Q4 2021 Humacyte Inc Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the human side fourth quarter and year end 2021 results Conference call. Currently all participants are in a listen only mode. Later, we'll conduct a question and answer session and instructions will be given at that time.
As a reminder, this conference call is being recorded.
I will now turn the call over to Laura Merrick with life side Visors Warren. Please go ahead.
Operator.
Before we proceed with the call I would like to remind everyone that certain statements made during this call are forward looking statements under U S. Federal Securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ material from our historical experience or present expectations.
Additional information concerning factors that could cause actual results to differ materially from forward looking statements made on this call is contained in our annual report on Form 10-K for the year ended December 31, 2021 and other filings made with the SEC when available before.
The forward looking statements made during this call speak only as of the date hereof and the company undertakes no obligation to update or revise the forward looking statements except as required by law.
Information presented on this call is contained in the press release, we issued this morning and in our Form 10-K , which may be accessed from the investors page of the human site website.
Joining me on today's call from Hemocyte, Our Doctor, Laura Nicholson, President and Chief Executive Officer, Dale Sander, Chief Financial Officer, and Chief Corporate Development Officer, and Dr. Heather Pritchard, Chief operating officer, Dr. Nicholson, who will provide a summary of the companys progress during the quarter and year ended just.
Remember 31, 2021 and recent weeks before turning it over to Dale for a review of the Companys financial results.
Following their prepared remarks, the management team will be available for your questions I will now turn the call over to Doctor Nicholson.
Thank you Lauren good morning, everyone and thank you for joining us on the inaugural humus like quarterly results call.
As the company progresses toward commercial stage, it's our intent to expand our investor outreach and provide regular opportunities for interactive dialogue. We appreciate your attendance and we look forward.
Two our discussion today on future quarterly calls.
Human side has made significant progress throughout 2021, including the closing of our business combination agreement with Alpha Health Care acquisition Corporation, and our debut on the NASDAQ, which provided US the strong foundation that we're continuing to build upon in the early part of 2022 .
As we progress forward, we remain focused on advancing our first in class regenerative medicine platform.
And our lead bioengineered human tissue product candidate the human a cellular vessel or H, a V towards regulatory milestones and commercialization.
I'll spend just a few brief moment.
Rising are recent developments before turning the call over to Dale.
For a review of our financials.
I'll begin with our late phase two three clinical trial that is evaluating H a vs and vascular trauma, which is continuing to progress.
As a reminder, this trial is a single arm open label Unblinded study evaluating the use of H a vs for vascular repair reconstruction and replacement and traumatic injury.
Currently we have enrolled a total of 50 patients and we are pleased with the results from this study to date, showing a very low rate of infection at approximately 2%.
Furthermore, we have had no reports of limb amputation that occurred as a result, because the H a V malfunction.
And we've seen high patency rates of the conduit.
Results from this trial are expected to support our plan.
<unk> filing with the F D a anticipated in 'twenty, 'twenty, two or 'twenty or 'twenty three.
We look forward to ongoing discussions about the trial design and the number of subjects to be enrolled with the FDA.
And we will provide enrollment updates and guidance for completion of the trial when finalized.
Concurrent with the advancement of our trauma trial, we've continued our strong working relationship with the defense Department or D O D.
Using H a vs to address the unmet need for repair of vascular injuries incurred by military personnel.
The D O D assigned a priority designation to the H a V and has provided approximately $7 million in grant support for.
Or the continued development of our H a vs for vascular reconstruction and repair.
We expect that as a result of this collaboration if approved by the F. D. A humus like will supply H a vs for military hospitals to treat injured soldiers and veterans.
As well as supply H a vs to be stockpiled for use in areas, where military personnel may be deployed.
In addition to vascular trauma, we're also evaluating H a vs. Her arteriovenous or a V access in hemodialysis patients.
Last month five year data from a phase two clinical trial of patients receiving the H a V for access in hemodialysis were published in the Journal E. J V S vascular form.
And this trial clinicians observed long term usability of the H a V. During the five year follow up period with no reports of infection or Immunogenicity.
Thus further supporting the continued development of H a V for hemodialysis.
To that end, we're nearing the expected completion of enrollment of our phase III trial designed to assess the usability of the H a V for dialysis and comparison to autogenous fistulas in up to 240 patients with end stage renal disease.
