Athersys Inc (ATHX) 2009 Q1 法說會逐字稿

Good afternoon. I will be your conference operator today. At this time, I would like to welcome to the Athersys first quarter 2009 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers remark there is will be a question-and-answer session. (Operator Instructions) Thank you. Ms. Wilson you may begin your conference.

Thank you, and good afternoon, everyone. I'm Lisa Wilson of InSite Communications Investor Relations for Athersys. Thank you for joining today's call. You should have a copy of the press release issued at the close of market. If you have not received it, please call Libby Abelt at 212-759-5665 and it will be sent to you immediately. Gil Van Bokkelen, Chairman and Chief Executive Officer; and BJ Lehmann, President and Chief Operating Officer of Athersys will host today's call. The call is expected to last about 45 minutes and may be accessed through the Company's website at Athersys.com. A replay will be available after this call's completion by dialing 800-642-1687 in the United States and Canada and 706-645-9291 from abroad and entering access code 95296759.

Any remarks that Athersys may make about future expectations, plans and prospects constitute forward-looking statements for approximate purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements s a result of various important factors including those discussed in the Company's Form 10-Q, 10-K and other public SEC filings. Athersys expects that subsequent events and developments may cause its outlook to change, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. With that, I would like to turn the call over to BJ Lehmann. BJ?.

Thanks, Lisa. Good afternoon, and welcome to the Athersys first quarter 2009 earnings conference call. I'm BJ Lehmann, President and Chief Operating Officer at Athersys. I will review our financial results for the first quarter ended March 31, 2009, and then I will turn it over to Gil Van Bokkelen for a corporate update.

In the first quarter of 2009, revenues decreased to $370,000 compared to $792,000 for the same period in 2008. Our revenues were comprised of license fees and grant revenue. License fees decreased by 202,000 from the first quarter last year as a result of differences in the timing and nature of milestone achievements under our collaboration agreement with Bristol-Meyers. Grant revenue decreased $202,000 from the first quarter last year as a result of differences in the timing and nature of milestone achievements under our collaboration agreement with Bristol-Meyers Squibb. Grant revenue decreased $220,000 in the first quarter primarily due to the completion in late 2008 of a three-year state grant and differences in the timing of expenditures that are reimbursed with grant proceeds.

For the remainder of the year, our revenues for any period may fluctuate compared to the same period in 2008 due to differences in demand for targets and achievement and timing of future milestones if any, related to our BMS collaboration. Based on the timing of grant related activities and award of new grants, and as a result of new business collaborations. Our research and development expenses for the first quarter of 2009 decreased to $2.6 million from $4.3 million for the same period last year. The change was primarily due to a decrease in clinical and preclinical development costs of $1.8 million the majority of which was related to a decrease in costs associated with ATHX-105 clinical program, that was suspended early in 2009. There will be no future costs incurred for this program.

General and administrative expenses were approximately $1.5 million in both the 2009 and 2008 first quarters. Interest income decreased to $128,000 in the first quarter of 2009 compared to $459,000 in the first quarter of 2008 due to the decrease of our average cash and investment balances. Overall, our net loss was $3.6 million in the first quarter of 2009 compared with $4.7 million in the first quarter of 2008.

In terms of operating capital, we had $28.3 million of cash, cash equivalent, and available for sale securities at March 31, 2009. As noted in our last earnings call, based on current business and operating plans, we believe our available cash should fund our operations through 2011 even without a new financing or business partnership. With that, I would like to turn it over to Gil for a corporate update.

Thanks, BJ. Good afternoon, everyone and thank you for joining our call today. I will begin with an update on our key development programs and briefly summarize the progress that we continue to make in several key areas. Let me start with our lead programs involving MultiStem our patented and proprietary stem cell product in development for the treatment of multiple disease indications.

As we detailed in our recent investor day event, we are engaged in active research programs exploring the potential utility of MultiStem in multiple disease areas including the cardiovascular area, cancer treatment support, multiple neurological conditions and diseases affecting the immune system or involving chronic inflammation. In this work we not only continue to evaluate the safety and potential therapeutic benefits of MultiStem, in validated preclinical models, we are also focused on developing a deeper understanding of the biological activity and potential mechanisms of benefit delivered by MultiStem.

Based on results from numerous studies conducted by Athersys researchers, our collaborators and contract laboratories where we have sponsored work to support ongoing and planned clinical trials we are confident that MultiStem represents a stem cell therapy that can be used without tissue matching or immune suppression, delivers a benefit in multiple ways and can be produced on a large scale basis. As a result, we believe it represents a fundamental advance in the field of stem cell medicine and a best in class development opportunity.

