Athersys Inc (ATHX) 2015 Q2 法說會逐字稿

Good afternoon. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Athersys second-quarter 2015 earnings call. (Operator Instructions)

Thank you. I would now like to turn the call over to Ms. Laura Campbell. You may begin your conference.

Thank you, and good afternoon, everyone. I'm Laura Campbell, Vice President of Finance for Athersys. Thank you for joining today's call. If you do not have a copy of the press release issued at the close of market, it is available on the Athersys website of athersys.com, or you may call Matt Selesnick at 216-431-9900 to receive it via email.

Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer, and BJ Lehman, President and Chief Operating Officer, will host today's call. The call is expected to last approximately 45 to 60 minutes and may also be accessed at Athersys.com. A replay will be available two hours after the call's conclusion, and access information for the replay is in today's press release.

Any remarks that we may make about future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements as a result of various important factors including those discussed in our Form 10-Q, 10-K, and other public SEC filings.

We anticipate that subsequent events and developments may cause our outlook to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. For the benefit of those who may be listening to the replay, this call was held and recorded on August 6 of 2015. Since then, we may have made announcements related to the topics discussed, so please reference our most recent press releases and SEC filings.

With that, I would like to turn the call over to BJ Lehman. BJ?

Thank you, Laura. Good afternoon, and welcome, everyone. I'm BJ Lehman, President and Chief Operating Officer at Athersys. I will briefly review our second-quarter 2015 financial results and then turn the call over to Gil for a corporate update.

For the second quarter of 2015, revenues were $216,000, compared to $388,000 for the same period in 2014. They are comprised of grant revenues and royalties from our collaboration with RTI Surgical.

The $10 million upfront payment from the license agreement with Chugai Pharmaceuticals, which was announced in March, is recorded as deferred revenue at June 30, 2015 in accordance with our accounting policy for such arrangements. Under the terms of the agreement, we may terminate the collaboration in the event that Chugai does not pay us the $7 million milestone payment following this review of the interim results from our Phase 2 ischemic stroke study. This payment is due during the third quarter of 2015.

Research and development expenses were $5.3 million in the second quarter of 2015, compared to $5.8 million in the prior year's second quarter. The difference reflects decreases in clinical and pre-clinical development costs and sponsored research, which were partially offset by increases in past legal fees. General and administrative expenses were relatively consistent at $1.9 million in the second quarter of 2015 and $1.8 million in the same period in 2014.

The change in the fair value of our warrant liabilities resulted in income of $6 million in the second quarter of 2015, compared income of $7.9 million in the comparable 2014 period, reflecting primarily the impact of changes in our share price. Net loss for the second quarter of 2015 was $1 million, compared to net income of approximately $700,000 in the second quarter of 2014. The increase in net loss reflects a $200,000 reduction in loss from operations as offset by the $1.9 million increase in non-cash expense from our warrant liability valuation. Net loss per share was $0.01 per share in the second quarter of this year, compared to net income of $0.01 per share in the second quarter of 2014.

It's important to note that our reported net loss of $1 million for this quarter includes non-cash income of $6 million related to the change in fair value of our warrant liabilities and non-cash expense of $700,000 related to stock-based compensation, aggregating $5.3 million of non-cash income.

Further, our reported loss does not include any revenue impact from the Chugai license since the upfront payment is recorded as deferred revenue as of June 30, 2015.

Similarly, our reported net loss per share of $0.01 for this quarter includes a $0.06-per-share favorable impact from the $5.3 million of non-cash income.

As of June 30, 2015, we had $32.3 million in cash and cash equivalents, compared to $26.1 million at December 31, 2014. Additionally, we are expecting a $2 million Japanese tax withholding refund during the third quarter. During the second quarter of 2015, cash used in operating activities was $5.8 million, compared to cash used in operating activities of $6.1 million in the second quarter of 2014. Cash provided by financing activities in the second quarter of 2015 was $2.7 million, compared to zero in the prior year's second quarter, and include proceeds from the use of our equity facility.

With that, I would like to turn the call over to Gil for a corporate update. Gil?

Thanks, BJ, and good afternoon, everyone. As we describe for you each quarter, Athersys is committed to developing innovative new medicines that have the potential to address serious areas of unmet medical need. We believe that by developing safer and more effective treatments, it can provide substantial benefits to patients in areas like neurological, cardiovascular, inflammatory and immune disease, and other areas that we are pursuing. We will be able to meaningfully improve medicine, enhance clinical outcomes and patient quality of life, and improve the efficiency of health care. In so doing, we expect create substantial value for our shareholders.

