Q1 2025 Humacyte Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the human side first quarter results Conference call. Currently all participants are alright listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time as a reminder, this conference is being recorded.
Speaker Change: Now I'll turn the conference call over to Tom Johnson with lifestyle Advisors. Please go ahead Sir.
Speaker Change: Thank you operator before we proceed with the call we'd 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 materially from historic experience or present expectations additional information concerning.
Speaker Change: Factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC.
Speaker Change: The forward looking statements made during this call speak only as the date hereof and the company undertakes no obligation to update or revise the forward looking statements except as required by law.
Speaker Change: Information presented on this call is contained in the press release, we issued this morning and in our Form 10-Q, which after filing may be accessed from the investor page of the insight web site.
Speaker Change: Joining me on today's call are Frank how much Hemocyte are Dr. Laura Nicholson, President and Chief Executive Officer, Dale Sender, Chief Financial Officer, and Chief Corporate Development Officer, and B J, especially.
Speaker Change: Commercial officer, Dr. Nicholson will provide a summary of the company's progress for the first quarter in recent weeks and Jill will review the financial results for the quarter ended March 31, 2025, following their prepared remarks, Vijay will join Laura and Dale for the Q&A session I will now turn the call over to Dr. Nicholas Laura.
Speaker Change: Thank you Tom and good morning, everyone and thank you for joining us for our first quarter 'twenty 25 financial results and business update call.
Speaker Change: Following the landmark success of obtaining FDA approval of <unk> for the treatment of extremity vascular trauma late last year, we're keenly focused on the commercial launch of this groundbreaking product supporting the launches our number one priority and we're pleased by the traction gained in our interactions with hospitals. Despite the current volatile economic environment.
Speaker Change: Ireland.
Speaker Change: Based upon our March 'twenty 'twenty, five financing and some recent cost reductions we've taken steps to extend human sites cash runway with this extended runway will continue to aggressively expand our commercial launch while creating additional enterprise value from our bioengineering pipeline.
Speaker Change: Upcoming major value drivers that we anticipate include publication of additional clinical results in trauma and in dialysis access and filing an IND with the FDA later this year to enable first in human clinical testing of our small diameter eight have in coronary artery bypass grafting.
Speaker Change: In addition, as a result of reaching a major milestone in enrollment in our V. O 12 phase III trial in dialysis. We're also on track for filing a supplemental BLA for the 8000 dialysis in 2020 six.
During today's call I'll review these developments in more detail before turning the call over to Dale for a review of our financial results P. J Chesley, our Chief Commercial Officer will then join us to help answer your questions.
Speaker Change: As I start the review of the quarter I wanted to acknowledge the strong support that we've had from surgeons, who have treated patients with <unk> and the resiliency of our team members in the face of some unfounded negative press regarding some vest in humans site as you probably know we've addressed these critiques in public statements in recent weeks.
Speaker Change: <unk>.
Speaker Change: In short we believe that these criticisms are ill informed and without merit.
Speaker Change: Over the last two decades, we've worked hard to build human sight into what it is today the body of clinical results supporting the use of him. So invest in extremity vascular trauma will be further strengthened by up upcoming publication in peer reviewed medical journals of our long term patient outcomes, we will continue to combat answer.
Speaker Change: Sounded attacks with science based facts.
Speaker Change: With that out of the way I'm proud to report that humans site commenced its commercial launch of Sim best in late February 'twenty 'twenty five.
Speaker Change: The first commercial shipments containing multiple units of <unk> were made during the first quarter to three level one trauma centers.
Speaker Change: As a reminder, commencement of sales to hospitals for new products typically requires review and approval by a value analysis Committee or V C.
Speaker Change: As a centralized decision making body within the institution.
Speaker Change: Only a few months after commercial launch we're excited that 45 hospitals have already commenced an evaluation of <unk> as part of their vac approval process approximately one quarter of all level, one trauma centers nationwide.
Speaker Change: The vacs are five hospitals have already approved the purchase of <unk> and we expect this number to grow throughout the second quarter based on current discussions with hospitals.
Speaker Change: Our commercial launch of <unk> is further supported by publication in March of 2025 of our budget impact model in the peer reviewed journal of metal medical economics.
