Vericel Corp (VCEL) 2005 Q1 法說會逐字稿

Good day. Welcome to Aastrom Biosciences investor conference call. This morning you will here brief remarks from Aastroms CEO and CFO about the company's recent progress and future goals. The balance of the call will focus on the question and answer session with Aastrom management executive, now I would like to introduce, Doctor Doug Armstrong Aastroms CEO and Chairman of the Board and Mr. Alan Wright. Aastroms Senior Vice President Administrative and Financial Operations and CFO I'll now turn the program over to Aastrom's CFO, Mr. Al Wright.

I would like to thanks everyone on the call for taking time out of their schedules to participate with us. Before we begin, I will read Aastrom's Safe Harbor reminder. This conference call on web cast contains forward-looking statements, including, without limitation statements concerning product development, objectives and anticipated timing, clinical trial results and anticipated timing, revenue results, potential market opportunities, market development plans, anticipated key milestones and potential advantages and applications of the Aastroms replacell system which involves certain risks and uncertainties. These and other significant factors are discussed in greater detail in Aastrom's annual report on Form 10-K and other filings with the Securities and Exchange Commission. Actual results may differ significantly from the expectations contained in these forward-looking statements. And now, it is my pleasure this morning to turn the call over to Doctor Doug Armstrong our CEO and Chairman. Doug.

