Q2 2022 Humacyte Inc Earnings Call
[music].
Okay.
Good morning, ladies and gentlemen, and welcome to the human side second quarter 2022 results conference call.
All participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, this conference call is being recorded.
Now I'll turn the call over to La and married with Life Science Martinez. Please go ahead.
Thank you 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.
Statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC.
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-Q, which will be filed today and may be accessed from the investors page of the human site website.
With me on today's call from humans site are Dr. Laura Nicholson, President and Chief Executive Officer Dale.
Dale Sanders, Chief Financial Officer, and Chief Corporate Development Officer, and Dr. Heather Pritchard, Chief operating officer Dr.
Doctor Nicholson will provide a summary of the company's progress during the quarter in recent weeks and Dale will review 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 Dr. Nicholson.
Thank you Lauren.
Good morning, everyone and thank you for joining us for our second quarter 2022 financial results and business update call.
During this call I'll review, our recent highlights and progress of our key programs before turning the call over to Dale for a review of our financial results. Then we will be happy to open up the call for your questions.
I'm very pleased with the great progress human side has made throughout the second quarter in advancing our universally implantable bioengineered human tissue platform.
We're continuing to add to the robust body of data showing that our lead candidates the human cellular vessel or H a V. Maybe uniquely suited for vascular and complex, Oregon application in which the current standard of care is either unavailable or inadequate.
We've also strengthened our board of directors and leadership team with the respective appointments of Dr. Diane assignments and Doctor Schmieg Creek, who both bring global drug development experience that will be invaluable as we move closer to our goal of bringing the HIV to market.
I'll begin with an update on our initiative to provide H a vs to multiple hospitals in Ukraine for the treatment of wounded civilians suffering from vascular trauma injuries. We launched this humanitarian initiative in May in collaboration with the office of international programs within the U S food and drug administration.
As well as the Ukraine Ministry of health to coordinate the export and import of our investigational H a V.
We're very proud to report that H a vs have been successfully implanted into several Ukrainian patients with vascular trauma injuries.
All H a V that have been implanted have been reported to be functional and infection free salvaging limbs and patients who are injured in this war time conflict zone is.
Humanitarian program is providing further real world evidence of the potential impact of the H a V in the treatment of vascular trauma injuries.
We're honored to contribute to the ongoing medical relief efforts in Ukraine and to help patients in frontline hospitals that are affected by this humanitarian crisis.
In addition, we're inspired by the dedicated medical teams on the ground who were quickly trained on the use of the H a V.
Patients are treated with the H a V in Ukraine will continue to work with the FDA and with the Ukrainian Ministry of health in an effort to help save limbs and save lives in patients of neat.
Moving onto our late stage program for the H a V in vascular trauma, our phase two three clinical trial is continuing to progress.
As a reminder, this trial is a single arm non randomized open label study evaluating the T v's for vascular repair reconstruction and replacement in trauma injury settings.
Currently we have enrolled a total of 55 patients.
We're pleased with results of this study to date, showing very low rates of infection less than 2%.
We've also had no reports of limb amputation that have occurred as a result of H a V malfunction and we've observed high patency rates of the H a V conduit.
Results from the trial are expected to support our planned BLA filing with the FDA, which we plan to submit by the end of 2022 or early twenties twenty-three.
We're continuing to discuss the required number of subjects to be enrolled in the trial with the F. D. A.
The FDA has previously indicated that the H a V for the indication of vascular trauma qualifies for the accelerated approval pathway.
The potential of H a vs and vascular trauma was further highlighted in a webinar that we hosted in July .
Featuring key opinion leaders doctors, Ernest Moore and Dr. Gregg Mcgee.
This was an enlightening discussion of the capacity of the H a V to address current limitations in the standard of care for both vascular and promised perspective, and we're grateful to doctors more and Mcgee for their insightful presentations a replay of the webinar can be found on the events page of the human site website.
