Athersys Inc (ATHX) 2015 Q4 法說會逐字稿

Good afternoon. My name is Shannon and I will be your conference operator today. At this time I would like to welcome everyone to the Athersys year-end 2015 earnings call. All lines have been placed on mute to prevent any background noise. (Operator Instructions). It is my pleasure to turn the call over to Ms. Laura Campbell. Ms. Campbell, you may begin your conference.

Thank you. Good afternoon, everyone. I'm Laura Campbell, Senior 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 at athersys.com or you may call Matt Celesnik at 216-431-9900 to receive it via e-mail.

Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer and I will host today's call. The call is expected to last approximately 30 to 45 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 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 forms 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 March 10th of 2016. Since then we may have made announcements related to the topic discussed so please reference our most recent press releases and SEC filings.

With that I would like to briefly review our 2015 financial results and then turn the call over to Gil for A corporate update, followed by a question and answer period. For the fourth quarter of 2015 our contract revenues were $10.1 million, compared to $131,000 for the same period of 2014, reflecting the revenue recognition of the full $10 million license fee from Chugai Pharmaceutical Company upon the termination of the collaboration in October 2015. We expect our future contract revenues to be comprised primarily of revenues associated with our recent collaboration with Healios KK in Japan, royalty payments and commercial milestone payments from RTI Surgical, and potential proceeds from any new collaborations. Our grant revenue increased to $501,000 in the fourth quarter of 2015 from $104,000 in the prior year quarter. Grant revenues fluctuate from period to period with the timing of grant-related activities and with the award and expiration of grants.

Research and development expenses decreased to $5.3 million in the fourth quarter of 2015 compared to $5.6 million in the fourth quarter of 2015. The decrease was primarily due to reduced clinical and preclinical development costs which vary based on trials underway and clinical manufacturing campaigns. General and administrative expenses were $1.8 million in the fourth quarter of 2015 compared to $1.6 million in the fourth quarter of the prior year, reflecting increases in legal and professional fees, personnel costs, and stock-based compensation.

We recognize net income for the three months ended December 31, 2015 of $3.6 million compared to a net loss of $6.6 million for the same period of 2014. The $10.2 million net variance results primarily from the $10 million Chugai license fee and increased grant revenue, and to a lesser extent, the net impact of the variances in R&D expenses, G&A expenses and other net expenses.

Turning to the results for the full year our contract revenues were $10.3 million in 2015 and $286,000 in 2014 with increase related to the $10 million license fee. And our grant revenues increased to $1.7 million in 2015 from 1.3 million in the prior year.

Research and development expenses decreased to $21.3 million in 2015 from $23.4 million in 2014 due to lower clinical and preclinical development costs, sponsored research costs, legal and professional fees, and travel costs, with such decreases partially offset by increases in license fees and personnel costs. We will continue to have the same types of expenses in 2016 as we advance our programs, and our costs may vary based on clinical manufacturing campaigns, the timing and stage of clinical trials underway, and manufacturing process development activity. General and administrative expenses increased to $7.5 million in 2015 from $6.9 million in 2014 due primarily to increased stock-based compensation, professional fees and consulting.

We recorded noncash income from the change in the fair value of our warrant liabilities of $772,000 in 2015, compared to $6.6 million in 2014, reflecting the impact of warrant issuances and expirations, the price and remaining lives of warrants and changes in our stock price. Cash used in operating activities was $13.8 million in 2015 and $25.8 million in 2014.

Financing activities provided cash of $10.8 million in 2015 and $20.3 million in 2014, with the 2014 amount including a registered direct offering.

Our net loss for 2015 was $16.4 million compared to $22.1 million in 2014. The difference reflects the impact of the $10 million Chugai license fee, the increase in grant revenues, the decrease in R&D expenses, the increase in G&A expenses, the variance in the noncash income from the fair value of our warrant liabilities and an increase in net other expenses. At December 31, 2015 we had $23 million in cash and cash equivalence compared to $26 million at the end of 2014. Additionally in January of 2016 we received $15 million in cash associated with our Healios collaboration.

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

Thanks, Laura and thanks everyone for listening in today. I would like to just begin by wishing BJ Lehmann and his son the best of luck in the state hockey championships that are going on down in Columbus today and over the weekend. It is a huge thrill to be part of something like that and we wish them all the best in the semifinals today, and if they advance on to the championship game on Saturday.

