Athersys Inc (ATHX) 2010 Q2 法說會逐字稿

Good afternoon, my name is Gordon and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Q2 financial results conference call. (Operator Instructions) Thank you. Bill Bunting, you may begin your conference.

Thank you and good afternoon, everyone. I'm Bill Bunting, I-Site Communications Investor Relations for Athersys. Thank you for joining the call. You should have a copy of the press release issued at the close of market. If you have not received it, the release is available on Athersys Web site at www.athersys.com or please call Libby Abelt at (212) 759-5665 and it will be sent to you immediately. Gil Van Bokkelen, Chairman and Chief Executive Officer; BJ Lehmann, President and Chief Operating Officer and John Harrington, Chief Scientific Officer of Athersys will host today's call.

The call is expected to last approximately 30 to 45 minutes and may be accessed through the company's Web site at athersys.com. A replay will be available after this call's completion by dialing (800) 642-1687 in the U.S. and Canada and (706) 645-9291from abroad and entering access code 86664466.

Any remarks that Athersys may make about further expectations, plans or prospects constitute forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these forward-looking statements as a result of various important factors including those discussed in the companies form 10-Q, 10-K and other public SEC filings. Athersys anticipates that subsequent events and developments may cause its outlook to change. While the company may elect 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, Bill. Good afternoon, and welcome to the Athersys Second Quarter 2010 Earnings Call. I'm BJ Lehmann, President and Chief Operating Officer at Athersys. I will briefly review our financial results for the second quarter ended June 30, 2010 and will turn the call over the Gil Van Bokkelen, our Chairman and Chief Executive Officer for a corporate update.

In the second quarter of 2010 we recorded revenues of approximately $1.9 million compared to $436,000 for the same period on 2009. Contract revenue increased $1.2 million for the period, primarily as a result of our collaboration with Pfizer. We expect our contract revenue related to the Pfizer collaboration in the next few years to reflect the amortization of the up-front license fee over the estimated performance period, research and development funding and performance of manufacturing services. Grant revenue increased $197,000 during the same quarter of 2010 compared to the prior year period, primarily due to the timing of grant-related activities and the award of new grants.

Our research and development expenses for the same quarter increased to $3.4 million compared to $2.6 million for the same period last year. The increase related primarily due to increased clinical and pre-clinical costs at $686,000, an increase in personnel cost of $172,000 and an increase in research supplies, sponsor research and stock compensation. These increased expenses were partially offset by decreases in other research and development expenses of $111,000 and patent legal fees of $81,000. We expect our research and development expenses for the remainder of 2010 to continue to be higher than the comparable periods of 2009, though this impact will be largely offset by increased revenues. General and administrative expenses for the same quarter of 2010 were $12.5 million compared to $1.3 million in the same quarter of 2009. We expect our general and administrative expenses to continue at similar levels for the remainder of 2010.

Our net loss was $3.1 million or $0.16 per share in the same quarter of 2010 compared to $3.3 million or $0.18 per share in the same quarter of 2009. Our cash, cash equivalents and available-for-sale securities were $20.1 million at June 30, 2010. For the six months ended June 30, 2010 our net cash used in operating activities was $5.8 million. Based on our current business and operating plans, we expect to have cash available to fund our operations through 2011. With that, I'd like to turn it over to Gil for a corporate update. Gil.

Thanks, BJ. Good afternoon and thank you for joining our call today. I'd like to begin with a brief review of several key developments during the second quarter and the progress we made with our clinical and pre-clinical programs. Just a few days ago, on July 28th, we released a summary of interim top-line data from our ongoing Phase I clinical trial involving the administration of MultiStem to patients that have suffered an acute myocardial infarction, more commonly referred to as a heart attack. Dr. Mark Penn, Director of Cardiovascular Cell Therapy at the Cleveland Clinic and Director of the Skirball Laboratory for Cardiovascular Cellular Therapeutics and a co-principal investigator for the study joined us for a conference call to summarize and discuss the interim top-line data from the trial. The primary objective of this Phase I study was to determine the safety of allogeneic MultiStem administered to patients following AMI after patients have received percutaneous coronary intervention, PCI, which typically consists of balloon angioplasty and insertion of either bare metal or drug alluding stents in order to restore and maintain blood flow to the ischemic region of the heart. This approach represents the current standard for most patients that are treated at leading cardiovascular centers following a heart attack. The trial was designed as an open-label study involving single dose administration of MultiStem with three dose levels, and a registry cohort of patients receiving only PCI.

