Athersys Management Discusses Q3 2013 Results - Earnings Call Transcript

Nov.14.13 | About: Athersys, Inc. (ATHX)

Athersys (NASDAQ:ATHX)

Q3 2013 Earnings Call

November 14, 2013 4:30 pm ET

Executives

Lisa Wilson

William Lehmann - President, Chief Operating Officer and Secretary

Gil Van Bokkelen - Co-Founder, Chairman and Chief Executive Officer

Analysts

Jason Kolbert - Maxim Group LLC, Research Division

Edward A. Tenthoff - Piper Jaffray Companies, Research Division

Greg Chodaczek - First Analysis Securities Corporation, Research Division

Stephen G. Brozak - WBB Securities, LLC, Research Division

Christian Glennie - Edison Investment Research Limited

Gregory A. Bonfiglio - Proteus Venture Partners

Operator

Good afternoon. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Athersys Third Quarter Results Call. [Operator Instructions]

Lisa Wilson, you may begin your conference.

Lisa Wilson

Thank you, and good afternoon, everyone. I'm Lisa Wilson of In-Site Communications, Investor Relations for Athersys. Thank you for joining today's call. If you do not have a copy of the press release issued at the close of market, it is available on the Athersys website at athersys.com, or you may call Libby Abelt in my office at (212) 759-5665 to receive it via e-mail.

Gil Van Bokkelen, Chairman and Chief Executive Officer; and B.J. Lehmann, President and Chief Operating Officer of Athersys, will host today's call. The call is expected to last approximately 45 minutes and may also be accessed through the company's website at athersys.com. A replay will be available 2 hours after the call's completion and access information for the replay is in today's press release.

Any remarks that Athersys may make about future plans, expectations and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's Form 10-Q, 10-K and other public SEC filings.

Athersys anticipates that subsequent events and developments may cause its outlook to change. And while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so.

For the benefit of those who may be listening to the replay, this call was held and recorded on November 14, 2013. Since then, Athersys may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

With that, I would like to turn the call over to B.J. Lehmann. B.J.?

William Lehmann

Thanks, Lisa. Good afternoon, and welcome, everyone. I'm B.J. Lehmann, President and Chief Operating Officer at Athersys. I'll briefly review our financial results for the period ended September 30, 2013, and then I'll turn the call over to Gil Van Bokkelen for a corporate update, followed by a question-and-answer period.

In the third quarter of 2013, we reported total revenues of $621,000, compared to $1 million for the same period in 2012, reflecting a decrease in contract revenue and an increase in ground revenue. Contract revenue may vary from period-to-period with achievement of milestones and the performance of certain research and clinical support activities. Absent any new business collaborations, we would expect contract revenues to continue at reduced levels over the next several quarters. Grant revenue may fluctuate with the completion of existing grants and the award of new grants, such as the SBIR Fast Track grant awarded in the third quarter to support our planned Phase II trial evaluating MultiStem for the treatment of acute myocardial infarction.

Research and development expenses were $4.7 million in the third quarter of 2013, compared to $4.1 million in the third quarter of 2012. Clinical and preclinical development costs increased by $219,000 over the 2012 period, reflecting increased expenditures associated with our Phase II ischemic stroke trial. Patent legal fees increased by $217,000, personnel cost increased by $130,000 and stock-based compensation increased by $207,000 in the current 3-month period compared to the prior year period. Sponsored research costs were reduced by $216,000 from the prior year period. General and administrative expenses increased to $1.5 million in the third quarter of 2013, compared to $1.1 million in the third quarter of 2012, primarily due to an increase in stock-based compensation expense.

Net loss for the 3 months ended September 30, 2013, was $5.6 million, or $0.10 per share, compared to a net loss of $3.4 million, or $0.12 per share, for the 3 months ended September 30, 2012. The difference reflects the increases in R&D and G&A expenses over the 2012 third quarter, the decrease in revenue from the prior year period and the impact of $871,000 in income from the change in the fair value of our warrant liabilities, which was recognized in the third quarter of 2012.

As of September 30, 2013, we had cash and cash equivalents of $17.8 million, compared to $25.5 million at December 31, 2012. In October, we put in place a new equity facility with Aspire Capital to replace our prior 2-year agreement. Under the new agreement, we have the right to sell up to $25 million in shares of common stock to Aspire Capital under certain conditions over a 2-year period. The agreement represents an additional tool for us accessing capital to complement business collaboration grants and traditional fundraising, and as such, provides us with added financial strength and flexibility.

With that, I like to turn the call over to Gil for a corporate update. Gil?

Gil Van Bokkelen

Thanks, B.J., and good afternoon, everyone. Athersys is committed to developing proprietary therapeutics that have the potential to address significant areas of unmet medical need and that also have the potential to create substantial value for our shareholders. Our current work is primarily focused on conditions where a growing body of data suggest that MultiStem, our patented allogeneic stem cell product, has particular relevance and clinical potential. Current regenerative medicine programs are focused on developing MultiStem for the treatment of inflammatory and immune disorders, neurological conditions, cardiovascular disease and other areas where standard of care is limited and significant medical needs exist.

Each of the areas we are pursuing represents a large market opportunity that is likely to grow substantially over time, given current population dynamics. As people familiar with the company know, MultiStem is a patented biological product that is manufactured from human stem cells obtained from adult bone marrow or other non-embryonic tissue sources. Unlike other cell types, after isolation from a qualified, consenting donor, MultiStem may be expanded on a large scale for future clinical use and stored in frozen form until needed. As a result of their robust growth properties and distinctive profile, cells obtained from a single donor require no genetic modification and may be used to produce banks yielding millions of doses of clinical-grade MultiStem, an amount far greater than other stem cell types can achieve.

Each bank is extensively characterized to ensure product consistency and safety. Over the past decade, we have conducted work with a broad network of collaborators at leading research and clinical institutions in the U.S. and internationally, resulting in numerous publications and top-rated peer-reviewed journals and presentations at leading conferences. This work has demonstrated that MultiStem consists of a special class of human stem cells that have the ability to express a range of therapeutically relevant proteins and other factors and promote healing in multiple ways.

A growing body of evidence generated by Athersys' scientists and independent collaborators shows that MultiStem promotes healing and tissue repair through multiple mechanisms of action. And importantly, we have demonstrated a deep understanding of those biological mechanisms, as well as distinctiveness and advantages relative to other approaches.