There are currently more than 210 patients enrolled in the trial and we expect enrollment to be completed this year.
Based on the one year follow up period built into the study we anticipate topline results in 2023.
Followed by a BLA filing later in 2023.
As we progress toward commercialization, we continue to work closely with our strategic partner and major shareholder for serious medical care.
Which is a leader in kidney care services products and value based care and providing valuable market insights and commercial launch launch advantages.
During 2021 we successfully deployed our commercial scale manufacturing system for the production of our H a vs.
Our commercial scale system is up and running and it's producing H a vs for our ongoing clinical trials.
Related to this achievement positive results from our phase two clinical trial in hemodialysis using H a vs that were produced in our commercial scale manufacturing system.
Were presented in the six World Congress of the tissue engineering in regenerative Medicine International Society in November of last year.
This presentation highlighted 12 month safety and efficacy data that were similar to those of H a vs produced in the legacy developmental scale manufacturing systems.
In 2020 , one the FDA agreed to the use of H a vs produced in the commercial scale system to supply the company's ongoing clinical trials in the United States.
Thereby reinforcing our confidence in the launch readiness of our commercial scale manufacturing of H a vs.
Moving onto our broader pipeline, we're making great progress on our earlier port portfolio program and other indications.
H, a visa or continuing to be used under an expanded access program or EAP, which is authorized by the FDA for <unk>.
Patients with vascular conditions, including critical limb ischemia.
In peripheral vascular disease or P E D.
To date, we've completed more than 20 implants in the U S. Under this program.
The first use of the H a V in the treatment of a patient with an infected prosthetic vascular graft was a procedure performed in 2019 under the EAP and was published in the journal of vascular surgery cases innovations and techniques in December of 2021 .
This patient has resumed regular physical activity and has no signs of infection of the T V.
Furthermore, outcomes of the first series of eight compassionate use cases of HIV for trauma and critical limb ischemia were highlighted in the presentation at the 46th annual winter meeting of the vascular and Endovascular surgical society in January of 2022.
In this high risk group of patients having no other options for Revascularization.
Five of the bi bypasses performed with the HIV currently remain functional with follow up times, ranging from four to 20 months.
And no instances of infection of the H a V had been noted.
We believe the positive results highlight the potential of the H a vs for use in vascular reconstruction and limb salvage where few options exist.
With respect to our preclinical programs.
H human site is investigating a T v's of three and a half millimeter diameter as opposed to the six millimeter diameter vessels that are used in our current clinical programs.
The 3.5 millimeter vessels are being studied in primate models of both coronary artery bypass grafting or cabbage as.
As well as pediatric heart disease.
January 2022 we presented positive results from our first preclinical study of our small diameter H a vs in cabbage at the advanced therapies week.
In this study researchers observed that the HIV maintained patency and exhibited host cell regeneration in a nonhuman primate model that we believe is highly predictive of human outcomes, thus highlighting the potential of HIV and cabbage.
In addition results from our Primate model simulating pediatric heart disease were presented at the American Heart Association scientific sessions in November 2021 .
Researchers observed that each of the H J vs remains patent throughout the study and exhibited repopulation with vascular shelves.
In addition, we continue to be encouraged by our efforts in developing H a vs as complex organ systems.
Our bio vascular pancreas, which is an H a V coated with islets and designed to deliver insulin to diabetics.
In a preclinical model and these results were published in the journal as tissue Engineering last year.
We're currently moving into large animal preclinical studies.
We look forward to updating you all on the progress of this exciting program.
As we prepare for our next phase of growth and planned expansion of the H a V applications. We're pleased to welcome three surgical key opinion leaders to advisory positions as we announced in December of 2021.
Doctors, Alan Gibson, Luigi pass Gorilla, and Todd Rasmussen, our experts in the fields of cardiac vascular and trauma surgery, respectively.
We look forward to their expertise and support to guide the education and clinical advancement efforts of the H N V.
As well as help identify opportunities to advance the company's early stage pipeline and platform.
And finally as part of the company's preparation for potential commercial launch of the H a V in vascular trauma and easy access in hemodialysis.
Market Research was conducted with 60 vascular surgeons in the U S.