As we have summarized on previous earnings calls, Athersys is an organization that was founded on the concept of developing and implementing cutting edge and treatment approaches that have the potential to meaningfully advance patient care in the practice of medicine. We are proud of the fact that we have willingly taken on significant challenges that many other organizations have avoided because they felt the task was too daunting or risky. To paraphrase the legendary Olympic hockey coach Herb Brooks, we believe that great achievements are made by a willingness to take on great challenges.

For many years the development of a safe, effective and clinically practical treatment for stroke has remained one of the most significant challenges in all of medicine. There are many areas of unmet medical needs in medicine, of course. But for anyone that has had a family member who experienced stroke or that understands the devastating global impact of stroke, and the expected consequences of the aging demographic transaction that are occurring globally, it is easy to appreciate just how serious a challenge this represents to patients, families, and health care systems around the world.

Over the past few months we have continued to review and analyze data from the interim results of our now completed phase 2 clinical trial evaluating the impact of administration of MultiStem to patients who suffered a serious and debilitating ischemic stroke. To our knowledge, this trial was the largest randomize double blind placebo-controlled study ever conducted evaluating a cell therapy treatment for acute neurological injury. As we have described previously, although the trial did not meet the prespecified primary end point, the interim results of the trial did suggest a consistent pattern of benefit for patients who receive treatment with MultiStem, especially if treatment was administered within 36 hours of the time of the stroke.

This benefit was evident in multiple clinically relevant parameters including a higher rate of patients achieving an vent outcome which is defined as an excellent outcome, which is defined clinically as achieving an excellent outcome in each of the three clinical rating scales used to evaluate stroke patients, which include the NIH stroke scale which measures cognitive and motor skill deficit, modified Rankin Scale, which evaluates overall disability, and the Barthel index, which assesses the patient's ability to engage in activities of daily living. In addition, study investigators observed lower rates of life-threatening adverse events and mortality, reduced occurrence of secondary infections and pulmonary complications, especially among those patients who suffered more severe strokes, shorter hospitalization times and less time in the intensive care unit. Furthermore, the clinical evaluation of patients at day seven, 30 and 90 showed that on average patients receiving earlier treatment with MultiStem meaning within 36 hours were improving faster and to a greater degree than those patients receiving placebo, as exhibited by strong trends or statistically different differences. Furthermore, the prespecified shift analysis that examines relative improvement for patients across the spectrum using the modified Rankin scale reinforced the evidence of this early treatment effect and improved recovery as well, and was statistically significant at seven and 30 days post stroke.

Additional analysis revealed that the benefit of early treatment with MultiStem was consistent among both patients who received no reperfusion therapy and those that had received either TPA or mechanical reperfusion. Furthermore, we observed that improvement robust among patients aged 65 and older which was relevant and comforting as these patients represent the vast majority of stroke victims. So in total, we observed from the interim results of the trial that there was in our view and in the view of clinicians participating in the study a consistent pattern of evidence that suggested that administration of MultiStem was beneficial, and early administration of MultiStem meaning within 36 hours of the stroke appeared to be particularly beneficial. In addition, biomarker data obtained from the trial provided direct mechanistic support for key aspects of the underlying therapeutic hypothesis of the trial, namely, that administration of MultiStem could meaningfully reduce the hyperinflammatory cascade that occurs following a stroke and which appears to cause significant tissue loss and inhibit patient recovery and healing.

As clinicians familiar with and specializing in the stroke area know, the concept of an effective treatment window is well established in the acute neurological injury field. However, historically the treatment window for TPA or surgical reperfusion using mechanical thrombectomy were limited to the first few hours after a stroke. And as the literature shows, this narrow time window and other limitations had prevented the vast majority of stroke patients from receiving these types of treatments. In contrast, the treatment window of up to 36 hours would have enable a much larger percentage of stroke patients to receive treatment. Clinicians and literature both suggest 95% of stroke patients reach the hospital within this time frame. Furthermore the data suggesting a favorable safety and tolerability profile from MultiStem in conjunction of encouraging evidence of meaningful therapeutic benefit in stroke patients who are treated within 36 hours, which represents the treatment window used for the initial trial design has been greeted enthusiastically by many clinicians in the stroke community around the world.

More recently we obtained the one-year results from the trial, which further evaluated patients using a range of metrics. I would like to point out that both the patients and the clinicians participating in the trial were blinded through the one-year clinical evaluation and in fact remain blinded as to what form of treatment each subject received. As we, clinical experts and members of the Healios team discussed during the recent R&D day event in New York in advance of having the one-year results we indicated that we were most interested in evaluating whether there was a significant impact on improving outcomes for patients in terms of their ability to regain their desired quality of life and independence. In clinical terms as I described at the R&D day event prior to evaluating any of the one-year results, this meant we were most focused on how patients improved with respect to achieving an excellent outcome which reflects complete or nearly complete recovery in each of the three clinical rating scales.