Thank you, Al. Good morning to our listeners. We appreciate your joining the call today. We want to provide you with the review of come of the progress, along with the financial details from our recently completed first fiscal quarter. Also comment on a few other issues relevant to our company. Well then open the call up to questions and answers that you may have. Before I get into my remarks, I want to say we sympathize and appreciate your patience as we are going through a little up and down in the stock market. Hopefully well -- this will begin to set will out and attention can be placed more on what is happening within Aastrom as opposed to what's happening out with things that we can't control. With respect to that, this has been a particularly encouraging period at Aastrom with our operational strength recently bolstered by new results from the clinical trials as well as the addition of an important new member of our management team and a much stronger financial position. Let me give you a few more of these details. We began our fiscal year 2005 clearly focused on our bone marrow stem cell based tissue repair cell technology or as we call them our TRC's and moving these TRC's into clinical trials. It always an important time when you moved your technology into the clinic and are treating patients. It is more exciting when you see some of the results from these new treatments as of now beginning to happen. As many of you know, we currently have in progress three distinct clinical trials using TRCs for the repair of severe long bone nonunion fractures. We have a multi center trial in the United States at two sites currently, including the University of Michigan Orthopedic Trauma Center and Lutheran General in Chicago. In addition to the U.S. Trial we have two other clinical trials in progress in Europe, specifically a trial in Germany as well as one in Barcelona , Spain. These trials all began treating patients, approximately, in March and have all been moving forward. The Barcelona trial has made the most progress to date accruing all five of its lead patients and completing the last patient treatment at the beginning of this fiscal quarter in July. Shortly thereafter the patients were evaluated and investigators have made several important conclusions. The very exciting progress report to Aastrom by our investigators has showed Aastrom's TRCs were clinically safe with no adverse events reported and that patients are exhibiting various stages of healing at their nonunion fracture sites. To put these early results in better perspective it is important to remember in each of these clinical cases the patient had previously received standard of care treatment which had failed to cause healing at their nonunion fracture site. Well continue monitoring the progressive bone regeneration in the patient that we have treated with our cells. and plan to be able to report on that progress at longer time points that better Allow the evaluation of bone fusion. This will be an announcement we can look forward to in early 1995 -- excuse me, 2005. Because of the severe nature of nonunion fractures, and that all of these patients had already failed to repair following a standard of care treatment, we do not necessarily expect that all patients treated will exhibit full fusion of the bones in a long term situation. However, based on the overall healing results to date among st these parents, the investigators at Aastrom have decided to expand the study and begin the formalization of the plan to obtained the clinical data that will be needed for registration of the TRC product for use in bone graft surgery in the European union. This is been very an important and exciting progressive step for the company. The results of the Barcelona fracture trial have led to our accelerating the initiation of a bone graft trial for a different indication, specifically, in late October we announced Aastrom has initiated patient enrollment in a clinical trial to determine the safety and efficacy of TRCs in maxillary sinus lift bone graft procedures. This new study will evaluate the ability of TRCs to regenerate and thicken the maxillary sinus bone, which is the upper bone in our jaws, and this bone thickening, bone regeneration is needed in order to proceed with a dental implant process where a post needs to be placed inside the bone tissue. In the initial phase of this trial, five patients will be acrured to compare the outcome of the Aastrom TRC treatment procedure with that of the standard treatment approach to build new bone tissue. We developed TRC to be able to regenerate multiple types of tissues. This is the basis for one of the stragetic strengths of the company, the ability to pursue multiple market indications. with a single technology and operational infrastructure, We are beginning to now see the value of this plan with examples such as the new sinus lift trial in Barcelona along with another recent company announcement. Last week we announced the signing of the clinical trial agreement with the heart and diabetes center in the North Rhine Vestalia (ph) area in Baudaun Housin Germany. This clinical trial will evaluate the safety and effect of our TRCs in the regeneration of proifial vascular tissue to treat sever ischemia in the legs of diabetic patients. ischemia.is a blood circulation deficiency thats caused by constriction or obstruction of the blood vessels and microvascuelature is commonly associated with diabetes as well as other diseases. Small artery obstruction is a contributor to the deep ulcers of the feet, loss of limb function and eventually limb amputation in these patients. This is an important market opportunity and a very exciting direction for our TRCs. We expect this clinical trial to begin recruiting patients by mid calendar year 2005 as we are now finalizing the manufacturing, training, validation and permits for the TRCs to be used in the study. There will be later announcements once this trial begins patient accrual along with more detail on its design. With our operational plan now heavily focused on the clinical development of our TRCs we made an important step to strength our management team with experience in this area through the employment of Doctor Janet Hock a our Vice President global research. Dr Hock brings Aastrom a fairly unique blend of biological research, medicine and drug development skills. Highlighted by her successful leadership in the clinical and regulatory approval of two important tissue regeneration drugs at Eli Lilly. She has the proven business and academic leadership capability along with the highly respect scientific credentials to support and compliment Aastrom's need to moving our own tissue regeneration product through the clinical development stage. I can tell you it is a real pleasure to have Janet as a part of the team as she is already making important contributions. We have achieved this progress while keeping in mind our obligation to ensure Aastrom has the necessary finance and operational resources to support its ongoing needs. Most importantly, as we move through fiscal year 2005, we do so with the strengthen cash position that will allow us to support plan clinical and operational goals and objectives. Al Wright will tell you a little bit more about our recent increases in cash. Before turn this call over to him, I would like to now review with you five of the key milestones that we are targeting for the remainder of fiscal year 2005. First, to continue the accrual of parents to our current FDA multi center bone graft trial in the United States and trial in German any and to add one more clinical site to the U.S. Trial. Number two, to initiate and complete the expanded clinical trial in Spain for bone grafting repairs severe nonunion fractures. We also expect to announce more specific long-term bone fracture compare results from the completed first phase of the Barcelona trial. Three, to complete the recently initiated jawbone reconstruction clinical trial in Spain for sinus lift procedures for patients needing dental implants. We expect these results should establish data to defiantly determine new bone from generated from tissue repair cells compared with the standard treatment approach. We think this is going to be a very exciting study in understanding the overall capability of our product. Number four, to initiate patient treatment in the recently allowance German clinical trial using TRC to regenerate vascular tissue in patients with diabetic limb ischemia. This company is focused on the clinical development of TRCs. This should begin to establish Aastrom as the leading company in this sector with active clinical trials with our bone marrow stem cell products. Our last point also extending from the clinical direction is that well begin to now formalize our clinical plan for the next bone regeneration treatment indication for TRCs. Our progress is firmly established Aastrom as an industry leader with our active phase two level clinical trials for bone fracture repair and jawbone regeneration and trial regeneration and shortly our trial for vascular tissue regeneration in diabetic patients. These trials are intended to demonstrate the clinical utility of this pioneering technology which we believe should lead to value growth for our shareholders. Now, I will asked Al Wright our CFO, to provide you with the review of the company's fourth quarter and fiscal year end results. Al.

