Lisata Therapeutics, Inc. (LSTA) Q3 2018 Earnings Report, Transcript and Summary

Welcome to the Caladrius Biosciences Third Quarter 2018 Financial Results and Business Update Conference Call. Currently, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a Q&A session. [Operator Instructions]. As a reminder, this call is being recorded today, November 8, 2018. I will now turn the call over to John Menditto, Executive Director, Investor Relations and 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 today, we filed our 10-Q and issued a news release announcing our financial results for the third quarter and 9 months of 2018, and first 9 months of 2018. If you have not received this news release or if would like to be added to the company's email distribution list, please email me at jmenditto@caladris.com. Before we begin, I will remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Caladrius. I encourage you to review the company's filings with the Securities and Exchange Commission including without limitation its 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 of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast November 8, 2018. Caladrius Biosciences undertakes no obligation to revise or update any statements to reflect events 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 for joining us. Notwithstanding that we haven’t released much on the Newswire during this past quarter, a lot is going on outside of the public eye as we advanced our product candidates, while maintaining our fiscal prudent. All three of our ongoing clinical programs in Type 1 diabetes, coronary microvascular dysfunction and critical limb ischemia remain on track for top-line data based upon our previous guidance. And our newest development program in refractory angina took a major step forward in recent weeks. However, before I highlight each one in more detail, I’ll turn the call over to our CFO, Joe Talamo for his review and commentary on the financial results we reported today. Joe?

Thanks, Dave. And good afternoon, everyone. I’m pleased to provide an update on our 2018 third quarter financial results highlighted by focused research and development spending, lower general and administrative expenses, a strong overall cash and working capital position at quarter end, and a quarterly cash burn that has declined for the third consecutive quarter. Before I provide additional details on our financial results, please note that my commentary will only focus on continuing operations before income taxes compared with the prior year. As a reminder, the operations of PCT our former subsidiary that was sold to Hitachi Chemical last year are reported as discontinued operations in the 2017 comparative financial statements along with the related one-time income tax benefit reported in continuing operations to directly offset the tax expense recognized in discontinued operations on the gain on the PCT sale. By excluding these items, my commentary will provide a better reflection of our actual financial results from continuing operations compared with the prior year periods. Now turning to our financial results, our net losses from continuing operations before income taxes were $3.5 million for the three months ended September 30, 2018, compared with $6 million for the three months ended September 30, 2017, representing a 40% overall decline. For the nine months ended September 30, 2018, our net losses from continuing operations before income taxes were $12.6 million compared with $20.5 million for the nine months ended September 30, 2017, representing a 39% overall decline. Moving now to our operating expenses, R&D expenses were $1.7 million and $6.1 million during the three and nine months ended September 30, 2018, compared with $3.2 million and $11.2 million for the prior year periods. The lower 2018 expenses representing 47% and 46% declines respectively, were driven by significantly lower CLBS03 study related costs, which were partially offset by higher expenses in our ischemic repair platform across three different programs. We expect this trend in spending related to our development programs to continue in the fourth quarter of 2018. As previously disclosed, we completed enrollment in all manufacturing related activities in the CLBS03 clinical study in December 2017, and accordingly, our CLBS03 study cost dropped significantly in 2018. We are now in the 12 month follow-up phase of the study and expect to incur only about $1 million in external spending to complete the study. We expect to announce the results of our CLBS03 study in late first quarter, early second quarter 2019, at which time we will provide an update on our future development plans for this program. Within our ischemic repair platform, we incurred higher cost in the current year periods due to the execution of our Phase 2 study of CLBS12 in critical limb ischemia in Japan. The initiation of CMD our Phase 2 study for CLBS14-CMD in coronary microvascular dysfunction and the initial planning related costs for our CLBS14-RfA program for the treatment of refractory angina. In addition in the first quarter of 2018, we made a modest undisclosed upfront payment to Shire for the acquisition of the exclusive data license to CLBS14-RfA as previously announced in March. All other transactional related payment to Shire related to this data license will be milestone and royalty based and contingent on the future advancement and success of the licensed program. Overall, the majority of our R&D spending in 2018 and continuing through the first half of 2019 will be focused on the advancement of our growing ischemic repair portfolio product candidates. G&A expenses were $2.1 million and $7.1 million during the three and nine months ended September 30, 2018 compared to $2.9 million and $9.1 million in the prior year periods. The lower 2018 expenses representing 30% and 22% declines respectively were driven by lower general and administrative headcount and corporate related activities compared with the prior year period. The nine month period also included a $1.4 million gain on the sale of our rights to a non-core asset a counter-flow centrifugation system or CFC device to Hitachi Chemical Advanced Therapeutic Solutions in May 2018. Overall, our G&A expenses have declined for the third consecutive quarter as we continue to manage our G&A expenses with the strong financial discipline we've demonstrated for several years. Turning now to our balance sheet and cash flow. We ended the third quarter of 2018 with cash and cash equivalents and marketable securities of $46.1 million and over $42 million in available working capital. Our operating cash burn for the first nine months of 2018 was $16.9 million including final one-time contractual TCT cell related payments in the second quarter of 2018. Excluding these payments, our operating cash burn for the first nine months was approximately $15 million or an average of $5 million per quarter in 2018. We expect the cash burn in the final quarter of 2018 to be approximately $5 million as well. Based on our existing activities and projections for CLBS03, CLBS14-CMD and CLBS12 programs and considering our cash and marketable securities balances on hand, we are confident that we can fund these programs through to the completion of their respective ongoing trials allowing us to project a cash runway in this regard of greater than two years. We are in mid-finalizing our development plans for CLBS14-RfA, which Dave will discuss more comprehensively in a moment. And we expect those plans once implemented will require incremental capital, which we expect to acquire through the capital markets and/or non-dilutive brand sources. Our $25 million ATM sales agreement with H.C. Wainwright remains effective, under which to-date we have chosen to sell only approximately 150,000 shares for approximately $1 million in net proceeds. We will continue to use the facility if and when appropriate, as an expedited path to raise funds at relatively low cost of capital. With that, let me turn the call back to Dave.