The target population for this study was first-time heart attack patients, exhibiting a left ventricular ejection fraction between 30% and 45%, in contrast to a normal ejection fraction, which is typically in the range of 55% to 70%. As Dr. Penn and others have described, a patient population experiencing a severe heart attack and exhibiting a left ventricular ejection fraction of less than 45%, is likely to be associated with meaningful loss of cardiac function and is at risk for future cardiac problems, including the risk of progression to congestive heart failure.

An important secondary objective of the study was to collect and evaluate data regarding cardiac function in patients who have received specified doses of MultiStem, in order to assess for evidence of efficacy compared to the registry cohort. Along with the safety data generated from the study, this information could be useful in planning for future clinical studies. In this study, MultiStem was administered locally using a trans-arterial micro-infusion catheter as was described during our second annual investor R&D day event last May by Dr. Penn and Dr. Warren Sherman. This delivery approach enables precise and rapid placement of cells directly into the relevant region of the heart following a heart attack. Dr. Sherman is Director of Stem Cell Research and Regenerative Medicine at the Center for Vascular Therapy at Columbia University Medical Center in New York and Co-Principle Investigator along with Dr. Penn.

The primary endpoints of the Phase I study included the following; first, assessment of acute adverse events during the first 24 hours after MultiStem administration; second, assessment of post-acute adverse events up to 30 days in MultiStem in treated and registry groups; third, assessment of catheter-related events up to 30 days post-treatment in the MultiStem groups. With respect to safety endpoints, all patients were evaluated for changes in vital signs, including monitoring blood pressure, heart rate, temperature and oxygen saturation. In addition, patients were evaluated for any signs of acute allergic reaction or any evidence of acute infusional toxicity for 24 hours following treatment. They were also evaluated for any evidence of any dose-limiting toxicity, product or treatment events, catheter-related events, major adverse cardiac events, as well as general safety issues that occurred within 30 days of treatment.

As Dr. Penn described, administration of MultiStem was found to be well tolerated at all dose levels, and no clinically-significant changes in vital signs, allergic reactions, flu-like symptoms or infusional toxicities associated with MultiStem administration were observed. Furthermore, there was no evidence of immune sensitization associated with MultiStem treatment at one month or four months post treatment. We believe the safety profile is very important because it provides clinical data that is consistent with our pre-clinical results, and helps validate the key aspect of MultiStem, that it can be safely administered to patients without tissue matching or immune suppression.

While this study was not designed as a statistically-powered evaluation of efficacy, in addition to safety parameters, the study involved an ongoing analysis of secondary endpoints including an evaluation of cardiovascular function for patients at one and four months post treatment.

The preliminary echocardiogram data at four months demonstrated that the MultiStem treatment groups exhibited improvement in mean left ventricular ejection fraction compared to the registry group, in which patients received only standard of care. Among patients with significantly compromised cardiovascular function, at the time of treatment, there appears to be a robust and encouraging improvement in cardiovascular function. While this study was not powered to demonstrate efficacy, as Dr. Penn described, these results are consistent with prior pre-clinical studies, and provide a strong foundation for further advancement of this program. Dr. Penn will be presenting a more detailed summary of the interim data from the Phase I study during the upcoming TCT conference in Washington, D.C. on September 22nd.

