Plus Therapeutics, Inc. (PSTV) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. Welcome to the Cytori Therapeutics Fourth Quarter and Full-Year 2017 Earnings Results Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions]. Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Cytori’s future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section included in Cytori’s annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Cytori advises you to review these risk factors in considering such statements. Cytori assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Cytori’s President and Chief Executive Officer. Sir, you may begin.

Thank you, Ian, and good afternoon, everyone, and welcome to our fourth quarter 2017 earnings call. As Ian said, I’m Marc Hedrick, President and CEO of Cytori. And joining me on today’s call is our Chief Financial Officer, Mr. Tiago Girão; and our Vice President and General Manager of Cell Therapy, Mr. John Harris. On the call today, I will provide an update on the company’s oncology and cell therapy programs. John will then discuss the commercial-related activities, primarily in Japan. Tiago will then update on financial performance, then we’ll have time for Q&A after which I will update on forthcoming milestones. So let’s begin first with oncology. Our lead oncology candidate is ATI-0918, a generic pegylated liposomal doxorubicin, bioequivalent to Caelyx, the current branded reference drug in Europe and chronically – a chronic drug that’s been in short supply. Since our last call, we have completed remodels and upgrades to our 10,000 square foot nanoparticle focus manufacturing facility and the in-process analytical chemistry laboratory at San Antonio, Texas. We’ve also made a number of key hires to our team and have begun manufacturing liposomes. In addition, we have presented our clinical bioequivalency trial data at the 2017 American Association of Pharmaceutical Scientists meeting in November 2017. As a reminder that data show that our ATI-0918 product is indeed bioequivalent within the regulatory guidance limits for encapsulated doxorubicin, free doxorubicin and the metabolite doxorubicinol. That data can be found in more detail on poster form on our website. Looking forward, our next objectives in this program are to complete the facility validation, which is nearly complete, manufacture approval lots for stability and final in vitro comparability testing; identify the best possible commercial partners for this product; and file our MAA for EMA approval. Now on to cell therapy. In terms of the STAR trial data, a full summary of the results was presented at the 2018 Systemic Sclerosis World Congress in Bordeaux, France this February and is available on our website. Regarding our discussions with FDA on the STAR trial, we have had several communications back and forth with the agency in anticipation of the forthcoming meeting later in Q1. Our plan is to provide you with an update once we have our meeting and receive definitive feedback, which is anticipated for later this month. Relatedly in January, full enrollment in the SCLERADEC-II trial in France of 40 patients was achieved. That was one of our first milestones for the year. This trial is similar to STAR except that the primary endpoint readout is earlier than STAR, specifically at 12 weeks after treatment. The SCLERADEC-II trial results are anticipated in the second-half of 2018. Also, in terms of cell therapy, as you know, we have a BARDA-related program and RELIEF is a safety and feasibility trial of a single IV administration of the DCCT-10 cellular therapeutic for the treatment of the partial thickness and full thickness thermal wounds treated also with skin grafts. The trial and its related activities are fully funded by a cost plus contract with BARDA. And details of the trial were presented more formally on the last call and can be found in great detail on the clinicaltrials.gov website. Since our last call, BARDA has further requested some small incremental protocol changes that they feel will both improve trial enrollment and the overall study timeline. So ourselves, Cytori and our third-party CRO, who is helping us manage the trial are ready to proceed with enrolling the first patient once BARDA’s changes are ultimately approved. We’ll provide an update to you once the first patient is enrolled. We also have a number of investigator initiated trials that could have significant impact to the company. In terms of our Japanese urinary incontinence trial called ADRESU. This is a potential registration or approval trial for our ECCI-50 cellular therapeutic. In this case, specifically geared towards men who had prostatectomy that have residual stress urinary incontinence. The trial is primarily funded by the Japanese government and is nearing complete or full enrollment. Our plan as soon as we have full enrollment with that trial and the last patient is treated, we will update shareholders when that occurs. And as mentioned previously, there are a number of other investigator initiated trials enrolling in the U.S., Europe and Japan, and we will provide updates periodically when those are warranted. So now, I’ll turn the call over to John to discuss what’s going on commercially in Japan in particular. John?