Receptivity toward adoption of the HIV was high occur.
According to surgeons queried, approximately 80% of trauma patients requiring vascular bypass.
Would be eligible for H a V. If approved by the FDA.
Reduce the operative time without an additional infection risk was perceived as being the biggest benefit of the HIV.
In addition, surgeons are highly receptive to the H T V for use in a V access if approved by the F D. A due.
Due to the potential for infection resistance that has been demonstrated to date and the potential of the H a V to reduce catheter exposure and prevalent dialysis patients.
We believe there's substantial opportunity for H a vs to deliver value to all relevant stakeholders, especially patients.
And we're excited to continue our efforts to plan for approval and commercial launch.
And with that I'll now turn it over to Dale for a review of our financial results and other business developments.
Thank you Laura.
We had cash cash equivalents and short term investments of $225 5 million as of December 31, 2021, compared to $39 9 million as of December 31, 2020.
The increase in cash cash equivalents and short term investments resulted from the $242 4 million in proceeds from the August 26, 2021 merger with Alpha Health care acquisition core and the related pipe financing.
Partially offset by $56 8 million and net cash used in operating investing in other financing activities during 2021.
We believe that the cash cash equivalents and short term investments are adequate to fund operations through the end of 2024.
Past, our current expected timelines for the two potential approvals with H E b in vascular trauma.
The access for Humira dialysis.
Revenue was 177000 for the fourth quarter 2021.
<unk> 224000 for the fourth quarter of 2020.
Revenue was $1 3 million for the year ended December 31 2021.
The $1 5 million for the year ended December 31 2020.
Revenue in all periods related to grants supporting the development of HIV.
Research and development expenses were $16 3 million for the fourth quarter of 2021.
Third to $13 2 million for the fourth quarter of 2020.
And were $61 3 million for the year ended December 31 2021.
Compared to $54 1 million for the year ended December 31 2020.
The current year increases resulted primarily by.
Increased personnel.
External services and material expenses designed to support expanded research and development initiatives.
The development of commercial scale manufacturing processes.
Support of our clinical studies.
General and administrative expenses were $5 6 million for the fourth quarter of 2021.
Compared to $2 6 million for the fourth quarter of 2020.
Andrew were $21 1 million for the year ended December 31, two.
'twenty one.
Compared to $12 million for the year ended December 31 2020.
The current year increase resulted primarily from noncash stock compensation expense related to hiring leadership personnel.
Increases in professional fees and insurance costs related to the completion of the merger.
Transition to being a public company.
And additional personnel and recruiting costs associated with company growth.
Other net income or expense.
It was $64 2 million and net income for the fourth quarter of 2021.
Third $2 5 million in net expense for the fourth quarter of 2020.
And was 54 7 million and net income for the year ended December 31 2021.
Compared to a $1 9 million and that expense.
For the year ended December 31 2020.
So your increase in the other net income resulted primarily from non cash gains related to remeasurement of the contingent earn out liability associated with the merger.
Net income was $42 6 million for the fourth quarter of 2021 compared to a net loss of $16 2 million for the fourth quarter of 2020.
Net loss was $26 5 million for the year ended December 31 2021.
Prior to a net loss of $66 5 million for the year ended December 31 2020.
The current year increase in net income for the fourth quarter and decreased the net loss for the year 2021.
The increase in other income.
With that I'll turn it back to Laura for concluding remarks.
Thank you Dale to conclude we've made exciting progress over the last quarter and year significantly advancing our clinical and our preclinical programs.
We look forward to providing continued updates throughout the year.
And through the next several quarters as we move toward regulatory submission and commercialization.
Operator, we're now ready to take questions.
Thank you.
Question and answer session, if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Press Star two if he like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing star one one moment. Please while we poll for questions. Our first question today is coming from Josh Jennings from Cowen. Your line is now live.
Hi, Good morning, Laurent deal thanks for taking the questions.
To be on your first public earnings call wanted to just ask about just the clinical trial enrollment environment No COVID-19 presented some headwinds over the past 12, plus months, but just thinking about the enrollment pace for the phase two three vascular trauma trial, the phase III IV access for hemodialysis.
Trial.
Okay.
Just in terms of the number of centers or any strategies to enhance the enrollment pace for those two those two trials.