Speaker Change: This publication shows that's invest provides economic value to the health care system.
Speaker Change: By reducing conduit infections and limb amputations simba's soon that's provides a strong opportunity for cost reduction as compared to synthetic conduits and as compared to xena graphs and the like.
Speaker Change: In addition to the civilian market human side has been working to address the military market for synthesis and extremity vascular trauma.
Speaker Change: Multiple military treatment facilities have already expressed an interest in purchasing seamless.
Speaker Change: To facilitate these purchases we expect that <unk> will shortly be listed in the electronic catalog or eat cat, which is an internet system that provides the department of defense and other federal agencies with access to manufacturers products.
Speaker Change: As we've previously reported due to the nature of the Vac process, we've consistently forecast that the majority of first year sales will occur in the second half of the year.
Speaker Change: We're pleased that the sales in the back activity to date is in line with our goals for this early period of market launch.
The U S commercial launch of <unk>. This quarter was a major milestone for humans site and we're excited to provide this transformative product to surgeons and patients in need of a new option to save limbs and lives.
Speaker Change: Let me turn now to the eight to have indication that is our next priority, which is in dialysis dialysis access as you'll recall about six months ago, We reported topline results on our prospective randomized head to head V O seven phase III trial, which compared RV.
Speaker Change: Vessel to the gold standard, which is autogenous fistula.
Speaker Change: This trial met its primary endpoints and showed superior patency at six and 12 months as compared to fistula.
Speaker Change: We were also able to identify two subgroups of patients who could benefit the most from the eight to have which includes all women and men with diabetes and obesity.
Speaker Change: These two groups make up more than half of the dialysis access market.
We believe that the efficacy and safety results in the subgroups combined with the approximately 50% failure rate of standard of care in these vulnerable populations.
Speaker Change: It means that there that they are important targets for the marketing of H have in dialysis access.
Speaker Change: We expect that the results from the V O seven phase III trial will be published in a major peer reviewed medical journal in the near term.
Speaker Change: We're also conducting an ongoing phase III dialysis access trial in women, which has passed a major in enrollment milestone.
Speaker Change: The V. O 12 study is a small phase III trial of 150 patients, which compares the efficacy and safety of a test officials for hemodialysis.
Speaker Change: A total of 84 patients has already been been enrolled in the trial to date and.
Speaker Change: An interim analysis for the V. O 12 trial is planned for April 2026, when the first 80 patients will have reached the 12 month follow up.
Speaker Change: Our plan is to submit a supplemental BLA in the second half of 2020 six which includes data from the V. O 12 and V O seven phase three pivotal studies and to add AZ access as he for hemodialysis as an indication for the 18th.
Speaker Change: Finally, I'll briefly discuss some of our earlier stage programs that we're also excited about our small diameter eight <unk> for the treatment of coronary artery disease.
Speaker Change: During the first quarter, we announced plans to file an IND application with the F. D. A to allow first in human clinical testing of the small diameter, a cellular tissue engineered vessel, which is 3.5 millimeters in diameter, rather than the six millimeter diameter of the approved <unk> conduit.
Speaker Change: Our plans for IND filing in 2025 to support a few first in human trial in coronary bypass or based on the outcome of a recent meeting held with the F D a to.
Speaker Change: To date only the six millimeter configuration of our vessel has been studied in human trials to include Avi access for hemodialysis trauma and peripheral arterial disease.
Speaker Change: We're very pleased to be moving closer to human clinical studies of the small diameter eight have in coronary artery bypass surgery, and we believe our planned I N E filing and initiation of first in human study after FDA clearance will be another major milestone for human site.
Speaker Change: So we're off to a good start in 2025, and we look forward to sharing our continued progress with all of you as the rest of the year unfolds and with that I'll now turn it over to Dale for a review of our financial results and other business developments.
Dale: Thank you Laura.
Dale: In March 2025, we completed a public offering that provided $46 7 million in net proceeds to the human side.
Dale: Subsequent to the financing in part due to current market conditions, we implemented a plan to reduce our workforce by approximately 31 employees. We also deferred additional new.
Dale: Planned hires and reduced other operating expenses.
Dale: These reductions have been done thoughtfully and we've retained key personnel resources and initiatives to meet our corporate goals and milestones.
