Vericel Corp (VCEL) 2006 Q3 法說會逐字稿

Welcome to the Aastrom Biosciences Investor Conference Call. This morning you will hear brief remarks from Aastrom’s Executive Management about the Company’s recent progress and future goals. The balance of the call will focus on the question and answer session. I would now like to introduce Dr. Douglas Armstrong, Aastrom’s CEO and Chairman, and Mr. Gerald Brennan, Aastrom’s Vice President, Administrative and Financial Operations and CFO. I will now turn the call over to Aastrom’s CFO, Gerry Brennan.

Thank you, Jim. I want to thank everyone on the call for joining us this morning. Before we begin, I will review Aastrom’s Safe Harbor’s statement. This conference call and web cast contain forward-looking statements, including without limitation, statements concerning product development adjectives and anticipated timing, clinical trial initiation, completion results and anticipated timing, revenue results, potential market opportunities, market development plans, anticipated key milestones and potential advantages and applications of Tissue Repair Cells, which involve 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. Now it is my pleasure to turn this morning’s call over to Dr. Doug Armstrong, our CEO and Chairman, Doug.

Thank you, Gerry and good morning to our listeners. We appreciate your participation on our call today. During this update, I would like to focus on some of the recent achievements of the past quarter, with particular attention to the related increasing third party recognition that our Company is receiving around events such as these. This recognition spans multiple time secluding clinicians, regulatory agencies, the orthopedic industry and the investor community. I’ll begin by addressing an important announcement that the Company made just this morning. We were real pleased to announce that we received our first human pharmaceutical manufacturing license in Europe for the production of our Tissue Repair Cell products and we have initiated operations at our pilot manufacturing facility under this license. This is an important step towards establishing Aastrom’s complete business model for the production and delivery of our novel TRC tissue products. This license authorizes Aastrom to manufacture TRCs under the European communities GMP guidelines, in compliance with the recently introduced cell manufacturing directives and regulations for cell or tissue based products. We will immediately use this new production capacity for our multi-center European clinic trials and later for our re-commercialization activity. This license, issued directly to Aastrom, is part of the collaboration with the Fraunhofer Institute in Stuttgart, Germany, which provides the facility, the local regulatory assistance and lead staffing for this pilot manufacturing operations. Now this milestone is a significant achievement for several reasons. Our TRC manufacturing is now compliant with these recently introduced regulations in the European Union that requires therapeutic cell or tissue products to be manufactured under a pharmaceutical license and provides an important validation for this piece of our business model. This is our first specialized manufacturing facility in the European Union, providing us with the ability to produce TRCs for the planned expansion of our clinical trial programs. We can now demonstrate our cell manufacturing capability on a larger scale in a format suitable for commercialization. This has been a key question amongst various analysts and potential strategic partners. We can demonstrate a key operational piece of our business model, this patient-specific manufacturing capability that supports multi-site and multi-national use of our TRC products. With the license in place, this facility’s begun per operations and is now producing cells for clinical use. This licensing and operational achievement compliments our other areas of progress this year, which collectively show that our business model is moving from development to the commercialization stage. This progress is driven foremost by results in patient treatment. At the end of the quarter, our lead clinical investigator in the United States reported positive patient treatment results at a symposium with a combined Orthopedic Research Society and the American Academy of Orthopedic Surgeons annual meeting. Dr. Matt Jimenez presented results from his first 7 patients treated in our U.S. Phase I/II multi-center clinical trial, evaluating the use of TRCs in the treatment of severe fractures. Dr. Jimenez reported that the 7 patients all had severe non-union fractures that had previously failed to heal following an average of 2 prior standard-of-care treatments. However, following the TRC treatments, all 7 patients had achieved bone regeneration and healing by 6 months, and early healings were seen in 4 of the patients by 3 months. There were no TRC related on-first events observed with the procedure and we are now on track to accrue a total of 36 patients, and we project all treatments for these 36 patients to be completed by the end of July. As we reported this interim, early interim data from Dr. Jimenez’s experiences, we currently expect to have additional interim results from this trial available during the October to November time frame. These U.S. fracture trial results complimented observations previously reported at our European feasibility study. Also showing positive bone regeneration with no TRC related adverse events in patients with similar non-healing fracture conditions. Further results such as these are very encouraging, especially given the poor prognosis of these patients who have failed previous standard-of-care treatments. Based on the overall positive clinical experience utilizing our TRCs in-patient that has occurred today, and particularly the results - - the recent results reported for bone regeneration, we’ve expanded our evaluation of additional medical applications that may benefit from the use of our TRCs. This activity has led to another recently announced success, the receipt of an Orphan Drug Designation from the FDA for the use of our TRCs in the treatment of osteonecrosis of the hip. Osteonecrosis is a debilitating medical condition where the tissue inside the bone is dying and unable to regenerate itself through natural processes. This disease often occurs in the head of the femur bone, which is the large leg bone that attaches to your hip. This progressive deterioration typically results in pain and immobility and ultimately leads to a total hip replacement when the bone collapses. An ideal treatment for this problem would appear to require the local regeneration of bone, bone marrow and vascular tissues at the disease site. We believe that TRCs offer a unique product technology with the potential to regenerate all 3 of these tissues and may offer a new treatment for osteonecrosis.

