Welcome to Macrocure’s Third Quarter 2014 Financial Results Conference Call. Before we begin, I would like to remind you that forward-looking statements will be made on this call. Forward-looking statements provide the company’s current expectations or forecast on the future events. Forward-looking statements include statements about the company’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Forward-looking statement are subject to known and unknown and uncertainties and are based potentially on inaccurate assumptions that could cause results to differ materially from those expected or implied by forward-looking statements. The company’s actual results could differ materially from those anticipated in the forward-looking statements for many reason. And I encourage you to review the company’s filings with the Securities and Exchange Commission including without limitation the company’s forms S1 and the 6-K which identify specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Unless required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events that are after this date of this call. At this time I would like to turn the conference call over to Mr. Nissim Mashiach, Macrocure’s President and Chief Executive Officer. Sir, Please go ahead.

Thank you, Operator and good morning everyone. Welcome to Macrocure’s third quarter financial results conference call. Joining me on today’s call are Shai Lankry, our Chief Financial Officer; Mike Molyneaux, our Chief Medical Officer; and Francesca DeMartino, our Vice President, Investor Relations. On today’s I will provide an update on the execution of our business strategy including the advancement of our clinical trials and the milestones we achieved during the third quarter. I will then ask Shai to provide an overview of our third quarter 2014 financial results. Following our formal remarks, we will be available for your questions. I will start with an update on the clinical development of our lead product candidate CureXcell, which is comprise of human living white blood cells for the treatment of chronic hard-to-heal wounds. As a reminder, CureXcell is injected directly into the wound bed. This direct compact triggers the body on healing process and allows the wounds to heal from the inside out. We believe that one of our key differentiators is that CureXcell is a true biological product. Due to our rigorous testing, we believe that we can ensure the potency and the effectiveness of every batch we produce and furthermore, that we can maintain this activity level throughout the shelf life of the product. As you know, we are currently conducting two pivotal double blind randomized Phase III clinical trials, we intent to file a biological license application to obtain a broad indication for the treatment of all chronic wounds below the knee. The first and the most advanced clinical trial is for the treatment of diabetic foot ulcers DFU. In early September, we reported that we met the completion of the patient recruitment a few months earlier than anticipated. Our DFU trial enrolled 285 patients across 22 sites in…

Thank you, Nissim and hello everyone. I will describe some Macrocure financial results for the three and the nine months end of September 30, 2014. I will start with the third quarter results. Research and development expenses for the third quarter of 2014 were $3.9 million compared to $2.4 million for the third quarter of 2013. This increase was primarily due to the cost associated with opening and operating new clinical sites in support of the VLU trail for CureXcell. General and administrative expenses for the third quarter of 2014 were $1.7 million compared to $2.9 million for the third quarter of 2013. The third quarters of both 2014 and 2013 include one-time non-cash expenses of $0.5 million and $2.5 million respectively which are related to options granted before the IPO. We reported non-recurring finance expenses of $4.4 million in the third quarter of 2014 and $4.8 million for the third quarter of 2013. The third quarter of 2014 includes a non-cash expense associated with a convertible credit line made available to the company before the IPO. For the third quarter of 2014, we reported a net loss of $10.1 million or $0.70 per share compared to a net loss of $10.2 million or $1.37 per share in the same quarter of 2013. Excluding the non-recurring finance expenses recorded in the third quarter for both 2014 and 2013, we posted an adjusted net loss of $5.6 million or $0.39 per share compared to an adjusted net loss of $5.4 million or $0.73 per share in the third quarter of 2013. Moving on to our financial results for the nine months period in September 30, 2014, R&D expenses for the nine months period were $9.1 million compared to $6.3 million for the comparable period in 2013. This increase was primarily due…

Thank you, Shai. Before we move to Q&A, I want to conclude by saying that next year is an important year for Macrocure. As discussed we have a full roster of clinical milestones and we are very optimistic about what lies ahead. Our test to transform the advance wound care space with CureXcell is not simple or easy, but we are confident that it is available. We remain committed to commercializing CureXcell and we continue to believe that the market would welcome and adopt this novel once a month injectable therapy of human living cells for the treatment of chronic hard to heal wounds. We thank you very much all for your continued support and interest. Operator, can you please open the call for questions.

Certainly (Operator Instructions). And our first question comes from the line of Bruce Nudell with Credit Suisse. Your line is now open please proceed with your question.

Good morning Nissim. Thanks for taking the call. Just a couple market questions and positioning questions. Firstly, it really seems like 2013-2014 has been radical share shifts with allograft and dermal graft following off and MiMedx showing great momentum. Could you just comment on what you think is behind those changes? And what’s the state of market growth right now as you see it.