Hey, thanks, Marc. Global Q4 2017 product revenue was $662,000 and full-year revenues was at $2.7 million. This is versus $1.5 million and $4.7 million, respectively, in 2016. Japan is our primary market due to its unique regulatory environment and that it comprises 71% of our global product revenue. Therefore, I will focus my remarks on Japan. The majority of the year-on-year revenue delta is due to decreases in premium priced solution capital equipment sales in Japan. Premium priced CapEx sales are lumpy on a quarter-on-quarter basis. Our installed customer base of 77 solution devices resides primarily with the innovators in notable academic facilities and high-end privately-held hospitals and clinics. Due to the deployment of our devices with these innovators, we are leveraging the resulting market awareness and focusing our efforts on the next tier of customers, the early adopters. To address this next tier of customers, programs were initiated in 2017. Our rental device program has had some early success in late 2017. We’re also refocusing our small team on driving consumer utilization at existing customers. Speaking of consumable utilization, year-on-year consumable growth in Japan was at 23% and our compounded annual growth rate over the past three years is greater than 50%. Looking forward to 2018. In terms of device sales due to the innovators using our technologies in these notable academic institutions and high-end private hospitals and clinics, we see continued and strong interest in the technology from the next tier of customers. To better address these customers, we will continue to implement our programs designed to lower the CapEx hurdle for device installation through our rental program and pricing moves. In terms of consumable utilization in line with our growth over the past three years, growth in 2018 again will come primarily from the breast aesthetics and orthopedic markets, which is where we are focusing our efforts. Our top customers focus on the breast and aesthetic markets, these customers represent the leading clinics in Japan with multiple locations and substantial opportunity for continued growth. Additionally, early results in knee osteoarthritis with our technology has been promising in the substantial market. One of our OA customers achieved its 100-patient milestone in less than a year. In the case of both clinical areas, both aesthetics and knee osteoarthritis, we intend to expand our customer support activities to further drive consumable utilization growth. Therefore, we expect strong double-digit growth for consumables in Japan in 2018. I’ll give you a brief update on the nanomedicine. And as Mark mentioned, we are communicating with potential partners for both ATI-0918 and ATI-1123. We’re focusing on key regions, such as the EU, but also feel global opportunities for our nanoparticle products are also promising. This effort remains a significant component of our commercial development activities. Now, I’ll hand off to Tiago. Tiago Girão: Thank you, John, and good afternoon, everyone. Our primary focus remains unchanged. The development of our late-stage clinical pipeline and related commercial preparatory activity that we believe can translate into shareholder value. In parallel, we are carefully managing our resources and tightly as – and as tightly as possible, while continuing to improve our operating performance. Despite the additional new investments in our recently acquired assets from Azaya, operating cash burn stayed consistent at $4.2 million in Q4 2017, as compared to Q4 2016. Fiscal 2017 operating cash burn reduced to $18.1 million, and within our guidance of $17 million – between $17 million and $19 million, as compared to $19.5 million for fiscal 2016. The reduction in annual cash burn was mostly related to reductions in operating expenses. Adjusted net loss totaled $4.3 million in Q4 2017, or $0.10 per share, as compared to $4.9 million, or $0.24 per share in Q4 2016. For fiscal 