C. H a V was also the subject of multiple presentations at scientific conferences and journal publication throughout the second quarter.
In a publication in the June 'twenty 'twenty. Two addition of Jama surgery clinical researchers emphasize the potential of the H a V to make a significant impact on the clinical care of patients with vascular disease and trauma.
This manuscript also highlighted favorable data from multiple clinical trials encompassing nearly 500 patients and over 1000 patient years of follow up.
Researchers described the potential advantages of the H a V over existing approaches.
I'd like to turn now to our development program of H a vs for arteriovenous or a V access in hemodialysis patients.
Enrollment is nearing completion and our phase III trial, which is designed to assess the usability of the H a V for dialysis in comparison to autogenous, Fistulas and up to 240 patients with end stage renal disease.
With 222 patients currently enrolled we are on track for enrollment to be completed this year with topline results are anticipated in late 'twenty 'twenty three based upon the one year follow up period that is built into the study Reis.
Results from the trial, if successful will support a BLA filing for the dialysis access indication.
In addition in June at the American transplant Congress human side presented data on more than 500 patient years of exposure from phase two and phase III clinical trials demonstrating that the H a V does not stimulate an increase in panel reactive antibodies.
She is an adaptive immune response, that's correlated with tissue rejection.
In addition in a phase III trial of patients with end stage renal disease, who received either the H a V or synthetic P. T F E graft or polytetrafluoroethylene for a V access.
H a V implanted patients exhibited fewer instances of sensitization than the patients who received the P. T F E graft.
The benefit of the H a V appeared to be even greater in women.
Who demonstrated fewer increases in antibodies as compared to women, who received the P. T F E graphs. These.
These results are further consistent with the absence of H a V rejection, that's been observed across trials that have been performed with the H a V.
As we progress toward commercialization in this indication were continuing to strengthen our relationship with our global partner and shareholder for Sunniest Medical care, which is the global leader in kidney care services products and value based care where.
We're partnering with for Nova which is the clinical research group owned by Fresenius to evaluate complications and cost of hemodialysis access care for vulnerable patients in both the U S and Europe . These.
These evaluations will assist with development of health economic models and value propositions for the H a V in patients with kidney failure.
In our earlier stage programs, we're continuing to advance preclinical studies of the H a V, particularly in coronary artery bypass grafting or cabbage.
In July we presented positive results from a preclinical study of our small diameter H a vs. In cabbage at the American Heart Association basic cardiovascular Sciences scientific session.
In a nonhuman primate model the H a V maintained structural integrity and patency for up to six months post implantation.
And showed evidence of robust host cell remodeling and repopulation.
We're excited that our small diameter H a vs continue to show promise in preclinical cabbage models and we look forward to publication of this study in the September issue of the circulation research.
Finally, human side has strengthened our board of directors and leadership team this quarter with the appointments of seasoned experts in global clinical development in June we welcome Diane assignments ph D to our board of directors. Dr. Assignments brings over 22 years of international drug development partnering and managerial.
Experience in the biopharmaceutical industry.
In 2013, she Cofounded Biopharma excellence, serving as its chief Executive officer until its acquisition in 2020 one.
In addition, as announced last quarter, we welcomed Chamique Perique M D as our new Chief Medical Officer.
Dr. Perique leads our global clinical development strategy, including oversight of the preclinical and clinical development clinical operations and the medical affairs function.
We're so pleased to have doctor assignments, and Perique join us and we look forward to adding their insights and expertise to the human side team.
With that I'll now turn it over to Dale for a review of our financial results and other business developments.
Thank you Laura as of June 32022, we reported cash cash equivalents and short term investments of $189 million compared to $225 5 million.
December 31 2021.
$36 5 million net use of cash cash equivalents and short term investments for the first six months of 2022 resulted in spending related to net operating activities for the period, including clinical and earlier stage research and development program and preparation for our anticipated commercial launch.