We are currently preparing the U.S. and European Union clinical trial protocols to evaluate TRCs in the treatment of osteonecrosis and we expect announcements regarding these studies in the coming months that will provide more details regarding the specific trials we’re undertaking.

I’m proud to report that our fine fusion and vascular clinical trial programs are both progressing and there should be some additional details from these areas in the coming months. As I directed our listeners to our earlier press releases, Company websites and regulatory filings for additional details of these specific studies.

At this time, we continue to believe that the first treatment phase of the vascular tissue trial should be completed towards the end of calendar year 2006, or soon there after. With the progress that is being made on both of these trials, we are now developing additional clinical trial sites and protocols.

Third party recognition has also recently been demonstrated doing this strategic alliance. In March, we announced a collaboration agreement with Orthovita, an orthopedic biomaterials company, where in our intention is to jointly develop products for the orthopedics market using Orothvita’s synthetic VITOSS, ceramic matrix technology in combination with artificial repair cells. We believe that a broad range of orthopedic indications may benefit from the combination of VITOSS and TRCs to regenerate tissue.

Orthovita’s VITOSS scaffolds are marketed specifically for the purpose of filling large gaps and providing geometric support during new tissue growth. And TRCs are intended to provide the biological components for the new tissue.

The first phase of this collaboration is already underway, with VITOSS scaffolds being used with our Tissue Repair Cells in our clinical trial in Barcelona, Spain for the treatment of severe non-union fractures. As part of the collaboration agreement, we will explore additional clinical indications that could benefit from the combination of TRCs and VITOSS.

The Orthovita relationship compliments our existing relationship with the Muscular Cell and Transplant Foundation to enable both synthetic and allograph tissue materials to be developed in combination with our TRC products. We are very excited to have such capable collaboration partners as Orthovita and MCF in the orthopedic area.

Now I would like to comment on the new additions to our Board of Directors that occurred during this quarter, which illustrates the increased attention and interest that the Company is receiving from leaders in the pharmaceutical industry.

In the third quarter, we were pleased to announce the election of Dr. Robert Zerbe and Mr. Nelson Sims to our Board of Directors. Dr. Zerbe adds an important new dimension to our Board with years of experience reading successful clinical and research programs at Pfizer, Clarke Davis and Eli Lilly and through his current role as CEO Chairman of the Biotechnology Company, QUATRx.

Nelson Sims brings to the Board of Directors a mix of small and large medical products company leadership at the international level, along with significant strategic partnering experience. Mr. Sims was most recently the President and Chief Executive Officer of Novavax, an international health and lifelines company. Prior to this, Mr. Sims held several Senior Executive management positions with Eli Lilly, including President of Eli Lilly Canada.