Yeah, Josh this is Laura necklace and we are strongly focused on that as you might imagine in fact, our clinical team just returned from Israel last week, where we opened up a total of four new clinical sites for the deal five trauma trial.
In efforts to spur enrollment by adding additional sites. So we've currently increased our total site number in the U S to 'twenty.
With four additional new sites in Israel. We're also really leaning into our sites that have that are located in population areas that see a higher amount of civilian trauma and we're offering to support them are you know with logistical help as necessary.
That said enrollment has started to pick up in recent months as Covid has receded and we're seeing that actually in both of our phase III trials in trauma and in dialysis access.
Excellent thanks for that and just two quick follow ups one on the on the vascular trauma program.
Just so I understand we have to use recording 75 patients I think you are in negotiations with the FDA and is there a chance that that 75 patient number can be reduced.
Any anything you can share just in terms of next steps are there any meetings on the calendar with the FDA to kind of finalize that.
The clinical trial plan and then the second follow up is just on the AB access clinical development program just for steadiness his role.
I'm, an investor and partner what is their role in the clinical development program and regulatory efforts and how are they collaborating in these early stages with humans.
For taking these questions.
So yes in response to your first question with respect to the size of the trauma trial, yeah. The guidance that we've given previously is that we estimate that approximately 75 patients will be required but to your point, we're continuing our discussions with the FDA that have been quite active trying to nail down that final number.
Unfortunately, I don't have any more specific guidance to give you four at this time. So I think we're still estimating 75 patients, but certainly when we get more clarity from our regulatory colleagues are we'll pass that along at the appropriate time.
As far as the Fresenius roll in in the dialysis access program. It's certainly true that for our V. O O seven trial, which is our phase III trial in dialysis are we actually have a number of sites that are for sending us affiliated with whom we have excellent relationships.
With the trial coordinators as far as trying to coordinate and speed of enrollment.
We're also working with Fresenius and the databases that they have both in the U S and in Europe are trying to understand which patients are.
<unk>.
Are the most difficult to care for or the most expensive to care for or who suffer the most complications with respect to their dialysis access as you might imagine that the bulk of dialysis patients have somewhat uncomplicated courses, but there are some patients who have a larger numbers of complications with.
There with the maintaining access for dialysis and we're really working with Fresenius to identify.
Those patient cohorts, who we think will benefit most from the H a V and really trying to be targeted as we think about our next steps in commercialization and marketing.
Thanks again.
Thank you. Your next question is coming from Ryan Zimmerman from BTG.
Hi.
Good morning, Thanks for taking the questions and again echo the sentiments congrats on your first public call.
I guess I wanted to ask a few questions. Laura about you have the lunar system kind of up and running now.
You know producing your commercial scale HIV is you can just talk about kind of the benefits that that can afford over time, certainly not today necessarily but you know as you start to think about commercialization.
What kind of scale and benefits that could afford and then I have a couple of follow ups.
Well Ryan.
You're right in that we we were pleased in 2021 to submit.
What is effectively a complete module of the biologics licensing application to the FDA that describes our commercial manufacturing methods and they signed off on that as far as using H. A vs that are made in our current commercial system in our ongoing trials. So we view that as an important and potential.
<unk> Derisking event for gaining eventual FDA approval for the for the HIV are currently we have the capacity in the building to grow approximately 8000 H a vs per year, which we anticipate will be sufficient to address the first one or two years' worth of demand post.
Realizations.
But importantly in the building. We also have a large amount of square footage that is shelled out and that is ready for it.
Essentially the installation of more of these modular manufacturing units.
We have room in the building actually for about 40 modular units, which we called lunar 200 units and each unit can produce a thousand vessels per year. So in the building where we currently reside we have capacity to produce 40000 vessels per year, which we believe should lead us through at least the first several years.
Commercialization, so we really feel very well positioned from a manufacturing standpoint that we can meet demand and that we've tackled many of the technical risks that can commonly afflict a cell therapy companies or biologics company.
Got it that's helpful. And then just two follow ups from me one.
In the compassionate use cases and I'm just wondering if you could talk a little bit of it all kind of who the users are from a surgeon perspective, who are seeing these patients with critical limb ischemia and whether those are similar to say any of the trauma. The vascular trauma surgeons that you may be working with them and you know how that does potentially benefit or help.
