Athersys, Inc / New (ATHXQ) 7 Aug 182018 Q2 Earnings call transcript

Good afternoon. My name is Sumaria and I'll be your conference operator today. At this time, I would like to welcome everyone to the Athersys' Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator turn to now host, the will our conference Ms. I Campbell. Laura floor Madam, yours. the is

and I'm for Thank Vice afternoon, good you, everyone. Finance Athersys. call. President Laura for Thank today's you joining of Senior Campbell,

via today's may about make differ Act statements Harbor is Litigation Private we Any constitute future materially purposes you and today's that Matt at Securities to expectations, important close host also events Athersys' the Celesnik to issued release. website at provision not press call. on call public or of athersys.com, in Operating that by various athersys.com. result SEC Officer of conclusion will Chief and information in it the XX it's including We XX-Q, those as the forward-looking two change. results and discussed may I may filings. the XXXX. a Safe of anticipate a Actual indicated to XXX-XXX-XXXX and expected and prospects of copy A available forward-looking our If for approximately call's the e-mail. replay the be The developments other do for you remarks may outlook from last President press release statements and Forms those cause factors, after our be and under is at of at available the XX-K market, hours BJ subsequent access replay Lehmann, the have minutes, may plans, receive will accessed call Reform

do specifically point some disclaim update we may future, elect so. to in at we statements While forward-looking any obligation to the these

related August was recorded who the to listening those the to Since announcements discussed. may replay, be on this XXXX. held call For of we made then, the topics have benefit of and X may

over to reference then With a quarter BJ second I call most results turn a followed now XXXX by and financial press filings. releases SEC question-and-answer corporate that, update, please and provide the So recent our will the for period.

increased revenues $XX.X $XX.X licensed of $XXX,XXX is XXXX XXXX. the During was during the that Healios increase, additional related second to from include with approximately to to in June million several million extended of indications. second XXXX, quarter our collaboration that quarter Of

of the million, revenues relates The were $XXX,XXX. comparable XXXX and compared lastly quarter slightly of increase and the $X.X other $XX.X Our research prior in fees expenses $X.X three higher million million period an of of XXXX in cost in license to personnel cost quarter to increase increase $XXX,XXX, an in second an other in and increase primarily increased second year. the the supplies $XXX,XXX, compared to cost month to development development Research an approximately clinical increase of period. internal research and of million $X.X in year in last

of cost as the the to primarily XXXX. Our three loss for same the for The discussed, the for the administrative $X.X our XX, stroke to XX, compared XXXX. to three scale to contractual to reflects million XXXX in income for clinical months of cost transfer second an cost reimburses quarter June and period for trial technology million of costs a $X.XX already compared for increased increase clinical personnel of MASTERS-X XXXX cost General increase a the us in and activities period of as in items. the of cost manufacturing start-up to same expenses well Net the quarter their per our us the XXXX a development million June variances manufacturing Japan. manufacturing. months reflected and million due of increased or portion technology and increase period difference million I've loss support was administrative per manufacturing net in year. other for $XX.X all fees, consulting Japan, in ended reimburses related during income to compared services, TREASURE $X.X transfer of was last XXXX XXXX. cost compared development Healios cost, large clinical The same of $X.X to share an income process in product the trial above net We $XXX,XXX period other had professional variance in $X.XX net the for $X.X ended product share

XXXX. expansion June included this During with of XX, license fees provided to was million the cash our the $XX.X Healios. net were $X.X note from second quarter used XXXX, million in net ended by our compared that in operating cash cash three $X.X for million And months quarter activities of proceeds of

$XX.X over As to and in of to corporate update. compared XX, cash we that, XXXX, cash BJ? had BJ a the call to XXXX. June at December million I'd $XX.X XX, million turn equivalents for With like

the will available today. I is call so couple Thank to not the thanks like joining I'd with And corporate provide for important start Gil today, you, updates. Laura. update. a everyone of

to development existing we First, its with Healios' license, agreement of license. license well its relationship have additional MAPC in our acute include syndrome bud of Healios. ARDS respiratory of scope exercise expansion We applications communicated include global as option utilizing we expand collaborative our an with or Japan as of its the into the distress continued organ to June, technology into as Technology its to announced