As a result of this work, we have systemically advanced three MultiStem programs to clinical stage. MultiStem is currently being evaluated in two ongoing Phase I clinical trials. The first trial is for patients who suffer from an acute myocardial infarction which despite advances in cardiovascular treatment and care remains a substantial cause of death and disability in the world.

The second trial involved the administration of MultiStem to leukemia or myelodysplasia patients who are receiving a traditional bone marrow or hematholetic stem cell transplant and are at risk for graft versus host disease or GDHD a serious and potentially life threatening condition that affects roughly half of bone marrow transplant recipients as well as other complications.

We initiated both of these studies based on extensive preclinical work conducted in well validated animal models in which MultiStem displayed both a strong safety profile and significant efficacy. We remain confident that both of these studies will demonstrate the safety of MultiStem and will help set the stage for additional subsequent clinical studies in multiple areas.

With respect to the current status of the AMI study, as of the first quarter of 2009, we have approximately one-third of the patients for the AMI study enrolled, have completed the first dosing cohort and have now begun enrolling patients in the second dosing cohort. Study currently includes seven participating clinical centers such as the Cleveland Clinic, Henry Ford, University of Michigan and Care Group in Indianapolis. We may add additional clinical sites to the study and believe we are on track to complete enrollment in the study by the end of 2009 announcing top line results shortly thereafter.

In our Phase I study for leukemia and myelodysplasia patients we now have three participating clinical centers and are in the process of adding additional sites. Although initial patient enrollment has been slower than expected we are exploring different options to accelerate enrollment such as increasing the number of sites, making certain protocol amendments to increase the number of eligible patients and potentially initiating a second arm to the trial. All of these potential activities will be closely coordinated with the FDA.

We continue to make progress in related areas as well. Last week as part of a consortium with several other collaborating institutions that are part of the center for stem cells or regenerative medicine here in Ohio including the Cleveland Clinic, University Hospitals, Case Western Reserve University and other institutions, the group was awarded a $5 million grant from the Ohio Biomedical Research and Commercialization Program, to support additional work in the stem cell and regenerative medicine area. Approximately $800,000 of the funding is directly aimed at supporting activities here at Athersys involving administration of MultiStem in the oncology and pulmonary areas. Funding from this work will be used to directly support work in the immunological and pulmonary area specifically targeting cancer patients at risk for GDHD where other complications such as acute respiratory distress syndrome.

This grant illustrates the success of the CSCRM consortium which has already advanced multiple programs into clinical development and received substantial grant funding from both the state of Ohio, the NIH and other funding sources while also being designated as a national center by the NIH in the regenerative medicine area. In addition to these studies, we have successfully established a broad network of collaborative relationships with other leading research institutions, have conducted extensive work in other areas, and have continued to evaluate potential applications for MultiStem in advanced key programs.

Last December, our IND application to initiate a third Phase I trial involving administration of MultiStem, the patients that have suffered an ischemic stroke was authorized by the FDA. An ischemic stroke is a stroke due to an arterial blockage typically due to a blood clot which prevents oxygenated blood from getting to the infected area of the brain. Stroke represents one of the leading causes of death and disability in the US affecting over 700,000 patients annually and with total direct and indirect costs to the health care system of over $65 billion in 2008, according to the American Heart Association.

Today the only FDA approved drug therapy for treatment an ischemic drug is the anticlotting factor tPA which must be administered to stroke patients within three hours of the occurrence of the ischemic stroke in order to remove the clot and to minimize potential complications such as bleeding into the brain. Since many strokes occur at night or at a place or time where immediate diagnosis or medial treatment is simply not available only a very small percentage of ischemic stroke patients are treated with tPA.

Our planned Phase I safety study authorized by the FDA is a double blind placebo controlled study involving administration of MultiStem to patients 48 to 60 hours after an ischemic stroke had occurred. Importantly, this represents the first study for stroke patients using an off the shelf stem cell therapy that can be produced at scale and that could provide a meaningful treatment option for ischemic stroke victims within a reasonable time frame. We believe that if we are able to expand the treatment window for stroke patients by demonstrating safety and therapeutic benefit of MultiStem, it can represent a substantial advance over currently available treatment options offering an enhanced quality of life for stroke patients.

Presently we are engaged in discussions with potential clinical sites and CROs while we also explore grant funding and strategic partnering opportunities that would enable us to initiate the study. As we have described at conferences, in publications and at the recent investor day event in New York, over several years of work MultiStem has exhibited a consistent safety profile and appears capable of delivering a therapeutic benefit in multiple ways. Benefits are achieved through the production of multiple factors that protect damaged and injured tissue and promote healing in a variety of ways. The innovative characteristics exhibited by MultiStem demonstrate its potential to deliver a therapeutic benefit in multiple ways such as the reduction of inflammation protection of damaged or injured tissue such as neural tissue and the formation of new blood vessels in ischemic injury.