Looking forward, we plan to further evaluate the data from the ongoing study, and we'll work in coordination with Dr. Penn, Dr. Sherman, our partner, Angiotech and the FDA to plan a robust Phase II program and continue our development efforts in the cardiovascular area.

Next, turning to our other MultiStem development activities, we continue to make solid progress in our collaboration with Pfizer to develop and commercialize MultiStem for the treatment of inflammatory bowel disease, or IBD for the world wide market. Members of our development team, together with the Pfizer regenerative medicine team, are fully engaged on multiple fronts, and as Dr. Ruth McKernan and I described at our recent investor and R&D day event, both sides are extremely pleased with the progress being made as we work together. And we look forward to building on that progress in the months and quarters ahead.

Our second MultiStem clinical trial, in oncology treatment support, also made steady progress during the second quarter. This trial involves administering MultiStem to leukemia or lymphoma patients, who are receiving traditional bone marrow or hematopoietic stem cell transplant. The objective of this clinical program is to reduce the risk of severity of graft versus host disease or GVHD, while also potentially addressing other complications commonly associated with radiation conditioning regimens, such as compromised gastrointestinal function.

In this Phase I study, we have two treatment arms. The first arm is a dose-escalation study that involves the administration of a single dose of MultiStem shortly after the initial hematopoietic stem cell transplant and involves the evaluation of three separate dose levels. We have successfully completed dosing patients in the first two dose levels, and are currently dosing patients at the third level. We intend to complete enrollment in the third cohort by the end of the year. The second arm of this study involves administration of MultiStem at weekly intervals for up to a month following the initial hematopoietic stem cell transplant. In the first quarter of 2010 we received authorization from the Independent Safety Committee to commence the multi-dose study, and we have initiated this arm and are currently dosing patients. The primary endpoint for this Phase I trial is safety, such as monitoring for acute infusional toxicity. We are also evaluating multiple secondary endpoints such as monitoring for incidence versus severity of graft versus host disease, survival and infection. Our goal is complete enrollment of approximately half of the patients in this arm of the trial by the end of this year.

We've also continued our planning activities for the initiation of a Phase I clinical trial administering MultiStem to patients for the treatment of ischemic stroke, the leading cause of death and disability. We received FDA authorization to begin this study, as we have described previously. And while we've continued our preparations for the initiation of this clinical trial, we have also continued to conduct research, both internally and with a team of independent experts. This work ahs broadened and deepened our understanding of the multiple ways in which MultiStem can have a profound effect on promoting tissue repair and healing in a range of neurological indications, including stroke, traumatic injury, spinal cord injury and other areas. Along with our collaborators, we were pleased to recently announce the award of a $1 million grant to support ongoing work in the area of spinal cord injury from the Ohio Third Frontier BioMedical Research Program, and we look forward to initiating our clinical trial involving administration of MultiStem to treat ischemic stroke patients.

We continue to make progress in other internal development programs, and are excited by the data being generated in a growing number of collaborations involving MultiStem. We currently collaborate with over 30 leading research institutions and many investigator4s across the U.S. and Europe, which provides us with a highly efficient way to explore the potential utility of MultiStem across a range of disease and indication areas, as well as deepen our understanding of how these cells can dynamically interact with other cell types and organs in the body to promote healing and tissue repair.

Next, I would like to make a few comments regarding our obesity program. The evidence in this area now clearly demonstrates that while potency for the 5HT2c receptor offers the potential to achieve meaningful weight loss, compound selectivity at both the 5HT2b and 5HT2a receptors is also necessary to achieve safety as well as tolerability as well as maximize efficacy. We have successfully achieved a major objective, and have developed a high quality portfolio of compounds which are potent at the 5HT2c receptor, yet exhibit no physiologically relevant agonist activity at either the 5HT2b or 5HT2a receptors. We believe this represents a substantial achievement, and that these compounds have the potential to be best-in-class clinical candidates. We are further assessing compounds we want to advance into further development.