Over the past several years, we have made steady progress in some important areas, including advancing and expanding our portfolio of clinical programs, continuing to advance and mature our pre-clinical programs, and broadening our network of collaborative relationships and partnerships. We remain committed to building on that progress and working with our partners to advance our programs through clinical development and commercialization.

In the past few months, there's been a lot of attention focused on our clinical program for treating ischemic stroke, which represents a high-priority area for health care systems around the world. Stroke represents the leading cause of serious disability and also represents a leading cause of death globally. The urgency of the need for new therapies is understandable given the rapidly expanding population of elderly around the world, the corresponding increase of aging-related diseases and conditions, the growing and projected shortage of clinicians and nurses, and the financial and operational impact on health care systems around the world, as we discussed in our last earnings call.

From a health care economic perspective, it is especially concerning for the three geographies that we are most focused on from a development perspective, including North America, Japan, and the European Union.

In April, we summarized the initial interim results from our stroke trial, which showed that administration of MultiStem following a stroke demonstrated a favorable safety profile, as we have seen in our other trials. These initial results also provided encouraging evidence of reduced infections, complications, life-threatening adverse events and mortality, and encouraging signs of efficacy, especially when MultiStem was administered within 36 hours of the stroke. Today, we have some additional results and analysis we will share that provides further support to substantiate the benefits of treatment with MultiStem following an ischemic stroke.

It's well-appreciated by the clinical community that a 36-hour treatment window would represent a dramatic improvement over the current standard of care, as represented by the three- to 4.5-hour window for TPA and a six-hour window for mechanical reperfusion based on the recent American Heart Association recommendations. While these treatments can provide substantial benefits, both of these interventions only reach a small percentage of patients given that most stroke victims don't get to the hospital on time to be definitively diagnosed and treated, an unfortunate reality that is not likely to change anytime soon.

In contrast, published studies suggest that more than 90% of patients reached the hospital within 24 hours of the stroke, and it is estimated that 95% or more reach the hospital within 36 hours. So in contrast to current standards of care, the therapy that could be safely administered within that time frame could become a treatment option for the vast majority of stroke patients.

The lead clinical investigator for the trial presented the initial results of our study at the European Stroke Organization meeting in April, which was greeted with substantial support and enthusiasm from many key opinion leaders and clinicians, with quite a few expressing their desire to participate in the next clinical trials. Since that time, we have met with and obtained positive and important feedback from stroke experts from around the world while we have continued to conduct further analysis of the data.

Initial investor and media response was one of confusion and disappointment, which we believe is a reflection of the media's focus on the trial's pre-specified endpoints and was therefore characterized as a failure. But this reaction failed to appreciate the broader body of emerging evidence, important aspects of the original study design, and the important realities in context regarding the purpose of Phase 2 clinical trials, which by definition are exploratory in nature. By design, these types of trials are meant to provide relevant information and initial perspective that will help shape and inform future studies, which could provide the basis for formal regulatory approval and subsequent commercialization.

Studies from BioMedTracker and other research projects show that over the past 15 years or so, approximately a third of Phase 2 trials succeed, meaning that the therapy demonstrates unambiguous safety and efficacy. But among the two-thirds of trials that do not initially succeed, there is a spectrum of outcomes, and it's important to understand why studies fail. That will help people appreciate the results of our trial and help everyone understand the compelling nature of impact we're seeing.

When studies fail, it may be due to one of three general reasons which, simplistically, are that the therapy is not safe, is not effective; or that the dosing, timing, route of administration, frequency of administration, or predetermined endpoints were incorrect.

When a therapy is inherently unsafe, or simply doesn't work as expected from a biological perspective, it typically means the end of the development program. However, when there is appropriate evidence of safety and evidence that the treatment can provide substantial benefit to patients, and a clear indicator of when and how to appropriately administer the therapy to patients, there is a strong basis for advancement and eventual success.

One tangible example of this principle is that historical, clinical, and development experience with TPA. Initial clinical studies conducted by Genentech, designed to evaluate safety and efficacy of TPA for treating ischemic stroke, did not meet their pre-specified endpoints and were therefore technically considered failures. In addition, there were clear indicators that suggested an elevated risk of hemorrhagic complications when TPA was administered too late after the stroke had occurred.

But the data warranted further examination, and investigators eventually realized that if TPA was given early enough after the stroke, initially defined as within 90 minutes of the stroke, it could be administered safely and provide meaningful benefits for many patients. The information generated from this post hoc analysis shaped the design and execution of subsequent studies which confirm that clinical observations regarding safety and efficacy and led to the approval of TPA, which now represents the standard of care in many parts of the world.