2017, adjusted net loss was $21 million, as compared to $22 million during fiscal 2016. Note that adjusted net losses exclude approximately $4 million related to a non-cash beneficial conversion future charge recorded in Q4 associated with the issuance of our Series B preferred – convertible preferred stock, as well as non-cash charge of $1.7 million recorded in Q1 2017 associated with in-process R&D as part of the assets acquired by Azaya – acquired by us from Azaya. For research and development expenses, in Q4, our research and development expenses excluding share-based compensation were $2.4 million, as compared to $2.9 million in expense in Q4 of prior year. For fiscal 2017, R&D expenses were $11.5 million, compared to $18 – I’m sorry, $15.8 million in 2016. The decrease in R&D spending is due to the completion of the STAR clinical trial, as well as completion of option one period under the BARDA contract, offset by our investments into the ATI-0918 program, our nanoparticle doxorubicin, for which manufacturing activities are ramping up in our San Antonio facility. In addition, the decrease is also attributed to the decrease in headcount from the restructuring activities implemented in September 2017. As a percentage of overall spend, our R&D expense for fiscal 2017 was 52% of total operating expenses when excluding share-based compensation. This is in line with our plans and indicative of our focus in late-stage programs. Now on our sales and marketing activities. Our sales and marketing expense this quarter was approximately $500,000, as compared to approximately $800,000 in Q4 2016. The decrease in expenses in Q4 relates to lower salaries and benefits, as well as lower professional services related to HABEO commercial activities mostly in the U.S. For full fiscal 2017, sales and marketing expenses remain consistent with 2016. G&A expense, excluding share-based compensation was $1.5 million this quarter, as compared to $1.8 million in Q4 2016. For fiscal 2017, G&A expense was $7.1 million, as compared to $8 million in 2016. The continuing tightening of our G&A expenses was related principally to reductions in salary and benefits, resulting from the September 2017 restructuring, as well as reductions in discretionary spend. Now with respect to our revenues. Q4 total revenues were $1.5 million, as compared to $3 million in Q4 2016. For fiscal 2017, total revenues were $6.4 million, as compared to $11.4 million in 2016, and the decrease relates to less product in BARDA contract revenues. Product revenue decreased in 2017 versus 2016, as discussed by John earlier on this call, and was largely related to less premium CapEx sales than in 2016. As per our guidance, we once again achieved double-digit consumable growth for the quarter and the fiscal year, where we have, in Japan, where we have regulatory approval. Our government contract revenues relate to our activities supported by BARDA. Such activities decreased due to switch from the development to clinical trial kickoff activities as part of our newly awarded option of the BARDA contract. As mentioned by Marc earlier, the FDA approved the IDE for the RELIEF trial in April and we negotiated BARDA’s option two of the contract in May, where we were awarded approximately $30.4 million. We have contracted with our CRO and are ready to begin enrollment of the RELIEF trial relatively soon. Turning to the balance sheet. As of December 31, we had $9.6 million of cash and $13 million of debt principal. This past September, we amended our debt with Oxford providing additional flexibility by pushing out our interest-only period through September 2019 – 2018, and decreasing our debt liquidity covenant to $1.5 million in cash. We plan to balance our ongoing capital requirements through several targeted activities that include revenue growth, business development opportunities, operating efficiencies, and working capital management, in addition to accessing the capital markets. Now back to Marc.

