 90 day topline data in.
Simultaneously or very shortly thereafter look at the 365 day data and as I pointed out.
That data in our Masters one study was even more compelling.
And then the 90 day data we saw improvement over that period of time. So it does create the opportunity for that short time.
That timeframe between those two data points, so I think thats a positive opportunity here, but yes, our strategy with the FDA is not the way to the.
Collection of last data from the 360 foot hit their one year.
Follow up visit before we announced data we are right now planning.
For collection and disclosure of 90 day data. That's also part of our protocol, but is subject to confirmation discussions with the FDA as we move forward.
Okay. Thanks, so much for taking place.
Sure.
Our next question is from Moshe <unk> with Needham <unk> Company. Your line is now open.
Hi.
Thank you for the.
Question Michael.
My question regarding study.
Study.
I wanted to ask like do you have any further updates on both metrics. Thanks Paul.
Goldman.
Sure.
Paul.
The government.
Cohort as well and you had mentioned bill Thank you.
Yes, thanks for asking and I know, we didnt cover it here, but trauma is also an area of real interest for the company.
We've been working very closely with.
The chief clinical site in Texas.
We've had we've made good progress early in that study I think our expectation is to make good progress.
Into 2022 with that study.
We are negotiating some things with the FDA about that.
Basic approach for enrollment, which is fairly typical in trauma studies.
One of the challenges in enrolling these patients as they are typically unconscious. So if you want to treat early you have to figure out ways to.
Get them into the study as quickly as possible and typically that would.
Involve consent from.
Legal representative of some sort, but were working as well with the FDA to figure out ways that they can see the more streamlined as we move forward.
That would be pretty important I think to.
Very accelerated enrollment.
Still opportunity to get this done in a reasonable timeframe, even if we can't reach an accommodation with the FDA on that.
That is something.
That is part of an ongoing.
Dialogue interaction, we have with the FDA, but things so far.
Positive in terms of enrollment.
Nothing untoward to report which is with.
What you'd want to here in the earlier stages of this study.
And we're very.
Encourage and optimistic about that study and its progress in 2022.
Great. Thank you.
Okay. Thank you.
And there are no further questions. So I'll now turn the call back over to BJ Lehmann for closing comments.
Well, thank you for your participation today.
We remain focused on the task ahead of us here.
But we will continue to cultivate broader opportunities that create value over the longer term.
And again want to thank all of you for your participation today and your interest in the weeks and the past months.
The questions and the input.
No. We don't answer all your questions, we try to respond to the input and interactions.
And even where we don't we do value the input you provide to us and we tried to build that in.
Our thinking and incorporated into our plans and business as we move forward. So thanks again and have a good night.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Right.
Okay.
Okay.