We continue to make headway in other programs, such as those focused on the development on potent and selected antagonists of the histamine H3 receptor. These compounds have potential utility in treating certain disorders involving cognition, attention and wakefulness. As we described at the investor and R&D day event in New York, we are also very excited by the interface between small molecules and stem cells and the impact this research could ultimately have in regenerative medicine.

In addition to our clinical and pre-clinical programs, we also remain actively engaged in the business development front, where we are exploring partnering opportunities in several areas. As a result of our diverse portfolio of programs, we have the flexibility to establish alliances with other leading organizations that are committed as we are to the development of safer and more effective therapies in areas of unmet medical need.

Finally, I'm pleased to announce a new addition to our Board of Directors, Dr. Lee Babiss. In addition to being an outstanding individual, Lee is a highly-accomplished executive in the bio-pharmaceutical industry, and during his extensive career he has held senior positions at global leaders like Roche and Glaxo. He brings development experience and a technical understanding to our team, and we are delighted to have him join our board.

In summary, we continue to make steady progress on multiple fronts, and are excited about the road ahead. With that, we'd be happy to take a few questions.

(Operator Instructions) Your first question comes from Steve Brozak from WBB Securities. Your line is now open.

Hi, congratulations gentlemen on quite a bit of a whirlwind quarter. I wanted two questions specifically. The first on applies on the stem cell front, and I-- can you describe the magnitude of what you're dealing with here in terms of on the cardiac side, in terms of what the current standard of care treatments are, because I think there's a bit of a disconnect? I don't think people really understand the orders of magnitude of difference if they cardiac improvement that you're seeing as compared to what the current standard of care is. That's the first question. And the second question would come in, in terms of your potential drug on the weight loss side, as it compares to drugs that are going before the FDA right now?

Yep. Thanks, Steve. In terms of the first question in terms of the magnitude versus the current standard of care, well the interesting thing about this study is, again, all the patients got the current standard of care, which relates to PCI involving balloon angioplasty and then the insertion of stents to restore and maintain blood flow. Historically, and there's a lot of literature out there that talks about the magnitude of the benefit that's been seen using various approaches, but some of the literature suggests that the benefits that are seen using PCI in terms of improvement of injection fraction are typically in the mid to upper single digits in terms of improvement over time. The effect that we saw in patients that had significantly compromised cardiovascular function at the time that they receive MultiStem actually looks very similar, and we saw in fact double-digit responses in some of those patients or average responses in some of those dose groups.

Now again, I want to temper people's enthusiasm by just pointing out that this is a small study. And we still have a lot of work to do to establish clinical proof of concept. But in terms of the results that we're seeing so far, I guess there's two things that we can point out. One, this appeared to be a very robust response in the patients that were receiving treatment. Number two, these results were entirely consistent with the pre-clinical result that we've seen previously in work that we conducted with the Cleveland Clinic and other people where we've collaborated. So I think that that consistency in terms of the response that we've seen and the early indicators in terms of the robustness of the response that we've seen are exciting to us. And I think Dr. Penn made that point when he was summarizing his view in terms of the importance of this event. I mean, he-- I think he stated during the call that frankly this compares incredibly favorably, and in fact this is the best response that he's seen in a study of this type. But again, it's a small study. We've got a long way to go, and we really don't want to blow it out of proportion. I think it's a great start in terms of what we're doing. If the additional clinical results that we generate in the future compare with the results that we've seen from these types of studies, then I think we'll be very happy about that.

In terms of the 5HT2c obesity drug program, again, I want, I guess, to make a couple of comments about that. The first is that we are generally rooting for the other companies that are actively engaged in development efforts with respect to obesity programs because, one, we think there's just a huge unmet clinical need, and it could do a lot of patients a lot of good. But as I think as we look at the competing programs that are out there that are in late-stage clinical development or under active review with the FDA, I think that there's a couple of things that we look at. The first is that we don't think that the perfect or ideal obesity drug has been developed yet. I think each of the programs that are out there have pluses and minuses, whether it be on the efficacy side or whether it be on the safely and tolerability side. And I think certainly when you hear people like Xavier Pi-Sunyer or others talk about some of the prior experience of what has been seen just from an efficacy stand point with [pensent], that there's certainly appears to be room for improvement in terms of maximizing the therapeutic effects of a weight loss drug.