We believe that our cash cash equivalents and short term investments are adequate to fund operations through 2024 past our current expected timelines for anticipated approval of the H E B and vascular trauma.
Revenue was $1 3 million for the second quarter of 2022 compared to <unk> 7 million for the second quarter of 2021.
And was $1 5 million for the six months ended June 32022.
Compared to <unk> 8 million for the six months ended June 32021.
Revenue in all periods related to grants supporting the development of the H E B.
Research and development expenses were $14 7 million for the second quarter of 2022 compared to 14 6 million for the second quarter of 2021.
And were 31 million for the six months ended June 32022.
Paired with $29 $7 million for the six months ended June 32021.
The current period increases resulted primarily from increased personnel expenses.
Support expanded research and development initiatives and the support of clinical trials.
General and administrative expenses were $5 2 million for the second quarter of 2022.
Compared to $5 4 million in the second quarter of 2021.
And were $10 9 million for the six months ended June 32022.
Hard to pinpoint.
$10 2 million for six months ended June 32021.
The increase during the six months ended June 32022, compared to the prior year period, resulting primarily from the transition to being a public company in preparation for the anticipated U S commercial launch of HIV.
<unk> and increased personnel costs professional fees and <unk>.
Sure Scott.
The decrease for the quarter June 32022, compared to the prior year quarter resulted primarily from non cash stock compensation expense incurred in 2021 related to restructuring of the management team to accommodate the transition to being a public company.
Other net income was $55 4 million in the second quarter of 2022.
Third a $2 1 million for the second quarter of 2021.
And was $57 3 million for the six months ended June 32022.
Compared to one 5 million for the six months ended June 32021.
The current period increases in the other net income resulted primarily from noncash gains related to the remeasurement of the contingent earn out liability associated with the August 2021 merger with Alpha Health Care acquisition Corp.
Net income was $36 9 million for the second quarter of 2022.
Compared to a net loss of $17 million to $22 million for the second quarter of 2020 one.
Net income was $17 million for the six months ended June 32022.
Compared to a net loss of $37 5 million for the six months ended June 32021.
The current period increases in net income, resulting from the increases in their net income described already.
Actually offset by expense increases also described above.
With that I'll turn it back over to Laura for concluding remarks.
Thank you Dale to conclude we're pleased with the progress that we've made across multiple indications in the first half of the year.
As we move into the latter half of 2022 we're entering an exciting time for human site with an anticipated cash runway to carry us through significant value inflection points and beyond we believe we are well positioned to deliver on clinical and regulatory milestones in the coming months.
Operator, we're ready to take questions.
Thank you and at this time, we'll be conducting a question and answer session. If.
If you would like to ask a question.
If you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
Chris using speaker equipment, it may be necessary to pick up your handset before Christmas Darkies.
One moment, please while every pool for questions.
Our first question comes from the line of Brooks O'neil with Lake Street Capital markets. Please proceed with your question.
Thank you and good morning, I have a couple of big picture questions. So the first one is obviously you're going after.
Number of big markets.
All of which had significant unmet clinical needs.
Can you just tell us Laurel, which one of these markets you are most excited about and think.
Offers human side, the most potential long term.
Thank you Brooks you know that's it that's an interesting question its a little bit like being asked which of your children do you love the best I would say that in the short term I, obviously that the trauma indication I think is just has huge appeal.
For the company I think the fact that we have had such good success with our humanitarian efforts in Ukraine. Just illustrates the fact that this product can can go out into the field into just terrible circumstances and.
Surgeons can be trained and outcomes can be excellent and so I. It just validates everything that we've been saying all along and R. R. K O L meeting that we had in July .
Where doctor more and Dr. Magee spoke about the product and about where they thought its utility was in and civilian trauma. I think was just reinforcing of that so so again, we anticipate being on the market with trauma first and I anticipate that when this is in a level one trauma centers.
And in the hands of experienced trauma and vascular surgeons that it will see a lot of us and in a broad range of applications.