We observed a strong trend in this key secondary end point in our intent to treat population in the interim 90-day readout, and both we and clinicians were interested in assessing the one-year durability of the outcome. In addition, we were focused on assessing patient recovery in terms of their ability to engage in a range of activities as reflected by the Barthel index, which evaluates patient function and independence in a range of tasks and activities that most of us typically take for granted such as walking, eating, bathing, dressing, going to the bathroom and going up or down the stairs without assistance.

Upon the evaluation of the one-year data we saw clear and compelling evidence that the magnitude of benefit had increased meaningfully over time and is shown by an increase of the proportion of MultiStem patients compared to placebo that achieved an excellent outcome in each of the scales, meaning specifically the number and proportion of subjects that achieved complete or nearly complete recovery. This is exactly the type of improvement hoped for by patients, their families, physicians and the third party payers. In the intent to treat population meaning all subjects in the trial the proportion of MultiStem-treated subjects that achieved an excellent outcome at one year was 23.1% versus success only 8.2% among subjects receiving placebo, ahe difference of 14.9% or an almost three fold increase. This difference was statistically significant with a p-value of 0.02. Furthermore when we consider patients who received treatment with MultiStem within 36 hours the effect was even more pronounced with 29% of MultiStem-treated patients achieving an excellent outcome which is also statistically significant with a p-value of less than 0.01.

Finally, when we considered subjects in accordance with the original trial design meaning those who receive treatment in 36 hours and including patients that received either no reperfusion, treatment with TPA or treatment with mechanical reperfusion, but excluding a small number of subjects that received both TPA and mechanical reperfusion, which was not permitted under the original trial design -- study investigators observed five times as many MultiStem-treated patients achieved an excellent outcome relative to those patients that received placebo which was also statistically significant with a p-value of less than .01. Similarly when we evaluated patient recovery using the Barthel index metric, trial investigators observed that among all subjects 61.5% of MultiStem-treated patients achieved a score of 95 or higher, reflecting an excellent score and ability to live -- to independently conduct daily living across a range of areas versus only 44.3% of placebo patients. This was also statistically significant with a p value of 0.05.

And when we evaluated subjects that received early treatment with MultiStem it was more pronounced with 67.7% of MultiStem-treated patients achieving an excellent Barthel index score, an increase by 24.3 % over placebo. This was also statistically significant with a p value of 0.03.

Furthermore we saw additional evidence of better recovery in MultiStem-treated patients over time including fewer serious complications and secondary infections, shorter hospitalizations and ICU times, and fewer rehospitalizations as well as improvement in other metrics. Importantly even among those subjects that did not achieve an excellent outcome by the one-year evaluation, we saw evidence of better improvement following the MultiStem treatment. So in total we believe that this trial represents an important demonstration of safety and meaningful evidence of clinical effectiveness for the treatment of ischemic stroke in a clinically relevant window.

It is fair to say that both we and our new partner in Japan, Healios, are quite excited by the one-year results. Over the past few weeks we were working with the team at Healios in preparation for some upcoming meetings in PMDA and in anticipation of obtaining authorization to launch our confirmatory stroke clinical trial in Japan which will be funded by Healios. Both teams have been working extremely well together and I feel we are well prepared and on the right path to achieving our goals.

Our main focus for the near term is working together with Healios to obtain input from PMDA, finalize a trial design and obtain authorization to conduct the study so we may then subsequently launch the trial. We are optimistic that we can achieve these goals in the next few months which would place us and Healios on a path of efficient use of this new regenerative medicine regulatory framework in Japan which we both feel represents an efficient path to market.

In addition to our partnership with Healios we remain actively engaged in discussions with other potential partners around stroke and in other areas. As we have discussed in the past we are most focused on finding the right partner for specific programs and finding the right development approach, economic, and relationship parameters. By continuing to advance our core programs and continuing to establish value-enhancing partnerships in specific areas, we intend to create substantial value for our shareholders.