Derisked, maybe that launch there.
And then the second question just for Dale as Dale I. Appreciate your comments on the cash position for the company, but if you could just give us your thoughts about kind of cash burn in 2022 months.
Much appreciated thank you.
So Ryan you're correct that the majority of the surgeons with whom we've been working in the clinical sphere, our vascular surgeons, but as far as the care of trauma patients and vascular trauma.
And the American medical system, there's actually a lot of overlap between vascular surgeons and trauma surgeons and there are some surgeons, who are who are board certified in both areas in vascular and trauma surgery.
And because of our extensive reach with vascular surgeons in our various E. D access N P E D trials.
As well as the the 'twenty a level one trauma centers that we're at in the U S for our trauma trial.
We're really seeing that the that we have connections with large numbers of vascular surgeons, but also trauma surgeons as well.
In answer to your question as far as who's reaching out for the expanded access cases, that's mostly a vascular surgeons in some cases, there or in many cases, they're treating patients with really critical limb ischemia, who are facing amputation and who have no other options for care we have.
On occasion treated severely injured trauma patients patients, who have suffered gunshot wounds or really severe industrial accidents.
And so typically we have a combination of trauma surgeons and vascular surgeons, reaching out in those situations.
And then just the cash.
Yeah Ryan.
Yeah, Ryan from a cash flow point of view, we haven't given specific guidance certainly.
You know kind of the average burn over the next three years can be extrapolated by your comments around round runway, but clearly the vast majority of our cash burn in the upcoming years is focused on the R&D, including currently the late stage programs in trauma and AP access as well as our earlier stage pipeline and cabbage and bye.
Vascular pancreas for type one diabetes.
And obviously R&D will ship over the course of the next three years with.
Trauma at AVX this winding down them.
We expect.
Human trials.
Cabot's, you'll ultimately be V P.
Hey, Krish program.
We have been up.
A portion of the burn obviously coming up is also geared towards our planned market launches and prominent access, including ultimately a ramp of the sales and marketing expenses and manufacturing readiness, but.
That's probably as is.
As detailed as will be at this stage until we start providing very specific more specific guidance.
Thank you.
Thank you. Our next question today is coming from Brooks O'neil from Lake Street Capital. Your line is now live.
Good morning, Lauren deal I, just want to ask a couple of bigger picture questions.
I'm curious if there's been any significant change.
Your expected timing for commercialization of your big programs in there. So you can just describe what's caused that change.
Yeah.
Yeah, we are not projecting any big changes in the timing of our BLA filings for trauma and dialysis access you know the previous guidance that we've given is that we anticipate filing a BLA in late 2022 for trauma or perhaps early 2023.
Obviously this depends on the total number of patients that are that need to be enrolled in this pivotal trauma trial and where you're at.
Continuing discussions with the FDA regarding that total patient number.
But as of today, we have no specific guidance from the FDA that would make US change. This this projection of BLA filing in late 2022 or early 2023.
With respect to dialysis.
Our phase III trial in in Hemo dialysis access is more than 90% enrolled as other analysts have mentioned earlier in the call. You know Covid has certainly provided headwinds for dialysis enrollment.
Over the last two years, there have been time periods, where dialysis operations were simply canceled are at at the vast majority of medical centers in the country because they were viewed us as a sort of discretionary operations. So enrolment there hasnt been slowed by Covid, but I would say.
It's starting to pick up and we would anticipate completing enrollment.
In the V O seven trial, our dialysis trial later on this year.
Since we have a 12 month endpoint after that trial I would anticipate that 12 months. After completion of enrollment we would have top line results that would support a filing in dialysis access late in 2023.
Right.
And then I'm.
I'm just guessing based on your earlier comments that your relationship with <unk> continues to be quite strong.
Comments or update there.
Well I'll, let Dave comment on this as well, but I would say that fresenius and human site have really mutually embraced each other on several projects over the last year year and a half as I mentioned earlier in the call. We're working with Fresenius to really identify those patients and the.
U S and Europe , who suffer a lot of complications from their dialysis access site and it's really these patients who in a commercial sense.
Ourselves and Fresenius would like to target in the U S and Europe as far as potentially benefiting from the H a V a.