Dale: We have undertaken these cost reductions to extend cash runway and better align our organizational structure with our top business objectives.
Dale: Objectives include the commercial launch of <unk>, including sales marketing and manufacturing complete.
Dale: Completion of the B O 12 phase III pivotal trial.
Dale: They each have in dialysis and the client filing of a supplemental BLA with the FDA.
Dale: And the filing of an IND commenced human study.
Dale: Diameter AIDS.
Dale: In coronary artery bypass graft or cabbage.
Dale: We estimate that we will incur.
<unk>, representing one time cash expenditures for severance and other employee termination benefits of approximately $800000.
Dale: The majority is expected to be incurred during the second quarter of 2025.
Dale: We estimate a net saving.
Dale: Forced reductions operating cost reduction and reduced capital expenditures.
Dale: A termination severance and benefits totaling approximately $13 8 million in 2025.
Dale: Savings are estimated to be as much as $38 million in 2026 for a total estimated savings of over $50 million in 2025 and 2026 relative.
Dale: Relative to our original forecast.
Dale: Regarding the first quarter financial results.
Dale: There was 517000 in revenues for the first quarter of 2025 of which a 147000 related to the initial U S commercial launch of <unk> and trauma.
Dale: Remaining $370000 in revenue.
Dale: From a research collaboration with a large medical technology company to evaluate the potential use of our bio engineered human tissue.
Dale: Specific cardiovascular and vascular applications.
Dale: There was no revenue for the first quarter of 2024.
Dale: Cost of goods sold was 147000 for the first quarter of 2025.
Dale: It includes overhead related to unused production capacity, which was recorded as an expense during the first quarter.
Dale: There was no cost of goods sold for the first quarter of 2024.
Dale: Research and development expenses for the first quarter of 2025.
$18 $4 million compared to $21 3 million for the first quarter of 2024.
Dale: The decrease in 2025 expenses compared to the prior year result, primarily from decreased material costs as we began capitalizing expenditures for inventory during the first three months.
Dale: Ended March 31, 2025, following the commercial launch of Zumba.
Dale: As well as the reduction in clinical study costs.
Dale: General and administrative expenses for the first quarter of 2025, or $8 1 million compared to $5 3 million for the first quarter 2024.
Dale: The increase in 2025 expenses compared to the prior year period, resulting primarily from the U S commercial launch of <unk> and vascular trauma, including increased personnel expenses associated with that.
Dale: Other net income for the first quarter of 2025 was $62 3 million compared to net expense of $5 3 million.
Dale: First quarter of 2024.
Dale: The increase in 2025 of other net income compared to the prior year resulted primarily due to an increase in the noncash remeasurement of the contingent earn out liability associated with our August 2021 merger with Alpha Alpha Healthcare acquisition Corp.
Dale: Net income was $39 1 million for the first quarter of 2025 compared to a net loss of $31 9 million for the first quarter of 'twenty 'twenty four.
Dale: Increase in 2025 net income compared to the prior year period.
Dale: Primarily due to the increase in the noncash remeasurement of the contingent earn out liability described previously.
Dale: We had cash cash equivalents and restricted cash of about $13 2 million at March 31 2025.
Dale: Net cash provided was $17 9 million for the first three months of 2025 compared.
Dale: Net cash provided of $35 1 million for the first three months of 2024.
Net cash provided for the first three months of 2025 included the net proceeds from the March 2025 public offering.
Dale: The decrease in net cash provided during the first three months of plenty plenty of five compared to the prior year resulted primarily from the receipt of $20 million in proceeds.
Dale: Under a draw from our funding arrangement with Oberland capital.
Dale: Curt in 'twenty 'twenty, four but did not reoccur in 2025.
Laura: With that I will turn the call back over to Laura.
Laura: Thank you Dan.
Laura: The approval and the launch of <unk> is a powerful example of our commitment to delivering truly transformative regenerative medicine solutions to improve patient outcomes humans site continues to deliver on our promises to physicians and patients with our strong commercial execution, our promising pipeline programs and our dedicated team.
Laura: We're confident in our ability to continue.
Laura: Okay.
Laura: Okay.
Laura: Okay.