The product conveys reparative effects in several ways, such as through the expression of factors that reduce inflammatory damage, enhancement of the formation of new blood vessels in regions of ischemic injury and protection of damaged or injured tissue in areas where otherwise healthy tissue may be at risk.

Furthermore, our research has shown that MultiStem regulates other cell types in key organ systems in the body to promote tissue repair and healing. Like a drug or conventional biologic, the cells are cleared from the body over time, although their effects on promoting healing and tissue repair appear to be quite durable and long lasting.

Five of our MultiStem programs are now in clinical development, including 3 programs in the inflammatory and immune disease space. Our most advanced program is evaluating MultiStem for the treatment of inflammatory bowel disease, or IBD. This program is partnered with Pfizer under a global agreement. The current Phase II clinical study involves administration of MultiStem to patients suffering from treatment refractory ulcerative colitis, or UC. This is the most common form of IBD with an estimated 2 million people suffering from UC in the U.S., core European markets and Japan.

Other forms of IBD include Crohn's disease, which also represents an area of significant unmet clinical need. We are pleased to report that enrollment in the ongoing double-blind, placebo-controlled Phase II UC study is now nearly complete. We expect the last several patients to be enrolled shortly, and we look forward to Pfizer reporting initial results early next year, around the end of the first quarter.

Enrollment is also underway in our ongoing 136-patient Phase II study evaluating the administration of MultiStem therapy to patients who have suffered an ischemic stroke. This double-blind, placebo-controlled trial is being conducted at leading stroke centers across the United States and in Europe, specifically at 25 clinical sites in the U.S. and 6 leading stroke centers in the United Kingdom, which are all part of the national stroke clinical trial network there.

In contrast to treatment with thrombolytics like tPA, which must be administered within 3 to 4 hours after a stroke, we are treating patients 1 to 2 days after the stroke has occurred. In preclinical studies, administration of a single dose of MultiStem, even several days or a week after a stroke, resulted in significant and durable improvements. We previously completed dosing of the initial dosing cohorts for the study. And the independent safety monitoring committee evaluated the initial data and found that MultiStem was safe and well tolerated at both of the doses evaluated. As a result, all patients are now being randomized to receive either high-dose MultiStem or placebo, and this randomization is occurring in a 1:1 manner.

Recently, we conducted a trial investigator meeting to review study progress in key aspects of the trial with the clinicians and study site coordinators. During the meeting, leading clinicians from a couple of the highest-enrolling sites shared their experience with the other study site investigators and site coordinators, and it's fair to say there was a lot of excitement at the meeting. Our enthusiasm for the study remains very high. We believe that this approach has tremendous potential and could represent a major advance in stroke clinical care.

In the U.S., enrollment continues to ramp up as we build momentum, with enrollment rates improving with the addition of new sites and increased site activity levels and impact of recent minor protocol amendments.

Momentum has also been building in Europe. In August, we received formal ethics approval to initiate the trial in the U.K. And since that time, we have conducted site training and have been completing certain logistical activities, such as finalizing site contracts. This process has taken a bit longer than we had hoped, but the initial U.K. sites are now in the process of launching. We expect 4 sites to be operational in the next few weeks, with 2 more added early next year.

Given that these sites tend to see a larger number of stroke patients than many of the sites in the U.S., we anticipate that this will continue to drive momentum for the study. Our objective is the disclosure of the initial results from the study sometime next summer, which, of course, will depend on continued study progress.

We're also seeing some important international possibilities emerging, most significantly perhaps is the exciting progress from a recent initiative in Japan, designed to establish a new accelerated regulatory framework, specifically designed for regenerative medicine therapies. This framework, which was first announced earlier this year, is intended to create a rapid new regulatory and commercialization path for stem cell therapies in Japan. As a result, this initiative could be very important for Athersys and our shareholders because it might enable accelerated development opportunities in several very important areas.

For example, stroke is the leading cause of death and serious disability in Japan. And in addition to the enormous clinical and quality of life burden it imposes on patients and their families, it also creates an enormous economic burden on the national health care system in Japan. Demonstrating clinical proof of concept and achieving expedited approval in an area like stroke could help many patients and dramatically accelerate our commercialization path, resulting in substantial value creation for our shareholders.

We recently had the opportunity to meet with senior leadership at the PMDA, which is the Japanese regulatory authority that is equivalent to the FDA here in the U.S. or EMA in Europe, as well as leadership from the Ministry of Health, Labor and Welfare in Japan. As a result of these discussions, we are convinced that the leadership in Japan understands the potential of these technologies and is committed to enacting this bold new vision and to positioning itself as a global leader in the regenerative medicine area. As further evidence of this, we understand that a few days ago, the legislation authorizing the official creation of this new accelerated regulatory framework for regenerative medicine therapies was passed by the lower house in the Japanese legislature, essentially the House of Representatives, and passage of the framework is now expected in the upper house, or Senate, shortly, whereupon it will become a law.

While the detailed regulations that will govern this new framework will take some time to develop, we are excited by the potential of this new initiative and are actively exploring how we might be able to utilize it to speed development and commercialization in several important areas, including stroke and others.

In addition to the stroke and IBD programs, we continue to advance other clinical projects. In 2014, we will advance a third program into Phase II clinical development, MultiStem for acute myocardial infarction or heart attack. This study will build on the promising Phase I data announced previously, demonstrating a favorable safety profile and encouraging signs of improvement in heart function among patients that exhibited severely compromised heart function prior to treatment.

This data was published in a leading peer-reviewed scientific journal in 2012. Although this initial trial was designed as a small safety study, the 1-year follow-up data suggested that the meaningful benefits observed in multiple clinically relevant parameters were sustained over time.

We're pleased to have recently been awarded an SBIR Fast Track grant funding, which includes funding of up to $2.8 million from the NIH to support our Phase II study. This grant testifies to the strength of the Phase I clinical data and will enable us to advance clinical development of MultiStem for patients that have suffered a myocardial infraction.

Preliminary planning for the Phase II trial continues, and we expect to begin patient enrollment next year. This will be our third program in Phase II development, and it represents another potential opportunity to evaluate emerging regulatory paradigms here in the U.S., Europe and in Japan.