Thanks Joe. I’ll begin my brief business review with a repeat of the news we released this morning announcing the appointment of Ms. Cynthia Schwalm, Former President and CEO of Ipsen North America as the newest member of our Board of Directors. Cynthia brings extensive experience in leading and managing biopharmaceutical companies during transformative years of growth and we are delighted to have her join our Board. We believe she will offer a fresh perspective on making important contributions to our strategic and operational plan, particularly with respect to the commercialization of our products. We look forward to our guidance as we continue to advance our clinical programs through late-stage development and toward registration and eventual launch. Let me now turn to a discussion of advances in our development programs beginning with those based on our CD34 positive cell therapy platform. To those who have listened to my previous calls, I apologize for the redundancy of some of my remarks. But for the growing list of newcomers joining our calls, it is vital that we provide the rationale behind our platforms. Heart attack, congestive heart failure, angina, critical limb ischemia and stroke are often caused by an acute or chronic deficit in the supply of oxygenated blood. This deficit is typically due to disease in the large and small blood vessels or capillaries that serve the target tissues. Historically, the clinical focus of treatment has been on strategies to address the problems in large vessels leading to the use of clotbusting drug, angioplasty and stents to treat heart attack and percutaneous and surgical revascularization for chronic ischemic conditions. Yet to-date, no therapy has been designed specifically to address the defects in the small blood vessels which contribute to the overall impairment of patients with acute and chronic ischemia. We have long being known that one of the body’s responses to coronary disease is the recruitment of CD34 positive cells to ischemic tissues. These cells which reside naturally in the bone marrow are preprogrammed to repair damage to the small blood vessels or microcirculation in all tissues. CD34 positive cells have been shown to induce angiogenesis where the development of new blood vessels, thereby contributing to the preventing tissue death by facilitating blood flow. At Caladrius we are now advancing three proprietary CD34 positive cell therapy development programs, namely, CLBS12 as a treatment for critical limb ischemia, CLBS14-CMD for the treatment of coronary microvascular dysfunction and CLBS14-RfA for the treatment of refractory angina. Let's start with CLBS12, our proprietary CD-34 technology specifically formulated for intramuscular administration for the treatment of lower extremity ischemia. As I've explained previously, critical limb ischemia is a severe obstruction of the arteries that significantly reduces blood flow to the extremities, principally the feet and legs and represents the end stage of peripheral arterial disease. CLI patients often experienced severe rest pain, limited mobility, non-healing skin ulcers, and if not successfully treated, eventual amputation. No-option CLI means that pharmacotherapy is no longer working, angioplasty, stenting and bypass surgery have failed or not possible and that amputation of limb or limbs maybe the only remaining treatment for these patients. CLBS12 is currently in Phase 2 clinical evaluation in Japan and has received SAKIGAKE designation from the Japan Ministry of Health Labor and Welfare in the treatment of CLI. For those unfamiliar with the nomenclature, SAKIGAKE designation is similar to breakthrough or RMAT designation as awarded by the FDA in United States and promotes research and development in Japan, driving early practical applications for innovative pharmaceutical products, medical devices and regenerative medicines. The CLBS12 as a designated therapy under this system Caladrius enjoys prioritized regulatory consultation at dedicated review system to support the development and review process as well as reduced review time from the typical 12 month down to six months for the CLBS12 registration application once filed. Additionally CLBS12 is eligible for early conditional approval and possibly full approval based on the compelling nature of the data generated in our ongoing 35 subject prospective, randomized, controlled open-label, multi-center study in no-option CLI patients in Japan. The study comprises the 35 subjects divided into two cohorts. A 30 subject group with traditional arteriosclerotic CLI and a