In addition, we're also discussing with Fresenius the design of a pivotal a P. E. D trial are which would be based in Europe , but which might also include sites in the U S. A the design of this pivotal.
Trial will probably be preceded by some phase two work and perhaps by some registry work that we're planning are in in Europe right. Now. So this is still in the planning stages, but I would say that fresenius and humans site are working very closely on a on a variety of <unk>.
<unk> and several different markets and it's been it's been synergistic for both of us.
Great Fantastic I'll, just ask one more.
I'd just love any comments you have about.
Are you seeing anybody else doing anything significant in terms of.
Competition overlap with the broad outlines of the work you guys are doing.
Just help to kind of get a sense for what else you might be seeing out there in the marketplace right now.
Well in terms of engineered tissues, I would say that the situation has remained essentially unchanged certainly over the past year and that there are a small number of smaller startup a biotechnology companies, who are making attempts to mimic to a degree.
Sorry, what human site is doing I'm, just looking objectively at where those other smaller companies are there's probably a 10 year gap as far as our development pathway between where these other potential competitors are and where humans site fits.
Of course, there there are there's a continuous evolution.
Of new synthetic products are whether they'd be degradable or non degradable or electro spun them, but there's a continuous evolution of new synthetic materials that are being tested in the vascular system.
That said.
The fact remains that our kevlar and Dacron are the to synthetics that have been used widely in the vascular system for 30 or 40 years and despite our continuous march of new materials being brought forward. None of them has really gained significant clinical traction.
Right.
Thanks, a lot and keep up all the great work.
Thank you. Our next question is coming from Matthew O'brien from Piper Sandler Your line is now live.
Good morning, and thanks for taking the questions.
Laura is there any way to just talk a bit more about the discussions with FDA because I thought that we would have the full design buttoned up by now.
The actual number of patients kind of buttoned up for Vas.
Vascular trauma and I don't think we're there yet so is there is there some sort of pushed back that they are giving you is there any kind of commentary that makes you concerned about what youre doing with your clinical study or is it just more of the agency is.
As busy with a lot of things at the moment.
Well I think the agency is very busy I do not perceive any fundamental difficulties with humans site and our technology with respect to the regulators I actually think that from a technical standpoint, and our scientific and clinical standpoint, we have a great relationship with the F D. A and I think that's.
Illustrated by the fact that you know they've reviewed our commercial scale manufacturing system and have agreed that we can use it in ongoing clinical trials. So so I, we have a good working relationship with the F. D. A but this is first of all this is a fundamentally new product and I think regulatory bodies tend to be more.
We're cautious with fundamentally new technology, although we're working through that and I think secondarily, even though we sort of feel like a device where regulated as a biologic so where rent regulated by the center for biologics that the F D. A.
Which as we all know has been caught up in the Covid maelstrom for the last two years. So between the huge distraction that Covid has provided to the biologics group combined with the newness of our technology and also combined frankly with leadership changes in the F. D. A as we all know Rob Calif.
Came in as the commission are only a few weeks ago. After a long hiatus with an interim commissioner. So I think there are a lot of factors that are contributing here.
But what I don't see it's fundamental problems between the agency and our company with respect to the technology or the Medicine science.
Okay, that's great to hear.
How do we think about that.
Chip with the D O D. Here when you do knock on wood get approval for the HIV I mean, how quickly can they start purchasing the product and using it.
You know I'm going to ask Dale to field that question, because I think he'll have a better answer for you than I will.
Yes.
Thanks, Matt for the question.
Certainly we appreciate the support we've had from the D O D.
Quarter of the ongoing trial in trauma and probably more importantly.
It had been a key in our discussions with the FDA in terms of their advocacy for the product I think we expect from a commercial point of view their support to manifest itself two ways one would be no problem.
Pure military point of view stockpiling the products, but it can be forward deployed to wherever you.
Our forces are deployed throughout the world and in the event of conflict because obviously in vascular trauma the product needs to be nearby.
Point in time because of injury to to expeditiously treat the patient.
Beyond that we also expect based on our ongoing discussions that are there.
This would be heavily use within the VA hospital system and in fact, when you look at our our history of compassionate use cases, many of those have been had been veterans that have been treated for.
