Ocugen Inc (OCGN) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Histogenics First Quarter 2015 Financial Results Conference Call.

At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance, please press star then zero. And as a reminder, this conference call is being recorded.

I would now like to turn the call over to Adam Gridley, CEO of Histogenics. Please begin.

Thank you, LaToya, and good morning, everyone. The press release announcing Histogenics first quarter 2015 financial results was issued this morning. For those of you that have not yet seen it, you'll find it posted in the investor section of our website at www.histogenics.com.

Joining me for the call today are Stephen DiPalma, interim Chief Financial Officer and Steve Kennedy, Senior Vice President of Technical Operations.

Before we begin our prepared remarks, I'd like to remind you that various statements we make during the call about the company's future results of operations and financial position, business strategy and plans and objectives for our future operations are considered forward-looking statement within the meanings of the federal security laws.

Our forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. These risks are described in the risk factors and management discussion and analysis of financial condition and results of operations sections of our Form 10-K to the year ended December 31st 2014 which was filed at the SEC on March 27th 2015 and our subsequently filed quarterly Form 10-Q which are available on the SEC's EDGAR system and on our website.

We encourage all investors to read these reports and our other SEC filings. All the information we provide on this conference call today is provided only as of today and we undertake no obligation to update any forward looking statements we may make on this call on account of new information, future events or otherwise.

Please also be advised that today's call is being recorded and webcast.

So, the agenda for today's call will include a brief overview of our business and highlights from the first quarter. Stephen DiPalma will then take you through a summary of our financial results and then we'll open up the call for questions.

So, as a brief reminder for everyone that is new to Histogenics, we are a regenerative medicine company focused on the advancement of NeoCart. Our Phase 3 candidates being evaluated to treat knee cartilage injuries or focal chondral defects.

We believe our unique combination of biomaterials, cellular expertise and our tissue engineering capabilities may create better therapeutic outcomes for our patients than the current standard of care.

Our ability to make a cartilage-like implant prior to implantation to the body is unique and appears to provide for a more rapid recovery and long-term results. Our primary focus and our continued priority as an organization is to move NeoCart to our ongoing Phase 3 trial all while executing on the underlying manufacturing scaling and reimbursement initiatives to support our future potential approval and launch.

Our pipeline efforts include our collaboration with Intrexon Corporation, development of various next-generation products and then expansion into new indications.

We continue to believe that this is a significant opportunity with positive demographics. Our target market is really those active and healthy adults who are seeking better alternatives to the current standard of care both in terms of near-term recovery dynamics as well as long-term durability.

Despite many of the well-published challenges with many of the alternate therapies including the standard of care, there's still 500,000 procedures done each year in the United States. This represents a several billion dollar opportunity at our estimated price points.

Now, our enthusiasm and confidence regarding the potential role that NeoCart may have in redefining the standard of care comes from compelling clinical data from our Phase 1 and Phase 2 clinical trials which of course then led to our ongoing Phase 3 clinical trials. This robust clinical trial design may provide a first-to-market advantage in a new and compared to the standard of care if approved.

We're currently actively enrolling our 245-patient study which is in randomized two to one NeoCart versus standard of care under a special protocol assessment or SPA as agreed to with the FDA. We continue to target completion of enrollment by the end of the second quarter of 2016.

With our one year primary endpoint, we expect to be in a position to file our Biologics License Application or BLA with the FDA in mid 2017 with an FDA decision in 2018, if approved.

So, moving to our business highlights for the first quarter, as a reminder, we completed the partial exercise of the over allotment of our December 2014 IPO and that was completed in the first quarter including the partial exercise of the underwriters over allotment option in January 2015. We raised approximately $70.1 million in gross proceeds. Net of expenses including additional closing expenses associative at the offering, we raised approximately $61.3 million.

For our Phase 3 study, as I noted earlier, we continue to target completion of enrollment of the 245-patient study by the end of the second quarter of 2016. During the quarter, we continue to see the encouraging activity from our clinical trial investigator site as many of the training and certification activities were completed in 2014 and we transitioned into the enrollment phase with many of the sites in the first quarter of 2015. Previously, we were highly reliant on just a few select sites for the bulk of our volume and the overall mix is trending positively.

Another new initiative is the change in our strategy on investigator sites, both adding selectively high volume sites and closing underperforming sites. We're looking to add selectively another 5 to 10 additional high potential investigators over the next quarter as we can bring up to 40 investigative sites per our agreement with the FDA.