five subject group with the Buerger's disease a type of CLI often associated with heavy smoking. Those subjects who are randomized for treatment are dosed with CLBS12 through intramuscular injection in addition to receiving standard-of-care pharmacotherapy. Subjects randomized to the control arm received standard-of-care with drugs approved in Japan including anti-platelet agents, anticoagulants, and vasodilators. The choice of which is made by the investigators according to the program. The study allows for the rescue of subject to the control arm by indicating the crossover to treatment if their CLI is deemed to be progressing. The primary objective of this study is to show that CLBS12 can prevent the serious consequences of no-option CLI by reverting the patients to a CLI-free condition through improved blood flow in the affected limb. CLI-free status is defined as two consecutive monthly visits in which rest pain is absent and previous non-healing skin ulcers are completely healed as determined by Independent Adjudication Committee. CLI-free status is a highly clinical -- highly clinically relevant endpoint and encompasses a broader spectrum of improvement in the time to amputation or amputation free survival which are the historical endpoints for CLI studies. Our confidence in this approach to CLI is supported by the substantial clinical data from four prior trials in CLI and claudication conducted in the US and Japan which showed CD34 cell therapy was not only safe but also improved CLI-free status and amputation free survival in those trials. Trial completion remains on target. And in fact, I am pleased to announce that the Buerger’s disease cohort is fully enrolled. We remain confident in our expectations to report top-line data from the complete study in the early part of 2020. As the cost, we project it will require less than $7 million of additional expense to complete this study. Since these costs are part of our current operating budget projections, this study can be considered fully funded to completion. As I have indicated on past call, our strategy is to partner CLBS12 for commercialization in Japan. And to that end, our conversations continue with prospective partners, and we continue to expect to consummate a deal in concert with the completion of the study. Finally, our progress in Japan combined with a high degree of interest and enthusiasm from US and European CLI experts has prompted us to consider the initiation of CLBS12 development in the United States and Europe the commencement of such a program being a function of the identification of the corresponding necessary capital. Moving on to CLBS14-CMD, our proprietary CD34 positive cell therapy for the treatment of coronary microvascular dysfunction. The two CLBS14 programs, CMD and RfA both employe CD34 positive cells isolated, harvested and concentrated in the same way as for CLBS12, but formulated for intracoronary or intramyocardial injection, respectively, specifically for repair and regeneration of cardiovascular tissue. CMD is a plaqueless heart disease involving damage to the inner lining of the tiny arterial blood vessels in the heart. CLBS14-CMD is designed to reduce this damage by exploiting the innate ability of CD34 positive cells to repair small blood vessels and increase microcirculation. ESCaPE-CMD, our Phase 2 clinical study of CLBS14 for the treatment of CMD is enrolling well, and according to plan. As we have previously communicated, most of the costs associated with this trial are covered by a grant from the NIH. And as such, this study should also be considered fully funded through completion. Now, let’s turn to our newest CD34 positive cell therapy program CLBS14-RfA. CLBS14-RfA is intended for the treatment of refractory angina and we’ve worked rapidly since acquiring the exclusive data license to this asset to reactivate the IND and to file for a secure RMAT designation. Regulatory milestones are key to the efficient advancement of the CLBS14-RfA program. We see the addition of CLBS14-RfA to our CD34 portfolio as a core component of our business strategy. The RMAT designation makes cellular therapies eligible for the same actions to expedite development and marketing application review that are available for small molecule drugs that receive breakthrough therapy designation including increased meeting opportunities, early interactions to discuss potential surrogate or intermediate endpoints and the potential to support accelerated approval. Our enthusiasm for this program is based on a series of published Phase 1, 2 and 3 data that include