Laura: Okay.
Laura: Please standby one moment, please standby one moment.
Laura: [music].
Okay.
Laura: Okay.
Laura: [music].
Laura: Okay.
Laura: [music].
Laura: Thank you.
Laura: Momentarily.
Laura: It's the wholesale accounts.
Laura: You announced rejoined.
Laura: Hello, operator, we're ready to take questions now.
Laura: Yeah.
Laura: Thank you we will now conduct a question and answer session. 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.
Laura: Press Star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again Thats star one to ask a question at this time one moment, while we poll for our first question.
Speaker Change: The first question comes from Ryan Zimmerman with <unk>. Please proceed.
Ryan Zimmerman: Oh. Thank you can you hear me okay, yes.
Speaker Change: Yes, we can hear you.
Speaker Change: Okay, great. Thanks for taking the question congrats on the first sales of <unk>.
Speaker Change: Maybe on those three sites that have purchased Laura.
Love to understand kind of what their experience has been since they've purchased.
Speaker Change: You know whether you service those cases, how you're servicing those cases et cetera.
Speaker Change: And then you know.
Speaker Change: As we think about kind of the uptake of <unk>.
Speaker Change: This year I appreciate your commentary about it being kind of a second half loaded you know love to understand how those 45 or so sites are.
Speaker Change: <unk>.
Speaker Change: Running through the process and.
Speaker Change: How you expect that maybe to translate into initial sales.
Speaker Change: After you've now had a lot of kind of back experience under your belt.
Speaker Change: Well I'll I'll take the first part of the answer to this question and then I'll ask our commercial officer, B J carefully to weigh in as well.
BJ: So as far as the as far as the three commercial sites. We have we have performed our first implant.
BJ: And at that at that particular site or our sales rep was able to be there for the implant.
BJ: Although I will say that at many of the sites that have used the vessel before having having a sales rep in the O R or certainly not necessary.
BJ: In addition to the clinical trial experience that a lot of surgeons have had them. We have also been conducting sort of hands on training in hospitals, where where our sales executives have have approached heart surgeons and vacs are to get on the formulary. So so it's certainly not.
BJ: Sorry to have a sales representative in the O R for the initial cases, although sometimes we do do that.
BJ:
BJ: As far as as far as our experience with the backs you know we have we have had a fairly good conversion rate of vac approvals I would say that that there was a little bit of a headwind that was that was imparted by the New York Times article, particularly during April but that seems.
BJ: To be receding.
BJ: As as the facts of the clinical experience you know become become clearer to to surgeons and hospitals and we also expect that publication of long term data will also you know further improve our position there.
BJ: You know the health economic model that we published in March is also a huge help because it shows pretty clearly that on a per patient basis are the the total cost of the initial admission for patients who were treated with <unk> should be lower than the total cost of the initial admission for patients who are treated with us.
Speaker Change: Thetic grafts and this is independent of any untapped reimbursement. So you know I think that that the growing public number of publications and the growing factual story around the conduit is helping us get traction, but I'll, let b J weigh in here as well.
BJ: No Laura Thank you cover things well, yeah, Ryan I would add.
BJ: We're not only of where those three institutions.
BJ: <unk> product, but even of the the back the missions as a good mix of hospitals and surgeons that have known us notice from our clinical studies, but others that have no experience with us. So I think that that's a good sign.
BJ: And in terms of the the vac submissions and the sales funnel feeling good about you know that we're laying the groundwork now we have a wholesale funnel with a 45 submissions we continue to add those on a regular basis.
BJ: As Laura mentioned, you know we had some quick wins.
You know on the other side absolutely you know the New York Times article with a couple of the backs some pushback for us that without you know now had to respond to it to get back on track I think also the tough economic environment. We're in.
BJ: Has pushed out some of the the back reviews and add an additional financial reviews.
BJ: Youre, bringing a new product to market.
BJ: We still see that there's a three to six months back process for the majority of the ones that we're facing and that we submitted to and as Laura mentioned the early feedback from those where we have had the formal back review the conversion to approval has been strong.
BJ: Now with the five approval then obviously looking to build upon that so you know it now building momentum you know.
BJ: Currently and we absolutely expect to see in the back half of the year the full impact of that.