Transplantation support is another area where data suggests administration of MultiStem can have significant benefits. Our most advanced program in this area focuses on patients suffering from leukemia or certain other blood-borne cancers. Following radiation therapy, patients receive a hematopoietic stem cell or peripheral blood stem cell transplant. Such patients are at a significant risk for serious complications, including graft-versus-host disease or GvHD, an imbalance of immune system function caused by transplanted immune cells that attack various tissues and organs in the patient. Previously, we released data from a 36-patient Phase I study, which demonstrated the safety of MultiStem in this indication and suggested that MultiStem may have a beneficial effect in reducing the incidence and severity of GvHD, as well as providing other clinical benefits, such as augmenting rates of platelet engraftment and time of engraftment.

Based on these positive outcomes, we intend to further develop MultiStem for this indication, and a few months ago, we submitted a proposal to the FDA for conducting a registration-directed study in this area. In late spring, the FDA sent us their response to our proposal, which, in our view, was favorable. The FDA conveyed some specific questions and recommendations regarding the proposed study design, which we have been working to incorporate and run statistical simulations around.

We are now in the process of completing the simulations and the incorporation of the FDA's recommendations and intend to submit the revised trial plan for their review shortly. We are optimistic that we will reach agreement with the FDA regarding a defined protocol for this important study sometime early next year. We believe we will be ready to start this study in 2014. The actual study initiation will depend on the progress in our other clinical trials and the achievement of certain other business development and financial objectives.

It is worth noting that our GvHD program has already been assigned orphan drug designation from the FDA, which provides us with 7 years of market exclusivity upon approval and certain other benefits. And we are actively exploring other important regulatory designations as well.

Research is also underway in providing support for solid organ transplantation. The risk of rejection and the requirement for long-term immunosuppression are key challenges in donor organ transplantations, which could be addressed by administering MultiStem to transplant patients. In preclinical models of solid organ transplantation, we and our collaborators have demonstrated that a treatment protocol that includes administration of MultiStem shortly after the transplant procedure enables durable organ graft acceptance without the corresponding requirement for the long-term administration of immunosuppressive drugs. We are actively collaborating with a leading transplant group at the University of Regensburg in Germany on an institutional-sponsored clinical trial to explore the administration of MultiStem in patients following a liver transplant. We plan to provide some financial support for this 12- to 24-patient dose escalation study and will provide the MultiStem product required to conduct the trial. We currently expect that our collaborators will report initial results from this study sometime in 2015.

This new transplantation study built on pre-clinical research conducted at Regensburg University Hospital in an established heart graft transplant model, which was published in STEM CELLS TRANSLATIONAL MEDICINE during the third quarter. The preclinical study demonstrated that an independent donor-derived Multipotent Adult Progenitor Cell, or MAPC, increase the long-term survival of organ transplants in instances where the cell donor is not related to the receipt or the organ donor, and also alleviate or eliminate the need for long-term immune suppression. Animals receiving MAPC in short-term immunosuppressive therapy survive long term and displayed better outcomes than relevant controls. Specifically, in the untreated group, heart grafts were typically rejected in less than 2 weeks. Treatment with mycophenolate alone kept them intact just a few days longer.

However, animals given a combination of short-term mycophenolate and MAPCs exhibit 80% survival in 100 days post graft, which is the length of the study, even after immunosuppression with mycophenolate was stopped at 1 week, suggesting a durable effect and promising pathway for clinical immunotherapy.

Furthermore, the allogeneic heart grafts recovered from MAPC-treated animals were successfully retransplanted into naive secondary recipients without triggering rejection, even when no immunosuppressive drug was administered to these animals. These findings demonstrate an immunoprivileged state or regional immune tolerance had been induced in the graft that was robust and durable, as evidenced by the fact that it could be transferred into another animal.

By addressing several of the major hurdles that represent real challenges for transplant patients, this work further demonstrates that MultiStem could have a significant impact on transplantation medicine. It also supports the broader relevance of MultiStem in the treatment of inflammatory and immune conditions that we have previously discussed.

We are also applying our pharmaceutical discovery capabilities to identify and develop small molecule compounds with potential applications in indications such as obesity, related metabolic conditions and certain neurological conditions. These represent major areas of clinical need, as well as substantial commercial opportunities. To date, our work in this area has centered on the development of potent, highly selective compounds that act through stimulation of a specific receptor in the brain, the 5HT2c serotonin receptor. In preclinical studies, our novel 5HT2c receptor agonist compounds have exhibited favorable attributes, including outstanding receptor selectivity and greater potency and activity as compared with other 5HT2c agonists. We've also demonstrated that our compounds have a distinctive profile and are superior to other FDA-approved drugs, as well as complementary with certain other agents. We believe these features will enable us and our partner to achieve best-in-class weight loss, as well as a superior safety and tolerability profile.

Additionally, we have evaluated certain compounds we have developed in preclinical models of schizophrenia and other neurological disorders and have shown that these compounds exhibit an attractive selectivity profile and potent effects. This represents a distinct development opportunity to the obesity and metabolic area and another opportunity for value creation.

We intend to enter into a partnership to advance the development of our 5HT2c agonist program, either for the treatment of obesity, schizophrenia or both indications. We also continue to explore collaboration opportunities for the development and commercialization of MultiStem for certain therapeutic areas.

It's also worth noting that our long-standing partnership with Bristol-Myers-Squibb, or BMS, also continues to pay dividends as they recently notified us that they are advancing a third program into clinical development from their drug discovery programs established using our RAGE technology platform, representing an important milestone and triggering our payment to the company in November.

In the meantime, as B.J. described, we have continued to maintain a stable balance sheet and recently entered into a $25 million equity facility with long-standing shareholder, Aspire Capital. We have successfully utilized similar facility with Aspire over the past couple of years. This flexible access to capital is intended to complement funding from business collaborations, grants and traditional fundraising, providing added financial strength and flexibility, if needed, as we execute our strategy.

In summary, we are making substantial progress in several key areas, and we are now rapidly approaching data from some key studies while we continue to pursue other opportunities. We believe more than ever that we are well positioned to create extraordinary value for our shareholders as we continue to advance our core programs.

With that, we'd be pleased to open the call for a few questions.

Question-and-Answer Session

Operator

[Operator Instructions] And your first question comes from Jason Kolbert from Maxim.

Jason Kolbert - Maxim Group LLC, Research Division

Can we talk just a little bit about ulcerative colitis and stroke? Given the fact that you'll have all the sites up and running, sounds like by first quarter, should we be expecting top line data about 6 months? You mentioned the summer. Help me understand what the timeline is once the last patient is enrolled.