consistency of therapeutic effect with CD34 positive cells to increase exercise tolerance, improved heart functionality and decreased long-term mortality associated with the condition. After receiving the RMAT designation and by the way, we believe we are the only active cardiovascular development programs with such a designation, the next step in the process was to request and conduct a Type B meeting with the FDA. I’m pleased to announce that we recently completed this meeting, the goal of which was to obtain FDA guidance regarding the requirements for registration of this product under the terms of its RMAT designation. Our assessment of the meeting was that it was positive and collaborative and reinforced our expectation that FDA would demonstrate maximum flexibility afforded under the RMAT system regarding the main development steps necessary to bring this minimally manipulated autologous cell therapy product to registration. We will be working with FDA in the coming weeks to finalize our development plan and to formalize the merits of the meeting in any follow on discussion and we look forward to providing further details once these actions are completed. Lastly, let's turn to our landmark Phase 2 study of CLBS03 as the treatment of Type 1 diabetes. Our CLBS03 program using autologous ex-vivo expanded and activated polyclonal T regulatory cells has several key global regulatory designations including FDA Orphan Drug status, EU Advanced Therapeutic and Additional Product Classification and FDA Fast Track designation. As for the latter, we believe that CLBS03 is the first Type 1 diabetes program ever to receive Fast Track distinction. These regulatory designations are key as they provide various exclusivity benefits, tax credits for certain research, a waiver of the new drug application user fee and priority review of regulatory approval submission. As you know, in March, we reported results from the prescribed analysis of the Sanford Project: T‑Rex Study a prospective, randomized placebo-controlled double-blind Phase 2 clinical trial of 110 patients to evaluate the safety and efficacy of CLBS03 as a treatment for recent-onset Type 1 diabetes. The interim analysis was triggered by the completion of the nine months follow of 50% of the targeted total number of subjects in the trial. The analysis was conducted by independent statisticians and showed that CLBS03 continues to be well tolerated and led to the conclusion that the study was non-futile as determined by predefined criteria for therapeutic effect. We remain on track to complete the 12 month follow up on all 110 patients by year-end and to reporting top-line data in early 2019. We expect the trial will provide a tremendous amount of data which we will evaluate vigorously in order to define the next steps in the development of what we will hope will become an important new tool in the treatment of children with recent-onset Type 1 diabetes. We project only about $1 million of remaining expense to complete execution of this trial and since it is also part of our existing plan consider this fully funded to completion. So in closing, we are pleased to share our progress this quarter and to demonstrate continued execution against our stated objectives. Our financial position remains stable, our pipeline programs are progressing. And with the addition of the refractory angina program we have multiple mid and late-stage product candidates under evaluation. We look forward to continued momentum in the coming months and expect to achieve the following milestones: Working with FDA to finalize the development plan for registration for CLBS14-RfA for the treatment of refractory angina; continue enrollment of our Phase 2 clinical trial of CLBS12 for CLI in Japan; continue enrollment in ESCaPE-CMD Phase 2 clinical trial of CLBS14-CMD. And complete the 12 month follow up on all 110 patients in the Phase 2 T-Rex study and announce top-line results. As you can see despite the lack of recent news announcements Caladrius continues to make measurable progress advancing its development programs. Our enthusiasm for our pipeline is reinforced by the fact that we believe to the best of our knowledge that we are the only company with development programs have been awarded respectively the SAKIGAKE and RMAT designations and our dedicated and passionate team remains keenly focused on realizing the potential of these exciting and promising technologies that address large unmet medical need in cardiovascular and autoimmune diseases. And with that overview, operator, we’re ready to take questions.