We think we're on the right track because we think we've been able to accomplish some things that others have tried to accomplish, but have not yet delivered on. And so we're really excited about that, and again, we think that they're-- given the profile of the compounds that we're developing, we think there's reasons to think that we're on the path to developing a best-of-class obesity drug, and we're excited about that and I think it compares pretty favorably with the things that are out there.

Just one last follow up on the first part, you know, you say it's a small end, which it is obviously, but it isn't as if it was done in a vacuum. You've got tons of pre-clinical data that pretty much give you-- you know, it's not just as if you just pulled these numbers and pulled the procedures you know, directly off of some spreadsheet that had no correlation with pre-clinical data. So you had a good degree of comfort that there was correlation between the pre-clinical and the actual human data. Is that a correct statement to make?

Absolutely. And I think even going a step further, I think somebody asked a question at the R&D day event in New York and I believe Dr. Sherman, somebody had asked Dr. Sherman or Dr. Penn, I think it was Dr. Sherman, you know, what did people see previously in terms of other studies, and what, you know, what do you think would be a reasonable outcome in terms of seeing improvement in terms of ejection fraction, and I believe his response was he saw something in kind of the 3% to 5% range, that that would be considered by most clinicians being very meaningful. And I think the data and the response that we saw from this study, albeit a small study was I think compares pretty favorably with what he described.

Great. Well, I appreciate the good information. I look forward to the next quarter, and congratulations gentlemen. I'll jump back in the queue.

Thank, Steve.

Your next question comes from Steven Dunn from LifeTech Capital. Your line is now open.

Thank you. Congratulations, Gil and BJ. I missed the AMI announcement. I was traveling but a belated congratulations on that.

Thanks.

Thanks.

Just one housekeeping question on that trial, are we continuing to follow those patients just to check for durability of response or are they lost-- are the patients lost to evaluation?

No, they're not lost to evaluation. We will continue to follow them out for out to one year, and then I believe there's kind of a cursory check up at two years.

Great. I want to move onto the leukemia trial. Now, the single-dose ranging arm, you said you'd get the enrollment complete by year end, and then there's a 100 day follow up. Would you be reporting the results of that arm before the repeat-dosing arm or are you going to wait until the repeat dosing arm is complete?

Well, we haven't made a final determination on that, but I think our preliminary viewpoint is that we'd like to at least give people at least a top-line data summary after we completed the single-dose administration arm.

Okay.

That's our expectations.

All right. Just one last question, just want to move on to your 5HT2c, Arenas-- lorcaserin, you know, is viewed as street as being safe. Now, we know at high doses as it hits the 2a receptor it gets toxicity issues, but the feeling is it's safe. Would you characterize your 5HT2c receptor candidate as having a chance that I can give it a higher does than I can for lorcaserin, and therefore, increase the efficacy, which seems to be the big $64,000 question around Arena's drug?

Yeah, that's exactly the concept that we're talking about here is that better selectivity will allow us to achieve a higher effective dose and see a much more significant weight loss effect as a result of that. And in fact, just pointing back to some of our prior clinical work in the area, that's exactly what we predicted with a previous compound, ATXH 105 that we were focused on. We felt that we had better selectivity profile overall for . And we-- although we had similar potency to what Arena had described for lorcaserin in terms of activity at 2c, and so we predicted that we would be able to dose at meaningfully higher levels, and in fact we were absolutely correct on that. So in this case, again, the central hypothesis here is that we will in fact, as a result of substantially better selectively be able to does at higher effective levels, maximize the weight loss effects, but at the same time maintain outstanding safety and tolerability.