Aastrom’s progress over the past year’s the key to our ability to attract high caliber pharmaceutical executives, such as Dr. Zerbe and Mr. Sims, and along with our recent Director employments, provides us with a strong and diverse industry related Board to represent our shareholders and to assist our management team.

I would like to briefly update you now on the management succession process, which we announced at the end of calendar 2005. As you may know, responding to my request, the Board is implementing the plan to bring in a new CEO as we continue to expect this process to be completed during calendar year 2006.

As I stated in the second quarter conference call, upon the naming of the successive to the position of Chief Executive Officer and subject to my reelection by shareholders and the Board of Directors, it’s my personal intention to remain involved in the Company’s business as strategic directions at a minimum as a member of the Board of Directors with overall responsibility determined by the Board at that time.

With my tenure of over 15 years, I remain certainly committed to the Company and I’m excited about the direction we are headed, which should lead us to a stronger Aastrom.

As I complete my remarks this morning, I emphasize the real progress that real progress should be accompanied by third party recognition. We believe that the operational achievements and the advance of the past few quarters made by Aastrom are increasingly bringing this recognition, positive reports by clinicians using our TRC products, support of our programs by regulatory agencies, attracting highly competent industry leaders and new strategic partnerships are all very visible acknowledgments of the positive developments in the Company.

Now Gerry Brennan will provide you with a brief over view and review of the Company’s third quarter financial results and review our recent financing, Gerry.

Thank you, Doug. We ended the third quarter on March 31, 2006 with approximately $22.3 million in cash, cash equivalents and short-term investments and note outstanding. In early April following the completion of several key milestone events, we were very pleased to announce that we closed on the sale of approximately 15.9 million shares of the companies common stock and registered direct placement to a select group of institutional investor funds at a price of $1.60 per share for net proceeds of approximately $24 million.

This financing was completed under the company's active S3 registration, and that the time of the transaction, increased our institutional ownership from approximately 12.5% at the beginning of the year to approximately 25%, which also added approximately 14 new funds to share holders. We were very pleased with the funds that participated with this round of financing, and the overall response and interest that we received during this process.

Upon completion of this financing, we had approximately $46 million cash, cash equivalents, and short-term investments on hand. And management believes this is adequate to finance currently planned activities beyond the end of fiscal year 2007, which ends on June 30, 2007.

Our monthly cash utilization during the third quarter was approximately $1.3 million. And we expect the average cash spent per month to increase, as planned and as previously announced, to approximately $1.5 million per month during the remainder of the fiscal year. This increase results primarily from growth and our clinical trial activities and research expenses and related staffing additions.

Product sales revenue decreased to $85,000 for the quarter ended March 31, 2006 from $150,000 for the same period in fiscal year 2005, reflecting a shift from instruments sales to the development of our own TRC product programs.

As expected with the continued expansion of our research activities, including additional staffing requirements to support future regulatory submissions, ongoing and planned bone and vascular tissue regeneration clinical trials in the US and the EU, product development activities and development of our centralized manufacturing facilities for product manufacturing and distribution processes. Research and development expenses for the quarter ended March 31, 2006 increased to $2.597 million from $2.095 million for the same period in fiscal year 2005.

With increased staffing requirements, we are also seeing our marketing general and administrative expense increase for the quarter ended March 31, 2006 to $2.438 million from $1.624 for the same period in fiscal year 2005. This increase also reflects employee performance bonuses paid or accrued, expenses associated with the CDO succession process, additional consulting and marketing activities, increased legal costs associated with intellectual property, and increased costs required for financial internal controls compliance and certification. The increases in research and development expenses, and selling general and administrative expenses also included noncash charges pursuant to SFAS 123R, which requires us to measure the fair value of all employee share-based payments and recognize that value as an operating expense. This concludes our prepared remarks, and we would now like to open the call to questions. Dan, please recall the registration procedures for our listeners.