Now, this needs to be coupled with rapid training, site initiation and qualification visits. An example of this is the new site that we identified earlier in the quarter and took them through our entire qualification process to enrolling a patient in six weeks.

We're in advanced discussions with several potential new sites as we speak and hope to bring several onboard on the second quarter of 2015. And we did close down several nonperforming sites in the first quarter which leaves us with approximately 31 investigative sites currently.

As many of you know, these cartilage regeneration trials require a significant customer support and practice management so that we can assist our sites in finding the appropriate occasion to meet our enrollment criteria. At the same time, many of these investigative sites are running businesses. And so, our recent targeted approaches over the last several months to support each site with local recruiting, practice management assistance and referral programs have been viewed positively by each of our sites.

There's a significant level of reengagement that we've seen over the last couple of months and we're very pleased by the activity that we saw during our annual investigator meeting at the annual American Academy of Orthopedic Surgeons meeting held in late March 2015.

At that meeting, we had an opportunity to speak with every one of our investigators and there we receive valuable feedback on areas for improvement in our internal offices and our investigators shared with each other some of their successful strategies for recruiting and enrolling patients.

Our strategy is simple. We're listening to our customers and appreciating that they're also running busy practices while also trying to enroll our trial. We rapidly pivoted in a number of areas to streamline, simplify, and assist our investigators in focusing their activities in a manner that works for them individually.

No surprise no one investigator site is the same and our customized approaches and engagement efforts are showing some early additional momentum. Some additional examples of success here are recent breakthroughs in [Taft Kaiser] patients in California. We've improved some of our local recruiting initiatives coming out of our broader national recruiting efforts that we employed last year and we've redeployed our personnel from case coverage at experienced sites to practice management and site coordinator support. And we're finding that the quality of the leads from these local recruiting efforts are more focused and relevant to our enrolment criteria.

Some of the key metrics that we will provide to investors to assess our progress include the following updates. We currently have 23 of 31 sites consenting up from 18 of 30 at the time of our last call at the end of February 2015. And we currently have 20 sites enrolling now up from 14 at the end of February.

Also, since our last call at the end of February, we have four sites that have enrolled their first patients over the last few months and we currently have three sites that have now enrolled more than five patients overall.

On a quarterly basis, we also intend to confirm for our investor base our expected enrollment completion date. And as a reminder, that's currently projected for the end of the second quarter of 2016.

On the operational side, our teams continue to make good headway on our raw material technology transfers and capacity upgrades that are running in parallel to our regular supply of NeoCart clinical trial materials. Initial focus there is on our source collagen and moving into our other raw materials such as scaffold and our proprietary adhesive.

Our focus project teams are taking the early technical successes that we have late last year and moving those into a validated state where we are generative formal data under the appropriate quality systems.

Our investors may recall that we received constructive preliminary feedback from the FDA regarding our overall strategies to incorporate such improvements into our ongoing trial and future regulatory review. We continue to believe that those investments and control supply chain on the long-term will drive more attractive gross margins, supply flexibility, and importantly enhance our ability to successfully navigate any pre-approval inspection by the food and drug administration.

Also, in the quarter, the FDA approves our recent protocol amendment to expand our data collection with additional help economics outcomes research data particularly around what we believe will be an outstanding recovery and return to work dynamics based on results on our previous trials. This amendment has largely been implemented on our sites over the last quarter.

Looking at our pipeline, we're pleased with the progress of our collaboration with Intrexon where the parties will work to develop next generation products in NeoCart. As a reminder, our primary goal is to create a ready-to-use or off-the-shelf next generation NeoCart for use on a one-step procedure and that's presuming our ongoing Phase 3 NeoCart program is approved and our future programs are successful.

The combined Intrexon and Histogenics project teams have completed preliminary work on our initial project plans that were initiated in January 2015 focusing on the assessment of immunogenicity of chrondrocyte and evaluation of several technical pathways to developing a universal donor chrondrocyte. Based on the results of these initial studies, we expect to further develop our project plans over the next several months and we'll update investors accordingly.

We also announced the establishment of a world-class scientific advisory board earlier this week and we couldn't be more pleased to reengage with some of our scientific co-founders and early advisers and we've added a number of new advisers with remaining cartilage repair, musculoskeletal and biomaterials expertise.

This team is chaired by Steve Kennedy, our head of technical operations, and is expected to assist and guide future development and commercialization initiatives. Steve's done a tremendous job working with these advisers in the level of mutual enthusiasm around respective expertise and technical acumen has really been truly rewarding.