Okay. And just one-- squeeze one more in there, on the IBD work, can you characterize how far Pfizer's on-- are they still doing animal trials or how many species have they done or can you give us a little color on how much work they've done so far?

Well, I can't really go into details there unless I get Pfizer to sign off on that, but I can tell you that's it been an extremely first half of the year, and the good news is that we've all ready got a lot of data in hand from work that we've done previously even before we entered into the partnership with Pfizer that I think is relevant. As we've talked about previously, one of the nice things about developing MultiStem and the approach that we're taking is that we're building a strong foundation of central safety and other types of information related to product validation and characterization that will be useful across multiple different clinical programs and multiple different dimensions. So again, we aren't able to give guidance about when we expect to advance this program into clinical development, but I can say the first half of the year has been highly productive and we look forward to what we think we'll be able to achieve in the second half of the year as well.

All right, great. Thanks to the team.

Your next question comes from the line of Nathan Cali from Noble Financial. Your line is now open.

Hi, good afternoon. Thanks for taking the questions. A question of the 5HT2c, what do you think the outlook would be for that program if the lorcaserin fails to get positive vote from the FDA panel on September 16th?

Well, you know, that's an interesting question. I think most of the analysts' opinions out there that I've read or you know, the data that we're aware of is that lorcaserin has a very clean safety profile. I think that the central question really relates to is the efficacy that they've seen, is that going to be good enough to get them over the hurdle, and that's still an open question. But I think that at the end of the day, I'm not sure you could draw a really hard and fast conclusion from the outcome with respect to that particular program, and necessarily apply it. I think it really gets down to the specific reasons as to why. So if the advisory committee or the FDA says look we think this is an acceptable safety profile, but we'd like to see slightly higher efficacy, then I think obviously that would factor into, you know, factor into the thinking accordingly. But I think they've shown promising efficacy. There was obviously a lot of patients that took the drug that demonstrated a meaningful amount of weight loss, and again, I think relative to what's out there now, I think their safety profile is very, very strong.

Okay. And then as far as the IBD, I know you sort of answered this question all ready, but when do you think Pfizer may file the IND for that?

Yeah, we can't give guidance on that. Historically, we don't give guidance on when we expect the filing of an IND. In this case, we, you know, anything we say publicly about the timing about that is something that we would have to get Pfizer's approval on, and it's not their policy to make comments or guidance on those types of activities. Our-- in the past what we've done is we have announced when we have gotten authorization for an IND after it's been submitted, and I suspect that's what we will do in this case as well.

Okay. And is there any plans to initiate the next clinical trial with MultiStem in cardiac patients?

Well, we just recently got the results from the Phase I study. And so we're now in the process of continuing to go through the data and look at what we can learn from the amount of information that we've got from the study and go through it with our partner, Angiotech. Once we've mapped out what we think is a reasonable approach to a potential Phase II study, then at some point in time we will present that plan to the FDA, get their perspective on that plan and then refine that accordingly and then move forward from there. So we're still kind of in the early part of the process from that, but obviously there's going to be a lot of work in that regard as we map that our over the course of the next several months.

Okay. So that maybe coming in the first half of 2011 or not sure yet on the time line?

Well, I mean, I can't really give you kind of a specific target, but I can say that historically, it's not uncommon for it to take something on the order of about 12 months from the time that results are reported out until moving onto the next stage of clinical development. I think you want to make sure you do it right. The process is a little bit of a complicated process. You want to make sure you've got the right study design parameters in place. You want to make sure you line up the right clinical centers to participate in the study. In our case, obviously working with the right CRO, you know, making sure we've got the right investigators that are part of the process. And that's something that we are, you know, in the process of beginning to work through with Angiotech as well as the other people that will be involved with the process.

Okay. I had a couple of other questions-- real quick questions. Does the company plan to ink any additional partnerships on MultiStem in the near term?

We aren't going to give any guidance on specific areas of business development activity, but I can say we're active on several different fronts.