[OPERATOR INSTRUCTIONS]. Our first question is coming from Stephen Dunn of Dawson James.

I just wanted to know if you could give us an update on your clinical pipeline, in particular the spinal fusion and osteonecrosis.

Osteonecrosis we talked about a bit in the call, and with the [Ortho] product designation, we are now preparing the clinical protocol and plan for submission and discussion with the FDA, as well as the appropriate agencies in Europe. We expect to initiate trials, or at least trial activity, both in the US and Europe. As I mentioned, there will be additional announcements in the coming months to give you specific details around the format of those protocols and studies and the results of our discussions with the regulatory agencies. So we are really optimistic and enthused about where we are with the osteonecrosis indication. It goes beyond just receiving [Ortho] and drug designation. We have gotten great response from the clinical community and great interest in this direction. This is a great example of what tissue repair cells are intended to do, which is offer a new treatment capability where there is no effective treatment. And that is the case in osteonecrosis, a very exciting direction.

In spine, as I mentioned, the trials are progressing, both in the United States with patient accruals and we are looking to expand these studies. One of our near term milestones was to start–I don’t know the exact date, but I know it was by the end of 2006, and I would say we are well on track to that to expand in Europe with a spine trial there as well. So that will be announced within the coming months.

Anything on the limb ischemia?

Limb ischemia, again, that trial is accruing patients at our current single site in [indiscernible] Germany. This is a randomized trial that has 2 different PSC 2 treatment arms controlled against the bone marrow injection, as well as standard of care. So this is a very interesting controlled trial. We are making good progress, and as I mentioned during my remarks, accruals should be ending approximately on schedule. We are looking, as I mentioned in previous calls and in our presentation, we are looking to expand the limb ischemia trials to the United States. The protocol and site selection is well underway. Again, that should be an announcement within the coming month. One of the details of that trial aside and the results of our discussions with the FDA.

Now you have your license for the manufacturing facility in Germany, and I know you are also pursuing a future facility in Ireland. Is that still the case?

Here is– it is important to understand this we are staging manufacturing scale ups relative to the capacity and need requirements we have for cells coming through our clinical trials. We do not want to accelerate spending in any operation in advance of where we are going to need the product. So the key, the key milestone for this year was to get a first European centralized site approved under the new guidelines, and get operations initiated and begin to shift all manufacturing for our European Union trials to this site. That was just a real exciting achievement that we announced today because there have been many, many questions that have come up as a result of these new European regulations that were just put in place within the last 18 months or so about the ability of cell therapy and tissue product companies to comply with these new manufacturing regulations, which as we mentioned, are a pharmaceutical level. We have now been able to demonstrate, we have done that, that is eliminated a huge risk in our business model that people were feeling existed with the company. Both from the investment communities as well as the pharmaceutical industry who we are looking at for potential partnership. So this was a key, key benchmark, and we think meets our current capacity requirements. This is just a pilot facility. We will be looking to build and construct in larger total commercial facility, which is targeted for Ireland as you mentioned. So the near term milestone, the relevant one was to establish our pilot plant that is now in place. We are moving forward with preparations for the larger commercial facilities. We will just hold off on triggering costs out of that, so it is clear that we will have that capacity requirment.

Our next question is coming from Jose Haresco of Merriman Capital Management. Please proceed with your question.

A couple of questions here. What, where the new manufacturing regulations that were put in place in the East. What about them made it particularly hard for tissue or cell-based product? Can you just give us a little bit of a background there in terms of where was the doubt? What was causing the doubt in [inaudible]?