BJ: Yes.
BJ: Very helpful and I appreciate that.
BJ: I'm, the eat cat and some of the government.
BJ: Hospitals, whatever you want to call them.
BJ: It is the process similar I mean, I'm curious you know once you get on the <unk>.
BJ: And VA hospitals or whoever.
BJ: In that order.
BJ: As needed or is there.
BJ: More hurdles to go through on that on that side of thing.
BJ: Well again Oh.
Speaker Change: Oh go ahead.
P. J.: Oh, I'm, sorry, Yeah Beach P. J I'll ask you to weigh in too. So so the EQECAT process, which were which were nearing completion on does technically allow military hospitals and V as to order to order. The product. However, typically you know certainly in military institutions. There Theres also.
P. J.: It has to be you know surgeon champions and certainly we in addition to working with civilian hospitals as I mentioned or our sales executives have been working closely with with some military institutions and we in fact have previous relationships and some military care facilities, who participated in our clinical trials and our <unk>.
P. J.: Passionate use cases. So you know we are building out that that's sort of Ah I surgical support for the product.
P. J.: Military hospitals tend not to have a formal V. A C process I'm not sure. If that's true in all cases, but but really having surgeon champions and and being on the having the correct distribution and and being on the E cat are really.
Speaker Change: Key inputs, there and I'll, let Dale I'm, sorry, I'll, let BJ, correct me, where I'm wrong.
No no I think that that's exactly right that in parallel with building surgeon advocacy, which we you know back to clinical studies to our sales effort you, obviously I absolutely have to jump through those procurement hoops and soon.
Speaker Change: Soon getting onto EQECAT is going to be a big milestone in the ability to order and yeah. We've been fortunate we've actually been working with an outside D. O D procurement partner too to help in that regard given their expertise and connections.
Speaker Change: That.
Speaker Change: It gives you a sense of where we're at.
Speaker Change: It's particularly.
Speaker Change: That's very helpful. Vijay and this last one I'll sneak it in do you have to expand the sales force.
Speaker Change: Service the military hospitals with your existing sales.
Speaker Change: For us right now as well as the you know 200 or so level one trauma.
Speaker Change: Yeah, I would say now our current salesforce feel comfortable being able to cover you know the sales targets for the geographies that we have those hospitals and submitting to those back then and again you kind of get a sense of the full sales pipeline.
Speaker Change: And then certainly.
Speaker Change: Early read from the military treatment facilities match up well with where we have our sales reps and sales force deployed I think you know as we increased success, both civilian and military will look to to add to our sales force at that time.
Speaker Change: Okay. Thanks for taking my questions.
Speaker Change: Oh.
Speaker Change: The next question comes from Josh Jennings with TD Cowen. Please proceed.
Josh Jennings: Hi, good morning.
Josh Jennings: Congrats on the progress with the U I assume this launch.
Josh Jennings: Yes.
Josh Jennings: These were gracious enough land.
Josh Jennings: Turning to call to just comment on where street estimates stood for for 2025 and.
Josh Jennings: Just wanted to check back in after the last month and a half with the experience and the progress you've made as to the does the.
Estimates still seem reasonable or in the ballpark, who kind of the internal expectation for the revenue ramp here.
Josh Jennings: I think I think we remain in the same place with our expectations, but I'll, let Dale comment further.
Dale: Yeah, I agree that I think we gave some guidance Josh on the on the force.
Josh Jennings: I'm sorry.
Josh Jennings: It was it seemed like the first quarter call, but that was our year end call that that happened in March.
Josh Jennings: Based on the traction we're seeing the number of.
Josh Jennings: Hospitals that are involved in the Bac processes as P. J mentioned.
Josh Jennings: We're still comfortable with the guidance.
Laura: And again as Laura mentioned earlier in the call.
Laura: Due to that the ACO ramp we expect most of those revenues to come in the second half.
Laura: We're not seeing anything currently that would suggest we need to move all those those estimates.
Laura: I appreciate that.
Laura: Just wanted to ask about visa Europe 12, and.
Laura: You guys are enrolling that nicely.
Laura: Hoping for just a review on from in terms of how the clinical development team on your team has kind of apply the learnings from from other phase II studies clearly in the summer collection and the subgroups you guys are going after is one but just I think you know.