Okay. And then you're projected cash burn for the next 12 months?

We haven't given a hard financial target, but again, as BJ mentioned during his comments, we've got sufficient capital to take us through 2011, and obviously, the nice thing about our position is that because we have the ability to establish partnerships, I mean, in addition to the ongoing relationships we have and the support we're getting from those relationships, we do have the ability to put in place new partnerships in the areas where we think it makes sense and under terms that we think are advantageous for the company and make sense for the company. And then of course, we also have access to the capital markets if we feel like it's appropriate to use the shelf that we have in place as well.

Okay. Did you say that you have cash for the next 12 months?

Out through the end of 2011.

Okay. All right, thank you very much.

Thank you.

Your next question comes from George [Marx] from Shareholder. Your line is now open.

Hi, thank you for taking my call. Can you hear me okay?

Sure, George. How are you?

I'm doing great, thanks. As I said, my name is George Marx. I'm a retired engineer from the Chicago area and an shareholder of Athersys, You may have answered some of the questions, but please allow me to read the statement of questions, because it may reflect on what I and other shareholders were thinking before the conference call.

First, I'd like to express my congratulations to Athersys' scientists for the great job they're doing in developing stem cell regenerative medicine. I think there's a lot to be proud of, giving people the chance for longer, pain free lives is very gratifying, and I am pleased to be a shareholder of the company. However, for some unknown reason, we don't seem to be getting the appreciation in the valuation of our stock, particularly after the recent announcement of the preliminary Phase I work for heart attacks. One would think that the accomplishments would have resulted in an appreciation of the stock price, which didn't happen. I'm wondering, as I'm sure most of the other stockholders of Athersys are, just why that was so. Was it the lack of news distribution or is there another reason? I've recommended following the stock to friends, family, made a few posts to the 1,200 members of [laforum.com] board. I owe those people who may have bought stock an explanation. Is there a ready answer? Well, I didn't expect instant gratification in buying Athersys stock, and I appreciate it's a long process. I'm glad to be a shareholder, and I'm wondering why greater interest wasn't expressed in the heart Phase I announcement. The results seem to be great. Thanks for taking my call, and I'll hang up and listen to your response. I appreciate it.

Well, first of all George, I'd like to thank you and the other shareholders that are actively following in the company and are paying attention to what we're doing. I think that, you know, it means a lot to us here at the company. We're working hard here on behalf of you and all the other shareholders and all the other stakeholders that we're responsible for representing. You know, in terms of the somewhat muted response in the market, it's a little bit difficult to pinpoint why that happens. I mean, there's been instances where I've seen companies that have announced very positive news and their stock has actually gone down on the announcement. And it's frustrating. It's frustrating to us here at the company. You know, if you asked us if we thought our stock was under valued, I think every single member of the executive team would say absolutely. You know, I personally think we're substantially undervalued. But I also know that that's not the type of thing that you can cure in a day or with necessarily with a single event. I do think that the clinical data that we got, and again, I think this was echoed in Dr. Penn's comments. He's not an employee of the company. He's an independent objective observer, somebody that makes his livelihood looking at the advancement of medicines to treat cardiovascular patients that are seriously in need. And I think it's fair to say that Dr. Penn was quite excited by the results, and you know, is very excited about where this program could be going over time.

Why that doesn't necessarily translate into a stronger response in the market? It's a little bit difficult to say. I know that there are a number of analysts out there that are following what we're doing. I think they've responded positively to the progress that we've made. I think we're certainly excited about the progress that we've made. We work with a communications team so that we can actually get the word out so that we can actually help educate people in terms of the progress we're making whether it be from this study or the other things that we're actively engaged in. It's why we hold events like our investor and our R&D day event in New York is precisely because we want to take the time and the opportunity to educate people with respect to the exciting progress that we're making.