On the corporate front, we are currently moving through later stage interviews with several qualified candidates for our CFO and CMO positions. We've retained separate leading executive search firms and are targeting filing each of those positions in the coming months. We've been pleased with the considerable interest in the Histogenics opportunity by candidates and we'll be screening additional expertise and experience to our management team while also carefully taking the appropriate cultural [fit] with our team, board, and advisors.

You'll note that the addition of Stephen DiPalma from Danforth Advisors in March 2015 has provided the operational stability and SEC reporting capabilities during this interim period. And he has quickly integrated into the organization without missing a beat as we recently filed our 10-K at the end of March, Annual Proxy at the end of April and we'll be filing our 10-Q this afternoon after the market closes.

Lastly, on the investor front, following the end of our quiet period post IPO in January 2015, we continued our investor outreach efforts and participated in several industry conferences such as the Alliance for Regenerative Medicine or ARM as it's known. These were industry forms in January and March of 2015, and then also at the annual healthcare conferences hosted by BTIG, Cowen and Company, Canaccord Genuity and Needham & Company.

We also continue to focus on attracting new research coverage and additional investors given our relatively low flow currently and we'll balance our proactive investor outreach programs with our myopic focus on execution of our Phase 3 study of NeoCart.

At this point, I'll turn the call over to Stephen DiPalma to discuss our financials. Stephen?

Thank you, Adam, and good morning, everyone.

The first quarter of 2015, Histogenics reported a net loss of $8 million or $0.60 per share compared to a net loss of $3.4 million or $5.90 per share for the same period in 2014 which included a $1.7 million dollar gain related to fair value adjustments to certain liabilities that we either settle or terminated on the closing of the company's IPO in December 2014.

Research and development expenses were $5.8 million in the first quarter of 2015 compared to $3.4 million in the first quarter of 2014. Increased research and development expenses in the first quarter of 2015 was primarily related to the enrollment of the patients in the NeoCart Phase 3 clinical trial. Our agreement with Intrexon Corporation and our manufacturing scaling projects.

General and administrative expenses were $2.1 million for the first quarter of 2015 compared to $1.8 million for the first quarter of 2014. The increase in general administrative expenses is primarily the result of additional headcount and increased insurance cost partially offset by reduced fees for professional services.

As Adam mentioned earlier, the company in January 2015 raised an additional $5.1 million dollars in gross proceeds from its December 2014 IPO through the partial exercise by the underwriters through their overallotment option bringing total gross proceeds to $70.1 million or $61.3 million in net proceeds.

At March 31st 2015, Histogenics had cash, cash equivalence and marketable securities of $53.2 million compared to $58.1 million at December 31st 2014. Histogenics believes its current cash position will find these operations into 2017. As a reference point, we currently have approximately 13.22 million shares outstanding.

With that, I'll turn the call back to Adam for concluding remarks before we go to Q&A. Adam?

Thank you, Stephen.

The first quarter of 2015 was one of continued progress on many front and we believe our team members, investigators, board of directors are fully aligned around executing on our Phase 3 trial for NeoCart. Time and time again in repeated conversations, we hear of the enormous unmet need for better knee cartilage therapies supported by robust technical advancements and evidenced by well designed prospective randomized clinical trials.

We believe that we've [upheld] advanced regenerative medicine technology with an implant making new cartilage prior to implantation and arguably some of the highest [hurdle endpoints] in the industry.

We believe that we have a potentially significant improvement and durability in recovery in an ongoing NeoCart clinical programs versus the existing standard of care and we owe it to all of our stakeholders to thoughtfully advance our programs and that's responsibly and selectively in near-term scaling efforts and, of course, developing our pipeline for future unmet medical needs.

Thank you for joining today's call. We'll now open up the line for any questions.

Operator, please open up the lines.

Thank you. (Operator Instructions).

The first question is from Josh Jennings of Cowen & Co. Your line is open.

Hi. Good morning. Thanks a lot for taking the questions. Adam, I'm understanding that it sounds like you're not going to give an update on the enrollment numbers specifically but can you just give us a little bit more color on your confidence that you still are on track. It sounds like by that statement that the enrollment number was filed a quarter and just give you a chance with some of the management turnover to just address whether or not that has had any -- been an impediment to any of the enrollment phase?