Gil Van Bokkelen

Yes. So we were -- so our primarily clinical endpoint is 90 days after the last subject has been admitted to the study and treated with MultiStem. Obviously, we take -- we're taking several measurements along the way, 1 week, 1 month and at 90 days, but the primary is at 90 days. So roughly, it will be 3 months and change from the time that we enroll that last subject into the study. We have been targeting completion of enrollment by the end of the first quarter, but because it's taken us a little bit longer to get the sites in the U.K. up and running and a couple of sites in the U.S. actually took a little bit longer than we anticipated as well. For example, the Cleveland Clinic, which, frankly, is a meaningful site, has just recently come online. So it's taken us a little bit longer to get those guys up and running. So that's put us a little bit behind. But we're still targeting for completion of enrollment a little bit behind of what we were originally projecting and having data sometime next summer.

Jason Kolbert - Maxim Group LLC, Research Division

And on the -- yes, that's very helpful. And on the Pfizer side, on ulcerative colitis, help us understand how that sequence of events may play out as that trial looks like it's beginning to -- it sounds like it'll be completely enrolled soon. So same question, what's the timeline? And given your interactions with Pfizer, how should we expect that data to arrive?

Gil Van Bokkelen

Yes. So we're still working through some of the logistical elements with Pfizer in terms of how the data will be presented. But I know the plan is that once all the data is basically accumulated and analyzed, that there isn't going to any delay in terms of getting it out there. And it's going to be -- it'll be announced very quickly once we have all the data in hand. We're still targeting around the end of the first quarter. We're literally down to just the last several patients in the study. And of course, Pfizer's quite anxious to get those last several patients enrolled, and they're just about there. So we're still targeting around the end of the first quarter for that. And in terms of what the precise venue will be or the mechanism for actually conveying the data, I'm not quite sure, but certainly we'll let people know as we get closer to that event.

Jason Kolbert - Maxim Group LLC, Research Division

And I sense your excitement about Japan. Is there going to be a window to include Japan in any of these trials, in terms of kind of opening up the pathway should this legislation actually be enacted and happen?

Gil Van Bokkelen

Yes, it's a great question and it's something we're actively exploring. I mean, we've already made, as I mentioned, a trip out to Japan to meet with the regulatory authorities there and actually had a series of meetings and discussions with them about various issues. And we're going back to Japan in early December to continue that discussion and explore with them what the options might be and the ways that we might be able to advance our clinical programs. As I mentioned, as I know you know, Jason, there's tremendous interest nationally in Japan in the area of regenerative medicine. And there's a particular interest in an area like stroke, just because it's such an enormous health care and clinical burden and quality-of-life burden in Japan. So it would make sense that there would be a lot of interest in the possibility of exploring our clinical activity in an area like stroke into Japan. But really, a final decision on that is going to depend on a number of things that we intend to discuss with the regulatory authorities there. I think that -- and we'll have clarity around, I think, in the weeks ahead. But I think that our long-term plan is certainly to expand our clinical activity in the stroke program, as well as other programs. In Japan, now that it looks like this initiative is coming to reality, I mean, literally, it seems like they're just a short time frame away from actually having it pass legislatively. And then they're going to get busy working on the fine details of the framework, which, our understanding is it will take about a year to actually define that. But that's not going to stop things in the meantime. People will have the ability to begin planning and thinking about how they can take advantage of this new framework and we intend to be right at the front of that process.

Jason Kolbert - Maxim Group LLC, Research Division

Just one last question. There's been so much movement in the competitive landscape. Mesoblast acquired Prochymal. They're clearly interested in pursuing GvHD, and I was really fascinated by the fact that they released some preclinical studies in stroke. How do you view the competitive landscape and the work that they're doing versus what you're doing?

Gil Van Bokkelen

Well, I think it's interesting. They've been focusing largely on areas of opportunity that we really haven't been concentrating on. For -- if you look at a number of their clinical programs, they're focused on local administration or they're focused on different segments of the patient population. For example, Osiris is focused on treating patients that have graft-versus-host disease and Meso has picked up the baton there. So that's really been their point of concentration, whereas we focus more on preventing graft-versus-host disease in patients that are at very high risk. We focus pretty extensively on the neurological space and area in stroke and other conditions. And frankly, we feel like we're ahead of the pack in that regard, and we think that we've demonstrated our technology can do things that other technologies don't appear to have the capacity to do or don't do nearly as effectively or potently. I'm, frankly, not really concerned. And I think it's validating, actually, that Meso was presenting data that reinforces the notion that stem cells can be an important therapeutic intervention for an indication like stroke. I think that's one of the reasons why people are really excited about us. And actually, just to come back to the topic of Japan, the really exciting aspect of what they're doing in Japan is that by creating this new regulatory framework, what that means is that if you demonstrate robust clinical results, that the path to commercialization and value creation for a company like Athersys could be dramatically short. And that's something that investors need to be aware of, which is why I took the time to mention it on the call today because now that it looks like it's about to become a reality, I think it's got very important ramifications for us, and frankly, for the people that are excited in the programs that we're pursuing.

Operator

Your next question comes from Ed Tenthoff from Piper Jaffray.

Edward A. Tenthoff - Piper Jaffray Companies, Research Division

Picking up where Jason left off, we're really intrigued by some of the preclinical work that you've been discussing for neurological efforts. And can you give us an update on sort of where things are there and what plans might be, both in terms of advancing those to the clinic and/or potential partnering opportunities?

Gil Van Bokkelen

Yes, that's a great question. I mean, the neurological area -- the way that I think about the neurological area is we can divide it into kind of segments or quadrants, right? There are the acute indications, so things like stroke or TBI or other forms of acute injury or acute conditions. And then there are the chronic conditions. We've done work in multiple sclerosis, which is being funded by the National Multiple Sclerosis Society. We've done work in other chronic injury or disease indications as well. And it's fair to say that not everything that we've tried or everything that we've explored has worked. And to a certain degree, I think that's actually pretty comforting. But where we have seen very good results working with independent, leading research teams and investigators, key opinion leaders across a variety of different disease indications and disciplines, we've done a lot of work with them over the past few years to really understand what are the mechanisms that are relevant and how is MultiStem behaving in these various disease and injury models.