Severe ischemia, so so we think.
There's clearly going to be a stockpiling.
From the Department of Defense post approval.
Terms of the exact timing right now well, it's difficult to comment on that as well as any aspect of the timelines are but we.
We will be able to give more guidance I think as we get closer to the actual approval date.
Got it and then just last one for you Laura.
Everybody's focused on vascular.
Trauma and Navy access and maybe a little bit on EBIT.
Seems like there was some some other updates I don't know if cabbage was really the the other.
Update that was a little bit newer than it may be a little bit more progress than then.
The last time, we spoke so outs.
Outside of those kind of three indications can you just maybe highlight one area, where you've made some real progress that you really want to emphasize here today. Thank you.
So, yes, if you're asking me to choose between our cabbage, our development program and our diabetes development program, it's sort of like choosing between two children, but I guess I'll go with Cabot's, we've been working on developing this animal model for a couple of years as you.
I'd imagine doing heart bypass surgery on a nonhuman primate is actually a non trivial set of experiments.
But there they're well underway now with Duke University, which is a which is a leading primate research organization and they're just down the street from humans site and so that makes this development program a lot smoother we.
<unk> So we reported in January .
Six month results of a human sized coronary artery bypass conduit that had been studied in nonhuman primates.
And we really saw very favorable outcomes and good patency and a good good remodeling and good biological functioning of the graft. So.
So we were very encouraged by these results because as I've mentioned with in prior meetings.
We believe that the nonhuman primate model.
Particularly the baboon is very highly predictive of what we've seen in patients. We did all of our preclinical work in baboons prior to going into a V access and this was more than a decade ago and the results in baboons were very.
<unk> of what we went on to see in humans. So the fact that we're getting positive results in baboons and a coronary model for me is very encouraging we're going to continue to do more coronary work in baboons this year and expect to progress to a to a pre IND filing on cabbage.
Got it got it.
Perfect. Thank you so much.
Thank you. Our next question today is coming from Suraj Kalia from Oppenheimer. Your line is now live.
Good morning, Laura Dale can you hear me all right.
Yes.
Perfect.
So Laura thanks for further clarification.
Vacation or a bunch of endeavors.
The production capacity with the Luna.
In terms of quality sampling rates today.
And how do you envision the 40000 units what would be the normalized quality sampling rate.
Suraj, that's an excellent question and I might have to be supported by our CLO Heather Pritchard Who's also on the phone call with us.
But I would we haven't really shared the sampling rates.
In the public domain as of yet.
You can expect though that are sampling rates currently because they were still in the fairly early phases of commercial scale production.
Our higher than they will be in the long term.
It's.
Ah I I I can say in the long term I would expect that the sampling rates would be well under 10%, but I would ask Heather also the way in on those projections.
Sure Laura what we're predicting as Laura said as our sampling rates are somewhat higher now, but we predict by commercial you're one or two.
You have it similar to other biologics.
So in the rates that Laura was speaking to.
Fair enough, Hey, Laura I know you've provided.
Or at least you referenced your efforts with Fresenius the.
The identified the.
The dialysis target market and whatnot forgive.
Forgive me I'm, drawing a blank Laura.
Strachan minimums post commercialization.
It's just more of a best efforts basis post commercialization post approval.
We I don't believe we have any set minimums that are built into our commercialization agreement with Fresenius as you may recall Fresenius Ah is charged with leading commercialization and marketing for a V access and trauma.
N P E D in Europe , well humans site will lead those analogous efforts in the U S.
Yeah.
Fair enough and last question from my side, Laura Hey, It's interesting you guys are following the nonhuman primate model right.
So Laura visited diabetes, whether it's cabbage.
Any other target segment that Youre exploring is there enough body of evidence apples to apples and let's say baboons.
Two eventually sort of have a smooth.
Whatever the data shows right to have a smooth sailing through the FDA and the reason I asked for example in Cabot's right. Most of the preclinical data. If you look at the literature, it's more centered around cash and sheets and so on and so forth.
I would agree it makes sense, but I'm just curious how the FDA would view that and how are you all are doing risk mitigation.
Overall, thanks for taking my question.
Yes, suraj that that is a good question and certainly very very early in human sites development more than 12, or 15 years ago human site looked at using a pig models, our canine models to evaluate our products. However, these are these are human engineered tissues.