Tiago, John, thank you. Ian, let’s open the call up to any questions that are on the line.

The floor is now opened for questions. [Operator Instructions]. Our first question is from the line of Jason Kolbert from Maxim.

Hi, guys, thank you so much for the update. Marc, can you spend a little bit of time and just explore with me what your last interaction with the FDA was like? And now, is it my understanding, I thought I heard you say this that you’re expecting regulators to come back to you at the end of the month regarding the possible pathways for HABEO going forward. And then I’d like you to switch gears a little bit and just clarify for me exactly what the next steps are in terms of Caelyx and kind of moving forward with that in Europe and moving forward both in terms of our partnership? And what I’m trying to do is to tie both of these events, which I see as catalyst with your cash balance and kind of how you’re going to manage the year going forward? Thank you.

Hi, Jason. No, thank you. Yes, let me clarify and related to your first question about HABEO in our forthcoming meeting with the FDA. So to be clear, we have not had a face to face meeting with the FDA. So that’s going to be later this quarter. The regulatory path for the product is a PMA, not as a drug. So the PMA pre-submission process allows for Cytori to have a written back and forth with the agency prior to the meeting, which we have had multiple rounds of communication, and then we have the opportunity to formally discuss the data and the plan. And in this case, discuss the requirements for a sort of unique PMA/Cell Therapy Submission. And that’s something that we will have relatively shortly. So that’s – our guidance has been we would get that done in Q1 and we’ll have that done. So I think it – none of the feedback with the FDA is, I think, it is to a point where it’s discussable. I think, our plan is that, we’ll go have the meeting. We won’t comment any further at this time, but maybe refer you back to our prior public statements about how we intend to move forward and that – and to be clear, I think, the more conservative and likely outcome here is that, we’ll require another trial to gain approval. But until we have a meeting face to face to discuss the data and the path forward, we’re just not going to be able to give any further guidance until we have that meeting with the agency. So I hope that helps. On the ATI-0918 area, so let me talk about the BE trial. So in – late in 2017, we presented the BE trial data at the American Association Pharmaceutical Scientist Meeting. And specifically, if you look at that trial data in the poster that we met the interval for 80% to 125% of branded products and met the 90% confidence in interest – confidence interval ratio over test to the reference drug. So that we think that is potentially sufficient for approval. So that’s a key step. On the other side, we’ve got to make the drug and get to stability lots before we can file the MAA. So in terms of the timeline, as you’re sort of looking at this as a catalyst and so forth, but to be clear. So after the scleroderma readout midyear, we definitely lost some time, as we were going through the restructuring, the ball was moving forward, but not nearly as fast as I would have liked. We’re back moving at full speed ahead on that program, where the facility is very close to validation, whereas I mentioned, we’re making liposomes. Our goal is to make registration lots as soon as we can, get that in vitro comparability testing done and the stability on the timeline. And the goal is to get that MAA file as soon as possible. So we’ll update the timeline over the next few months, but we’re sort of – we’re full steam ahead with that plan. I hope that helps.

Marc, that does help. But I’d like to ask you to try to speculate a little bit on what the possible outcomes are? I mean, when you say, the FDA might – the conservative approach is to expect a new trial. But and given the 21st Century Act, this is a pretty complicated scenario. So I’d just appreciate it if you could opine a little bit on what this might look like?

Yes. So Jason, I think, we’re close enough to having that meeting that maybe it’s better not to opine at this point and prepare for that meeting, have the best meeting possible, and then as soon as we can get to the result. I think, you’re alluding to the fact that there are – as a device, there might be some advantages as an orphan disease. There might be some advantages and to the 21st Century Cures Act, there might be some advantages. But on the flip side, as we know, we didn’t meet the primary endpoint in the combined group. So that’s a hurdle that’s difficult to overcome. But let’s have that meeting and then we’ll endeavor to do our very best to report definitively once we have that feedback.

Okay, I understood. And Tiago, can you talk with me a little bit about the financing strategy associated with the company with $10 million cash balance, given kind of what you see as the catalyst. How are you going to make that cash last? And kind of what’s the plan going forward? Tiago Girão: Sure, Jason. Certainly, we don’t have as much cash as we would like to have, that’s a point. That said, we have a few things coming up that we’re working on. That includes some potential milestones from current partners that we have that are coming due. We have activities related to business development that I can’t we really precisely tell you when it’s going to happen, but we are having ongoing dialogues to partner one or more of our assets that could bring in some cash. And we will continue to look at ways that are as friendly as possible to shareholders to raise money. We have not given up. We are not giving up and we will move this company forward. We have a lot of assets that we think are valuable and a lot of things that we can get to patients that are in need.

Okay. Thank you so much, gentlemen.

And our next question is from the line of Andrew D’Silva from B. Riley FBR. Andrew D’Silva: Hey, good afternoon. Thanks for taking my questions. Just a couple quick ones here. First one, as it relates to SCLERADEC-II, if my memory serves me correct, you were about 50% enrolled when you got the STAR data back. Were you in any way able to modify the enrollment to be skewed a little bit more towards diffused group versus the limited group, because obviously, that was far more favorable for you in the STAR trial?