In addition to the preparations for the trial in Japan, we are also engaged in early preparations for a parallel international trial we intend to conduct in North America and the EU. To achieve that goal, we have already had some initial communication with regulators and are in the process of scheduling a meeting with the FDA to discuss the BO102 trial results and plans for the next study at their suggestion. During that and subsequent discussions with regulators, we anticipate establishing a clear path for the next phase of clinical development that would be consistent with our objective to obtain efficient approval for MultiStem in treating ischemic stroke both here in the US, EU, and other key geographic territories. In the meantime, we continue to advance our other clinical and preclinical programs including our ongoing Phase 2 trial for treating the myocardial infarction patients and our trial evaluating treatment of patients that have been diagnosed with acute respiratory distress syndromes, or ARS, as I described in the last earnings call. For both of these trials we have been adding additional clinical sites and in the case of the MI study, making certain refinements to help improve the efficiently of trial enrollment so we can achieve our goals.

So in summary, we are focused squarely on advancing our key programs most importantly for stroke and exploring new partnering opportunities where it makes sense to do so, reflecting our ongoing commitment to creating substantial value for our shareholders.

With that we would be happy to take a few questions.

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(Operator Instructions). Your first question today comes from the line of Jason Kolbert from Maxim. Your line is open. Please go ahead.

Thank you so much. Gil, congratulations. To BJ, we wish him best of luck. I recently had a son who got to go to state and I know how exciting it is. Go, go, go. That's really exciting, BJ.

Let's talk on a little bit of granularity. When we start talking about the critical trial design and timelines, both international and in Japan in particular, can you help me understand the next steps? What role Healios is playing and how that is coming together? I think that will really help us define a sense of timing.

Yes, so as you know Japan is strategically important to us and Helios and we have been spending a lot of time focused on that over the past couple of years since the regulatory framework went into effect there. At a high level we and Healios both anticipate the ability to run one trial, one well-designed study, and we think that would be sufficient for us to be able to obtain approval under the new regulatory framework in Japan. We are really focused on making sure we have the right trial design and there are a number of specific steps that we are going through in order to get to where we want to be. We and Healios agreed on the approach we want to take in regards to the pending clinical trial in Japan and we have already submitted relevant information with PMDA.

And as I talked about on the last earnings call, we didn't even wait to have the contracts finalized and executed before we both sat down with PMDA to have a conversation around -- to explain the context of the new partnership with them or what we were planning on doing together and start to get their input. But in the near term we are working together to prepare for a couple of upcoming face-to-face meetings with PMDA to discuss the proposed trial design -- as I mentioned, we have already submitted information to PMDA in relation to that -- and then discussed other topics as well as address any points or answer any questions that they may have. If those meetings go according to plan as we expect then we would be in a position to soon thereafter submit our formal application to initiate the clinical trial. We expect to submit the application sometime in Q2 and then hopefully initiate the trial after that before the end of the summer.

My second question is really linked to the first one. It has not only to do with the trial design and the ability to enroll the trial, but KOL awareness ... I know you had created a lot of kol awareness in the recent R&D day as well as the presentations you did out at the stroke conference on the west coast. Can you tell me are there similar events occurring in Japan? If there are, what are you doing to be ready to raise awareness to ensure that when you do have a trial design ready to execute that you are going to be able to enroll sites and get patients?

For those people who are not familiar with the International Stroke Conference, it is a huge event. It actually has about 6,000 attending stroke specialists and other attendees from around the world. It is actually an international conference and this year it is taking place down in Southern California. I think it is fair to say there was a lot of interest and excitement in the work we have done and the trial results, as evidenced by the fact we were asked to participate -- or give study investigators involved in the trial were asked to be part of or give five presentations in all. It was three scientific presentations and two panels that talked about the meaning and impact of the results and the potential impact in terms of stroke treatment.

But it is also fair to say we have been getting a lot of interest and excitement in Japan as well. And in fact, to your question, Jason, there is actually a stroke conference coming up in a few weeks that we have been invited to give a special -- it is the annual congregation, if you will, of the stroke specialists and neurologist and neurosurgeon community. It is focused entirely on stroke. We have been invited to give a special symposium there. There are several thousand people that are going to be attending the conference. So one of the trial investigators that we have worked with very closely is going to be giving the presentation that will summarize the results of the trial and talk about the upcoming trial we intend to run in Japan.

Prior to that, as we talked about previously, we have engaged in multiple meetings and various conferences in Japan engaging with some of the leading stroke specialists there in the country. That's been happening over the past almost close to two years now. So there was already before we went into the ISC conference in Los Angeles, there was already a high level of awareness of what we were doing. I think the interest level has grown since then. There saw lot of excitement and a lot of enthusiasm, and a number of people have stepped forward and said that they really want to be part of that next trial, whether it be the trial in Japan that we intend to run, or the international study that we want to run.