You broke up a little bit but I think I understood the essence of you question, but if I miss it then please ask again. Prior to these new regulations, if you had [target] cells or tissue, in other words, cells or tissues that were taken from a patient, were manipulated, and then given back to that patient. You could do that with no regulatory requirements. So there was no licensing, no market approval needed for these products. It just was able to be done. A few years ago we thought we may be able to take advantage of that and get into the market at an early stage because you did not have that delay in going through regulatory approval. What Europe did was adopt-- let me rephrase -- In the United States, of course, that has already shifted into cell and tissue product that were manipulated products were required to go through full FDA pharmaceutical level approval. More specifically, approvals as a biologic, much like a growth factor.

So what Europe did was actually adopt 2 different approaches. One is most of the countries are requiring any of these products to be registered as pharmaceuticals. That is going to be modified a bit in the coming months to introduce their capability for tissue products, but it will still require registration. And they required the at any manufacturing and production of these products had to be done in a licensed facility with a [indiscernible] pharmaceutical level license. So both of those 2 changes in the regulatory agencies in Europe were adopted approximately 18 months or so ago, and basically stopped all use of autologous selling tissue products that were being produced until you were able to get this licensure. So that became a real question. There were a few things that were grandfathered in, but essentially all new activities you were going to have to have a licensed facility. A lot of the procedures that had been used in the past, not by Aastrom, but by clinicians in other groups, have not been able to convert over to a format where they could be licensed and regulated in an appropriate way. At least that has been the question. So our being able to demonstrate successfully obtaining this license in compliance with the new regulations is a big, big check mark, and importantly initiating centralized manufacturing in an environment that is being adopted for preparation for commercialization important operational achievement of the company.

Did this have any effect on your conditional iliac press harvesting and its use in a pathologist manner or other applications?

It does not because that is a procedure where it is done in surgery. A surgeon is collecting a little bit of tissue at one site in the body and moving it to another site. And the difference is it is not being processed or changed into something that was different from what was collected.

Okay. Respectively, have you guys explored or thought about the use of TRC in cartilage repair?

We have. We have already demonstrated the capability of TRCs. If you put them in an environment that has the signals that can stimulate cartilage growth then our cells can move down that particular lineage and form cartilage lineage. We have and disclosed probably a little over 2 years ago, a model that was done with human tissues, it was not done in humans, but was done with human tissue, that showed the ability of TRCs to go on to form a normal cartilage. We have been exploring different clinical directions for that, but have put that behind the bone regeneration program because we felt we needed to get that established first. And of course behind the vascular tissue regeneration because of what such an important market opportunity that represents. That is something in the pipeline.

Our next question is coming from Ren Benjamin from Rodman & Renshaw. Please proceed with your question.

I am sorry if I missed this. I come to the call a little late. Could you go through, please, the drivers as you see it for the rest of 2006. In particular when you think we may see data from the ongoing trials. When we may see results from the ongoing trials. And if there are any potential scientific presentations in the works?

The – we do expect for there to be interim results from the multi center U.S. non-union fracture trial. We expect those to occur in the fall. We are waiting to hear now whether they will a part of some of the orthopedic needles or not as they are being prepared for submission so we can be – we’re going to be exploring that direction and we just don’t know for sure if that’ll be the disclosure or not. But independent of that, we expect to, either through the meetings with our investigators or through other announcements, be able to give you the results probably at least two-thirds of the 36 patients who were treated in that trial. So that’s going to be a very large piece of clinical data coming out. The – as far as data goes, we currently can’t project when we’ll have the interim results from the vascular trial or the spine trial since those are ongoing, but that is something more in the 12 months. We just don’t know when that we would begin to expect results from those studies.

Okay. Okay.

Now that goes with the results that we’ve already presented this year demonstrating TRC’s ability to regenerate new bone tissue in the jaw in a very successful controlled study that we reported in December, and then our earlier disclosures the positive treatment results that occurred in non-union fractures in our study in Spain.

Right. Now, are we expecting any more data from the jaw reconstruction trial?

Only follow-up data, except that the endpoints we reported on then were the results of six months which reported the three and four-month endpoints. We are monitoring and tracking the patients beyond that, and there will be a follow-up report, but we would presume to have it be just confirmatory on what the earlier results were that were reported.