So how do our results compare to this experience? To begin with, our data show convincing evidence of safety when MultiStem is administered to patients following a stroke and is further supported by the safety profile we've seen in other clinical trials, as well as results obtained during years of preclinical studies. In fact, one could justifiably argue that MultiStem has a much cleaner safety profile than approved standard-of-care treatments that are associated with an elevated risk of serious complications like hemorrhagic events. In our case, we see a substantial reduction in serious complications when MultiStem is administered.

So what about efficacy? Our analysis shows that although the study did not meet the pre-specified endpoints when considering all patients enrolled in the trial, there's a consistent pattern of evidence suggesting therapeutic benefits when MultiStem is administered to patients following an ischemic stroke.

Specifically, this evidence includes a higher proportion of patients that achieved an excellent outcome, which is a well-accepted benchmark and a pre-specified endpoint and defined clinically as a patient achieving an excellent score in each of the three clinical rating scales we used in the study. These include the Modified Rankin Scale, also referred to as the MRS, which is a 6-point scale that assesses overall disability, with zero reflecting noticeability and 6 indicating death.

The NIH stroke scale, also referred to as the NIHSS, which is a 42-point scale that assesses cognitive and motor skill deficits, with zero reflecting no meaningful disability in any category and 42 reflecting maximum disability in all categories.

And the Barthel index, which is a 100-point scale measured in 5-point increments, which evaluates the patient's ability to engage in activities of daily living such as feeding, bathing, grooming, and other activities that most of us take for granted.

In order to achieve an excellent outcome, a patient must show excellent improvement in each of the three clinical rating scales, as evidenced by a score of zero or 1 in the MRS, a score of zero or 1 in the NIHSS, and a score of 95 or 100 in the Barthel index.

With all subjects from the trial were considered, 15.4% of patients that received treatment with MultiStem achieved an excellent outcome, versus only 6.6% of patients that received placebo, a difference of 8.8% that was nearly statistically significant. We also saw a reduction in complications such as secondary infections, reduced life-threatening adverse events and mortality, and reduced hospitalization, as we've described previously.

We also considered the individual clinical rating scales and used the global statistic as a primary endpoint, which may essentially be considered as a weighted average of the three components. Good or excellent improvement for each clinical scale was prespecified as achieving the following at the 90-day clinical assessment: an MRS store of zero to 2; an improvement in the NIHSS of 75% or more; and a Barthel Index score of 95 or 100.

However, at the time of the interim results, we had not yet evaluated the proportion of patients that achieved a good or excellent outcome in all three clinical rating scales, a measure referred to as global recovery. Recently, however, this analysis was completed and consistent with other indicators when we examined all patients. We observed that 30.8% of MultiStem-treated subjects achieved good or excellent global recovery in all three clinical rating scales versus 24.6% of placebo-treated patients. We also saw a 19% reduction in average hospitalization for MultiStem-treated patients compared to subjects that received placebo.

So in summary, when considering all subjects, we observed very good safety in a consistent pattern that suggests the potential for therapeutic benefit.

We originally designed the trial to evaluate patients that receive treatment with MultiStem 24 to 36 hours after the stroke had occurred. We also defined the inclusion criteria to allow for patients that received no intervention or those that had received TPA or mechanical reperfusion, but that did not meaningfully improve, to participate in the study. As we and study investigators have disclosed previously, we intentionally excluded patients that received both TPA and mechanical reperfusion since at the time, there was not enough known about the safety and potential efficacy of that approach.

As evidenced by the TPA experience, it has long been realized in the stroke clinical community that early intervention is key to effectively treating stroke patients. Our original trial design contemplated assessment and evaluation of patients during the initial 24-hour period after they had been definitively diagnosed with an ischemic stroke. This evaluation period was designed to identify patients that were exhibiting meaningful recovery, as evidenced by 4-point improvement or greater in the NIHSS from their initial screen to their baseline assessment prior to patient enrollment in the trial.

It was recognized that a meaningful number of patients exhibit spontaneous recovery. For example, because the patient had suffered a transient ischemic attack, or TIA, or because they had successfully responded to treatment with TPA or mechanical reperfusion. For those patients that did not exhibit substantial improvement, eligible patients were then enrolled and randomized to receive treatment with either MultiStem or placebo within a 24- to 36-hour window.

For operational reasons we have described previously, midway through the trial, we modified the inclusion and exclusion criteria to expand the treatment window from 36 to 48 hours. And based on the advice of certain clinical investigators, we also made an adjustment that allowed for the inclusion of patients that have received both TPA and mechanical reperfusion provided that they met all other criteria and did not exhibit substantial improvement from screening to baseline.

Once we had the initial results from this study and determined that administration of MultiStem was safe, and observed the pattern suggesting therapeutic benefit in multiple important parameters, it was logical for us to have two key questions in order to further evaluate the data from the trial.