First of all, good morning Bruce, and thank you for the question. I think the main driver behind what we see around MiMedx as well as the skin graft is really the pressure from the reimbursement. And the bundle the upper bundle, the lower bundle prices really putting a lot of pressure on the skin graft. And I would say the other thing around the reimbursement is the fact that there is still a lot of ways with the skin graft normally for small wound size or an average wound size or 2 square centimeters you’ve had the big skin graft you throw the rest. And MiMedx actually came with very unique proposition by coming with different type of membrane for different type of wounds. And we see their success in this space. And I think this is one of the driver forces behind it. The other thing is I would say data. CMS continually expect to see more data, more clinical data, from double blind controlled clinical studies. I think for us as a company this is exactly what we are doing and what we are providing. We are doing a two Phase 3 clinical study very rigorous type of regulatory pathway with double blinds hundreds of patients in each study. And our product is a liquids product and we can adjust and offer different fill sizes to different size of wounds and basically meets the expectation both from a regulatory point of view and from reimbursement point of view.

Great, and just speaking to data, I mean you’re doing a mechanism of action study. You’re doing a very rigorous BLA. I mean, I think the wound field was shocked by the failure of the Smith & Nephew drug. And how do you feel about positioning CureXcell against MiMedx which has incredibly impressive top line results but certain not in a study of the rigor that you’re undertaking now? And what’s necessary to kind of effectively compete with those kind of headline numbers, especially when you see what happened to Smith & Nephew in a rigorous Phase 3 trial?

Bruce, I cannot give you any comment about the Smith & Nephew I can really focus on what we are doing. And the level of confidence that eventually the BLA study will be with the better results I think what I can say is few things about our study design. First of all, it’s really the hard to heal type of wounds in terms of inclusion exclusion criteria. And I think it’s very rigorous like you said before clinical study from a design point of view over 250 patients in over 25 clinical sites. So, from a design point of view and rigorous level it’s really the top level in this industry. And the other thing is it’s the level of confidence that we have with the technology the level of confidence that we have which previous clinical study that we did in this base of VLU and also in DFU. As you may know, we had a previous study MC-103 where we showed 84% closure rate with VLU patients and these were similar type of inclusion exclusion criteria as the current study and I think it was filled very rigorous type of design similar to what we are doing today. So the previous data that we did gives me the level of comfort that our study design will look differently plus the fact that this technology maybe unlike other technologies in the field of wound care has been in Israel for the last 17 years we treated over 5,000 patients VLU, DFU and other type of wounds so this gives us the level of assurance and validation that the outcome in our case would be much more positive.

I guess I wasn’t clear, I do have every expectation you will meet your endpoints. But just relative to cashing your results against other firms that have maybe spectacular top-line results in most rigorous stage commercially, how do you hope to speak to that?

Again I don’t know what happened with Smith & Nephew, I know that they had a very good Phase 2 data, but eventually their Phase 3 clinical data didn’t came so good as expected. Again I think it's all about the technology, the comprehensive solution that we are providing with CureXcell, the previous data and the validity in the market that we have and that’s kind of giving me the different level of assurance. But I hope I address your question, Mike do you want to add anything else here?

Good morning, Bruce, I think a lot of this will come out when the go for reimbursement and coverage, they may won sometime a comparison phase Bruce that’s possible or they may want some type of head-to-head study, but I mean you talking about one player in this phase in the mass of market. So it's like in terms of the hypertensive market, it's like one drug in the market and then there is another drug to potentially get approval, I mean right now we’ve got dozen of hypertensive mediation. So the market is definitely large enough for one more player and both companies could be very successful. Our data is obviously much more rigorous and sometimes you will get to a situation where payers will want some competitive effect in this data. So, I think it will depend on how aggressive the payers are and how much information they want because we’ll have a package that will get us reimbursement in coverage, so we don’t really have any concerns in that area in terms of getting coverage and getting reimbursement. We think the market is big enough to support lot of potential players in this phase.

Thank you. Our next question comes from the line of Raj Denhoy with Jefferies. Your line is now open. Please proceed with your question.

Hi, good morning. What if I can start with the FDAs decision to remove the blood matching requirements and I am curious does it have any bearing on the current trials currently underway, I guess the way you still enrolling or is this something that you're going to have address post approval of the based on the current studies?

So the removal of the blood matching requirement is absolutely implemented immediately in the previous study and of course later when we come to commercialization it will enable us to supply the future demand, market demand and scalability all of that and we talk about it before that this is something that we expect the FDA to approve it, eventually we came through an agreements with the FDA, so it's a good news for us. And as I said it's implemented right away and it will allow us to move and excel in the future.

Just to add to that Raj, it's Mike. It's implemented in both the DFU and the VLU like you got to remember with DFU we’re still actively treating subjects, we completed recruiting but we’re still treating subjects in that study. So it's implemented in both studies.