Laura: What was the learnings are being applied to anything anything from just a procedural technique to.
Laura: To anything else you want to comment on in terms of.
Laura: Helping us think about the potential for successful music easier one too.
Laura: Yeah, Josh so so we certainly have we've treated a lot of dialysis patients and as you know this is a complicated and sick population and we have benefited from our prior clinical experience. So you know that there there are a couple of key key outputs that I think we're following one is you know it.
Laura: Not just the surgical implantation of the conduit what happens to the conduit in the dialysis center and in the hands of various intervention less for these patients is very important to the outcome of the study and so we're paying close attention to our two how the dialysis centers are handling the conduit.
Laura: And what and how the dialysis centers are adhering to the clinical trial protocol and we're doing the same thing with interventional is because you know that they are our surgeons do a great job of selling the vessel in but what's important for the execution of the clinical trial is that we follow up on these on these later.
Laura: Health care providers, who are also working with patients. So so we're paying a lot of attention to that and I again, I think that the female population.
Laura: Struggled so poorly struggled struggled so much with FIS sure. We do anticipate that the results of this trial will be positive.
Laura: Great and maybe just one follow up on.
Laura: Uh huh.
Laura: Access indication is just in terms of the kind of partnership with Fresenius. The investment there have there been any changes them.
Laura: And I guess the second layer is Hal.
Laura: How involved are they in and the visa went to and.
Speaker Change: In terms of the design of the trial anything else that you can share. Thanks for taking the questions I appreciate it.
Speaker Change: Yeah. So the the partnership with Fresenius remains strong I I think that the Fresenius leadership, we're particularly encouraged by by the wonderful results that we had and tee up seven.
Speaker Change: Fresenius is also fully aware that that women are in particular, but also patients with obesity and diabetes.
Speaker Change: <unk> are not only not only have trouble with their access, but they're very expensive to care for them and in some cases, you know fresenius as as sort of a.
Speaker Change: Holistic health care provider for these patients has to bear those costs.
Speaker Change: So as I think I've mentioned in previous calls you know we have been working with Fresenius to quantify the added costs that are incurred in patients who have an access that isn't working or in patients who are forced to remain on catheter.
Speaker Change: Those costs are significant and we believe there's going to be a strong health economic case.
Speaker Change: I also pointed out.
Speaker Change: On the last call that.
Speaker Change: Dialysis access centers are used to be used to be penalized for not having a sufficient number of officials, but but that the the reimbursement penalty now has been altered so that if centers have too many patients on catheter their reimbursement is penalized and so I I believe.
Speaker Change: That Sim burst in the dialysis access space, which has the potential to get so many patients off of catheter really aligns with the reimbursement objectives and the business objectives of Fresenius.
Speaker Change: Yeah.
Laura: Thanks, Laura.
Speaker Change: The next question comes from Christian cluster with Cantor Fitzgerald. Please proceed.
Christian: Hi, Good morning, everybody at your Analyst day, two months ago, you gave us a very.
Speaker Change: Early review and we heard from some surgeons are actually so now that you've added about 20 more hospitals since that time I'm just curious on the vac questioning if you're hearing that it's fairly consistent it sounded like that that have that that the surgeons were alluding that it was pretty straight forward, sometimes they were asked.
Speaker Change: King about how often the products would be used in cost, but has anything changed since you've added more hospitals.
Speaker Change: Yeah, I'll, let BJ answer this as well, but I would say that no you know that the the dialogue and the talk track it's pretty similar.
Speaker Change: The you know the clinical data that we published in Jama surgery in November are very strong.
Speaker Change: And.
Speaker Change: You know the the the the label is really not you know I mean, it's that that just doesn't come up as an issue very often you know we we do we do have to talk about the price point.
Speaker Change: And so you know leveraging our our published a budget impact model that came out in March I think it's going to continue to be important when we get in front of vacs and when we present the budget impact model. Our success rate is very high.
P. J.: P. J do you have anything to add.
P. J.: No I think that covers it well.
Speaker Change: Yeah strong clinical belief and understanding based not only our clinical data, but their personal experience either questions on price value, but again as Laura mentioned, our publish them and the data from that again, showing that the cost to offset fewer infections fewer amputations more than off.