Okay. And –

We have not expanded that study. We are now again focusing the resources on bones and spine osteonecrosis.

Okay. And - I mean, obviously, so you’ve initiated the clinical trial in spinal fusion. When do you think – How do you envision enrollment will proceed there and when do you think we’ll see data from that trial?

Again, it’s enrolling. We expect to have an announcement of an expanded site in Europe and soon. And it’s just too early to designate when we would be able to disclose the results.

And does that pertain to peripheral ischemia?

Peripheral ischemia, again we expect to have the bulk of the first cohort of patients treated by the end of 2006. Again, because that is a controlled study with multiple arms, it’s difficult for us to know, where the patients are being randomized into what arm. So it’s difficult to pinpoint when we would be able to analyze that data and announce it. And of course, it’s going to come off from when that last patient is treated. But that will be something in the next 12 months for sure and should be a very exciting announcement.

And a final question. With all this, I mean, this has been a pretty impressive year for data from Aastrom. With all these results that are being announced, has there been an increase in partnership talk and do you have any thoughts as to how the company is moving forward regarding partnering?

I think that-- we were always and have been attentive to try to look to talk to potential partners. What we have seen is a defined and measurable change in their attitude towards what is going on here, and they’re really looking for two things. They want to see that these cells really work, and the more clinical data that’s coming out the, of course, the better they can understand it and to answer that question. But the second thing they’ve been very attuned to is the business model and manufacturing issues and questions such as can you really manufacture TRC’s to meet a multi-national market? Can we really have these procedures meet with the new regulations for manufacturing of these types of products? That was like today’s announcement was such a big checkmark. Not only does it get us capacity, capability and put us in compliance with these roles but it really validates a key part of our business model for these strategic partners and other savvy investors who then have been asking the same questions. So we’ve greatly improved our position to begin to move towards the marketing partnerships and developmental partnership that we are seeking.

Perfect. Thank you very much and congratulations.

Our next question comes from Anthony Gallo and he’s a private investor, please proceed with your question.

Good morning, Dr. Armstrong. Congratulations on all of the licensing and the tremendous progress your company has been making. I have actually two comments. The first has to do with the announcement of the secondary offering. In all candor, I was really a little disappointed in terms of the fact that our shareholders didn’t get a rights offering. I sincerely believe that A) The company could have gotten a better price and I think there would have been significant interest. Any money beyond that, I think you could have gone into the institutional market vis-à-vis the broker involved, but I think this kind of cost us more money and I think we could have done a better job on that. My second comment has to do with the replacement of your own position. And it’s basically been said by some of my constituents that we could’ve probably done a better job by at first delaying that, deferring that, until you actually had a replacement because it seems that most of us went into the company’s stock primarily because of your leadership, your vision and really we were kind of betting with you. And the idea that you’re leaving, even though you’re going to be part of the Board of Directors, you’re not going to be the boss and it kind of leaves a big kind of question mark. But other than that, congratulations for doing a great job.

Anthony, thanks for your comments. And the points you bring up are, I think, really important. Let me, let me address a couple of them. And let me start with the last one first. I’ve had multiple roles here at the company as many of you know from leading clinical programs to the President, CEO and Chairman of the Board of Directors. I’m not – we are looking to replace the CEO relationship – activity principally because of all of the pieces of operational functionality that are going on at the Company right now. And that requirement for key day-to-day management, more strategic, more hands on management and doing that takes me out of the opportunity to have strategic discussions with partners, to deal with some of the additional strategic issues, help with the regulatory and other clinical aspects and some of the other things where I can really contribute.

So I will continue as Chairman of the Board of Directors. We’re not stating in detail what other responsibilities may be or even Chairmanship because that has to be elected at a future point but my intention is to be very involved in many of the ways I have been, so bringing in additional resources, so that we can deliver better proficiency the business plan to bring value to our shareholders.