Thank you, Doug. I would like to give you a brief review of the company's finance highlights for the past physical quarter. As you know, we ended the first quarter September 30, 2004 with approximately 15 million in cash. In October we completed an equity financing with institutional investors that added gross proceeds of approximately 10 million, bringing our current cash holdings to approximately 25 million. This level of cash will help insure the completion of all current clinical activities as well as phase three clinical trials for our bone graft product within the next two years. Our monthly cash utilization with this level of activity stands at approximately $1 million.

In the first quarter of fiscal 2005, we also received a grant from the NIH national cancer institute in the amount of $110,000 to study the efficacy of our Aastrom replacells system in enhancing cell based cancer vaccines. Although total revenues for the quarter were slightly less than the same period last year our total expenses of 2.9 million were reduced from the first quarter of last fiscal year which was 3.2 million, a decrease of $.3 million. Now, we both would like to open the call to questions and answers. Kyle please recall for the group the registration procedure for our listeners.

Okay. Thank you, at this time if you would like to register to ask a question press the star and one on your touch-tone phone. You may remove yourself from the queue if necessary by pressing the pound key. again If your site would like to register for a question today you can press the star and one on your touch-tone phone. And if you need to remove yourself from the queue press the pound key. We'll pause for a second here while we queue up our questions. Okay. We'll take our first question today from Ian Melon , private investor.

Good afternoon. Good morning gentleman. Doctor Armstrong can you address the recent passage of proposition 71in California and how that will impact your plans going forward?

Well, the first of all I think it is very exciting that California took an initiative to focus financing capability to fund stem and other cellular research, very important step forward and hopefully other states will, of course, follow. We are interested to see what happens. The key thing here is this type of funding helps fill some voids that occur in the cell therapy arena. That void is there because the pharmaceutical industry, the big pharma companies that largely stepped away for a while from stem and other cell therapy products waiting for some clinical progress. So having additional funding should be a great stimulus to the sector both in a direct way and indirect way. So, we think here at Aastrom that's great. We think the increased funding will continue to bring more attention and support to the sector. Since we are already in the clinic and very important thing to remember, and we're going to be working hard as a company to bring that key point out, that Aastrom is already active in the clinic with our lead stem cell product, that the increase to attention should begin be a benefit to us all as our clinical results begin to come out. Ian, did that answer your question.

And will you be able to receive funds from the state?

We don't think that we can right now. We've already been asked a few times are we going to look to set up a California operation. I think that we certainly would do that if we thought there was merit in doing so. I think that -- we already have some active collaboration in California at Stanford University, we have some active clinical studies going there. First we'll begin to explore this through our collaboration and then what makes sense operationally.

Thank you.

Okay. We'll take our next question from Steven Don with Dawson James, go ahead, please.

Morning gentleman, thank you for taking my call. The previous caller really asked the question I wanted to about proposition 71. Just to make it a little clearer, the company would be open to moving to California should a significant amount of funding be available for your work?

I think -- I wouldn't put it in that term, sir, or that strong, Steven. This management team and the board is committed to doing whatever is necessary to build value growth in the company. If we think getting access to that funding is real and available, well -- and that will bring value growth to this company, we would determine the best way to do that. That doesn't necessarily mean we would move the company there, but could potentially be access to other means. Well explore that. But I don't think we should get too consumed with this right now, we are not sure yet when that money will be available. The state has a variety of other financial issues they are trying to deal with concurrent with this. We are going to keep our eye on them mark, which is moving our TRCs through the clinical trial process. We think that is what is really going to drive value growth showing clinical results and bringing this first stem cell product to market.