[Operator Instructions]. Our first question is from live of Steve Brozak from WBB.

There’s two items that I’m kind of curious about. The first one is you given a litany of different programs and everything that are able to use leverage and in the partnering that you’ve got, what would be the, let’s say cash equivalent, or what would you think would be the cash equivalent that we want to think about in terms of what you’ve been able to conserve or partner with other folks, so that we could think about what the values are? Because obviously, you’ve been conservative in terms of husbanding your cash and expenses. How should we look at that? And I’ve got one follow-up please.

I think the best way to look at that is to look at maybe a running summary of all of the non-dilutive capital that we’ve been able to achieve through grant awards going back to perhaps even the early 2016 timeframe. So, if you look at all of the current ongoing programs and if that you include some of the awards that we’re committed for CLBS20 back then, we’ve attracted about $40 million in non-dilutive funding from a variety of sources, including the California Institute for Regenerative Medicine, the Juvenile Diabetes Research Foundation, as well as contributions to equity and operating expenses from our research partner Sanford Research.

And in terms of the different programs that you’re talking about. Because obviously on the CLI side you’ve got terribly affected sick patients. And one of the particular parts here is that in different programs that we’ve looked at where new therapeutics were being involved, there was a bit of a consideration or even in some cases, there were issues around the safety and the combination. Because obviously, these are patients that are being treated in different modalities. And you always have to consider yourself when you’re adding one more thing. What can you tell us about -- and I don’t know how you would describe this, the lack of concern or the differentiation in terms of the therapeutic approach, you’re talking about not having to consider what are in conventional terms what used to be the drug-drug interactions of the past and looking at the involvement of new therapies?

Actually, I’m going to take advantage of the presence of our Chief Medical Officer Dr. Doug Losordo and ask him to comment on that. Because Doug, as many of you know, no and if you don’t, I’ll take the opportunity to introduce him is one of the pioneers in CD34 positive cell therapy, having essentially initiated work on this when he was an academician back in [Utah] continue that work when he was at Northwestern, and then through his career in industry. And I think, since he’s been actively shuttling back and forth to Japan, he’s in the best position to comment on that question. Doug?

Thanks Dave and thanks for the question Steve. It's a very important question. As you point out this is a very sick patient population. But in the patient for CD34 cells, I think we're in a unique position. First of all it's an autologous cell therapy which already gives you a sense of the level of safety that we're talking about. But on top of that even among other autologous cell therapies. The CD34 cells my knowledge is the only cell that is actually the naturally occurring cell kind of designed by nature to do what we are targeting it to do which is to reconstitute the microcirculation. We're also advantaged by the fact that over 700 patients have enrolled in clinical trials using CD34 cells in various indications. And without exception the patients who receive cells have the better safety profile and measurable improvements in clinical outcomes. And that includes the three CLI studies that have been done so far, two in Japan and one in the United States that have all showed better safety outcomes and the better clinical outcomes in the patients who received the cell. So as we're now on around 14 years of experience with these cells, our level of confidence in the safety profile is actually quite high.

And the follow up in terms of the competitor because obviously other entities are looking and trying to go out there and offer any solution which is in some cases standard-of-care is not really very good, it's cognitive. How are the clinicians looking at this and saying when you go out there and present how do they look at it differentiate saying okay I can either look at different approach which to me have some significant downsize or you what's the answer there? And I'll hop back in the queue. Thank you.