So to get back your question, we do see some exciting partnering opportunities around MultiStem, both in acute and chronic neurological indications, and some things I think we kind of prefer to hang onto because we see them as major opportunities for value creation for us and for our shareholders. I think one of the exciting ramifications of this new framework in Japan, for example, is that it really creates some interesting possibilities about how we might be able to attack some of those things. We also believe that there are some really good grant funding opportunities, and our track record to support things, largely over the past few years, has been around preclinical development, but now increasingly, we're showing evidence that we can get funding to support clinical programs. Well, that's another great opportunity. And another good example would be the work we've been doing in the multiple sclerosis area. Some of our research team leaders have actually presented at scientific conferences showing that if we administer MultiStem in some of these models, we see clear evidence of remyelination and an ability to really get at the underlying mechanisms that are causing the damage in those types of models. Well, that's something that's actually got the folks at the MS Society quite excited, and I think others, some of KOLs that we work with in the field, excited as well. And my expectation is, is that, and just from conversations with people that we interact with, that they're excited about getting that program into clinical development as soon as we've dotted the Is and crossed the Ts and we're in a position to make that happen. We've got a few more things we've got to do, but I think that the quality of the science is clearly driving the interest level among the people that are familiar with what we're doing. And that's also driving tangible displays of support and funding that are helping us advance these programs in a cost-effective way.

Edward A. Tenthoff - Piper Jaffray Companies, Research Division

That's really helpful. So, secondly, I know big goals for this year have been to enter into some new partnerships, whether that be for the diabetes program or some of the MultiStem opportunities. Has the activity in the space that Jason referenced made this more difficult? Has your prioritization there changed? What's been the key factor, the key limiting step to getting some of these deals across the goal line?

Gil Van Bokkelen

So we're still very busy in the business development front, and that remains a key priority for us. But as I've said on past conference calls, we're being very methodical and systematic about this. And we're not going to do a deal just for the sake of doing a deal. We want to make sure we've got the right partner. We want to make sure that we're doing the deal in the right way. In some respects, partnering opportunities are impacted by things like what is going on in Japan right now. You can imagine, the creation of a new accelerated framework like that could have a very tangible impact on how people view the opportunities that we're focused on. And I think that creates some exciting possibilities for us. So we're -- I realize it's tough to be patient sometimes, but I think that's what we need to be, and in terms of making sure that we put ourselves in the best position to maximize value for the shareholders. So we're still seeing a lot of interest. I don't think anything that's happened in the regenerative medicine space lately has had any kind of dampening effect. If anything, I think people are becoming -- some of the partnerships that have been announced recently, I think it really illustrates the global interest in regenerative medicine and the willingness on various entities to meaningfully invest and make things happen. I think that what Mesoblast did in terms of acquiring the rights to the Osiris franchise, it was a smart move for them. And I think it was a smart move for Osiris in terms of allowing them to focus where they really want to focus, in some of the other areas where they've gotten traction recently. And I think that events like that illustrate that people understand that there are some really good areas of opportunity, and they're taking the steps they need to make sure that they can capitalize on them. And we're doing the same thing.

Operator

Your next question comes from Greg Chodaczek from First Analysis.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

First, I just want to say it sounds like 2014 is going to be a very exciting year, to say the least. But switching gears real quick, in terms of AMI, is the Phase II trial -- it sounds like you're going alone on this. And is that protocol already signed off by the FDA?

Gil Van Bokkelen

So we have an authorized protocol from the FDA for a 150-patient study. When we submitted the grant, we actually took the opportunity to implement some kind of new information and relevant findings into the grant application, which has shifted our thinking a little bit about some of the precise elements of the study. And we did that, and we got an incredibly high score on the grant, which led to the funding, which is great. So we are planning on actually revising the study approach, and we're busy working on that right now, which is why we're not kind of in a position to move instantly into study initiation. But let me just stress that I do think that the cardiovascular area is an area which is attracting a lot of attention. And, frankly, our long-term strategy is to partner in the cardiovascular area. And I think there's some good possibilities to do that. This particular study, I think, we want to make sure that it's designed in a way where we can execute the study very efficiently. Some of the studies that people have tried to execute previously in the cardiovascular area, I think they -- maybe they didn't think through all the issues. And that led to some complications down the road. And we're trying to make sure that we're applying, not only what we've learned, but the clinical team of experts, some of the great thought leaders in the field actually that are going to be running this study, are able to take advantage of everything that has been learned over the past few years, so that we can really maximize the benefits of our technology and that we can enroll the study as efficiently as possible.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

So I'll take a quick step back then. Timing-wise, unknown, and partner-wise, if someone comes with the right price, absolutely, if not, you're going alone and then you seek a partner after? Is that the right way of thinking about this, Gil?

Gil Van Bokkelen

Yes. I wouldn't say that timing-wise it's unknown. I mean, timing, we're expecting to launch the study next year, as I mentioned.

William Lehmann

We have funding to support that study.

Gil Van Bokkelen

Yes. Exactly. I think our goal is to get that study up and running as quickly as we can but, again, we want to make sure we're doing it the right way. One of the things that we're considering is what is the impact of the new regulatory framework in Japan and how might that affect things, right? I mean, my view strategically is that it makes sense if you're going to run a study and you can actually get some international coverage and you can take advantage of those types of opportunities. And that's certainly a prudent thing to explore.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

Right. And so if you take that one, you also take GvHD, which has a possibility of starting next year, but you also have 2 other ones that are rolling out. So it looks like you'll have 2 Phase II starting up next year as to roll off? Is that correct?

Gil Van Bokkelen

Well, the GvHD study is actually a Phase II/III type trial. And we actually believe it's highly likely that we will be getting external funding to initiate that study. We're focused on the partnering side. There are some other opportunities, but the -- that's something we're really focused on.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

Okay. And in terms of stroke, you said there was a minor protocol change. Is that just adding the change of the years for the patients? Is that the only thing that changed?