Immediately you switched over to the new protocol in a sense?

Yes, that was a simple amendment [indiscernible] was eager to do.

And then on the method of action study that you're going to be reporting early next year, can you maybe perhaps provide a little bit more by what we should expect from that study is there any possibility to see some efficacy data in that if you're looking at the factors that might be patient or subject is treated versus one that’s not -- is there anything Michael to green from that beyond just simply looking at different cell type accounts from the like?

Yes, there will be efficacy data from the MOA and there also be quantitative measurements of brain relation tissue formation, blood vessel formation and then also how it impacts the fiber glass and how it contributes to laying down the necessary metrics and that will be looked at from an efficacy standpoint as well.

Raj, I want to say that what we are doing in investing and highlighting with this MOA is something unique write-off, we are not just showing the mechanized traction fraction but also the whole signs behind CureXcell and I think it should give some level of comfort when people are looking on the level side that we are going to stores in early next year and the possible outcome from our pivotal study that will come and days taken half of 2015.

And just one last one perhaps for Shai, I think you gave the cash burn expectation of 1 million to 2 million per quarter, I guess I am curious….

I am sorry, not for quarter per month.

Per month, I am sorry about that, I am curious how long you expect to be to run at that that level, at some point you think if you will start to scale that up and I know it still number of years before market launch, but at some time that curve start to bend as you think about getting closer to submitting and then also commercializing the product?

Raj, good morning. So I would address your question with I would say two different answers that potentially can happen. In audit our cash burn is directly linked to our R&D progress in our two clinical trials that we have the VLU and DFU. Currently, we are expecting to burn between 1.5 million to 2 million I would say in the next two to four quarters. However, I believe once we have the final read out results, we’ll probably have a better clarity about what will be the future expenses especially we are talking about building a new plant or adding additional pipeline activities based on the MOA study and mainly the DFU for read out results. So I believe that for now the forecast of US$1.2 million to US$2 million is still good for the next, I would say, two to four quarters.

Okay. And then one last one, but if I remember correctly the revenues and expenses in terms of the profits you get out your commercial expense in Israel is in the R&D line. And I am curious whether how much of an impact what you’re doing in Israel has on that line or is it sort of pretty de minimis in terms of you sort of operating at kind of breakeven in that operation right now?

I can tell you that it’s not the revenue but the income that we are generating from the Israeli commercial sales it’s insignificant and it’s the sales itself bears the negative gross margin. There is no real value to keep the sales in terms of commercial. We are mainly doing this for data collection and for our clinical trials and data.

Thank you. Our next question comes from the line of Steve Lichtman with Oppenheimer. Your line is now open please proceed with your question.

Just two parts just and other one on the MOA, is there any comparable type of study to benchmark it against maybe you could flush out further why you believe the results could provide support to investors as they look at the ongoing DFU and VLU studies?

Good morning Steve. So I am not aware to any comparison studies that any other company in this space invested so heavily in terms of generating in-vivo and in-vitro data. I think that for investors -- and we’re doing it not just for investors I mean we are doing -- I mean the purpose of doing this study is actually I think it would play good for us for reimbursement because we are going to provide and now that I mentioned another date set of data that nobody else did. I think it will help us also when it comes to regulatory bodies, FDA, who would like to see not just the clinical data but also the science behind the technology and this is what we are going to expect to get from the mode of action. And I think for the investors people would like to see how this drug is working, what’s make it so special, how it’s effective, how it effect the tissue after each injection, what are the changes on the tissue, what is the role of each component in our CureXcell product. And this is all we are going to disclose as part of the mode of action. And once you will be able to share such robust information from an in-vivo and in-vitro data I think people can analyze and understand the outcome of clinical studies more as expected because of the mechanism of action. Because we know the effect of each injection, we know the changes that each injection can do. And this is what we are trying to do. Mike do you want to add anything here?

Hi Steve. Good morning. I mean we know that they’ve all done these studies Steve. And we know in terms of the model we’re using it’s the up to date most rigorous model that you can sequence the data on the graph. We know the other companies done and we know they haven’t released or published and we’re very confident that we will get full publication from the studies due to the results that we’re seeing and that it will stand up to any that have been done in the past and we’re actually superior. And I think that will give the investors the level of comfort to see the performance on starting level. We know clinically that it works because it’s been working in here for 15 years plus now we’ll know on a [study] level that it works and how it works.

Thanks Mike. And then just real quickly, based on enrollment trends positive I missed this when do you expect to complete the patient enrollment in the VLU study?

The patient enrollment we expect to finish by the first half of 2016, and the definite read out should on the second half of 2016.