In contrast to traditional cell therapy which aims to achieve direct replacement of damaged tissue, MultiStem exhibits a more drug like profile in which cells exert a benefit in multiple ways and then are cleared from the body over time. We believe these and other capabilities will allow them to be relevant in a number of therapeutic areas and are excited about the potential utility of MultiStem for treating a range of other conditions including auto immune diseases, other conditions that involve the immune system, and certain neurological conditions especially those in which inflammation plays a key roll.

Along with our advisors we are actively evaluating possible partnering opportunities, with companies that understand the potential of stem cell therapy and its long term potential impact across multiple clinical areas. We are encouraged by the level of interest among potential partners in the stem cell and regenerative medicine area and are confident that we will be able to secure additional strategic partnerships that will enable us to advance our programs in a meaningful and substantial way.

We are also exploring strategic partnering opportunities in our other programs. Beyond our various MultiStem programs we are continuing our focus on the development of pharmaceuticals for the treatment of obesity and other conditions specifically those that affect the central nervous system. In the obesity area, we are developing and evaluating compounds that selectively stimulate the 5-HT2C serotonin receptor in the brain which is known to play an important roll in regulating appetite. These compounds known as 5-HT2TC agonists are designed to reduce appetite and food intake in order to achieve substantial weight loss over time. While this mechanism is widely recognized to provide an effective approach for achieving significant weight loss, over the past several years much has been learned about the need for compound selectivity in order to maximize therapeutic benefit and achieve patient safety and tolerability. We believe our program is well positioned to produce the quality of compounds that will be necessary to achieve safety, tolerability and the highly effective weight loss that is required to achieve a best in class obesity drug.

In the neurological area, we are developing novel orally active pharmaceutical products for the treatment of central nervous system disorders. This includes a range of indications including narcolepsy, excessive daytime sleepiness or chronic fatigue associated with certain other disease conditions. It also includes potential indications such as attention deficit, hyperactivity disorder and cognitive disorders such as schizophrenia or certain diseases affecting memory. These programs are focused on the development of selective histamine H-3 receptor antagonist or inverse agonist compounds that act by elevating levels of neural transmitters in the sleep and cognitive centers of the brain and stimulating neurological (inaudible).

This results in an enhanced state of wakefulness and cognition without causing hyperactivity, excessive rebound sleepiness or addiction. Published clinical work has suggested potential therapeutic conditions affecting attention wakefulness as well as other conditions including epilepsy.

However, challenges described in compounds developed in competing programs have created significant room for improvement. As we have described in detail to investors over the last several quarters and at the recent investor day event, we have established highly potent selective histamine H-3 antagonist and inverse agonist with properties that we believe create the potential for delivering best in class therapeutics that can have relevance in multiple disease areas. Specifically, we have been committed to developing compounds that exhibit outstanding potency and selectivity, half life suitable for once per day dosing and a strong safety profile that is free of toxicological properties that could be problematic for competing programs established at other companies. We have successfully establish a portfolio of compounds that we believe have an outstanding competitive profile. As with our other programs we are currently evaluating potential partnering opportunities around this program.

Our other patented and proprietary technologies continue to provide value for us and our partners. We recently extended our ongoing partnership which Bristol-Meyers Squibb which represents the third expansion or extension of this relationship which was originally established in 2001 and is now entering its final phase. As part of this partnership we have applied our proprietary genomics technologies to create assets for use of drug screening and optimization programs at BMS across a range therapeutic areas.

As we announced last fall, the most advanced of these programs has now advanced in mid stage clinical development and the collective progress illustrates the breadth and utility of our technologies in the development of novel pharmaceuticals.

In closing, I'd like to state that we are encouraged by the results we have achieved and look toward to the continued progress of our trials and other efforts. We believe that each program we are pursuing offers the opportunity to develop best in class therapeutic products with the potential to establish safer and more effective therapies to treat patients suffering from a broad range of diseases. We are committed to achieving that goal and believe that in doing so, we will be able to create substantial value for our shareholders. As of the end of Q1 2009, we had $28.3 million in cash and available for sale securities enough to support our core operations through 2011 and we expect to add to our capital base through partnering activities furthering our ability to create significant value for our shareholders. With that I would like to open the line up for some questions.

(Operator Instructions). Your first question comes from [Kevin O Connell]. Your line is open.

I misunderstood. I am just listening. Thank you.

Okay.

I just want to listen.

Okay. At this time sir, we have no questions in queue.

Okay. Well, if there's no questions I would like to thank everybody for listening in on today's call. And we thank you for your continued interest in the Company and your support.

This concludes today's conference. You may now disconnect.