Gil Van Bokkelen

Yes, there was 2 things that we did. One was that we extended the age window. When we originally conduct -- constructed the study, we allowed patients up to and through the age of 79, that met the other inclusion and exclusion criteria. And we were getting feedback, really, on 2 fronts. One from some of the clinical investigators that said, hey, we're getting a lot of otherwise healthy 81 -- 80-, 81-, 82-year-old patients that we think would be great candidates for the study, but the way the study is currently designed, they're excluded. And the ethics board, actually in the U.K., also suggested that we increase the age limit as well. And so we did a lot of analysis. I mean, we didn't just do that because people suggested it. We spent a lot of time analyzing it and kind of looked at the pros and cons of that before finally making the decision that we were going to make that adjustment in the protocol. The other thing that was relevant was, originally, when we designed the study, we were really focusing on treating patients kind of in that timeframe that is 30 to 36 hours post-stroke, right? So the first 24 hours of the clinical observation period, you evaluate to make sure the patients are stable, specifically, as we've talked about in the past, you want patients that are not showing dramatic signs of recovery in the first 24 hours. So their initial measurements might be in the range, but then if they're showing significant improvement or recovery in that first 24 hours, those are largely patients that are probably going to exhibit substantial recovery within that first 90 days on their own. And so, what we did was we extended that time window out a little bit, and we did that for a very specific reason. Some of the clinical sites that are responsible for processing the sample before it actually is administered to the patient, they're not 24/7 operations. They basically -- they're 9 to 5 kind of operations. And by adjusting the window there, that allowed us to actually get more out of those sites that are very excited about the trial, but that wouldn't necessarily have the capacity to enroll all the patients that might otherwise be qualified because of a timing issue, right, where somebody can't stay overtime, basically, to process the sample and make sure that it gets to the doctor, so the patient can receive it. So we're treating patients within that 24 to 48 hours post-stroke, and as we've always talked about, really from the beginning, we think that's a relevant clinical window. We think that, that modification, along with the age modification, has had a very -- well, it's had a positive impact on the study. But I think a lot of the momentum is really being driven by the excitement and the enthusiasm at the various sites, and the clinical investigators and the site coordinators. And that's great.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

Right. Well, that sounds great. And last but not least, in terms of business development, I know you were talking about, you don't sign up a partner just to sign up a partner. But in terms of the 5HT2c product, with -- I got to be careful in how I say this, with Arena and Vivus struggling a little bit, and we know there's issues with their drugs, has that caused some potential partners to step back and reevaluate this potential? Or are you -- is your compound so much different that potential partners look through that noise of these 2 other guys?

Gil Van Bokkelen

No -- well, I think most partners are -- particularly people that are technically sophisticated are capable of seeing through the noise, but I think, it clearly has an impact, right? Because I think a lot of people look at the less-than-expected traction in both of those programs and it's logical for them to ask the question, "Well, why is that happening?" Right? From our perspective, one of the reasons why it's happening is because both of those programs have some limitations that we feel like we were extremely well-positioned to address. But it is very logical for people to take a look at that and say, okay, I want to understand that. Before I'm willing to make a meaningful bet in an area like this, I really want to understand what's going on in that marketplace and what is holding things back. But that doesn't diminish my or, frankly, I think, most other organizations' belief that this is still a huge area of unmet medical need, not just on the obesity side, but on some of the other applications of the technology as well. And I think in some ways, it illustrates that you really want to demonstrate a clean, safety profile and an absence of some of the limitations that some of the other approaches have shown, as well as robust, compelling weight loss. And I'm absolutely convinced that we're going to able to deliver that. And -- but like I said, we're willing to be patient and do what we need to do to make sure that we find the right partner that sees the world the way that we see it, and they're willing to put their money where their mouth is.

Greg Chodaczek - First Analysis Securities Corporation, Research Division

Okay. So I'm assuming this is a 2014 at the earliest, timing-wise?

Gil Van Bokkelen

Yes, I'm not really going to make any assumptions about anything. I don't think it's illogical to continue to expect that because things have a tendency to slow down when we get into the holidays. But, honestly, I still think there's tremendous potential in this program and people that are clearly interested in it.

Operator

Your next question comes from Steve Brozak from WBB Securities.

Stephen G. Brozak - WBB Securities, LLC, Research Division

I'm sensing a trend here and, frankly, you've had expertise as far as being in charge of the stem cell, how should I put this, continuum for a good bit of time. What makes the end of 2013, 2014, different from all the different perspectives, and I'll itemize it for you: from the large pharmaceutical perspective; from the companies that -- yourself included and your competitors; and, obviously, from your clinical partners? What makes it different now than at any other time in, let's say, the last decade? And I've got a follow-up on that and one after that.

Gil Van Bokkelen

Yes. I think the -- one of the key factors, Steve, is that we're really on the cusp of having data from robustly designed, well-controlled studies. And there's been a lot of -- if you think back a decade ago, or even just a few years ago, where there was a fair amount of clinical trials that were going on, but I don't think it would be fair to say that all of those studies were constructed to demonstrate a robust effect or were necessarily powered or constructed the way that I think, ideally, we would want them to be constructed to actually show a meaningful effect. And I think that what the field has been able to do is -- and what I think we have been able to do, is kind of wade through all that over time and now put ourselves in a position where we've got some important studies we're about to read out, we've got some other important studies that are coming behind that. I think the regulatory framework has shifted in a pretty dramatic way. I mean, for example, if you talk about things that are going on between now and the end of the year, well, in the U.S., the FDA is in the process of finalizing the breakthrough therapy and accelerated approval framework. That's supposed to happen before the end of the year. And Japan is in the process of finalizing and passing their new regulatory framework, which is specifically designed to create what we refer to as a hyper-accelerated path for regenerative medicine therapies. I mean, those types of events, honestly, I think, should be viewed as very catalytic for the companies that are willing to work within those types or -- and have the capacity to work within those types of frameworks. And I think the data that's coming, beginning in the early part of next year and then more data a little bit later in the year, I think are all very important indicators and milestones for the field. From a big pharma company perspective, they're looking at it exactly the way that we're looking at it, right? They're looking at it and they're saying, there's data coming, that's going to be really important. And there's also a shift in the regulatory landscape, which they're asking themselves how and should we take advantage of that? And just one more point. As I have the opportunity to work with -- I mean, I'm still obviously actively involved as part of the leadership team of The Alliance for Regenerative Medicine, but for those people on the call that are not familiar with ARM. I mean, ARM is essentially the group that represents the interest of companies, leading research institutions, patient advocacy groups and disease foundations, and a whole host of others about what's going on in the field of regenerative medicine. What I've seen happen, both during my time as Chairman for 2.5 years and then -- since then, as Geoff MacKay of Organogenesis became Chairman earlier this year, is that the interest level and the activity level among some of the big pharmaceutical companies has increased steadily, and in some cases, markedly. And I think they're doing that because some of them are really paying attention to this space, and they're positioning themselves to be ready to move as soon as they feel like the opportunity is right. And I think -- and it's not just companies based in the U.S., or some of the players that you would suspect in Europe. It's some of the international companies outside U.S. and Europe as well. And I think that that's great.