Thanks, Josh. So, I'll address the questions in order and you're correct. We'll continue to guide towards our longer term goal of the second quarter 2016 completion and we've affirmed that today. We're also planning to provide our investors updates on the overall strategy and, of course, comfort for the timelines.

As you probably know, the consenting process is rather complex. It's hard to predict quarter to quarter and we feel our long term plans are very nicely on track.

What we will also do is provide updates from strategy and I think the notable change over the last quarter or two was looking to add a couple of additional investigative sites. I think that we've got an enviable list of investigators in our current mix, a nice combination of key opinion leaders, a number of thought leaders from a technical perspective and, of course, those private practice folks.

What we're now looking to do is identify some additional high potential enrolling sites that are able to move quickly through the consenting process and also to come on board. And so, I think that a tweak to our strategy that is starting to bear fruit. The other thing that we're doing is as we turn the corner for some of those investigators that have been around for a while are properly trained.

We're trying to redeploy our teams to be focusing on simple practice management. Many of the investigators told us as we speak to them over the last quarter that we need to help them manage their business at the same time that they're running our clinical trial. And so what we're doing is easing many of the materials that we putting in place, making sure that we can be more efficient in our call point with those particular investigators and therefore, we're both able to mutually achieve the goal of enrolling that clinical trial.

So, I think what you'll see in the coming months is we'll continue to show that phase of investigative activity and we want to make sure that we're providing some of those details.

On the management turnover side, there has been no impact to the ongoing clinical trials and we continue to affirm as I mentioned in my previous statement.

Thanks for those answers. I just want to do -- just ask another question just on the -- the consenting process and the hurdles.

Sure.

It sounded that that's the biggest hurdle to -- to the enrollment phase. Can you just talk a little bit more about -- about that process and then how should we think about going from 23 over [31 instead some is] consenting, you know, getting out to that full 31 in terms of the -- the timing of that.

Sure. So, let me first take the consenting process in the conversations that we're having with physicians. There's probably two overall teams. One is, of course, our inclusion and exclusion criteria are intended to demonstrate the similar effect of NeoCart versus the standard of care.

What you often see in a number of knee procedures or injuries is oftentimes, there may be concomitant injuries. So, a combination of our inclusion and exclusion criteria, of course, leads to a lengthy time to make sure that you can bring those patients into the pipe.

Once we have identified that there may be appropriate candidates because you can imagine as we talked in the past and as many of our investors and employees will sort of talk about knee pain, in many cases, a lot of the patients may have some sort of pain but being able to then, of course, bring that down into our inclusion and exclusion criteria requires some additional handholding.

So, one of the things that we're doing there, of course, is trying to make it easier for patients to read up on these materials, for example on line. Ahead of time, avoiding the situation where you got to really commit to the investigator who's got a patient who may be interested but naturally, if they don't know a lot about knee cartilage, you could have an hour and a half procedure or an hour and a half discussion. And that is taking away from the physician's ability to either treat the patient or to treat other patients. So, we're trying to ease that process.

What we're also expecting to do is roll out a number of materials that will allow them to then push that down to the study coordinator and speed up that process as well.

What we're typically seeing from a time period is roughly 30 days as the patients, let's say, coming in to the pipeline, moving through the consent process of inclusion and exclusion criteria. And then if they're appropriately identified for this patient, we will then take them into a potential scope procedure and if they meet all the criteria, they will be randomized.

I will tell you that typically was on board in sort of the one to two-month period. What we're now seeing with a number of the investigators that we brought on board is we're starting to streamline that and bring that down to a couple of weeks.

The other big conversation that position will often have, quite frankly, is around our standard of care. A number of our patients and our target market are typically active, younger, healthy, adults that's, let's call them the weekend warrior, that are looking for the best possible solution that gets them back on their feet as quickly as possible.

And I think it's well known and understood that microfracture works very well in some case but there is some variability. So, the other thing that we are having discussions with investigators around is you have patients who are very enthusiastic and you can imagine that the conversation goes like this which is I'd love to participate in the trial but only if I get NeoCart.

And so, that's one of the other things that we're working with the investigators on because microfracture is a good procedure for the appropriate candidate and we want to make sure that they would still participate whether it'd be

NeoCart or microfracture.

Does that help address the questions, Josh? We may have lost Josh. I know that the second question was how do we expect to see the rest of the sites consenting and how do we move them up so that all of them are consenting?

We expect that we'll continue to see continued growth in a number of those areas and we are seeing on a monthly basis investigators who have reengaged, that may have been involved earlier in the study and so we're seeing new activity from them and then, of course, really taking a much more sort of commercial approach to working closely with these investigators to remove barriers and to make sure that they're actively participating.