Dialysis is also something that obviously, we've been focused on for a number of years I'm, particularly excited about.
The results of the the.
The research clinical research studies that we're doing with for Nova as part of our Fresenius collaboration right now and that's because we expect the data from the for Nova study to help us understand which dialysis patients really are going to benefit the most from our product both in the U S and Europe .
We're looking at hundreds of thousands of patients worth of data. So it's so it's a tremendous opportunity for us to really hone in on those patients who will best benefit.
Great.
I have to say you know having visited your facilities and talk with your people just a few weeks ago.
It's tremendously impressive all that you've accomplished and all you're doing.
Really excited about all of these indications. So I think it's great. One more question I guess, maybe most suited to Dale but.
Neither of you please feel free to comment obviously.
<unk> mergers have come under a lot of pressure in.
Yeah.
Thank a lot of people comment that that was an ill advised time in the marketplace for you guys I think it's positioned us.
Extremely well for the future, but can you just comment on how.
How you feel today about having participated in its back merger and what that's done for you as a company.
Yeah, Brooks Brooks I mean, certainly.
The stock transaction, we undertook the allowed us.
No transition to being a public company, which we think was important in our evolution.
It also provided resourcing that take us well past the anticipated approval.
Online for first launch, which we expect to be Invesco trauma here in the United States.
So I think it was a transaction that served us well I mean, you know for me I've been in the biotech industry directly more than 30 years.
<unk> worked on for Ipos.
During that time, the multiple in the U S and.
One over in Europe .
I guess is that.
Relatively newly public company I don't feel any different.
As a snack company than it is and I feel in my prior company.
Our expectation is that this has given us the resources to improve value for shareholders.
We would expect that as we see fit our milestones you our shareholders will be rewarded just like a like.
Shareholders than any other company that had gone public.
Absolutely makes sense to me. Thank you very much and congratulations on all the progress.
Thank you.
Our next question comes from the line of Ryan Zimmerman with <unk>.
With your question.
Hi, good morning, Thanks for taking my questions Laura.
I think at the site visit you had talked about some new enrollment sites for B O five.
We are the trauma trial and just wanted to see I think those are in Israel, if I'm not mistaken newish I guess I should say you know what the status of those and you know are you starting to be able to.
Get some patients in the door at least to start the enrollment process for.
For the V O five trial.
Yeah. So we're looking at four sites in Israel, and one or two of those sites that have been fully activated them and we're anticipating activating the other sites very soon.
Israel, obviously is a site with with some active cotton domestic conflict as we know them and also the the consenting process under Israeli law is a little bit different than it is in the U S. So we are while of course, we would never wish anyone injury, we are expecting and hoping.
That that enrollment.
Contributions by the Israeli sites will be substantial but it's still something that we're activating right now.
Okay Fair.
Fair enough and then I imagine.
Even though the answer to this question, but theres no potential to utilize any of the Ukrainian patients aren't getting HIV is as part of the enrollment.
In the V O five trial is that correct.
So that's correct I mean this is a humanitarian effort, we're certainly not doing a clinical trial in a war zone with with patients in need. So so I do want to make that very clear that said any summary of data in the trauma indication that it's provided to regulators whether it's in the U S.
S or Europe .
Would certainly include information on the real world outcomes of this humanitarian effort. So on the one hand. These are not V O O five study patients, but on the other hand, the information that we're able to glean will I think bolster our overall case for for the trauma indication.
Yeah, no I completely agree with that it makes it makes perfect sense and then lastly for me and I'll hop back in queue Daily operating expenses came in a little bit lower than we were expecting this quarter and just wanted to see.
If theres any specific call out as to you know.
If I look at R&D cost for example was down a healthy amount relative to last quarter anything to call out there or just how to think about opex for the balance of the year. Thanks.
For taking the question.
Yeah, right right certainly can comment on that so we have you know.