[ph] our in in align license form they and We These million organ capital additional combination certain but globally, ophthalmology Athersys provide substantial with our rights further of Healios our the also stock cells Japan. technology of license arrangements iPS-derived in to quarter. with use the actions, Healios and and and This also for investment the in $XX.X fee first expansion completed made area payments. interest of applications in equity in in transplantation investment granted the rights by half of falls committed

though and believe license for certain area among collaboration, option with not cardiovascular commercialize to discussing with say for We otherwise illustrates. and with a further areas activity the we analysis therapies our meet work other this have collaboration. recent been discuss a shared in a on and or approval China. license collaborative in further geographies. exclusive substantial do to that said, develop further continue for therapy including, in opportunity Healios guarantee therapies, been things, is Healios and important into We It of to or that possibility activities the our everyone no productive than our of MultiStem stem constructive. there our will to in expand agreement have indications rights to these disease call China Healios discussions enter other with important day-to-day is there the achieving I expansion Healios that goal MultiStem remind the is Chinese option cell partnering we of as to negotiations as plan That for

of in as just including to our plan sites Second, open our of study, registration first Shortly TREASURE cannot of sites the noted study, larger enrolment approach of the to several TREASURE treatment continues milestone Healios publicly study updates our is for have very the we It at for promising. Healios' represents with America U.S. and recruitment, study associated we initiating with will This clinical in in this more phased important this sites. Healios study. represents This is the this for MultiStem patient first after and of Overall, employ sites We enroll number large MASTERS-X support with activity trial, but lead difficult and Europe. previously, study. subjects an for next will of small number initiation study, as will a operational more a it to sites initiating XXXX. press followed study. X complete to study comment patients MultiStem reflects Healios' our the adding this when adds a about factors, enrollment, ramp ongoing by XXX Though is ischemic and early of in study number year, North at comments sometime to number at Healios' year, regulatory of as in point requirements our enthusiasm company include of are up in therapy conducted approximately further its we summarized our we We Phase recently the study study, release, the initiated program. management program this U.S. stroke. the early enrolled beginning XX European a considerations to the we on the complete enrollment as as be investigator come and expect and project precision the Europe. subjects we of sites target our

and year primary in held earnings in management However, call results results today, both enrollment of earlier in one goal having reiterated completing XXXX. their Healios' final XXXX three month the Healios and quarterly

study ARDS and several We enrollment enrollment completion are the to our within months. next of of nearing expect complete

major patients trial study ARDS. a is evaluate from severely ill are and result of and to the treatment serious It exploratory As safety this who to a may typically function. affected feasibility affects ARDS occurs who that is inflammatory condition reminder, can causes severe near-drowning vary to cases of for patients, other a failure or patients in lung are by critically small aspiration a lasting MultiStem a lungs. patients of result among in the underlying damage is older mortality there number pneumonia, high in including trauma, typically among organ things. and rate. severe more can and intensity ARDS among And

the just us and help about the we nature inform in help collecting to MultiStem MultiStem of about subsequent patient from and effect. clinical the about administration. also intended the of development, treatment that with is potential information are small XX intended Our benefit which our is are study for the treatment subjects can some biological to to including data population most likely clinical patients understand study Though provide

demonstrate neither efficacy development. signals information to powered that designed However relevant that looking nor study for would the of be only to future we're is meaning

meaningful we the of supporting ARDS As ARDS. recently in MultiStem area for product Japan from to believe there a in expand the noted look the to MultiStem significant patients of address help this scope forward treatment include Japan. option efforts clinical Healios' to therapy need Japan I of exercised to opportunity Healios We to and to suffering is above license its develop

Now for highest these moment. the were company of the the programs priority

have other We well. clinical as activities development

some For heart Enrollment changes to been operational some considerations well has infraction study. into our of in instance number including we a practice expectations below myocardial time attacks. to to due FORTUNE for subjects treatment continue acute for enroll