Comprising human extracellular matrix, that's not cross link and because of that when we implant the H a V into a peg or to a dog over a period of weeks or months that H I V rejects the human matrix is eventually recognized by these lower animal models and has rejected and.
So because of that it's it's not a high fidelity model for the human.
Certainly we have experience with the F D. A a in terms of providing them primate data, which we did in advance of our a D. Access program and also in advance of our phase two P. E. D program in the U S. So certainly the numbers of animals that tend to get utilized for these types of preclinical packages are smaller.
You know typically less than 20 animals are is what we've submitted to the F. D. A to support phase one work, but again the F. D. A realizes that that these nonhuman primate models are very high fidelity. So so we have never encountered any difficulty with them question.
The body of preclinical work.
Thank you.
Thank you. Your next question is coming from Bruce Chan from Benchmark. Your line is now live.
Hi, good morning, and thank you for taking my questions.
With regard to the compassionate use data, which looks great.
With the compassionate use program do you have any plans to expand that.
And maybe you could talk a little bit about what's required to get that expansion and why it might be a an indication of support for your product from the clinicians.
Well in terms of the EAP program, there actually has been an expansion.
That is obviously affiliated with human site, but its not humans site driven.
No Doctor Tallgrass Nielsen, who is a former military searching a was a colonel in the air Force and it was.
Deployed as a vascular surgeon to the middle East multiple times has now left the service and he is a.
In addition to being a long term advisor for human societies now a vascular surgeon operating at the Mayo clinic in Rochester, Minnesota.
Recently, Todd initiated a compassionate use protocol with the FDA, which is a mayo sponsored I N D and under that protocol.
Dr. Rasmussen will be enrolling compassionate use patients on a more regular basis.
That that program is underway and we're not at Liberty to share those results as of yet, but we were very encouraged by the fact that the Mayo has has taken up this program.
Okay, Great and then a question for Dale about the operating expenses for 2022.
Research and development should we look for levels that are similar to the fourth quarter and will there be any.
Churn for the quarter and the cadence.
Yeah, you cut out on the second part Bruce but I'll address the first part first.
Yeah, I think in terms of any expansion of our expenses with the.
Yeah kind of.
Advancement.
During this year heavily in terms of cabins in the vascular pancreas, we will see Ya.
Slight uptick or somewhat of an uptick in R&D expenses. So that's about as much as the guidance we've given so far.
And I think you've cut out a little bit on the second part or at least I didn't cut out for me Bruce on the second part of the question.
Oh, Yeah, I'm, so sorry about that the in terms of the quarter to quarter variance is it going to be a fairly straight line pattern or will there be any kind of like.
Differences in the calendar quarters quarter to quarter.
Yeah, I mean, the individual components can change I think on an overall basis, you'll you'll see.
Relative consistency from quarter to quarter I My only.
Qualification of that is as we get later in the year.
It dependent upon the very specific timeline of the BLA filings for trauma.
You know associated with that you'll start seeing an uptick in marketing and sales.
Sales preparation expenses for the planned launch.
Okay.
Alright, well. Thank you very much for taking my questions and congratulations on all the progress in 2021.
Thank you.
Thank you we reached end of our question and answer session I would like to turn the floor back over to management for any further or closing comments.
Well this is Lauren Nickerson I'd, just like to say that I'm very grateful to the human side team, which has really executed beautifully during 2021 and during the first quarter of 2022, our we have a lot of irons in the fire in terms of multiple clinical development programs and all.
So.
Our preclinical development programs as well as growing our commercialization efforts and also growing our communication efforts with with analysts and with investors.
So this has been a time of tremendous growth, but also tremendous stick-to-it-ive Miss from our team and we really look forward to 2022 being very exciting as far as further advancing our clinical milestones and also regulatory milestones.
Dale I'd like to ask do you have any final comments.
No I mean clearly the.
2021 was a very pivotal year, we've been grit and supported by our legacy Hemocyte shareholders that supported us during the private period and we've been please.
Please dad public.
Shareholders as part of the transaction that we completed in August . So clearly we appreciate the support of our shareholders.
You wouldn't be able to improve patient care without that level of support.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.