Great. That's great to hear and it sounds like you will have no problem lining up patients when the trial is ready.

Let's just digress to something that seems to be coming out more and more. I think I understood it a little better from the R&D day. It had to do with not just the efficacy cognitive function and observations that occur in patients that are treated with MultiStem, but also with some of the natural adverse events that stroke patients face. Can you help me understand not if we were to look not at the therapeutic cognitive benefits, but what's been seen about the adverse event profile that occurs naturally in stroke patients versus MultiStem. It is important to better understand both sides of the coin, if you will, which is one, can you improve cognitive function, but two can you reduce the natural adverse events often seen in stroke?

Thank you for letting me ask three questions. I will get back in the queue after this.

Yes, thanks. So in relation to that last question, it was interesting -- we spent a lot of time ... a big part of our hypothesis going into this study is that we could have an impact, or that administrating MultiStem could have a very profound impact, on reducing and neutralizing that hyperinflammatory cascade that happens in stroke patients or in other forms of acute neurological injury or other forms of acute injury generally that tends to leave these patients in an immunosuppressed or immunodepressed state for an extended period of time. That leaves them vulnerable to a whole host of different complications and issues that can arise in the weeks following the initial event. In fact, a lot of people don't know this, but if you survive the stroke the most common cause of death in the weeks that follow are complications related to that immunosuppressed state like secondary infections or other things that can happen once that initial acute phase of the stroke has passed.

We looked at the -- we had some specific hypotheses that were going into this, that we were going to mitigate that, a lot of those complications. And that's exactly what we saw from the trial. In fact we saw a very substantial reduction in a lot of the complications that many of these patients would normally observe and/or experience. And interestingly enough, there was one set of observations we think are relevant to one of our other clinical programs, that being in our ongoing clinical trial for acute respiratory distress syndrome. So when we look at patients who had the more severe stroke, these are patients that were defined as being 15 plus on the NIH stroke scale in their baseline evaluation, so the more severe end of the spectrum, if you will. There were 49 patients in the trial that were at this end of the severity range in the study. And among these patients we specifically evaluated them for the occurrence of grades three through five adverse events which are regarded as severe and life-threatening adverse events. And among the patients that received placebo, 43% experienced one or more severe or life-threatening adverse events. This would include things like acute respiratory failure or sepsis or acute renal failure or edema or other complications that can occur. But among the MultiStem-treated patients with comparable stroke severity, there was one event and that was a transient increase if white blood cells which was characterized as a grade three adverse event.

So I think the take home message from our perspective is we are having the type of effect that we hoped for, and predicted, when we went into the trial, and we saw a meaningfully lower incidence of severe pulmonary complications or related types of complications that patients that are being treated for ARS or similar types clinical events may experience. So it's an indirect observation, but we think it is very clinically relevant and we also think it provides support for a hypothesis for the treatment of ARS, which is one of the reasons we are excited by the trial.

Terrific. Thank you, Gil. Really appreciate the update.

Thanks, Jason.

Your next question comes from the line of Steve Brozak from WBB. Your line is open. Please go ahead.

Hey, Good afternoon, Gil, and thanks for taking the question. Since you are on the path of inflammation, you have actually piqued some questions here. People are familiar with small molecules. They are familiar with monoclonal antibodies and how they go out there and shut down the immune system or how they go out there and they basically shut down a lot of things. Can you give us insight into how MultiStem works, not so much in shutting down, but what you think it does in terms of going out there and dealing with the inflammatory cascade? Because it obviously doesn't apply for stroke or ARS, but it applies for just about every other serious indication. If you can start down that path and I have a follow-up after that, please.

Yes. It is a great question. One of the things we tried to stress to people over and over again -- the cells when we administer MultiStem are not just dialing down the inflammatory cascade. That's an important part of what they do. But we have a lot of evidence from studies we have run and published many of them over the past year that the cells are doing other things as well. In the case of stroke or acute neurological injury or other things we looked at, they are actually up-regulating the repair process such as stimulating cells like regulatory T-cells or other cell populations that are really an important part of the process. At the same time we are dialing down that inflammatory cascade, we are up-regulating and stimulating repair which we believe is helping these patients recover. And it is creating a more conducive environment that allows and enables better long-term recovery and we think that is clearly reflected in the clinical data we generated from the study.