Okay. Well, for California in particular, or as other states follow suit, if they do so, are you getting any flavor for what the agreements would turn out to be as far as, perhaps, some royalties back to the state of California, for example, are you seeing any of that in these early discussions?

You know that is a part of that plan And that's typically a part of the plan for most governmental agencies. Typically, those rights tied to the development of new intellectual property. In our case, our intellectual property is basically pulled together, we are already in the clinic. Any funding we would look to access would probably tie to new indications and use of the technology we have. So typically that does no end up with any paybacks. I will tell you, just like with any investor, when money comes in there should be something back to where the money came from and there's different ways to address that that aren't necessarily detrimental.

I noted 10% of these funds for the first five years will be available for construction of new facilities. Well hopefully you can tap into that if you decide to open a center there.

You know, we have different thoughts along those lines but I think it is way premature to be commenting on them right now.

Thank you, guys.

Okay.

Okay. We'll take our next question from Alan Zahan (ph) with Greenwood Partners, go ahead, Alan.

Good morning yeah, and thank you for taking my question. On intellectual property, I have a feeling that sometime within the next year or so you may be approached by a major drug company, either domestic, or European, about a takeover. My question is, is the management completely aware of the incredible value of your intellectual property? . Thank you.

Well, you know, value is what the buyer will pay, we always have to be looking at that. I think we have to, and this has been a key issue in the field of tissue engineering cell therapy, which is how do you productize technology. In other words, how do you take this technology that has all types of exciting potential and really turn it into something that can be used in ever day medical practice that the FDA will improve and reimbursement agencies will pay for and the medical community will use. So being able to productize the technology is what's going to open the door to the value that is inheriaent in our intellectual property. and that's what we're focused on We think that the key strategic position this company has is that we have been able to productize bone marrow stem cell therapy. We have been able to turn this into something that can be used for everything virtually every patient eligable patients And will fit with these requirements from the various agencies and payers. So I think once we can convince a few other people besides ourself that that is true, and that's what is starting to happen with our clinical trial results, then well be drawing the attention of some of the larger healthcare companies and they certainly will be looking at the results as well as our IP. I think they're going to be gratified by what they see is the strength of the IP position behind what we are doing.

Second part of my question would be are you open to that kind of a situation?

We are open to anything that will really do two things, help us to deliver the technology into products and into the marketplace and number two, bring value to our shareholders. If can meet those two objectives we are going to be looking at it.

It sounds great. Everything you said this morning sounds wonderful. I thank you.

Thank you, Alan.

Okay. Our next question comes from Theodore Roamer, private investor. Go ahead, please.

Thank you very much gentleman. My question is, what is happening with Germany, that was one of our first starts at Zolera , why aren't we getting some detail reports of what's going on, in addition to in piece in Australia, what has been happening the last year.

I couldn't hear the very last part of your question.

What has been happening in the last year, we've heard stories you are in there, but haven't had any details.

Okay. We do have subsidiary company called Zolera, AG. Located in Berlin, it is a small group of four people and they coordinate our activities around Europe. So, for example, when we talk about Barcelona, Spain, and activity there, although we have a very good group we are working with, IT RT, led by Francisco Vidal in Barcelona, a lot of the activities managed through our Zolera office although they are in Germany anything we are doing in Europe has contribution from Zolera. We initiated a study in Bokum(ph) Germany, it has started to accrue patients, we are working through a few operational issues with that site and you should be hearing more results from them in the coming year. Now, one important thing that did happen in Germany and throughout Europe, which was the renew regulation that has been put in place just in the last year that now require any cell production for clinical use to require permits. And that had slowed down some activity in developing new sites in Germany and other countries while we are going through it permitting process. For example, I mentioned in my remarks that we signed our agreement for the clinical trial in Baudaun Housin Germany for limb ischemia in diabetic patients although we're set up ready to go the protocol has been approved we are working through this new permitting process which is taking a little time. It slowed down some of the progress in the new studies but that should be remedied going forward. That did impact a part of our business that we had been looking at a couple years ago, which was to offer our technology, our manufacturing platform technology, the Aastrom replacells system for dandridic cell manufacturing for clinical trials. These new regulations have basically stopped all the dandridic cell vaccine trials in Germany and Europe so that deferred really that type of activity for a while. But for us, we haven't been concerned with that because our focus is now on our tissue repair cells, moving those through the trials and bringing them onto the market.