As you've seen as a company public we haven't actually get them for.
Forward looking projections or set ranges for expenses or any other financial parameters right now, but yes. The expenses are in line with our expectations.
R&D expenses ebb and flow, depending upon where you are in the clinical trial lifecycle.
Many patients are newly enrolled versus.
When you think about.
The the seven trial and and easy access even though enrollment is expected to be completed quickly the bulk of the patients are through their implants.
So we are seeing some wind down costs there.
Beyond that.
You know if you were to extrapolate what we've done it for six months forward through the remainder of the yard is probably going to be.
Close to where we expect to end up.
Yeah.
Okay I appreciate that thank you.
Yeah.
And our next question comes from the line of Matthew O'brien with Piper Sandler. Please proceed with your questions.
Good morning, Thanks for taking my questions just on the enrollment Laura it looks like from May until I was assuming that the latest information you're giving us is probably as of today. The enrollment has been fairly slow in both the b trauma and Fistulas studies, so that make sure everything's on track as far as patient enrollment.
It goes with those two studies.
Yeah. So on the dialysis study on the Fistula study, we do anticipate you know we're enrolling some number some a handful of patients every month. We certainly you know we anticipate that will be at or very near 240 by the end of the year and then that would mean that we would have top line result.
In late 2023, because the the endpoint is a year away.
With respect to the to the trauma trial I'm, you're right. The enrolment in the trauma trial is a little bit more how shall I say her key jerky because it's not like there's a continuous reliable flow of patients that come in the door. Because these are acute trauma Ah patients again, we.
We saw enrollment pick up substantially in the spring and it slowed down in the last month or two.
But we're hoping to have it pick up in coming months, we're certainly doing things as I've mentioned, we've brought on we're bringing on the Israeli sites. We've brought on the Mayo clinic is an additional site and we're also working to support the sites are with clinical trial monitors and support because that's a really big.
A limitation not just for us, but for a lot of companies.
Companies, who are working on clinical trials is that the the nursing shortage, which we've all heard about it.
Its really impacting the ability of some clinical trial centers to to staff their trials and so we're also actively trying to support.
Nursing support for these trials so were pulling out everything we can I I think that we're still on track to to file a BLA, but perhaps late this year, perhaps early next year certainly we've had no indications from the FDA that the that the numbers that they're expecting or.
Any different I'm, where I'm still expecting around 70 or 75 total patients as we've as we've enunciated in the past.
Okay and to that point, Laura when do you think you'll have full clarity on the exact number I know it can be up to 75, plus or minus but I mean, when do you think you'll know if it's going to be 75, and <unk> 70, you're going to be any sense for that.
We are we have continued to work with the FDA very closely we have not shared that exact timing on when we're going to have an exact number so I'm afraid I can't provide that at this time.
But all I can say is that I believe we're still tracking and when we have more information we'll share it.
Got it thank you.
Yeah.
Our next question comes from the line of Suraj Kalia with Oppenheimer. Please proceed with your question.
Good morning, Laura Dale can you hear me all right.
Yeah.
Perfect.
Laura I just wanted to follow up on Matts question forgive me for Belaboring view five.
The discussions with the FDA have been going on for some time, you know 20, let's say 20 additional patients maybe 25 right. Israeli comes online mail comes online fine.
But what specifically is the nature of the discussions with the FDA that have been ongoing for.
You know sometime.
Well as far as what I can share in this setting suraj you know, it's really been about it's really been about understanding how many total patients but also how how the F. D. A should should think about the data given that this is a single arm.
All in in an acute injury population in trauma and trauma patients, where it's physically not possible to randomize and so in this trial, we specify that that patients who are enrolled must provide consents, but they also must not be suitable for other options such as safra.
The same grafting. So that has had an effect of of providing a patient population that is very much in need because by definition, if they're acutely injured and if its after this thing is not suitable then these are patients who are facing amputation or other significant a more.
So so it's really been about discussing.