First, was there any evidence that suggests that earlier treatment is better with regard to MultiStem, consistent with the original trial design and other clinical experience? Second, what was the impact to the modification that allowed for inclusion of patients that received both TPA and mechanical reperfusion?

With regards to the first question, the answer became pretty obvious pretty quickly from an evaluation of the data. Just under half of the patients that received MultiStem were administered treatment within 36 hours or less of the occurrence of the stroke, a total of 31 subjects. Whether we compared these patients with all patients receiving placebo or only those subjects that received placebo within 36 hours or less, the pattern was the same. Clear and consistent evidence that administration of MultiStem within 36 hours was associated with better outcomes across a range of parameters, which we have summarized previously.

Additionally, we have found in subsequent analysis that the proportion of patients that achieved substantial improvement in each of the three clinical rating scales, also referred to as global recovery, rose dramatically for the patients that received MultiStem within 36 hours. 41.9% of the patients were MultiStem-treated individuals versus 24.6% for those receiving placebo, an absolute difference of 17.3%.

Furthermore, there was a consistent pattern of meaningful improvement for each of the individual clinical rating scales used to evaluate patients. And the proportion of patients that experienced secondary infections decreased to 19.4% for the MultiStem-treated patients versus 49.2% for placebo patients, a difference of 29.8%. These results corresponded with other parameters, including a significant reduction in hospitalization times, with MultiStem-treated patients experiencing a 30% average reduction in hospitalization time, equating to a reduction of three or fewer days in the hospital relative to patients that received placebo.

We also saw in this patient population consistent improvement in other areas such as the proportion of patients (technical difficulty) achieved an excellent outcome and other clinically relevant metrics that we evaluated. In short, for virtually every parameter we consider, there was meaningful improvement or retention of benefit for this early MultiStem treatment population compared to the larger treatment group.

We next consider the impact of the second modification we have made to the trial, which allowed for inclusion of patients that have received treatment with both TPA and mechanical reperfusion, provided they did not experience meaningful improvement from screening assessment to baseline. Among these subjects, there were 9 patients that received placebo and 8 that received MultiStem, including 4 patients that have received administration of MultiStem in 36 hours or less.

Upon examination of the results for these 17 patients, we noticed two important things. First, despite the fact that all of these patients had arrived early at the hospital, enabling them to be treated with TPA and mechanical reperfusion, there was a group of 6 patients that were in the late placebo group that had unusually late screening assessments, as evidenced by a meeting and screening assessment time of more than 22 hours post stroke. In contrast, the meeting and time of screening assessments for the early placebo and early MultiStem patients that have received TPA and mechanical reperfusion were roughly four hours.

Second, this group of patients in the late placebo group had substantially lower baseline NIHSS scores then other patients receiving similar treatment with TPA and mechanical reperfusion. The combination of late screening, meaningful lower NIHSS baseline scores, and other evidence suggested that these patients have either had substantially improved following treatment with TPA and mechanical reperfusion, which would've precluded their enrollment in the trial, or had substantially less severe strokes, skewing the data for this group.

Regardless, among the subjects that received TPA and mechanical reperfusion, the greatest average improvement in NIHSS stores occurred in the patients that received early treatment with MultiStem. To address the imbalance, and consistent with our initial study design, we excluded from consideration the patients that received TPA and mechanical reperfusion.

As we have previously presented, we saw clear, consistent, and substantial evidence of improvement in each of the three clinical rating scales as well as other parameters. For example, as I mentioned a few moments ago, we recently completed the assessment of the proportion of patients that achieved good or excellent recovery in each of the three clinical rating scales or global recovery. From this analysis, we observed that 44.4% of the patients administered MultiStem within 36 hours or less achieved good or excellent recovery in all three clinical rating scales versus only 17.1% of patients that received placebo, a difference of 27.3%. In other words, more than 2.5 times as many patients achieved improvement in all three clinical scales. This difference is statistically significant with a P value of less than 0.01.

We observed a consistent pattern of improvement in other clinical parameters as well, including a greater proportion of subjects achieving excellent outcome, 18.5% versus 3.8%, with a P value of equal to 0.3. A reduction in life-threatening adverse events and mortality, secondary infections is represented by 18.5% for the MultiStem patients and 55.8% for placebo. And a 35% reduction in hospitalization times, which on average were 6.7 days for MultiStem versus 10.3 days for placebo-treated patients, or the equivalent of 3.6 days less hospitalization per patient with a P value of less than 0.01.