Okay.

Once begin if you would like to ask a question press the star and one on your phone now. If you would like to register for question press the star and one on your phone now. We have a question from Anthony Bello, private investor. Go ahead please.

Dr. Armstrong, congratulations for the excellent quarter once more. I have a number of questions. First, it seems no matter, you know, how much we try, the media and I guess a lot of shareholders seem to identify Aastrom with embryonic stem cells. Is there anything we could do so that we don't suffer the, you know, the down cycles of what might be happening in that arena, that's the first question?

Well, we've certainly been caught up in that. Some weeks it is to our benefit and some weeks it is to our detriment isn't it.

Yes.

As the side goes up and down with the sector. I don't know what we can do to really get out of that entirely other than I think we should be grateful that all of this is bringing attention to cells as therapeutic tools and potential of stem cells for multiple sources. So I think we just have to not get caught up. I know it is hard for a lot of investors to do but not look at day-to-day but a little overtime as we are moving forward. I think once our clinical trials -- and we are already beginning to see this, Anthony, once our clinical trials begin to progress and we begin to bring out more and more data, I think that well break free of that tie, and that'sI think one of the exciting things for this year, is this data is starting to come out, we have the first cut of data from Barcelona, we were very pleased with it as I said and expanded those studies. Once Wall Street begins to understand where we are, we'll begin to break free. You know, we are a company now with basically three phase two level trials and if you look at a typical market cap valuation for a company that is has one phase two level trial it is in the 250 million range which we are well below. If we can get our status and the clinical status of where we are out and understood in the investor community, which we are actively and trying to be proactive in doing, we can begin to break free of that trend and show some value growth based on our own progress. Another example might be there is an article in today's New York Times. I haven't been able to read it yet, but I got some verbal reports where I am quoted it and in there at least it begins to note that here we are, we are active clinically, we have not embryonic stem cells or not these other source stem cells but adult bone marrow based products that we're in the clinics with. That's an important message to get across. I know that both larger companies, larger healthcare companies and some of the Wall Street analysts are final now starting to realize where we are. We know that by our conversation and discussions and hopefully they'll begin to be good agents for us in spreading that word.

Dr. Armstrong as the activity in stem cell research explodes probably in the next 18 months, we have a situation where we have a very price pattened, what are we going to do to monitor that technology so that we don't have any infringement by companies just entering this field?

I think that, you know, -- that's a tricky issue. Before you can deal aggressively with infringement issues they actually have to be father along than just doing research. And I would say that the best way that we can deal with this is to get our technology out as products, establish this industry position and then from that position of strength, begin to deal with the challenges as they come. Or if there is something new that even could benefit us, I they that we could be in a position to bring that into Aastrom.

I see. Doctor, one more question, with reference to the secondary offerings that have been made in the last six months, whatever, is it possible, perhaps, maybe to have a rights offering to the existing shareholders so that they could participate in one of those offerings?

We've -- we had a lot of discussion about that in house and along with consultants and so on and trying to go through and look at experience and rights offerings with other companies have had, I think from a phisiological point that is exactly what we would want to do. And to be proactive on that, we actually setup last year a program where any of our shareholders can buy stock directly from the company and that money comes to the company. So the continuous shareholder direct stock purchase program that is available for any of our shareholders.

Uh-huh.