The cells are doing other things as well. We know the cells express multiple factors that help promote the repair of tissue that is damaged in ischemic injury, so promoting new blood vessel formation, for example. And it's not just one factor, it is actually a series of several things that the cells express. And we also have shown that the cells up-regulate expression of neurogenic factors in the region of injury in the brain. They are having direct affects and indirect affects by stimulating other things, other pathways, other cascades or other cell types that in their totality are having a profound affect. It cuts across multiple different levels.

So it's not just dialing down the inflammatory piece of it, but clearly we think there are many conditions where this type of inflammatory cascade is going to be relevant whether from acute disease or injury, because we've done work in other indications, whether it be things like traumatic brain injury or we published recently, I think, a very compelling study on neonatal hypoxic ischemia which is a large animal model using sheep -- this was done with one of the research institutions that we collaborate closely with in Europe. They showed when they administered MultiStem in that type of environment there was a dramatic impact in terms of reducing neurological damage and seizure activity. So both in terms of seizure incidents and duration which was very profound. That's consistent with some of the studies that we published several years ago that had been conducted in other animal models looking at neonatal hypoxic ischemia.

And then we have also published multiple studies that illustrate the profound impact that these cells appear to have when we administered them in acute spinal cord injury which is another area which we think is a real area of substantial unmet medical need, and we think our technology can have a difference. So across many of these areas, not just in the neurological area, but in a few of the other conditions and some of which I have already mentioned today, we think that mitigating and reducing that the inflammatory cascade that happens which is a defense mechanism the body mounts or triggers when these types of things occur is an important part of the therapeutic utility of MultiStem. We think the benefits actually extend well beyond that into these other areas, as I have just described, which means we think it is going to have broad clinical relevance across -- or could have broad clinical relevance across a lot of different areas.

That brings back the question to stroke, because obviously -- the initial results, looking at 90 days out, were one thing. But when you look further out you are talking about stroke and recovery and measuring it can take literally a year. How do you see this fitting in and how do you see the clinicians understanding how this would fit in for treatment of stroke? And I'll hop back into the queue after that. Thank you.

Yes. We have actually got a lot of feedback on how they view this. And quite honestly we have heard from clinicians around the world that have said, "Look, we are excited by a couple of things, several things. The first thing is that this product has a very clean and consistent safety profile." Which is very comforting to them, because that hasn't been the case with other therapies or procedures that people have developed, where you may have an elevated risk of hemorrhaging in the brain or other types of complications that can occur. So I think they are very pleased with and actually very comforted by the fact we see a clean and consistent tolerability profiles.

The second thing is that we made this really easy for them to use. As we talked about at the R&D day event and showed some video on this, we envision this will be a product that can be stored in the hospital pharmacy and through a simple procedure can be prepped and administered directly to the patient in less than an hour. In fact, we think it is closer to 30 minutes in terms of prep time and getting it right to the patient. It doesn't require any specialized facilities, or infrastructure or highly specialized training for personnel. It is very, very simple to use. So I think a lot of clinicians look at this and they say, "Okay, there appears to be a consistent safety profile. There appears to be robust evidence of clinical benefits among the patients that were treated with MultiStem, and it is easy to use and we don't have to worry about a lot of complications in terms of how we prep or give it to the patient."

And I think all of those things, just as we have been intending for quite some time, really point strongly in terms of the utility of the product from a clinical perspective. In fact, we have heard from quite a few clinicians that said, "If this product was available to me I would give it to every stroke patient I would treat." Because frankly, there is no reason for them not to. If it's safe, if they think they could provide meaningful benefit, they would want to give it to as many people as they possibly could.

I think that's a pretty strong statement, on the part of these clinicians, in terms of their interest level, their excitement, and their enthusiasm for what we have been doing. In Japan we think we could be one modest-sized trial away from having a product that's approved and on the market. We think that we have some interesting regulatory opportunities in front of us in other areas that we will be able to take advantage of, and I think in an areas that's widely recognized globally, in a substantial area of unmet medical need, that's a good thing for patients and frankly it is a good thing for us and ultimately a good thing for our shareholders.

Well again, I am delighted by the progress. Obviously, the validation on your transaction proves that folks are looking at your MultiStem the same way you are. Look forward to hearing the good news of future trial results. Thank you again.

Thanks, Steve.

I would like to thank all of our participants for their questions today, and turn today's call back over to Mr. Gil Van Bokkelen.

Well, if there are no other questions I would like to just once again thank everybody for participating in the call and especially thank all of our shareholders for their continued support of the company. We look forward to providing additional updates in the coming weeks and months as we make progress toward our activities in Japan and in other areas. But in the meantime, we would just like to thank all of you once again and say good night, everyone.

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