All of these parameters and others we've considered point in the same direction. The evidence tells us that MultiStem is safe and provides a meaningful therapeutic benefit if administered within 36 hours, and that administration of MultiStem is associated with accelerated improvement as evidenced by patient recovery at seven to 30 days post-stroke.

Furthermore, the emerging biomarker data provides additional mechanistic evidence in support of these findings. Although work is ongoing, data from the analysis we have already completed indicates that MultiStem administration results in a substantial reduction of multiple inflammatory cytokines -- including TNF alpha, IL-6, IL-12, and others -- and that these effects are even more pronounced for subjects receiving MultiStem administration within 36 hours.

In addition to the statistically significant reduction in circulating inflammatory cells we have described previously, this additional data provides direct support for key elements of our therapeutic hypothesis.

So in summary, we are very confident in the evidence that tells us that MultiStem can provide a meaningful therapeutic benefit to patients that have suffered an ischemic stroke and lays a strong foundation for subsequent development, and we are moving ahead accordingly.

We have already shared most of this data and information with our partner in Japan, Chugai. And we are engaged in an ongoing discussion with them about potential ways to proceed. Under our license agreement, Chugai has a defined period of time to conduct a full review of the trial results and make a $7 million payment to us. In the event that Chugai does not make this payment, or if we do not reach some other mutually acceptable arrangement, we have the option to terminate the agreement. The dialogue with Chugai continues to be constructive, and we look forward to updating our shareholders once we have reached resolution.

In the meantime, we continue to explore other partnering opportunities around multiple programs including stroke. And while we cannot make any guarantees, we remain very optimistic about the path ahead.

We also continue to advance our other clinical programs, including adding clinical sites to our ongoing Phase 2 clinical trial for treating patients that have suffered significant damage from an acute myocardial infarction. The study is designed to evaluate the safety and efficacy of MultiStem in patients that have suffered an NSTEMI, the most common type of heart attack, and to evaluate functional improvement as well as incidence and severity of adverse events. Functional improvement will be evaluated using MRI, assessment well-established -- assessing well-established cardiovascular performance metrics, with a primary efficacy assessment at 120 days post treatment. We will also assess patients for major adverse cardiovascular events, or MACE, out to one year post treatment in addition to further evaluating improvements in cardiovascular function.

I would remind everyone that we received a meaningful grant award from the NIH to conduct this trial. In addition, we made important progress in our exploratory clinical program for treating patients with acute respiratory distress syndrome, or ARDS. We recently received authorization from the FDA to initiate the study. And working with our partner Catapult in the UK, we expect to receive MHRA authorization for the trial there. We intend to launch this study, which will also be funded with grant support from Innovate UK.

So just to wrap up on our preliminary comments, we are making steady, consistent headway on multiple fronts, and we remain very excited about the road ahead. While we share investor frustrations regarding the recent decline in stock price, we are focused on executing against a game plan that we believe will correct us in due course. In the meantime, we appreciate the continued expressions of support.

On a personal note, I would also like to let everyone know that a senior member of our team will be transitioning into a new role with the Company in the weeks ahead. Dr. Robert Deans, who has been a longtime leader in our stem cell, exploratory, and translational research programs, will be moving into a consultancy and advisory role, allowing him to spend some more time with his family and pursue some other areas of interest. We are immensely grateful to Bob for his leadership and all he has done for us and with us over the past more than 12 years he has been with the Organization. And we wish them all the best as he transitions into this new role.

With that, we'd be happy to take a few questions.

(Operator Instructions) Jason Kolbert.

Appreciate the rundown. Can you do me a favor and just take your time and walk me through a little bit of the statistics, the 17% difference that you called out and the P values associated with it, so I can just jot it down and really capture the data you are talking about? And I guess we could start with the excellent score.

So when you read analyze the data, talk with me about the percentage of patients that realize the excellent outcome. What was the difference between the treated and non-treated patients? Was there a P value associated with that? And then walk me through the exclusion criteria on the TPA and mechanically perfused patients and, again, what the data was when that group, which was an anomaly, was excluded so I can just capture the numbers precisely.

Yes, okay. So I'll cover everything, but just remind me and BJ can chime in here as well if there are things I missed along the way. But just beginning with excellent outcome, as reflected in the table that's included in the press release, right out of the gate, when we were looking at all subjects in the trial, we saw a meaningful difference between the percentage of patients that achieved an excellent outcome, which has really stringent criteria associated with it. And you've got to get -- again, as I defined, you've got an MRS value of zero or 1, reflecting no or slight disability, and an NIHSS score of zero or 1, which again reflects zero or very slight disability in one category. And a Barthel Index score of 95 or 100, which, again, reflects the ability to conduct the entire spectrum of activities of daily living that are covered under the Barthel Index score.