You can buy stock into that and the money comes. If that program would take a hold, that reduces our need to be able to go out to other investors. But the other aspect of that is that we've learned, and we are trying to be very careful of, anytime you begin to advertise that you are going to do an offering, in today's world with our type of company, the number of shorts begin to show in the stock, the stock price typically gets driven down, sometimes huge percentages, so by the time you complete the offering, you are at a much lower price and basically it is just not good for anything, it is not good for the shareholders who didn't participate, I don't think it is good for the shareholders that participated but they are at a lower value and we have to fight our way back.

Okay.

We've been trying to do the right thing to protect where the stock is. There is just so many --

variables

Professional funds out there that look for announcements that the company is doing financing an then they start overcharging the stock.

I see. Thank you very, very much.

Thank you. We have a question from Dennis Kurin with Hilyard Lions.

Thank you. Alan I wonder how many shares do you now have outstanding resulting from this latest transaction, the financing deal you did.

In total approximately 91 -- 93 million shares.

Regarding your burn rate, does it stay relatively stable at 1 million per month or accelerate or deselrate in a year.

It has always had a pattern of stability. The only thing that with change that is down the road in phase three where there might be a payment to research organization and so on that might be lumpy. It is pretty stable.

We've -- that burn rate has come up just a little bit here over the last couple months as we have added in some new management team members, Janet Hock, and Jim Cour our COO who some of you met on our last conference call as well as we are establishing the infrastructure supporting our clinical studies in Europe. Now, the nice thing is is that once we get in basic infrastructure in place, we can support multiple trials, multiple indications from that dollar that has already been spent. A good example is the Barcelona trial is where we planned to get established for the long bone nonunion fracture trial and from that exact same infrastructer we are able to very cost-effectively inisiate a whole new indication trial with the sinus lift trial for the dental implants. Regarding the financing issue, has there been a further discussion or any discussion with the state of Michigan as far as any kind of grants or any financing available from them to help at all? You know, we've explored that in a casual way and keep coming up empty. So that has not been a direction. Let me tell you what I think is, and this is where an individual like Janet Hock can be so helpful to the company. We are exploring now, not going to the state of Michigan but going to the national government to look for funding support for our tissue regeneration project from groups such as the military where obviously limb injury from both bone, vascular damage is a major problem. We are looking to organize an approach to look to see if we can obtain major financial support from those avenues.

Great.

that is an intent I can't layout what that timeline or obviously what the success of that will be. But I think as we're now having clinical results showing local bone regeneration our ability to have those discussions is greatly enhanced.

Thank you.

We have a question from Don Conner with Reed Conner.

On the equity placement was that at market

The placement was done over a four-day blended price that was at market, yes.

Okay. Thank you.

Okay. Once again if you have any questions at this time press the star and one on your touch-tone phone We have a follow-up question from Ian Melon. Go ahead please.

Hi, Doctor Armstrong. The dandridic cell vaccine program I think I heard your comments about what is going on in Germany do you want to comment on what has transpired so far in North America object that front I noticed you recently signed up University of Stanford out in Palo Alto but that to me seems quite exciting program I was wondering if you could elaborate on that and give it some color.

Well, the requirement for permitted, if you will, cell manufacturing, which has now hit Europe, had hit the United States a couple years ago. The FDA was now requiring very specific capabilities for trials to begin and that had that same negative impact on a number of the immune therapy trials in the United States. Those of you are invested in some of the companies doing dandridic cell vaccines they actually had their phase two and phase three trials put on temporary hold until they could get those situations remedied So what we've done is taken a position is we think that activity is very important. I and we have great hopes on the dandridic cell vaccine directions but we think its going to take some time. Our strategic plan is to stay close to what we think are the leading programs that are going to be active clinically and make our technology available to them in a way that does not require extensive investment by the company and yet allows those trials to go forward with our technology. That's what we've done at Stanford. We actually have two active relationships and a third will be beginning soon, where using the Aastrom repla cell system manufacturing platform for dandridic cell vaccine production, these trials are going. So that's what we are going too look for is to collaborate with the groups who have the investments and interest to move forward clinically and to collaborate make our technology available. and of course if one of those vaccines works the of course we'll become very active.