We continue blood or likely study is MultiStem following the function improves our demonstrating adverse to and associated flow avenues cardiac be outcomes so-called MACE remaining true cardiac with performance to events. in as treatment our clinical objective explore to of the such improving major AMI while and for improvement

trauma brain one preparing previously the at Center Texas the in to a Texas to Additionally States. of objective described and we is increase adverse generally of multiple study The University with injury, with well. the collaboration inflammatory severe busiest a to have patient may level to of of failure impede efficacy with and Medical susceptibility dysfunction involve led complications associated Houston safety in in systemic we recovery. are that Trauma kidney study compromise, traumatic including MultiStem centers undertake injury the as inflammatory the organ and ARDS trauma treatment reducing intended as trauma Memorial United events is evaluate that Trauma one acute severe

the As ischemic module a for associated acute and central with Cell reduce system events. to traumatic builds and severe such severe this study immune therapies treatment. on MultiStem theme dysfunction potential complications

for With in our successfully to other continued launch MultiStem an early enable for, for advance. to plan the potentially ongoing we provide mind success capabilities in eye building to information apply as and our is substantial invest shareholders therapy treatments. planning further objective the start XXXX approval to study gain in ground generating towards for value preparations and to work we and for eventually the have us Our stroke

its In the results and product favorable regulatory a of proposition agencies and reimbursement management. quality effort strong commercial addition efficient productive favorable and pavers, sufficient with manufacturing require successful value ultimately to and positioning and and the capacity clinical therapy outreach

experts outside refine achieving areas Where of on success sense each help We work and makes are in most these are of focused and already them. to we in strategy. it execute our us with engaged

therapy are firms us payor efficacy environment value patients execution consulting that we leading of value optimal our of product and example with utilization reimbursement substantial assist and working navigation the and and development of well provides the payors reimbursement payor potentially thoughtful ensure complicated to planning For and creation. executed positioning, with with strategy. and to Even

some development made important Athersys in have and process to the Additionally fractioning we hires quality, many areas. in regulatory

biopharmaceutical than For XX an activities. Liposky development manufacturing week instance announced successfully operations last more efforts team we lead our has basis. years' Greg to and that and joined lead on brings experience our Greg help international manufacturing process

manufacturers all of members meet supply and facilities and have established in-house to and Importantly We're manufacturing the overseen other chain. he's product to and team. him he's the contract needs and commercial clinical both excited Athersys with works manufacture new on aspects

We to we add leaders, are will important continue employees, experienced to and With respect our especially areas. these more managers to generally, making team, progress. in manufacturing,

We continue our redundancy network. build manufacturing to into

We the States, with United have Europe Asia. facilities multiple manufacturers represented contract in several and

presence recently, through relationship a example, manufacturing in Nikon Cell we established Japan For with Innovation. a

Our intention support Healios. is of Nikon commercial to Japanese the market product and with manufacture clinical to in with our work collaboration for

manufacturing with a Additionally, maturing investment us, Ultimately, own commercial may manufacturers to to establish is plant to approaches scale-up. potential commercial support efforts contract ongoing including consider that's therapy and and support our capacity manufacturing optimize our are working efforts, activity. development having launch. in with still capacity we field active for other to development Cell manufacturing commercial we also by

along be Fortunately, respect have been focused our issues there have some our past approaches in manufacturing platform on the in work, large our time. and of a one, including bioreactors. periods this own large Two, things. source environment utilization will at efficient operational to processing development and any advantage. simple that cell work Based of requirements as the believe causing have transition scale we the challenges on, product three, characteristics distinctive manufacturing process And short substantial enabling time a with of cell of rapid, have noted the contract money. we the us in With robust product, of among unique competitive hospital volumes of we other we way that manufacturers and

important in transition history. at are company's point an the We

have in trauma We ARDS, stroke and exciting underway among studies and others. AMI opportunities pipeline an other in pivotal of

and late team development, platform of successful product potential and to regulatory assembling patients to the the the the with of successful stage pricing globe. issues challenges navigation a are ensure the and commercial the reimbursement launch out and We capabilities building of and millions affect a across

we our us in we been and that technologies. have interested several questions As like submitted done participants, we take from recently, before to have shareholders from questions others address would today's to

which a year a So I recall, little on I'll one, the Joel. was with that, start to agreement about and that you a activity. As you health we update by submitted animal extent entered progress? with more discuss question opportunity can into collaborative please And Can over some its ago.