So what we thought when we evaluated all patients was that 15.4% of the MultiStem-treated patients achieved an excellent outcome versus only 6.6% in the placebo-treated patients, or a difference of 8.8%. But then when we went on to do the next phase of analysis, just looking at the patients that were treated early with MultiStem, meaning within 36 hours or less, we saw that there was actually a slight improvement in that metric where 16.1% of the patients treated with MultiStem achieved an excellent outcome versus only 6.6% of all placebo patients. So that was identical to the first number that I had just given you.

When we then went on to assess the patients that had received either no intervention, treatment with TPA, or treatment with mechanical reperfusion, but excluding those patients that have received TPA and mechanical reperfusion, the difference became even more pronounced, with 18.5% of the MultiStem-treated patients versus only 3.8% of the patients that had been treated with placebo. So that delta, as noted in the table, was 14.7%.

And I'll come back to the patients that -- around the TPA mechanical reperfusion piece in a minute, but I want to just review the numbers in the other metric, the global recovery assessment, which requires good or excellent improvement in all three of the clinical rating scales.

So again, although we didn't have this analysis completed at the time that we announced the interim results, or in the call -- the earnings call that we did shortly after that, when we actually had this analysis completed, we saw that, even when you look at all patients, there was a respectable difference between the percentage of patients that were treated with MultiStem that achieved recovery -- had a good or excellent recovery in all of the three clinical rating scales. So 30.8% of the patients versus the patients that receive placebo, which was 24.6; so a difference of a little over 6%.

But when we looked at the patients that were treated within 36 hours or less with MultiStem, that difference actually improved pretty dramatically. In that case, we saw that 41.9% of the MultiStem-treated patients achieved a good or excellent outcome versus only 24.6% in the placebo group; so a difference of 17.3%. So that was a very robust difference between those numbers.

And then when we excluded those patients in the group that got -- the limited number of patients that got TPA mechanical reperfusion, the difference became even bigger. It was 44.4% of MultiStem-treated patients achieved a good or excellent outcome in all three clinical rating scales versus only 17.3% of the patients that receive placebo. So a difference of 27.1%, which was very statistically significant. So --

And Gil, just remind me -- thank you, that's really excellent. And while you are talking, I went and I looked at the table, so that will be very helpful to me. And just in order to address it for the naysayers, talk with me a little bit about the comparison of stroke size, location, and deficit in the two groups between active and control. Because I know we've discussed it previously, but I just want to make sure that you continue to see that those groups in fact were properly balanced.

Yes, and that's exactly right. There was actually good balance across each of these different analyses. In fact, in the severity of the strokes for the patient groups in terms of average or median severity, it was virtually identical for each one of the groups. You're talking about maybe a 10th of a point difference. In some cases, it might've been a 10th of a point less severe for the placebo patients, or it might've been slightly more -- slightly less severe for MultiStem, but it was virtually identical for each one of the different groups.

So we saw good demographic balance with respect to things like gender, age, stroke severity, site of the stroke, or location of stroke. We really looked at a range of different parameters. So --

So do you conclude in your head that, now, given the fact that you've got a thought device, you've freed up the ability to get the product MultiStem available to patients regardless of the hours of the BM lab that a trial focused on a 24- to 36-hour window predicated on the data you're seeing -- it sounds like your confidence level is pretty high that you're going to be able to replicate this data.

Yes, absolutely. And in fact, I think we may make a slight adjustment on the timing of it. We will probably utilize a window that extends from 18 to 36 hours. So it will give us a little bit more -- given that we are seeing this consistent benefit that earlier is better -- and in fact, one of the things that I'd mentioned in one of the calls prior was we actually looked at patients that were treated within the first third versus the subsequent -- the middle third and the late third. And we saw the strongest responses in that first third. And -- which is consistent with the impact that we are seeing in the 36 hours or less. Obviously, the numbers get a little bit smaller, so you always have to be a little bit cautious about that. But for us, this is a very clear, very robust pattern, and it cuts across pretty much every clinical parameter that we've looked at. So --

I think, Jason, we do believe we replicate this work within a prospective study and then show the significance we want to show.

One of the other interesting aspects I think Gil mentioned -- we are doing biomarker analysis now, so we have access to the data from the blood samples that were generated in addition to some of the tissue samples that were taken before. And the biomarker data supports strongly this impact that we're having early on in modulating the inflammatory milieu that follows the stroke consistent with the hypothesis. It supports the biological activity of the product.

And that seems to be associated as well with the timing of delivery. In other words, we are having an impact with all patients with MultiStem treatment. We seem to be having more of an impact with patients that were treated earlier with MultiStem. So we feel very confident about replicating these results in a prospective study.