You anticipate putting out any news in terms of clinical results in the near term?

Well, first of all, these trials are not under Aastrom's direction. They are not an Aastrom trial. We are collaborating in them but any announcements of these trials would come directly out of Stanford.

Any other Universities involved with you?

We have had also an early clinical activity at Duke.

uh-huh.

And those are the major once here in the United States. There may be one or two more additional once in the coming year.

Uh-huh. And results from Duke, you don't have a flavor for it yet?

With vaccine trials it is not like regrowing bone where you make the treatment and you see if the bone grows.

Right.

In these trials they are looking for induction of immune response to the vaccine, you know, casual tracking to see if there is any benefit on the tumor. These are patients that are late stages and failed other treatment approaches. So, you know, it is hard to comment effectively on any results other than the key result we want to look for is being active in trials.

Okay.

Okay. Once again if you have any final questions at this time, press the star and one on your phone. Again for any final questions press the star and one on your phone now, please. One moment, please. If you have any final questions press the star and one on your phone now, please. Well go to Leonard (indecernable) Len, go ahead, please.

Sir, has there been any romancing of the company in terms of being acquired or for that matter has there been any focus, near term or near future to acquire any company within the industry that your toying in. ?

First of all, let me tell you what our objectives are for this year with respect to major strategic partners.

That is, one, to begin to have discussions targeted towards getting a marketing and developmental relationship in place.

Alliance wise.

We think that any step towards a larger interaction probably needs to come from that type of first step.

So -- Currency wise, et cetera. I beg your pardon.

As far as currency. Well, before -- you need to have internal champions at a larger company if a acquisition is going to occur and that typically comes from, you know, a good first step of an interaction between the two companies and so what we're looking for and focusing on are marketing partnerships with larger companies within the key areas of orthopedic,ventrical and vascular tissue area. What I can tell you is is that our ability to have these discussions has changed dramatically to the positive over the next six months. I would say most of these groups, I would say all of these groups were totally unaware Aastrom was anywhere that close to the clinic and we've caught everyone a bit by surprise. I would say we are having some nice meetings and discusses now with groups that we really couldn't have talked to a year ago.

Doctor, you think you and your group could convert those confers into equity funding as opposed to debt type financing?

I think it is just too -- Early. To comment effectively on that. When you look typically a [larger] company marketing relationships, you see a blend of capital contribution to the develop Alex pens, clinical trial expense, certainly market development and often contribution of he captive capital or other payments to the company.

Thank you.

It depends what the company gives up, drives in terms of those deals.

Hopefully you won't give up much.

Whatever we do well focus on bringing value to the shareholders and bringing these products to the market.

Thank you.

All right. We have no further questions at this time. I'll hand the program back over to Mr. Wright and Dr. Armstrong for any final comments.

Before I turn it back to Al. Again, thank you for joining us today. Thank you for the great questions. I will tell you it is grad Friday to get the types of questions you all are asking, which really mean that we are making some nice progress. Also just want to direct before I turned it over to Al before, I had been too excited in talking about my clinical progress and told you he was going to talk about our fiscal results from the year end and, of course, he gave you the fiscal results for the first quarter. I hope I didn't confuse anybody there. With that, Al.

Well, I have no further direct comments except to extend my thanks to the investor support, both in placement and in particular, the open market. I believe this company shows great promise and is nationally in my belief on the right. So, continued participation in the future is encourage. One last comment, because it came out in questions, and it is almost a unique vehicle for Aastrom and maybe not so well understood, but is the direct stock purchase program available to our shareholders. In fact, you have to be a shareholder to participate in this program. But I think you can go right to our web site at www.Aastrom.Com and obtain the information for the direct stock -- direct shareholder stock purchase tram. Take a look at it and we welcome your participation there. With that, thank you all.

All right. Thank you for joining Aastrom's conference call today. You may now disconnect at this time. Thank you.