Stephen G. Brozak - WBB Securities, LLC, Research Division

Well, actually that leads me to the next issue. And it is, in some cases, unfortunately, problematic. You're obviously trading at a price that candidly is much smaller than a lot of clinical trials that some of these large pharma run -- companies run. And they're not -- they're pretty notorious for not being able to value things correctly and coming to the party too late. What do you expect, and how do you plan on controlling your franchise? Assuming, let's say, the positive results consist of what we are always looking for, they're usually different than what we -- what you expect. But they come out, and all of a sudden, what do you do considering your current market cap and the fact that you're not talking about a product that would have a 5% or 6% positive accretive effect. In some cases, you're talking about significant restorative effects and that, unfortunately, is really what we need to start to stabilize our healthcare expenditures. So what do you do in that particular case? Because now all of a sudden, you're -- with contemplated success, you're going to have a lot of people that will be focused on your franchise. What do you do in terms of controlling that kind of upside? And I have one last question, and then I'll hop back in the queue.

Gil Van Bokkelen

Yes, well, there was actually kind of 2 questions embedded or maybe more than that, but let me just say, in terms of -- I believe that if we -- so one, I think we are grossly undervalued right now. I've made no secret about that. I think that any analysis that can be done, that objectively looks at the upside potential around a program like the stroke program or IBD or some of the other programs, leads one to conclude that if we demonstrate robust results in any of those programs, it's going to have a major impact on the stock. That's my belief, and I think it's founded on a lot of analysis that we've conducted that I think supports the notion that we are meaningfully undervalued. And I think part of it is because the market, or a large segment of the market, really doesn't understand what's happening in the field of regenerative medicine and, I think, in some cases, maybe some people have been burned a little bit in the past because the enthusiasm didn't translate in a way that they were hoping, into tangible impact in certain areas because of poorly designed studies or because of other flaws and limitations that I think people may have been facing. That's exactly why we've taken so much time, care and effort to make sure that we're doing things the right way. But I think you hit it right on the head. I think the market has mispriced us as an opportunity. And I think it's -- we're misvalued, and I think that that probably relates to some others in the field as well. But I think things change as you deliver on the clinical results and the other things that are tangible evidence of real value creation potential. I think, in terms of what we do, well, my belief is that as we hit those milestones and we deliver on that -- on the goals that we have in front of us, that's going to put us in an entirely different position. And as you noted, and have written about in the past, we have a very broad portfolio of opportunities that we can go after, and some of which we're going to continue to develop it for our own account, and in other areas, we will do it through partnerships. And I think that as our access to capital becomes greater and greater, and as our valuation improves, that's going to enable us to run faster, capture more value and, frankly, really negotiate for the things that we might want to be negotiating for, from a position of strength. And that's how you become a leading biopharmaceutical company, and that's exactly what we intend to become.

Stephen G. Brozak - WBB Securities, LLC, Research Division

Okay. And I will only make it one last question, so I don't make multiple questions here. Considering the fact that you are a platform and, in terms of covering successful platforms, one of the hallmarks has always been one item, and that's safety. Differentiate for us what your safety profile is, vis-a-vis, other "technologies" that are being highlighted out there. And I'll hop back into the queue after that.

Gil Van Bokkelen

Yes. Well, the interesting thing is, is that the safety profile generally for cell therapy-based and regenerative medicine approaches over the past decade has been very, very good. In fact, I think, really, what the field is waiting on now is not additional demonstrations of safety, but is demonstrations of therapeutic benefit. And, furthermore, not just a demonstration of therapeutic benefit, but a cogent, clear, well-supported explanation of exactly how the therapeutic benefit is being achieved. And that's why we've spent a lot of time focusing on that latter point in a lot of our research activities and collaborative activities over this past decade. So I think that those types of activities, I think, are going to have a big impact for us and that's why we're focused on it so heavily. And I apologize, there was another part of the question, and I'm blanking out what it was.

Stephen G. Brozak - WBB Securities, LLC, Research Division

It basically had to differentiate vis-a-vis other programs that are...

Gil Van Bokkelen

Yes, yes, yes. Differentiation. So one, we have spent a lot of time actually looking at the safety profile and, again, I think that other platforms out there, whether it's traditional mesenchymal stem cells or other things, they have showed a pretty consistent safety profile across a range of studies. We spent time actually looking at things like biodistribution and passage of ourselves, for example, through the pulmonary system or other things. And one of the very interesting things about the preclinical work that we've conducted over the past years is in preclinical safety models and in disease models, we've never actually established a maximum tolerated dose because we've dosed the animals at extraordinarily high levels with our clinical rate, our human product. And it's consistently been safe. And that safety profile has translated over into the clinical programs that we've been conducting. And, frankly, all that's done is just reinforce our notion or our perspective that these cells are going to have a very strong, robust and consistent safety profile. And they're going to be therapeutically relevant, we believe, in a few different areas, and whether that's through IV administration, local administration or whatever the best format is for treating the needs of the patient. And not every sell type can say that. I mean, it's clear that we may have some advantages over some of the other cell types that are out there, but I'm not going to get into the specific details of that on this call.

Operator

Your next question comes from Christian Glennie from Edison Group.

Christian Glennie - Edison Investment Research Limited

Just turning, given the proximity of the ulcerative colitis data, could you just talk us through a little bit in terms of the study design and end points and, otherwise, the key things that we should be looking out for in terms of the outcomes from that study?