And we understand people's nervousness around the ways that post hoc analysis may be applied. Typically people get really nervous if you say, well, if you look hard enough, you'll find one or two things that are pointing in your direction and -- but it's always problematic when you just search among 30 things, and you find one or two that are basically pointing in your direction by random chance, if you will.

But I think it's really important for everybody to understand that that is not what we are seeing here. Virtually every clinical parameter we look at is strongly in favor of administration of MultiStem within that 36-hour window. So it is a very strong and consistent pattern, and it's corroborated by the biomarker analysis that BJ just described. So mechanistically, it's consistent with all the things that we were seeing in the preclinical studies. And we think that this is a very clear -- gives us very clear path with which to apply this knowledge and proceed to the next phase of development.

Thanks, Gil. I'm with you. I believe biotech and biotech analysis, particularly from the point of view of an analyst, is really about the data. And I think you're making a very compelling data argument. I really appreciate you taking the time and your patience to walk me and all the others through data with tables like this. It's very, very helpful. Thanks so much.

Steve Brozak, WBB.

You've gone through and meticulously talked about where you believe that you've got significant strength in terms of the analysis on stroke. Can you tell us what the KOLs you worked with are telling you in terms of what they look to see the difference between what current standard of care is going to be and what you need to do to make sure that the KOLs are on board? Because obviously this is something that, frankly, is different than what the current standard of care is. But also what they're going to need to be able to implement it and accept it?

Yes. So first off, the fact that a lot of KOLs compare this directly to the current standard of care is actually a big advantage for us because they compare and contrast the current, very narrow time window that's used for the currently available therapies, whether it be TPA or mechanical reperfusion or the combination of those two things, which will only be applied to a fairly small percentage of patients.

And they also compare it to the overall risks associated with using those current forms of treatment and the potential for things like hemorrhagic complications or other events that could occur. And basically the feedback we've consistently gotten from KOLs, both here in the US as well as around the world, has been, well, the safety profile looks very, very clean, and it appears that there is a pretty strong argument that you can actually help a lot of patients if you give it to them within 36 hours. So why wouldn't I want to give this to as many patients as I can?

They are not seeing that there is any apparent risk or downside to treatment, and we see exactly the same thing. So I think that there's a lot of willingness and a lot of enthusiasm and support to really want to continue to work with this and explore it and hopefully validate it further in additional clinical trials. We've had a lot of people who have stepped forward and said, hey please, can I participate in that next clinical study? And I think that speaks for itself. It's very comforting.

And the other thing that I think is really interesting about this is we're not making the argument that this has to be the treatment in lieu of other things that are already out there. You could give this in addition to. And in fact, a meaningful percentage of patients in the trial received TPA or they got thrombectomy, and we saw these improvements on top of --.

Now, we did try to weed out the patients that were exhibiting substantial early robust improvement following treatment with TPA or mechanical reperfusion, and this actually gets to a point that Jason was getting to which I didn't fully address in my answer to him. But when we looked at the data, we saw pretty clear evidence that there were patients in that late placebo group that had received treatment with TPA and mechanical reperfusion that should not have been enrolled in the trial.

I will just give you one example because I think it illustrates the point. There was a patient that improved by 11 points in their NIHSS score from screening to baseline. They never should have been included in the study, but they were. And because a lot of these patients in the late placebo group had this abnormally late screening assessment that was done, it was pretty obvious from going through the detailed records and looking at a number of things that patients in that group, although they were treated early with TPA mechanical reperfusion, had, in all likelihood, responded pretty robustly before their first screening was done. And that skewed things in a pretty meaningful way, which is the reason why we decided to conduct a separate analysis excluding the entire group of TPA and mechanical reperfusion patients.

But when we looked at the different groups of patients that got TPA and mechanical reperfusion, the group that had the greatest improvement in their NIHSS scores -- it's a 90-day assessment -- was the group that got treated with MultiStem in 36 hours or less.

So the -- again, I think pretty much no matter how you look at it, there's a strong rationale for administering MultiStem within 36 hours and how it can meaningfully benefit patients. And we are seeing that very consistently across a broad range of parameters. The clinicians in the KOLs that have seen the data and have taken the time to talk to us recognize that, and they're actually quite excited by it.

So actually, that leads to the follow-up. Given the fact that you have this much color, you have this much granularity, you have this much insight into how you will develop the next go-around of the tests that you are contemplating, I would say that you are pretty much prepared to go ahead no matter what happens and see about running the same -- running the next trial with all the additional data. Would that be a fair assessment?

Yes, we are planning for the next phase of development, which we intend and expect to initiate sometime next year. And obviously we are looking at -- and this is part of the ongoing conversation with people like Chugai -- what are we best positioned to do in Japan? And what do we intend to do outside of Japan in North America and the EU?