Speaker Change: The upfront cost of our product versus a synthetic or versus an allograft xenograft.
Speaker Change: Xena graft and then I think just the other piece of the equation is obviously, we're working on our end caps and so the proposed ruling was put out by CMS. We're in the process of.
Speaker Change: Putting our response back do mid June and then ultimately you here in August and then hopefully enacted.
Speaker Change: In October so that's obviously a piece of the equation to the incremental reimburse part of the <unk> and the <unk>.
Speaker Change: Follow on effect with private insurers.
Speaker Change: Thanks, So much and another 45 hospitals can you give us a sense of roughly what percent of them were involved in your clinical trials and have prior experience.
Speaker Change: Yeah, It's interesting I would say, it's actually the minority so less than 50% would have to look up exactly what that is and so back to my earlier point.
Speaker Change: You know I think there was a lot of understanding and visibility.
Speaker Change: <unk> from publications, the clinical data the approval industry conferences medical education and events that we've held that.
Speaker Change: Brought visibility to what we were doing that gave us a jumpstart when we went into these institutions and then obviously our sales force through their relationships and being able to communicate the clinical and economic value have brought these surgeons advocates and hospitals along through the vac process. So a good mix and knowing that.
Speaker Change: That's going to be important going forward, because you've kind of worked through those that you tell you, but the majority do not and feel good about our conversion rate at this point.
Speaker Change: Thank you.
Speaker Change: The next question comes from Bruce Jackson with Benchmark Company. Please proceed.
Bruce Jackson: Hi, good morning, and thank you for taking my questions.
Speaker Change: Was hoping to get a little color around.
Speaker Change: Surgeon adoption patterns at the accounts using the products. They usually you get the surgeon advocate champion. He starts during the first procedures and then the other doctors will follow along so do you have any anecdotal information on how that's going.
Speaker Change: Well it is truly anecdotal Bruce you know we do have we do have a vascular surgeon, who is actually new to the product who who treated a patient at one of our one of our commercial sites and and said he had a great experience.
Speaker Change: And and quote you know was looking forward to using the product again quote unquote.
Speaker Change: But you're right I think that in most institutions. This will start with one or two surgeons.
Speaker Change: And then and then move outwards, you know Theres always an early adopter in every crowd and that those what those are probably the first surgeons, who will work with.
Speaker Change: Okay, and then Oh go ahead, Oh go ahead.
Speaker Change: Great.
Speaker Change: No no no no go ahead.
No I would just add you know and it's also a mix between vascular surgeons and trauma surgeons are ultimately more vascular than trauma, but trauma, obviously in some ways see these patients can be first in also.
Speaker Change: <unk> influence on being able to not only treat these patients but during in new technologies into the hospital. So I think we see it as a mix of that wherever we get the traction I think we're able to port over to that other groups.
Speaker Change: But if you start with the vascular together trauma, our trauma vascular. We've you know again, it's early but we've seen the ability to get that message with one group to the other group then.
Speaker Change: And then obviously build upon.
Speaker Change: Interest from there.
Speaker Change: Yes.
Speaker Change: Okay, Great and then a question on the pipeline is there anything new on the bio vascular pancreas or any upcoming data.
Speaker Change: Yes, we have continued a primate implants in the bio vascular pancreas.
Speaker Change: We were also continuing laboratory experiments I don't have anything new explicitly to report now as compared to our last call six weeks ago, but but we are going to publish a preclinical results probably later this year.
Speaker Change: Yeah.
Speaker Change: Great. Thank you very much.
Speaker Change: You got it thank you at.
Speaker Change: At this time I would like to turn the call back over to management for closing comments.
Speaker Change: Yes. Thank you operator, you know this has been a great opportunity to share our progress.
Speaker Change: These are exciting times in the world as we all know and what with all of the flux going on in the economic markets and in the health care markets. We are pleased that despite all of that we are getting an important and substantial traction.
Speaker Change: And at level, one trauma centers with our first commercial launch so our fans are fabulous commercial team will continue to work this and we anticipate a more good news going forward. So thank you for your time.
Speaker Change: Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yeah.