I think, you know, one aspect of-- the stem cell and regenerative medicine field, until recently, relatively recently, I would say a lot of people hadn't really been paying attention to it. And if you look at the companies that are out there in the stem cell and regenerative medicine space, you know, we're one of the few companies really that has a meaningful partnership. And in our case, we've got a couple of partnerships that I think should provide a fair amount of validation in terms of what we're doing, that, in addition to the clinical results and the pre-clinical results that we're producing. So I think we're doing the right things. We're doing our best to try and communicate the progress that the company is making through leading scientific conferences and forums and regenerative medicine conferences and forums and through the work that our communications team is doing. I think that will translate into a better reflection of the progress we're making in our stock price over time, but it doesn't happen instantly. I think it requires a lot of work, a fair amount of patience and a lot of diligence and committed effort.

Your next question comes from Jason Kolbert from National Securities. Your line is now open.

Hi, Gil. It's interesting, I enjoyed those comments. The ones from the shareholder, and I just remind everybody that this is still a very new space. There have been a lot of critically positive announcements recently, and I do think that we will see an inflection point over the next three years. With that said, can you talk a little bit about what Dr. Penn is going to talk about at TCT, whether you know, he's preparing sub-group analysis and how the presentation at TCT and the data review might influence the next clinical step?

Well, I don't want to speak too much for Marc, because I know he's in the process of actually assembling the relevant parts of the presentation so that he's ready to go in September, but I do think, you know, one of the disadvantages of describing things on a conference call is you can speak to it, but you can't really show people the pictures and the graphics that go along with the data. And I think Marc will have an opportunity in front of his peers and colleagues and others in the industry or others in the field to actually walk through the data in a more pointed fashion, and really illustrate the types of benefits and the elements of the safety profile that have been observed.

Thank you. Appreciate the updated.

Yep.

Your next question comes from Sal [Siricio] from Griffin Securities. Your line is now open.

Hi, Gil. How are you?

Good, Sal. How are you?

Yeah, I'm okay. Most of my questions have been answered in regards to the AMI program and in the leukemia and transplant programs. I just had one general little follow up, just has there been any change in the status with the stroke program, timing wise, I guess any feedback from the FDA and so forth? And thank you, again.

Yeah, so again, I think we're making good, steady progress there in terms of getting that trial up and running. We're not quite there yet. You know, we got a little bit more preparatory work that we want to do, but I'm, you know, I'm as anxious as anyone to actually get that study up and running. I'm really excited about the difference that I think we can make in treating stroke patients. As I have talked about publicly, we've got a number of the leading stroke centers that have committed to participate in the study. We're excited about that, and some exciting investigators that are ready to participate in the study as well. We're not, again, I think we've got a little more work that we need to do to put ourselves in a position where we can start enrolling patients, but we're certainly anxious and interested to get that study up and running as quickly as we can.

I think that, you know, the modification that we're proposing to make this study, we think is going to make the study more informative. And again, it's based on information that we've generated over the past 12 months or so that I think will really deepen our understanding in a couple of key respects and we want to make sure that we take that into account in this particular study design because I think it's, you know, it's only a 48 patient study, but it's, you know, it's multiple doses and it's double blind placebo controlled, and the way the study is designed in terms of allowing us to treat patients 48 t o60 hours after a stroke has occurred, I think puts in a reasonable position to see some interesting benefits from the patients that are receiving therapy.

So again, can't give you a hard date to point at in terms of when we're going to get that up and running, but we're aggressively moving it forward as best we can.

I understand. Thank you again for your time. Thank you.

Thanks, Sal.

(Operator Instructions) Your next question comes from Keay Nakae from Chardan Capital. Your line is now open.

My question has been answered. Thanks.

Thanks Keay.

There are no further questions in the queue. I'd like to transfer the call back over to Dr. Gil Van Bokkelen. Your line is now open.

Okay. Well again, I'd like to thank everybody for taking the time to participate on the call today. We're certainly looking forward to a productive second half of the year, and I hope everyone will be actively following our progress. And I look forward to hearing from you gain on our next earnings call. Thanks very much.

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