And if they're not, worth having different conversations so that we can bring in those investigators who will participate. Overall, I think that we will continue to see pretty rapid trends here over the next quarter where we're not only moving up those number of doctors that are consenting and enrolling but also then growing the overall investigators.

Great. Thanks for that, Adam. Sorry, I had you on mute there before.

My last question, just any updates on the competitive landscape and just your comments that Histogenics will be the first to market with the superior product to microfracture for cartilage repair? Thanks a lot.

Sure. Thanks, Josh. So, the competitive landscape is the same as we announced over the last couple of quarters. We continue to believe that we have one highest hurdle endpoint in the industry. And two, with our one-year primary endpoint as part of our special protocol assessments, we also believe that we will potentially be first to market, if approved.

The nearest competitor as many of you know is B. Brauns Aesculap division, which is Novocart 3D that just started to randomize clinical trial last fall. It does have a two-year endpoint and we understand that there's good activity there. And quite frankly, we think that's good for the overall industry. We don't necessarily have competitive sights. And clearly, there's an opportunity for many competitors to succeed here. We do expect those that we very much will have that additional lead from a timing perspective.

Operator, next question.

Yes. The next question is from Bill Plovanic of Canaccord. Your line is open.

Great. Good morning. This is actually [Kyle] on for Bill. Can you hear me all right?

We sure can. Hi, Kyle. How are you?

Doing well. Just to -- just a quick question here. You know, I believe there's an initiative to, you know, broaden the scope to include international sites as well from a clinical investigator standpoint. I just wanted to see, you know, when -you look at, you're finishing your trial and then looking back, you know, how many patients do you foresee potentially enrolling OUS and then, you know, when should we expect to start to see some of these OUS sites come on board.

Thanks, Kyle. So, we're not formally moving forward into international sites right now, although we are looking at a number of collaborations with various sites in Canada. And so, in the current protocol, we had identified really those sort of 30 going up to 40 investigative sites in the United States.

Now, we may consider for some of our future indications very much looking at investigative sites overseas. So, I think I had mentioned in the last call that one of our next initiatives and we've got some good early work around this is to identify our next target indication.

Previously, that wasn't an opportunity for us to really think about going into, for example, ankle, which I would identify as probably the nearest term item that we would target because we didn't have the manufacturing capabilities to conduct such a trial.

We would expect that we will continue to do our continued market research and some of our scaling efforts to look at a OUS study, typically would be proof of concept or sort of an early base study that we would use to support and overall with FDA and, of course, international registration activities.

I would expect to see more activity on that pile towards the end of this calendar year.

Okay. Great. That's all we've got. Thank you very much. Appreciate the color.

Thanks, Kyle.

Thank you. (Operator Instructions).

The next question is from Chad Messer of Needham. Your line is open.

Great. Thanks for taking my question. So, Adam, in lieu of, you know, in lieu of the enrollment numbers which is probably what the investors would actually prefer to have you, you know, kind have given us some general guidance in your comfort for -- for your 2Q '16 objective and a few numbers on sites and, you know, a number of sites that enrolled patients and high enrolling sites, I believe you also mentioned something on the, you know, sort of kind that takes to screen a patient, are there any other quantitative met -- quantitative metrics that we could possibly expect to get from you over the coming quarters with regards to enrollment?

Thanks, Chad, for joining the call and appreciate the feedback and your questions. So, we will continue to provide guidance around the actual investigative sites.

We'll look to provide additional guidance on sort of the overall motivation engagement in some of those success stories and what we'll also do to give you a sense of the overall momentum because the mix is important is those sites that are enrolling their first patient, those sites that have now enrolled for, example more than five patients and as you can imagine, given that we've started up with many of the sites in 2014 including many towards the end of 2014, we're really now transitioning from startup into actual enrollment.

And in that process, that is a bit choppy. But what we're seeing that continued positive moment where if you look at the numbers, there is ample opportunity for every one of these investigators to step up and provide additional contribution. And every investigator that can provide 5 or 10 or 15 patients makes a difference and so what we'll give you a sense of is the overall mix.

Clearly, in 2014, we are highly concentrated on a couple of our lead primary investigators who are providing significant volume given that they have been working on these trials for many years. They had sort of, let's say, crack the code and had been able to those particular patients and enroll them quickly.