How to interpret the data that are coming out of the trial and you know frankly the center for biologics is filled with outstanding and smart people.
Who have typically though regulated biologics you know they typically regulate antibodies and and proteins and gene gene editing technology.
And there frankly.
Thinking about clinical trials that involved what is essentially a device even though we're a even though we're regulated as a biologic you know thinking about a clinical trial that involves a device and are acutely injured population with no active comparator. That's just required a lot of discussion, but I really see seeber as being a great partner with us here.
I I think that the benefits of the product or are obvious to us and I think they will be obvious to the to the regulators, but its just its been a process its taken time.
Got it.
Can you give us some additional color.
On the status of the Anastomotic junction for the six months primate and Youre cabbage pilot.
Our feasibility.
Okay.
So what we've reported in January and I believe also in July is that is that the anastomosis in general or are fine in our in our primate cabbage studies I will say that as you're as you may be aware suraj, we're studying adults.
<unk> size vessels, which are three and a half millimeters in diameter.
In our large primate, but but it's not a lot of large primate in an absolute sense. These animals way about 60 pounds.
And their coronary arteries or about one millimeter in diameter and so it's a little bit like it is like selling an adult human vessel onto a pediatric patient.
And so there there are technical challenges with with doing this type of study. Its just it just comes with the territory, but aside from the technical challenges of selling a three and a half millimeter vessel to a one millimeter vessel, we haven't seen anything unique or surprising about.
The Anathematic response are in these experiments compared to what we've seen in our clinical trials or compared to what we've seen in an earlier primate work.
Got it and final question Dale.
Have your expectations for cash runway changed somewhat.
And the reason I ask is you know there's been a subtle shift.
In the language.
In terms of your cash runway from prior quarters.
Just any additional color or clarity would be appreciated. Thank you for taking my questions.
Yes.
Raj in terms of our overall thoughts in terms of cash runway.
Yeah Ethan.
Going back to our original.
Launching the transaction without with health care at all as expected.
The net proceeds from the transaction, but takes us through the end of 2024.
That's still the case today.
Thank you know certainly where we're mindful about.
The current state of the market out there and ensuring that we get.
As the value inflection place with the cash on hand, and so we think about ways of modulating.
Some of them, maybe the medium priority projects and deferring efforts extend that even beyond that point.
We have not.
A lot of fighter currently our expectations in terms of.
The cash takes us.
The current cash balance.
It takes us past the expected.
Okay.
First market approval or anticipated approval and launch.
Thank you.
Our next question comes from the line of Josh Jennings with Cowen. Please proceed with your question.
Hi, good morning, Thanks for taking the questions I wanted to just follow up on the <unk> collaboration and.
Just better understand how this will inform fresenius.
Once you get to the commercial stage.
Sure it should be in the dialysis access indication and just remind us of the agreement there and then also how how this.
Investigation, what will inform pricing as well.
So thanks, Josh I'd say that that's a multipart question I'll try to handle what I can and Dale may jump in as well, but as you'll recall the Fresenius agreement stipulates that for some of the early indications which include trauma dialysis access and peripheral arterial disease.
That Fresenius would have the right rights for marketing and distribution of those indications in Europe for those same indications in the U S. Humans site will shoulder the marketing and distribution of.
Those products are in those indications.
As far as the data that we're collecting with for Nova a this is a project that's been going on for several months and we expect the readout on the several hundred thousand patients to come out in the next month or two I'm excited about this project because it will really.
Give us granular hard data on how many patients and what types of patients tend to have repeated problems with their dialysis access in terms of patency loss in terms of repeated infection in terms of for example.
What types of patients tend not to mature their fistulas and then are stuck on a catheter.
For a long period of time, so really identifying those patients subsets in the U S and Europe that that tend to have chronic difficulties with their access will really allow us to focus on those patients in terms of subsequent marketing and commercialization.
