Welcome to the Caladrius Biosciences Third Quarter 2017 Business Update Conference Call. At this time, all participants are in a listen-only mode. Following managements prepared remarks; we will hold a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded today November 9, 2017. I will now turn the conference over to John Menditto, Executive Director, Investor Relations & Corporate Communications at Caladrius. Please go ahead, sir.

Good afternoon and thank you all for participating in today's call. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer; and Joseph Talamo, Chief Financial Officer. Earlier, we filed our Form 10-Q and issued a news release, announcing our financial results for the third quarter of 2017. If you have not received this news release or if would like to be added to the Company's distribution list, please call our Investor Relations firm, LHA in New York at 212-838-3777 and speak with Carolyn Currin or e-mail update@caladrius.com. Before we begin, I would remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operation and future results of Caladrius. I encourage you to review the Company's filings with the Securities and Exchange Commission including without limitation the Company's Forms 10-K, 10-Q and 8-K which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content on this conference call contains time sensitive information that is accurate only as of the date of live broadcast November 9, 2017. Caladrius Biosciences undertakes no obligation to revise or update any statements to reflect event or circumstances after the date of this conference call. With that said, I will turn the call over to Dr. Mazzo. Dave?

Thank you, John and good afternoon, everyone and thank you all for joining us on the call. It's a pleasure to be reporting the achievements we've realized during the third quarter, our first full quarter as a pure play development company. As you recall, at the end of the second quarter we successfully closed on Hitachi Chemicals acquisition of our remaining interest in PCT, our then contract development and manufacturing subsidiary. This divestiture completed a transaction -- excuse me, a transition we initiated more than a year ago and allowed us to operate throughout the quarter just ended, solely focused on advancing and expanding our multiple technology platforms targeting autoimmune and select cardiovascular indications. Towards that end we made significant progress with our clinical development programs and remain as excited as ever about the potential of our technologies to address diseases that represent large unmet medical needs. Later in this call, I will discuss our specific achievements, as well as our plans for the future; but before I do, allow me to turn the call over to our CFO, Joe Talamo, for his review and commentary on our financial results. Joe?

Thanks Dave, and good afternoon everyone. As Dave just alluded, we have made significant progress during 2017 and specifically on the financial front which I'd like to highlight now. Caladrius exited the third quarter of 2017 with nearly $16 million in cash and marketable securities, and additional $5 million of restricted cash expected to be released from escrow in the second quarter of 2018, zero long-term debt. Our operating cash burn through the first nine months of 2017 was under $5.5 million a quarter on average which is significantly lower than the $7.6 million average quarterly operating cash burn for the first nine months of 2016. Moreover, our committed R&D spending for our primary clinical program, the Phase II T-Reg study for CLBS 03 will drop markedly beginning in 2018 as enrollment is expected to be completed later this year. As we near the end of 2017, we look forward into 2018 with our strong balance sheet and declining committed operating cash burn. The Company is now able to focus on other areas within our R&D platform while we are actively assessing numerous external value creating opportunities that can potentially be brought in-house. With that overview, let me now turn to the financial results from continuing operations for the three and nine months ended September 30, 2017. Third quarter 2017 R&D expenses were $3.2 million, an 8% increase compared with the prior year quarter. For the first nine months of 2017, R&D expenses were $11.2 million, down 17% compared with the first nine months of 2016. Our current year R&D expenses are primarily related to our immune modulation platform, and specifically our T-Reg study. Our third quarter 2017 expenses also included costs within our ischemia repair platform related to initiating our critical ischemia study in Japan. Third quarter 2017 G&A…

Thank you, Joe. Let me begin by providing an update on our lead clinical program, CLBS 03. As a reminder, CLBS 03 is a personalized autologous cell therapy consisting of each patient's own regulatory T-cells or T-Reg's which have been expanded in number and functionally enhanced by a proprietary method developed through a collaboration with Dr. Jeffrey Bluestone, and renowned researchers at UCSF. Caladrius has exclusive rights to an international portfolio of issued and pending patents for this technology as applied to Type 1 Diabetes, as well as other indications. CLBS 03 is being studied in a landmark Phase II trial called the T-Reg trial as a treatment for Type 1 Diabetes in patients with recent onset disease. As you know, the T-Reg study is being conducted in partnership with Sanford Research, a not-for-profit research organization that is part of Sanford Health that supports an emerging translational research center focused on finding a cure for Type 1 Diabetes. Again, as a reminder, the T-Reg study is a prospective, randomized, placebo-controlled double-blind Phase II clinical trial to evaluate the safety and efficacy of CLBS 03 as a treatment for Type 1 Diabetes in approximately 111 subjects, aged 8 to 17 with recent onset disease. To key endpoints for the trial are the standard medical and regulatory endpoint for T1D trial and include preservation of C-peptide [ph] which is an acceptive measure for pancreatic beta cell function, as well as insulin use, severe hypoglycemic episodes, and glucose and hemoglobin A1C levels. The study is 80% powered to detect 0.2 picomole per milliliter difference and AUC means C-peptide between the active and placebo arms at 12 months post-treatment. The study is being conducted at leading clinical centers throughout the U.S. including the Joslin Diabetes Center, and strong interest in innovative programs has allowed…

[Operator Instructions] Your first question comes from the line of Jonathan [ph] from H.C. Wainwright. Your line is open.

Thank you for taking my question. I'm on the phone for Yi Chen. Do you have any plans to use the $50 million cash in 2018 besides on the T-Reg study?

Thanks for the question and please send our regards to Yi. As I mentioned during the script, the 2018 budget encompasses now three clinical programs that use this to complete the T-Rex trial, it will also devote some funding to both, the CLI program for CLBS12 and the CMD program for CLBS14, although a majority of the funding for all those programs is coming from external grants support also as described. So that will be the majority of the use for the programs as they are currently defined in 2018.

All right. Thank you for taking my question. I appreciate that.

Your next question comes from Steve Brozak from WBB. Your line is open.

Good afternoon. Quick question; looking at the Sanford collaboration that you've got, and looking at the fact that you're looking to do additional transactions and expand your different opportunities; can we look at that as a model for future transactions where you would do collaborations -- open collaborations where there might also be the ability to leverage your balance sheet to leverage your technology? Can you give any feedback on that?

Well, certainly Steve, we are very happy with the Sanford collaboration and the structure that is based on. I think that could be one approach going forward in the future, and it's certainly a model that's been successful for us today and so we have no reason to discount that going forward. So if not the only thing that we might do, but it's certainly one possibility.

Well, actually that's the follow-up then. If you consider that to be a conservative and reasonable approach where you're talking about very little hit to your balance sheet; would you also be then looking to -- as you mentioned earlier, make acquisitions that might be actually far more reaching in terms of even products that are currently in the market or any thoughts about that?

We have actually a defined program of evaluation in-house that has fixed specific criteria I listed in the script but yes, we would be and continue to be looking at a variety of external opportunities that would be a bit more far reaching than just a simple collaboration with another research organization.

Okay. Obviously, given the fact that you've executed on everything you said you're going to do; something that we should all take seriously, I guess that's a good way of ending it, right?

I'd appreciate that. Thank you very much.

Thank you.

[Operator Instructions]

It appears that there are now no further questions. I know there are a lot of other conference calls going on today, so there is quite a bit of competition for airtime. So I'll stop and again, thank all those who have listened for participating on today's call. We look forward to speaking to you again on our next conference call and continuing to bring you news on the achievements and programs progress at Caladrius. We remain grateful for your continued interest and support of our company. And we wish you a good evening. Good night.