We're now taking their experiences in requesting that they share those with their peers and so I think you'll start to see that mix change tremendously and that is where we will provide additional guidance in that process. We will, of course, continue to affirm the overall target as well as we work through there.

So, we're very much going to want to make sure that the investigator -- or our investors understand the story how we're having the conversations with physicians and what is the levels of engagement at each of the sites.

Great thanks. And then in -- just a couple more quick ones if I may. On Intrexon, you mentioned that you've completed some preliminary work. I know one big question there was, you know, possible immunogenicity of cells when they're coming from a third party source. Is there any more you can say on any findings you might have had around immunogenicity in your work with Intrexon.

Sure. Great question, Chad. And what I'll do is turn that question over to Steve Kennedy. Our head of technical operations. He had actually been one of the architects of this particular deal and sits with me on the steering committee that governs this particular program.

His team also is working closely with the project managers, so he's best suited to address on that. Steve?

Thanks, Adam, and thanks, Chad, for the question.

So, what we does so far is really develop a customized MLR, mixed leukocyte assay reaction, for -- to be able to measure the immunogenicity of chrondrocytes and potentially measure the immunogenicity of tissue that's produced by those chrondrocytes. And so it really develop the assay and we're just starting to actually measure, you know, quantify and measure the immunogenicity right now and say just to the development of the assay itself, we haven't seen anything surprising or anything we didn't expect and we're going to take this data and really help shape our, really, our detailed development program to be able to develop this universal chrondrocyte.

Does that help?

Yes. Now, I appreciate that update. And, obviously, it's early days but look forward to hearing about the progress there.

And then just one more. I think you touched on this a little bit but I know going back to, you know, when you're on the road for the IPO, you know, one of your goals is to get some kind of proof of concept study going, I guess, you said ankle is a likely next candidate. I guess, in the past, you've also talked about kind of rest the knee. Any update as to when we might expect some kind of trial to get initiated?

Thanks, Chad. Good question. And so, yes, that is correct. We had identified previously that we would start exploring additional proof of concept work in potentially ankle. The other was patellofemoral joint.

So, one of the things that we're doing with the newly established scientific advisory board is actually working closely with them to potentially identify those best target markets and then you can also imagine that it's going to require potentially some modifications to our scaffold. And so, that is really the genesis of the work that Steve Kennedy had put in place with that group.

And I can tell you, having met with a couple of them over the last couple of weeks and making my introductions, there's a high level of enthusiasm and you can imagine there's probably about 10 new indications that various folks would like to go into. We're trying to narrow that around first on that medical need, potentially size of the market, and then the applicability for technology.

So, that's the overall sort of genesis of that group and where we intend to take that. I would continue to indicate ankle is probably our next target market and I would expect that we would have some additional thoughts around what that group of concept study may look like and where we potentially would do that towards the end of the year.

We're trying to, of course, let's say, stick to our knitting and focus myopically first on NeoCart. At the same time, the progress that we're making internally on the manufacturing side is creating some interesting leveraging opportunities where the work that we've done to, of course, scale up our own raw material capabilities then naturally lead into, for example, a larger or a smaller NeoCart matrix or scaffold that may be required for ankle.

A year ago, we couldn't even consider that. So, this is where we're doing some additional exploratory work both on the technical and on the clinical side. I think the level of enthusiasm from those folks outside of the scientific advisory board as well would indicate that if you can fix cartilage in the knee, you can fix it anywhere else.

Now, we need to think about the most appropriate delivery mechanism and then, of course, one-step versus two-step procedures. So, the overall thought process and pipeline is the work we're doing with Intrexon, the work that we're doing with our scientific advisory board and that's under our internal process and raw material scaling activity is great, so it's a nice virtuous cycle that leads into those next indications.

So, we'll continue to keep you posted there as well.

All right. Great. Thanks. Thanks for the updates.

Thanks, Chad.

Thank you. And at this time, there's no further questions in queue. I'll turn the call back over to Adam Gridley for closing remarks.

Thank you, LaToya, and we appreciate your help today. And of course, our investors, for listening in today. We believe that we've got a special opportunity to improve outcomes in a meaningful way for our patients and our surgeons with the underlying NeoCart product and really our regenerative medicine platform.

The efforts by our employees, consultants and board internally and the commitment provided by our investigators, investors and partners, such as Intrexon, has been especially gratifying. We thank each of them for the respective contributions and we'll look forward updating each of you on our future conference calls.

Have a good day.

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day.