There's a second part to this project, which we're going to undertake one once we understand which patients have the most difficulties then we will we will work to putting cost our cost estimates.
Those difficulties in these different geographies, both in the U S and Europe .
And I would expect that that would inform pricing and what the market will bear in terms of the H a V. Treating these patients who are currently not acceptably treated by by existing therapies.
Great. Thanks for that and just a follow up from our headquarter visit and facility tour I.
I think continuing our discussion of Ara you mentioned that.
There are no true into my pleasure hadn't been experiencing any implant in a tree, but you could take it.
Just wanted to follow up and just ask I mean, how how strong with single do you think you're having maybe a hypothesis or a mechanism of action of why you haven't seen shrink them away propulsion and then they would.
It would be great to better understand thanks for taking the questions.
Yeah, Josh so that that some you know that is a little bit of a scientific speculation on my part and I will I will admit to that as as you and I discussed and as we discussed at the site visit certainly we have seen what we would call pannus in growth, which is in growth of tissue.
Across the and asked them overseas, we've seen this and in some of our dialysis patients and some of our P. E. D. Patients. This is a standard biological phenomenon, it's seen with essentially all types of vascular grafting, there's nothing extraordinary about that and we have seen that and that that cats contributed to and asked him Onyx.
This I guess, what I would what I would say, though is that particularly in our in our peripheral arterial disease population.
At which is which has a population where the vessel is not getting stuck with needles three times a week as as it isn't dialysis, that's a little bit of a cleaner signal I would say that we have not to date seen any convincing evidence of intimal hyperplasia in the and the length of the graft in those patients.
But again I have to qualify that statement you know we don't we don't have biopsies to to confirm that because most of these patients are just walking around with their grafts and so frankly, I think it's going to take US a couple of years to really nail down.
The.
The complete accuracy of that statement is that that that statement that I made is is a scientific conjecture and belief on my part but.
But we really we haven't documented it fully yet.
Understood. Thanks for clarifying appreciate it thank you.
And just as a quick reminder, if anyone has any questions that you May press star one to join the question and answer queue. Our next question comes from the line of Bruce Jackson with the benchmark company Gleeful see with your question.
Hi, Good morning, I'm curious congratulations on all of the progress.
Or getting back to your favorite children with bio vascular pancreas project anything that looks forward to over the next few months.
Well so as as we said earlier, we have partnered with some smaller stem cell companies to look at our ability to produce islets from stem cells that would be part and parcel of the bio vascular pancreas product. So.
We are making progress there we have no plans for any scientific presentations in the next several months, but I will say that we're making progress in our ILEC differentiation efforts and we are also are progressing toward doing initial proof of principal studies in large.
Animals by late this year. So so we remain still on track for that so it's I'm I'm hesitant to share any more than that because because I wanna be definitive when when we shared the information, but I would say that the bio vascular pancreas is still on track compared to everything that we've been saying earlier.
In the year.
Okay, Great and then a question for Dale last year, there was a little bit of seasonality in the research and development expense.
Is that a similar pattern this year or.
Is it just going to be lumpy because of the clinical trial activity.
Yeah, Yeah, Bruce part of it's just the ebb and flow of clinical trial as part of it is there.
There are other meaningful components to R&D expenses.
You know as a biologics company.
Actual.
Baldwin and ongoing.
Enhancements and really preparation for.
The anticipated launch of our manufacturing facilities also drives cost through our bio processing facility.
Okay.
The visibility in terms of press releases scientific presentations, but is a key component as well.
The tour of the technology platform to the side and just.
So those are even flow costs associated with bioprocess and also depending on when were doing production run sorts.
Depending on when were doing you know certain experimentation either to support new product development or other activities.
Are additive to whatever cycles of costly clinical samples.
Alright. Thank you that's it for me.
And thank you I'm showing no further questions in the queue. At this time. This concludes the humans like second quarter results Conference call.
Thank you for.
Participating.
[music].
Yeah.
Yeah.