Hey, Andy, it’s Marc. So, the – as you sort of alluded to the SCLERADEC-II trial has been fully enrolled and we’re waiting to last patient visit. By the time we had the data, we were so far into that trial, having a protocol change related to that was really not feasible. We were too close to the getting the 40th patient and so 4-center trial and it’s in France. So that was a pretty tall order. We did communicate though to the investigators who are aware of the data. And I think, they were void by the effect in the diffused population. So bottom line is, we’ll have a mix of patients, it won’t be –with – in retrospect, we would like to have all the diffused patients, but we’ll have a mix and then we’ll have a look at that data. I think that the key point to highlight beyond that point is the readout is at 12 weeks. And the – as you know, it seems from the STAR data that primary impact was greatest at 12 weeks. So it will be interesting to evaluate that data in a randomized control trial with a primary endpoint that reads out at 12 weeks in terms of hand function and the other secondary endpoints. And recall in the combined group in the STAR trial, I believe, we did achieve statistical significance in the primary key secondary endpoint to 12 weeks in the mixed group of patients, I’ll just point that out. Andrew D’Silva: Yes, I believe that was accurate. I’m actually looking at the poster right now. But just moving over to BARDA really quickly, just educate me on this, because I believe it’s a little bit different. With the RELIEF trial, it’s successful. I mean, that could really just be the end right there and you could get a PO for the therapy right after that. You don’t have to go through a full on FDA approval process, or anything like that. And maybe if you could highlight the possible outcomes of what – sitting here today of what it could look like in a blue sky scenario?

Okay. So you’ll see the conservative approach is to say this is a Phase I and the base plan for BARDA would be to move this all the way through to FDA approval if the data supports that. So that’s sort of the base conservative assumption. One of the upside scenarios I saw go into the speculation land. So as you’re sort of alluding to – the BARDA has discretion that prior to FDA approval, if the threat condition wants to engage in an acquisition contract to apply the technology if they believe that it’s safe and effective. That’s the emergency use authorization legal framework. So we think that’s possible. It’s not something that we’re prepared to do today. If the government were – if the threat level was to warrant and they were to make that decision, then we would be ready to respond very quickly to whatever scenario they were concerned about as our customer. The – I think that practically, there – if the data in the Phase I trial is both safe and supportive of clinical effect, it does make that scenario – that more upside scenario more realistic. Right now, not having the – any clinical data in this indication, it probably makes that a little bit more unlikely. But the – that – I think those are the two base scenarios. Andrew D’Silva: Okay. And just final question. If we start thinking about catalyst going forward, you have 0918 that is most likely the first opportunity to get widespread approval in Europe. And then probably followed by either the RELIEF trial and depending on the outcome of what happens with the STAR being secondary to that getting approval for scleroderma. Is that kind of fair enough from a probability standpoint what comes, first, second and third?

So good question. So 2018 is really chock-full of milestones for us. When you look at you kind of look at what’s possible in Europe with the scleroderma trial, Japan with the urinary incontinence trial again, funded registration trial with the Jap – by the Japanese government. So if you look at the oncology product 0918, it will likely be a series of incremental milestones leading up to stability testing and approval. And our plan is to be transparent as those milestones roll out as we have discussions and we will make those public, because that’s an – that’s a – for this company and our market cap, as you know, that’s an enormous opportunity and time is of the essence. So we think that’s something that’s important to report on and communicate on. As Jason brought up the – there’s an importance in this FDA follow-up. I think, the market is – has already spoken with respect to the trial the data came out. But we’ll have to go to the FDA meeting and see what the definitive outcome for that before we report on that. And then also as Tiago mentioned, and then I followed up with, I believe that the – in terms of BARDA, we’ve shifted from development to now clinical. So getting that trial enrolled is an important milestone and I think that gets closer to the scenarios that you mentioned. So I’ll follow-up with the milestones and sort of list those out for you as we close. But there’s a lot of things in 2018 that could be positive for the company in the context of a company that continues to try to put downward pressure on cash burn. Andrew D’Silva: Great, thanks. That’s a perfect color. And you remind me of my one more thing, so this will be my last question. With 0918, obviously, in the past, we discussed this when you initially acquired Azaya, that it wouldn’t be out of the realm possibility that a partnership would happen in the back-half of 2017 or early 2018. Could you maybe educate us or give us an indication of how discussions are going? Are they progressing, or maybe just as far as how they’ve evolved so far with strategic partnerships?