Sure. I mean that's a good question. I started up my career as a cardiologist and so I have lots of contacts in the field. But I'll just give you an anecdote maybe from recent interaction that I had in Japan. One of the clinicians there had enrolled a patient in the study just happened to have that patient to come back in for three months follow up on the day that we visited the hospital. And this had been a patient in their clinic for a quite a long time with severe CLI rest pain and non-healing ulcer and all I can say is that I could see the surprise on the doctor's face by the fact that this patient come back and what he described that he saw smile on the patient's face for the first time ever, because their pain was gone and also had healed after a single dose of CD34 cells. When we serve docs and show them the accumulated data in these patients, the response is pretty uniform that they see this is a pretty significant advanced and something that were developed that they would apply to their CLI patients.

Great. Well obviously thank you for the feedback and the transparency. I look forward to the follow ups. Thank you.

Thanks Steve.

And our next question is from the line of Keay Nakae from Chardan.

Thank you. With the RfA, obviously, you have data from a Phase -- prior Phase 1, 2 and 3 studies, you’ve got the data analysis that’s been published. I haven’t heard you say is whether a scenario where that’s enough to file for registration is can be viewed as acceptable and appreciate you’re waiting for the written notes from most recent meeting. But then how do we think about what are the star on the table is a possible scenario?

I want to be Keay, I want to be clear I think, in our estimation, the RMAT designation should allow the FDA to give guidance that for goes the traditional development requirements for product namely, Phase , Phase 2a, Phase 2b two-fold Phase 3 and perhaps a bunch of associated preclinical testing. I think that at this point, and you can understand my relative to say anything definitive until we’re clear with the FDA, because I think, we have to view them as a partner and don’t want to put them in a difficult situation. But our expectation is that we will not be required to do two traditional full Phase 3 or any additional preclinical work. And so, if that is in fact what is finalized, then we will consider that a major win and a big step forward, because we are gone from essentially no program in refractory angina at the beginning of this year to now a program that is perhaps a single study away from [BLO] registration. That’s not to say that the opportunity to define a path to perhaps even conditional approval with existing data is completely off the table. But I don’t think that any of us should count on that at this point in time. But we obviously continue those discussions and we’ll let everybody know what the outcome once we finalize things with FDA.

And our next question is from the line of Pete Enderlin from MAZ Partners.

Dave, when actually was that Type D meeting that you just talked about?

The meeting actually occurred last week on October 30th.

And when you say that the relevant terms of the RMAT designation would apply. What terms actually are relevant to this whole procedure?

So allow me to give a little trim around that and I will try not to be too long winded. But you know that there are various designations for small molecules, biologicals, and now cellular and gene therapies. And the regenerative medicine advanced therapeutic or RMAT classification, in fact, embodies all of the benefits Fast Track designation and Breakthrough designation as they would be applied to say small molecules. So that allows us to have frequent and less formal interactions with FDA. And by less formal, it doesn’t mean that they’re any less important. It just means that we don’t have to go through for every interaction the process of requesting a meeting, waiting a certain period of time that’s prescribed in the guidelines for FDA to respond, schedule the meeting, submit a briefing book, et cetera, et cetera. It allows us to make phone calls and have discussions in ad-hoc fashion as we progress to save time and to focus. It also allows the agency to provide for them to take decisions that allows them as I just said a moment ago to forgo some of the traditional steps in development in a manner that they would believe would still ensure the safety and efficacy of the product with the expressed objective of finding a mean to get these safe and efficacious cellular therapy products to patients faster than would be the case than the traditional theme so that's available to us. We also will be eligible for a short review time six months instead of 12 and is even the provision for the agency to consider conditional approvals and accelerated approvals based upon a number of provisions. So all of those things which are made available to all programs that are designated RMAT are available to us and they're part of the discussion that we now initiated with FDA starting with the Type B meeting last week.

Okay. Thank you. And then what does “formulize the merits of the meeting” actually mean? I mean.

It means that FDA issues final written minutes. So the process is complete. We haven't meeting….

It’s just the transcription basically right? I mean.