But I think that not only do have a very strong rationale for what we want to do next and a lot of KOL and clinical expert buy-in, but we feel like we've got a very strong game plan for how we want to do what we would propose to do next, and we will unveil that in due course.

Great, great. Appreciate the color. We appreciate the go-forward statement and look forward to the results. Thanks. I'll hop back into the queue. Thank you.

Tracy Marshbanks, First Analysis.

Gil, I think you touched on this a bit, but I just wanted to confirm. With what you know now, you referred to maybe going a bit earlier in the time window, are there any other global constraints or criteria that you think will be in the future study that differ from the one you just completed?

No, honestly Tracy, we expect it to be pretty similar to what we did in the last trial. Obviously, the time window being a meaningful adjustment, and we're thinking that that 18- to 36-hour window is probably the appropriate window for us to pursue.

Other than that, frankly, we think that the endpoints were well-constructed. Obviously, we learned some important things there about things that we want to include in the assessment. We recently had a meeting in Japan with the PMBA to update them on the trial results and actually discuss general parameters around what we might conduct in terms of a study in the future in Japan, and got very constructive and positive feedback from them.

And frankly, we're getting -- we think we've got a pretty clear game plan, but we think we have learned a lot and validated a lot from this prior study. So I think there might be some things that we refine, and maybe that we elect not to include patients that receive treatment with TPA and mechanical reperfusion in the next study, or that we make some adjustments that actually limit how that might be done. Those are both possibilities, and we haven't made a final determination on that yet.

As far as inclusion/exclusion, I know the prior study ran a little bit long and may be one reason you opened things up. You think it will be a relatively rapid or similar enrollment?

Well, I think the enrollment was complicated in the last study because of the complications we were seeing with the processing of the product prior to administration to the patient. It required in the last study -- it required that we work with the bone marrow and cell processing units at the hospitals that were participating in the study. Or if they didn't have such a unit, then they had to rely on one from a neighboring hospital.

The problem that we ran into, and the reason why we made the protocol adjustment that we did, was that those processing centers are typically only open from 9 to 5 Monday through Friday. And we were missing a huge percentage of patients that would've been eligible for inclusion in the study simply because they were showing up at the wrong time of day or the wrong day of the week. Patients came in on a Thursday afternoon. They weren't -- in all likelihood, they weren't going to get into the study because there wasn't going to be anybody around on Friday or into Saturday that would actually be able to prep the product and treat them.

But we corrected for the complications that forced us to use those cell processing centers, and now we have a true thought administer formulation of the product that could essentially be maintained in the hospital pharmacy. And with a very simple process -- very simple procedure that just takes a few minutes, you could transfer -- you saw the product, transfer it directly into the IV bag, and then it's ready to go into the patient.

So it doesn't -- and the pharmacies operate on a 24/7 continuous basis, whereas the cell processing facilities did not. So the things that limited us in the last study and hampered enrollment are not going to be limitations in future studies for us. In fact, we are already applying some of this in some of the other studies that we are running.

So I believe that because of the safety data that we have and the very positive feedback that we've gotten from clinical KOLs and clinicians around the world, that because of the safety data that are very promising and encouraging signs of efficacy, and the much simpler logistics, that the next trial is actually going to be much more efficient than what we had to deal with in this last study.

And another important study that you haven't spent quite as much time detailing today -- could you just take us through AMI? And are there -- sort of the current status and plan there if there have been any changes.

Yes. We've got the first sites up and running. We are adding sites, which we intend to do through the rest of the summer and even into the early fall. And our game plan is still to complete the study sometime next year and have data sometime next year.

Again, the general parameters I talked about in my prepared comments were looking at a variety of well-accepted and validated cardiovascular performance metrics. So, looking at things like injection fraction or stroke volume or a number of other things that we and others use as performance benchmarks. And we are also looking at MACE, these major adverse cardiovascular events that occur through the first year of treatment. And that's all pretty well-established and validated from a regulatory perspective.

And the sites that are up and running are sort of enrolling and progressing as expected?

Yes, those patients are screening -- those sites are screening patients, and they're busy working on it. So I think we're making good headway there, and I think we're going to make even faster headway as we get some of these other sites up and running.

Thanks a lot.

Thank you. That was the last call we have time for today. I would now like to turn the call back over to the speakers for closing remarks.

Well, I would like to thank everyone. And since there's no further questions, I would like to wrap up the call thanking you again for your time and attention and your continued support of the Company. We look forward to providing you with additional updates in the coming weeks and months. And in the meantime, good night, everyone.

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