cats. So is treatment conducted targeting multiple areas research we've in in species, and dogs need unmet the of conditions and there horses, where

We activity have that have the biological developed in-vivo candidates with results and from have been promising conducted. desired studies

active to of healthcare but with including discuss am the as mentioned, research status in collaborations the overall moment the or this animal a liberty research I leading I have We at this space, collaboration. not at company

conditions to is However, And market, as been cell of we the appropriate. on of treat will update the based studies potential results excited by certain the have in our the the therapy future apparent these in size that we and completed and animals. remain

payments has As Would due and comment by are company's and at in next following financial the The strong quarter over committed the people. the financial you of and asked $XX.X end the discussed, I second second investment position license million expansion been several Laura have activity, the on by a $X.X of of quarters. additional we license collaboration with the fee several following Healios on position Healios? sheet an balance cash already the question million

invest, way to to capabilities to to potentially capital impact stroke advance continue essential trials adding creation we the over and along for, As therapy continue the in other healthcare multiple launch the successfully through MultiStem where purpose sheet our with planned capital business and investments the markets will geographies, partnerships MultiStem allow supply us therapies. our balance of these us and more build and gain the expect clinical treatments and we for to accelerate commercially optimizing value approval expand of for

Care ARDS of question that perspective, recover. in a are highly they - who cost these help ARDS? potential we world. comes ICU face months additional of to the or ARDS noted market hospital. healthcare believe around are in to weeks from on cost for meaningful substantial ventilator is the a suffering the high-intensity, you Unit As are Intensive I above, critically policy from From and the side of healthcare patients Our Can function, may opportunity a spend effects, extent to the ill a patients discharge high and patients they discuss third and there generally decline loss even life post quality Fred.

and a substantial cost the year a average favorable intensive Furthermore, approximately Japan $XXX,XXX be. survivors. reimbursement. has and time for ARDS treatment one out-patient post providing hospital cost about reduce are which a medication than for rehospitalization many there For $XX,XXX of as substantially market rates example, These opportunity return estimated one United a of drive successful States, work strong care, Europe. more to and annually factors that study potential XX% in MultiStem therapy hospital as improve We that discharge therapy, successful and believe the patients long-term will hope XXX,XXX outcomes, foundation we for to

we it's believe short patients. opportunity in impact have So we meaningful with can large a where

we have a few more answer time may questions. to So now,

go have question do Messer you Chad And your Please a ahead with question. from & Needham with Company.

your Great. and in Thanks enrolling progress, particular here Healios. that deal trial and withstanding for a the with update congratulations getting with on

make Healios. scope been details, to I a lot want from through outstanding what what's received of you go but sure did to is understand You just and

think of? And the So that Healios the take just some coming from then more $XX.X breakdown if could remind what you still have comprised quarter, second a in million I near-term? us, you you relatively payments in was recognized and

go can we take as it and I'll at Laura a Right. Thanks, contribute along. cut Chad.

that off, a is revenue first let around So, collaboration me like complicated. quite this say accounting actually the

to like case, So, know you in on it's that to I focus relatively collaboration. actually cash flows related And the the simple.