Now on the offering, it’s a little bit of darned if you do, darned if you don’t type of situation. We were very cognizant that there was getting to be increasing concern that the Company didn’t have enough funds to go into the next year of clinical development and to allow time for us to demonstrate the results from some of the trials that are ongoing and strongly encourage you to get additional capital in place to eliminate that concern.

So the question began to be, what’s the right way and the right time to do that. We wanted to be able to allow for some important milestones to be generated. We did that with the release of the interim clinical trial data that was positive. We did that with our new strategic partnership with Orthovita. We did it with the orphan product designation note. We met some operational achievements that we felt would increase the attractiveness of the Aastrom story to larger and stronger investment funds.

So we had two objectives, we wanted to both add additional capital and add funds, institutional funds to our ownership phase. And the best way to do that, we felt was to go out and target the funds after a number of meetings with different groups during the year. Not announce the financing, but quickly go out and see where the interest was. We thought that there was great interest from the types of groups we wanted to be shareholders of Aastrom and we were able to complete that financing. We felt in an effective fashion in a very difficult market situation at that particular time.

The rights offerings to current shareholders would not necessarily have met the objective to bring in new funds into the stock and we felt that that was important. We also felt that we could protect value for our shareholders in a much better way by not having it know that we were out on a lengthy fund raise. We’ve been very sensitive to the professional funds who short and begin to manipulate the stock when they know a financing is underway. And Aastrom is the type of stock where this has been an opportunity for that to occur, so we were very cognizant to try to protect value for our current shareholders, certainly not give it away.

[OPERATOR INSTRUCTIONS] Our next call comes from Bernard Kaplan, he’s a private investor. Please proceed with your question.

My question, it’s really funny, it was basically the same as person who just called, the other private investor. I just need it to be explained to me why an institutional investor gets a special or cheaper price for your stock shares when you’ve been in it before them and why does it go down after a buy. It doesn’t make that much sense to me. How do I get it cheaper?

One thing is, again, is – that’s a good question. One thing that is available to you as a shareholder is the Shareholder Stock Purchase Plan where you can buy shares directly from the Company and that money then goes directly into the Companies coffers. The more that’s done it eliminates our requirements to go out and have to do offerings such as these.

So our current shareholders have the right to participate in the Shareholders Stock Purchase Program and purchase stock directly from the Company at a reduced price. So that is available to you. You can –

So I could have gotten it at 1.60 as well as the institution when it was like 1.80?

You can get it below 1.60 right now. Right?

You can buy it at a 3% discount Bernard.

Wow.

So that is available to you at any point month-to-month and we encourage our existing shareholders to step up and do that. It’s a great way to increase your position. The money goes directly to the Company. And you get it at a discounted basis. But in the absence of seeing that, in the absence of seeing that interest it was – it did not give us a compelling reason to look to – to think that would be a direction to go in preference over the one we took.

There are no further questions in the queue. At this time, I’d like to turn the floor back over to Dr. Armstrong for any further comments.

Thank you and again thank you all for attending the call today. We think there’s just some exciting progress in defining the Aastrom opportunity during this fiscal year.

Bone marrow stem cells are just emerging with great therapeutic potential and there’s compelling early clinical evidence that our tissue repair cells are able to generate healthy tissue. We think that our plans for developing individual proprietary therapeutic products that can be leveraged and applied to multiple markets should ,as time goes by give and even stronger and stronger story to the market and as we think market and the pharmaceutical industry is going to– is beginning to understand that Aastrom isn’t about stem cell research, it’s about tissue regeneration products that are coming to market. So we welcome your continued participation, for our existing shareholders we welcome your participation in the shareholder’s Stock Purchase Plan as a great way to help the company and give some discounted opportunities to you to be able to buy stock, but that aside, this company is the management team, the Board of Directors, is committed to a program that is designed to bring this technology forward into the marketplace and bring value to our shareholders. Thank you very much.

Ladies and gentleman, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.