Okay, got it. Great, thanks Nissim.

Thank you. Our next question comes from the line of Iam Somaiya with Nomura. Your line is now open please proceed with your question.

Thank you for taking my question and good morning. I’ve got a few questions just how to pricing this environment and I was hoping it answered by maybe getting your thoughts on the type of pharmaco economic data that you will generate in your Phase 3 program? And if you just think about the benefit that you assume you’ll see in the Phase 3 studies, what that might translate into in terms of cost savings?

This is an area where MiMedx has actually done some pretty good work and they have been able to offer wide variety of sizes based on ulcer size. This actually is our strength as our liquid product, so we will be able to basically tailor the doses to fit the ulcer size. So for example with X number of males will be able to cover approximately 60% in the market by opting that slight we will cover 90% of the market that will allow us a lot of flexibility with pricing and it allows us a significant advantage when it comes to pharmaco account data. So if you're talking on average under three applications for diabetic and around two for venous leg ulcer, we’re confident we’ll have significant pharmaco lead time advantages. Within the clinical studies that we’re doing now this is built-in, so this data will be available with the readout with most of our studies, I mean we can directly added, retail the secondary endpoints, so we’ll be able to get pharmaco lead times from the studies that we are doing as well.

And I would like just to add another piece of information related to price advantage and capabilities moving forward. I think like Mike said we have a liquid product that we can offer different feet size to match different wound size. I think the other element that we have is the kind of high gross margin in our product, 80% above that will give us a lot of commercial flexibility when we will be able to offer different feet sizes on the different prices to match different wound sizes and that’s would be of course another element because of our a straight forward, a production process because of our capabilities and technology which is uniquely on the space of the wound care.

And just the one last question I had is just on the footprint that you have today, geographic footprint and how do you expect that to change overtime?

You mean footprint in terms of….

Just operations in Israel in the U.S. today and then how you expect to grow overtime?

So, I think in terms of the footprint, as you know the majority of the management team are based in United States, I think that would grow overtime because obviously the U.S. market is our major market and the main focus for the company. As part of the IPO proceeds would be used also to build our manufacturing capability to meet our future market demands. We are going also to look into expanding the pipeline and I think the first stage would be the mode of action results with in a way based it past for expanding the pipeline beyond just wound care. So we will expand by doing additional clinical trials and expand a total portfolio of the company. At the later stage, I think we mentioned that with that we are thinking about building our own commercial capabilities in United States, having our own sales force with this kind of product and with the huge maintenance space I think it would be an easy sale to penetrate to this market and to get a substantial track in terms of sales and marketing in the U.S. market.

(Operator Instructions) Next question comes from the line of Glen Yef, Stock Dock Partner. Your line is now open. Please proceed with your question.

Thank you very much. At a recent wound care conference, it seemed quite apparent that although many of the other products in the market usually were graft with really just overlays and they have a significant unsuccessful rate when it comes to curing VLUs and DFUs and speaking with physicians one of the issues that is a positive with yours was the fact that was injected and so it wasn’t just an overlay and they were concerned about impact that what you discussed the cross matching which just now been removed? And I was wondering if you could go through what led to that requirement being removed and how you see that in terms of the time saving to the position and/or his or her staff and how that may helped us trial proceed more quickly?

I think that the -- I mean you need to understand what we are doing with this product, so the product do not contain any red cells which may affect blood matching, the product is not injected IV or IM and it's really subcutaneous superficial injection. So the risk was is not there and in the past that was the company assumption that it’s better to avoid any potential safety risk but we didn’t see any safety whatsoever and I said and I disclosed before that with the DFU study we have a five DSMB looking in the safety, it’s all came clear without the initial round safety. So, we said we went to the FDA we’ll provide the set of data on the safety and we said there is no need really to have this blood matching requirements, FDA agreed with us. And I think it would simplify the trial conduct but also more importantly in the future the ability to scale this process and to meet the future market in that. In terms of I would like just to first of all refer to what you said before about your discussion with other physician and injectable type of therapy. I think what we are offering here is we are the only injectable therapy in the space and if you look on allograft that you mentioned there are the kind of disadvantage with all of this product is that they are placed on an infected wounds and most of this bio [indiscernible] bacteria would digest or eat or chew those type of skin graft and this bio-chem actually create a barrier and delay the healing process. We are able to overcome this layer by injecting directly to the wound bed and actually this healing process and that’s why we are different not just because of what we said about the blood matching and the requirement but the injectable itself and the fact that we are drinking a full cocktail of errors of growth factors and cytokines to the wound bed is really kind of differentiate us from others in this space.

Thank you. Ladies and gentlemen, that is all the time we have for questions. This concludes today’s conference. And you may all disconnect. Have a good day everyone.