So, from essentially, which $XX.X million a been disclosed received $X.X received additional million of last $XX.X over license in committed of then with fee Healios $XX they've pay that million the year, And or million this already. quarterly expansion, in several the And the be equity they've company, was this made investment will in payment. paid next call. to quarters. has

as But like. perspective, down collaboration From what the collaboration fairly a cash break you parts looks received overall or can take the essentially, I revenue value flow complicated. and it from you with So be revenue associated it indicated, perspective, kind then a of and this expansion. into that's particular in it transfer assign

revenue to license over reimbursed drives for get collaboration them with we're that gets you if a to with quarter. proportion brought represents essentially to with reflecting And now and includes that associated lion but so, of over that And the perspective, Healios it arrangements the fees, recognition different obligated reflects to those this the values really we to $XX respect share we of that it provide of of million but one includes committed time the about provide payments kind just that product to cash provision in to fee a would talked respect portions value the flow license $XX collaboration the of product million the services from overall be of also time. and and the I the the example of these just we're will calculated it allocation contribution in

to Laura? You add anything want else

you really did that's good Yeah right. job

little Chad? complicated. totally clear, Is It's more that a

important you Yeah, on expansion; that helpful, congrats and to for guys. thanks, again clearly and milestone an very

Thanks Chad.

go Blair. next Our with with Katherine your from Xu William question. is question Please ahead

partners are in as sort just Healios granularity of that other was on just rights very and then issues level some there that taking highest be for will afternoon considering debate, well? give with quite the I Chinese that of major time some been the the wondering you good whether whether helpful has are more you're negotiation China could are the color what any rights Hi some

collaboration had Healios can It's we I Yeah The the for and the Asian perspective with relatively comment that expansion several I for kind know of particular Katherine. in opportunities ability been the collaboration collaboration of in on very thanks part of guess extends discussions to and now. productive most we've couple off some been the the things areas. we've are several had as work with Healios you a are together. from Japan and which numbers about we're into years different collaboration respect well things negotiation operational first on complicated focus The perspective. Right talking that has that

has through that it to so of taken And potential elements each some collaboration. work time

completing over it those next kind so And execution to we of June right kind it's we through taken And of includes we discussion giving whether detail that China time we're relates Japan, globally Athersys reach negotiations of and ourselves some with and today a issues. China conclude on rights of perspective the without sense be in appropriate and as of in to clear substantial to of the kind negotiation fair the disclosed more one the Japan, what's best in opportunities an included it's additional respect done. with done the a months one collaboration thing option not work in several but to of bit say going is commercialize these a in negotiation what are terms of gave to components. bud technology now included with key time --I how of June negotiation, rights the Healios the of China and so areas look certain companies of necessary ongoing the like great expansion it's the and ARDS bit what So important the stroke give for we've the in collaboration only complicated with expansion to time it idea and would but make into forth. called addition is develop And it's little in open into is talking get in opportunities some indications and about already and ourselves can nature Healios organ to that thoughtfulness the the time ophthalmology both it's

going that to our are to forward in we're end is we've think can. we be want partner. productive the deal collaboration moving Healios best talked about this the as little opportunity the developing but I on but factors value working in still day so work past there for the know this bit the a played company, with think of drive what's that At lack it's in or China believe got how the some and going to how marketplace companies done cell get the developing particular of manufacturing to the for greatly The But you with we we're creates in kind property in China opportunity in of to of to we what other unique, consider with strategy with do this of commercialized of overtime. the ongoing potential the is do got So there substantial China particular, to We've you this be look see the creations things like, a right given engaged actually therapeutics. of like We some market that right China reflect that talked are we and right are that's discussions think and place there another in about something we've for with And is that etcetera reimbursements substantial will how said, out be with partnership, Healios one respect I right advanced elect one respect reimbursement in over intellectual intellectual I and example. past to market you China, markets as includes opportunity. clarity a ones particular many and years, in do still in protection then challenges, that's discussions as more that's the property ensure Whether of party as developing. that's at in commercialization an with several. course nature the in the Healios approved with discussions some

month where them. of of discussions and kind think China we respect that's with the more other We'll to have of to sort So, relative with or stand. Healios with having some respect in updates next two short-term, the we're I

And finances, top-line the you and to through you. to Thank through the rebound with of of Great. enough MASTERS-X end of have guiding you the fund plan what regard do that resources think is timeline?

there which than we is have TREASURE well, several MASTERS-X, you as there Well, the out way. obviously, MASTERS-X will mean earlier expectation. read our along is milestones is mean probably I I

We have some other and development business clinical well. things have in as potential activity hopper we the