Yes. So I met with a potential investor last week and I sort of talked about partnerships. So he said don’t tell me about partnerships, everybody’s always talking about partnerships, tell me when they happen. So with that sort of spirit in mind, I’ll give as much flavors I can. But – so first of all, one of the attractive elements of this product to us is that, it’s been on the global supply shortage list. It’s not a drug that’s going away. In fact, it’s anticipated to continue to grow over the next 10 years and be $1 billion-plus opportunity. So that’s – it’s a real opportunity, it’s hard to make. And that’s why there have been challenges. We think that the Azaya asset has internal manufacturing know-how and capabilities that aren’t necessarily patented, but give the company now Cytori some advantages and being able to make this thing in the U.S. is important. The Azaya company had completed two clinical trial successfully, a Phase I on a 1123 asset and the BE trial. We have a lot of confidence in the team and the capabilities and the manufacturing facilities and processes to be able to get us to market. So it’s a big opportunity. We have a lot of confidence in our ability to do that. So when – now shift to the partnering discussions. So one think partners tell us is that, this is an important drug to people. It’s a market that J&J has dominated for awhile. There may be a couple of foreign participants that are coming to the markets in different global regions, but it’s a drug that people want to have in their portfolio when they present to buying groups. It’s not insignificant and still has relatively high margins as opposed to perhaps other generic drugs as a complex generic more like biosimilar. So the partner discussions, I think are indicative of those economic drivers for this product, so that’s important. And then the question sort of becomes, is this a global or EU opportunity. Our focus is EU, because that’s where the timeline is most compressed. The goal is to be the first generic, and it’s a big delta to go from first to second generic. So that’s why time is so important. But there’s also global interest in that product as well, and there are some markets where having a reliable U.S. manufactured product of a very high-quality for a sort of a bedrock oncology therapy is really important, and that’s what we’re leveraging and selling to those partnering discussions. And there’s a lot of dialogue going on with a number of partners in due diligence right now. So we think it’s – the closer we get to being able to file that MAA or actually filing, we think that just – that makes the drug and the opportunity that much more interesting for a potential partner, and I’ll stop there. Andrew D’Silva: Great. Thank you so much for your time, and good luck going forward this year.

Thank you, Andy. I appreciate it.

[Operator Instructions] Our next question is from the line of Yale Jen from Laidlaw & Company.

Good afternoon, thanks for taking the questions. The ATI-0918 that have completed or past the bioequivalency, which is important. And also, one of the factors for me is that this is a difficult to manufacture drug. And some of the other players has sort of a – has problems and that ultimately created opportunity globally. So the question I have is that – in general, is there any specific aspect you guys can manufacture or produce this drug better so to avoid some the same type of pitfalls some others have encountered before?

Yes. Yes, thanks for the question. It’s a really good question. It kind of gets to the bigger picture of how do we differentiate, what Cytori does in San Antonio from the – some large foreign generics players who might be interested in $1 billion market with pretty high margins. So the way I would say that we have a couple of unique factors favoring us. I think number one is being in the U.S. is very important with a drug of this complexity. And just to kind of articulate what’s – we have – what’s evolved here. We have to make the liposome the appropriate size and distribution with appropriate charge and then load it with API such that in the BE trial that the doxorubicin capsulated and free are the same within the statistical bands and that the metabolite is the same. And so being able to do that reliably is the critical element. Also showing in vitro comparability, but the BE trial is really the key nut to crack. Why we think we’re particularly good at that is, we do, as I mentioned, have some in-process and final in vitro testing capability that we don’t think other people have. And that’s – I would say that’s the secret, and that’s something that we think has made the team in San Antonio particularly good. These are things that they’ve developed internally de novo and the proof is that they did two trials and two very distinct nanoparticles that have been successful. And I see no reason based on what we manufacture there so far and where we are in the facility that those advantages won’t help us as we go forward, both in the partnering process and then being able to make drugs that actually indeed is bioequivalent to the branded drug and provides the predicted clinical effect. So it’s U.S. manufacturing and it’s those in-process analytic techniques and it’s the processes that we inherited from Azaya that we think are going to allow us to be successful going forward.