No, no it's not necessarily -- it's not a transcription. There is no transcript of the meeting. The meeting minutes will be a documentation of to some extent the salient points of any discussion that was held, but most importantly a documentation of the agreement, decisions and prescribed next steps that were -- that came out of the conversation between us and the agency. And so that process of formulization is actually go through a system at FDA that requires them to issue written minutes within a certain prescribed period of time, it's usually within a month of the meeting where thereabout. And until those meeting minutes are written most companies and certainly we are reticent to go into too much detail because we want to be sure that we don't get ahead of ourselves in interpreting something that may not be quoted in exactly the same fashion in the minutes.

Okay, thanks. I'll get back in line.

Thank you.

[Operator Instructions] And we do have a follow up from the line of Pete Enderlin from MAZ Partners.

Trying to change by gender but I let it go away. Dave you have an ATM of course as you mentioned for up to $25 million and the shelf registration for up to $150 million. So how do you sort of balance the factors, the decision between equity financing and these alternatives? And included in those alternatives would be things like joint ventures outlicensing or partial sale of some program maybe for some geographical area or something like that's. So how do you look at all that and sort of come up with strategic perspective?

Thanks again. The simple is that -- the answer is actually kind of simple. It really comes down to financial evaluations. So we always seek the lowest cost of capital available to us. It would be as if you're out buying a home you always look for the lowest mortgage rate under the best terms from the most reputable lender. And so that’s the same thing we do with capital, we look for the lowest cost of capital that are the most reliable sources and the ones that we believe are most reputable. So, that includes. So obviously, if we could get non-dilutive funding of the type that we’ve collected in the past, where it has little or no strings attached basically a grant, that’s pretty cheap money, if you will, and so we take that first. And then we look at the other sources and decide what makes the most amount of sense and factored into that is also the consideration of, as I said, the source of the capital, and bringing larger institutions into our shareholder list. And the support that they would naturally bring is the strategic consideration that gets factored into the value of any offer that’s made by a certain institution to buy our share. So, that’s how we do and it’s the same calculus for outlicensing, partnering or joint ventures. It really comes down to the terms and what makes sense in the long run for our shareholders.

It’s kind of difficult to calculate the cost of setting up a joint venture though, is this outlicensing or something like that…?

No, no. it’s quite obvious. Because in those agreements, you typically -- not typically you have to define the share of the product that’s going to be offered up in exchange for consideration from the partner or the other member of the joint venture. So if you are forming a joint venture or creating a partnership that means that you're giving up access to some portion whatever is defined in the agreement of the future revenues and profits of the product and obviously what that means in terms of what they’re offering in the short-term and whether that makes sense or not.

That means you have to sort of have a pretty good idea what you’re giving up in terms of…?

Yes we do.

Okay. And I have one more if I may, that probably should be for Doug and that’s related to CLI. [Chloresium] recently got approval for something called expanded access program for their CLI product, which I guess needs that they somebody else pays for and the patients get the treatment. And what are the implications for you with their somewhat competitive CLI product and that kind of approach to financing it?

Sure. Thanks for the question. It’s a little bit hard for me to comment on the [Chloresium] product to my knowledge. No data on the use of that product in CLI patients has ever been published outside of say, a descriptive press release from the company. I don’t think there’s ever been a peer reviewed publication. It’s very hard for me to say too much about the, if and how it’s competitive with what we’re doing in the setting of the multiple published study results that we have. I guess, in theory, a compassionate use situation could be competitive. But I’m not really sure what the parameters of that are and how that would attract the attention of physicians in the absence of any data.

So the vehicle that they’re using is really just kind of an alternative to some compassionate use. It doesn’t really have much to do with the efficacy of the program. Is that fair?

Yes I think that's fair. Because again now it's of course possible if there is data in existence that just hasn't been the least. But as I say I'm just not aware of any evidence of efficacy that's been published.

I think just to reiterate, I don't think we should draw any conclusions about the efficacy or safety of any product that's granted expanded access for a compassionate use because it just means it's part of a larger clinical database that still remains to be evaluated.

Okay, well thanks and again congratulations on all the progress that’s going on and on the new Board member too.

This concludes the question-and-answer portion of the presentation. And now I will turn the call back to Dr. Mazzo for closing remarks.