So, on how about to about ultimately kind we and capital as of that room of we all as impact we of that some just sort with respect running discussions the Healios, stand other and kind well have think but the talked position thing. where and

kind all balance of the to equity example an that them, but of pocket at since line. if I back our we way, kind mechanisms level we've we're that haven't some quarter, position there. think the we use high like is we respect as got the the in to sheet. strong needed Obviously, feel it's in a used By now first with

launched respect to result moving strong study. of that, like and things done a that So, feel we we're stand to capital we have we MASTERS-X in we with that We as of And forward. if our have wouldn't as that like the launch didn't position feel support execution we financial the strength study.

some that to going We've through of kind got we we're there. from we're things where stand. development go that's business and working So,

you. Thank

Okay.

welcome. You're

your final question. with with ahead Group. McCarthy will Please go be from Our Maxim question Jason

the while I to more us might give I of gears catalyst and late as Can you events. give Thanks. us if if TRAUMA see MASTERS-X we for the be upcoming Hey color the just ARDS potential company? sets we on question. next study auto-pilot, and want XXXX TREASURE kind the BJ, those some clarity can you could, are that shift taking some more potential thanks view could data around may of when catalyst, on the for trial,

Thanks, Jason. color bit I more am happy to provide a there. little

I as pointed you of items, clinical out. mentioned, there number So are as

complete we the are on the launched there I TREASURE I've the and the in the both both Europe. and way, out today. then some and MASTERS-X trial perspective in think trials and that on Japan their stroke in given you That's read U.S.

out going We we're trial have read clinical have read soon. - relatively out, an to ARDS

as I remember, So mentioned, exploratory it's an study.

gathering not activity for the are of these and provide through or provide on efficacy. about efficacy patients kind study, product the that read some potential powered us in clinical of it's affect, sense We of data perspective biological will an ultimately

timing report several remaining. of that, time by the market. handful a to by be complete timeline terms well. as required the the That's patients out months of we that, once endpoints, well In will for the have of analytical before data it as obviously to have we And driven we

So, again, months we read to and handful that then complete a out patients, respect of with ARDS. several

As going I the respect our next of kind not leading if is study, The that's essentially news that, early trauma States, year. the TRAUMA to a started good center that top-tier. study of the is, in to place to that's objective United with get mentioned at take one the

got effects to have areas kind left still systemic could trauma, seeing that to which can't experience in area design And and that forth. inflammatory that of get so respect by bit in based kind associated the that's timing. the other expect that you any a manufacturing effects is of zone working respect got the strikes patients. we product the I dialog finalize had of that some study. prepare It's work little before on relatively we're to efficient and with We've that, information and study. built give excited study some forth. be to we're work. they've to and the the the We in around launched. the regulatory to in so we on Right right But Huge the do now kind We've XXX of But do some side response. with in of so something with guidance of

at we So enthusiasm to folks as really eager it study. down the have about started great We're that Texas. get other are

see. the I of So, those clinical kind are kind near-term milestones of

activities disclosed a of been well. know obviously on working the business the have we You things but got we've side, one on, the we're that's other again, is Healios as collaboration, couple that

things the along important way. turn could those So, be to out

we're out Aside kind that, operational on. milestones metrics have we'll to from and that report going of

that driving out get the the building activity. key think market, importantly Those to not Street, the as we time. to success are exciting reality is as we're over to the I commercial but to and launch the successful they're capabilities related the ensure in

report really creation. we'll putting give out understand the on our Hopefully stones also place patients best and impact as well. foundation those us in to will markets So kind of that to key value maximize the chance for we're the

at for So, now. I'd of kind leave it that

you Okay, taking great. question. for Thank the

Yeah. Thank you, Jason.

will there now time, to this Lehmann at remarks. final no it back I further turn BJ questions. over for And are

of of Okay. today. many that you like are for are participating folks but holiday, to came on it's Well, I'd all summer you thank I there a and month know in.

support and So, for to you appreciate thank your a our we we that. continued Have for want the And day. company good efforts.

today's concludes This conference call.

may You now disconnect.