Okay, great. That’s very helpful. I think that’s a question a lot of investors would be interested to know. Just another quick follow-up question, which is that for the post-surgical urinary incontinency study in Japan, could you briefly describe to me the sort of opportunity there? So I know this could be a very interesting program going forward – moving forward?

Yes, it is. It’s not something that we do much more right now than mention. And I think our strategy has been to get the trial enrolled. And then once the trial is fully enrolled, then we’re on the clock and we can really talk about the opportunity. But let me tell you how we think about that. So this was an example of a investigator-initiated trial from a very senior, well-regarded Japanese urologist who did his own preclinical work, his own pilot work, and then based on the success of the pilot went to the Japanese equivalent of the NIH, which is called AMED, and received funding from AMED to fund the trial. So we support it, but it’s largely funded by the Japanese government. They negotiated the trial protocol with them and the opportunity explicitly is a – it’s a male population that has had a prostatectomy and has significant urinary leakage. So these are men that are – lived a long time, wear diaper, and in some cases, it’s a significant effect on how they live. So a significant reduction in urine output and the primary endpoint is reduction of 50% or greater in those patients. And their ability to improve their lifestyle because of that or potentially be cured, which is possible with this group of patients. That’s an important benefit to these patients in terms of describing the opportunity. The market is relatively small. It’s probably a $75 million a year opportunity at the projected price points that we have for this therapy in Japan. So the opportunity to date explicitly is that male population, which is relatively small, and there – 1% to 5% of patients after prostatectomy have urinary incontinence depending on the facility. The bigger market is in female patients that have urinary incontinence, and we do have some pilot data that I can send you that suggests that it may work even more effectively in the female population. So our plan is to get this trial enrolled, evaluate the data. And then if the data looks good, perhaps bridge to the broader population of patients, where the opportunity, as you know, is much greater. So we’ll be increasingly talking about that once we get that trial enrolled.

Okay, great. Thanks a lot, and best of luck for the things move forward.

Thank you, Yale. I appreciate the question.

And at this time, I’m showing we have no further questions. Dr. Hedrick, I turn it back to you.

Thank you, Ian, and thanks, everybody, for participating in the call, and thanks for the questions. Let me just go through and list the forthcoming milestones. These are on the current investor presentation on our website, but let me highlight those. First milestone is actually complete and that’s getting full enrollment in our EU SCLERADEC-II trial, as mentioned. We also plan on having our meeting with respect to the STAR trial and HABEO and defining steps, and that will be later this quarter. We plan to enroll the first patient in for the U.S. RELIEF trial, which is funded by BARDA. And as mentioned, we plan to complete enrollment in the Japanese ADRESU trial relatively soon, and then we’ll be on the clock for reporting that data. We’re in the process of identifying a commercial partner, and that process will go on until we identify the right partner and partners for that opportunity, but continue to try to make progress in the background in manufacturing, which we will do. We intend to complete the manufacturing validation of our ATI-0918 and then get that on stability testing and do that as soon as possible. And then once we have six months stability testing, we believe at this point, we can file for EMA approval. Later on this year, the SCLERADEC-II trial readouts will be forthcoming and we hope the ADRESU trial readout will also be coming. So with that, I’ll just by – conclude by, again, saying thank you and appreciate the participation on the call. And as always, I’d like to just thank our employees who work so hard and for the patients who trust us and all the advisors and analysts who follow us. We’re appreciative of your time. Thank you and have a good evening. Ian, that’s it for us. Thank you.

Thank you. This does conclude today’s conference call. Please disconnect your lines at this time, and have a wonderful day.