Gil Van Bokkelen

Yes. So one of the reasons why we chose -- and actually thanks for being on the call, Christian. I know you're probably in the U.K., which means it's fairly late in the day for you, but thanks for participating. So one of the things that we did in the IBD area that we decided early with Pfizer, I think most people that are familiar with us are probably aware of the fact that there's a couple of different options when you're focused on patients with inflammatory bowel disease. Crohn's tends to be the more serious of the 2 conditions, between ulcerative colitis and Crohn's disease. But it's also more difficult to objectively assess whether or not your therapy is working the way you want it to. Whereas in ulcerative colitis, you can actually use endoscopic evaluation to determine, is the therapy having a tangible impact? Are the lesions healing? Are the lesions fewer in intensity, size, significance, if you will? And there are some other clinical benchmarks that people use, clinical rating scales that people look at. So the way this study is designed is there's really kind of 2 pieces to it. The first piece is patients are receiving treatment with MultiStem or placebo, and then they'll be evaluated. There's a baseline endoscopic assessment, and then there's another endoscopic assessment that occurs at 8 weeks post-treatment. And then following that assessment, they are actually getting either another treatment with MultiStem or they are getting placebo and actually kind of the 2 groups of patients in the beginning, the placebo- and the MultiStem-treated, are then basically being fragmented into 4 different groups. The primary end point is the 8-week evaluation. It's the endoscopic assessment and the clinical assessment that occurs at 8 weeks to determine whether or not the patients are actually getting better. And that's done, again, on an entirely blinded manner, using a centralized assessment, if you will. But the second piece of the data, which will come subsequent to the first wave the data that we'll announce, I think it's also going to be meaningful as well, because here you've got essentially patients that have received a couple of courses of treatment with MultiStem, or an initial course followed by placebo, or an initial placebo followed by a course of treatment with MultiStem, or 2 courses of placebo. And I think that -- I expect that to provide some additional information about these patients and what the impact of the therapy is going to be. Their study is really designed to focus on what's happening at that 8-week end point. And I think that's the data that will come out first, and that people should be paying the most attention to early on. But I think we'll get additional information over time, which I think will be indicative. I mean, the way Pfizer really thought about the study from the time that it was designed is, it's basically designed as an evidence of activity study. And we've continued to do work with them over the past several years to deepen our understanding of mechanisms of action and biological activity. And I think they are or should be just as convinced as we are about the therapeutic potential of MultiStem in an indication like this, as well as in other areas where inflammation and the underlying pathology of immune cells that are really causing the tissue destruction and the pain and the discomfort and the organ damage is occurring, because we've demonstrated over and over again that the cells have a profound ability to regulate the immune system and get to the underlying causes. So, again, the timing of the announcement around that first wave of data, we expect to occur around the end of the first quarter. The exact timing of it is obviously going to be predicated on when that last patient is enrolled into the study, and then how everything proceeds from there. But they're almost there, I mean, literally, down to the last several subjects. And as soon as that's done, then the clock will start ticking, if you will.

Christian Glennie - Edison Investment Research Limited

Sure. And just to be clear, on the study in terms of the final cohort, it will be empowered to generate the statistical significance according to obviously the standard means.

Gil Van Bokkelen

You're talking about the 16 weeks? You're talking about the 8 weeks?

Christian Glennie - Edison Investment Research Limited

Yes.

William Lehmann

Yes, it's power.

Gil Van Bokkelen

Yes, at 8 weeks, it's -- yes, power, it's a power to show a robust response.

William Lehmann

Yes, at 8 weeks.

Christian Glennie - Edison Investment Research Limited

Yes. Quickly turning to GvHD, can you talk a bit about what -- is that an SPA-type process you're going through? And then the second was, can you talk a bit about the size and scope of that study? Obviously, there's a II into Phase III element, but a little bit more about the details of that study?

Gil Van Bokkelen

Yes. So well some of it, obviously, is a little bit work in progress because of some of the simulations that we're still completing and running, so that we can get to what the final numbers look like. So I think it's perhaps a little bit premature to comment on that. But we do believe that there is a real opportunity here, again, based on our prior interactions and discussions with the FDA to pursue a very well-defined path towards a registration-directed study. And if we see a meaningful response, obviously, our intention would be to move that into registration as soon as we think it's defensible and appropriate and prudent to do that. In terms of the specifics around that, I think I really kind of prefer to wait until we've nailed it all down. You did ask a question about the SPA, which is a relevant question. So we considered the possibility early, of just going for an SPA right out of the gate. And then our conversations with the FDA, they said, look, if we make that request early on, it starts a 45-day clock that they've got to respond to. And honestly, the trial design, because we were designing this as a registration-directed study, that's got -- it's a little bit more complicated than maybe just a traditional, simpler study might be. The FDA said, "Look, we're not going to respond to you within 45 days. That would be unreasonable and impractical." And we said, "Yes, we're totally fine with that." So, in fact, we told them, "Take as much time as you need just to make sure that we're recovering all the issues and you're developing a full perspective on your thoughts related to questions or issues that you want to see us address in the study design." And they did. They took several months and they finally got back to us, it was in late May and submitted it to us. And then -- and they had some very good suggestions and guidance and advice on a variety of different issues. And so, we've been incorporating all that stuff. But the -- in terms of the path, I guess, we would have a couple of different options. One would be to resubmit the study design to the FDA and get their take on it from there, and then contemplate filing for an SPA. And I think that is one path that we could pursue. Or we could simply file the plan, get the FDA's feedback, see where we are on it from there, and then decide whether or not we think filing an SPA at that point would be prudent to our advantage or like. In general, people tend to look at -- when you're in that situation, to say, an SPA has some value because it actually provides a very clearly delineated roadmap of what's supposed to happen. And that's how I tend to think about it. But the reality of it is that we want to make sure we've had the conversation with the FDA thoroughly and covered all the issues, and then we can decide whether or not that's the next step we want to take.

Operator

[Operator Instructions] And you have a question from Gregory Bonfiglio from Proteus, LLC.

Gregory A. Bonfiglio - Proteus Venture Partners

It's Greg. A quick question for you. I have a question on the deal with Aspire. Can you talk a little bit about the pricing of their infusion of capital and has a price been set? And if so, what was it?

William Lehmann

Greg, I'll take that. Essentially, yes, the facility is a $25 million facility. It's similar to what we had in place before, so we're essentially replacing the prior deal. It allows us to sell to Aspire at our discretion up to $25 million worth of shares over a 2-year period. There is actually a couple of pricing mechanisms built into the deal, so there's no set price beforehand. Essentially, the 2 different mechanisms, without providing specific details, are driven either around the pricing over a predefined period before a transaction takes place, so average pricing over that period. Or secondly, it's tied to a small discount to VWAP on the day of the transaction. So those are the 2 mechanisms that are used. I think the pricing that we've gotten over time, using the past facility has been favorable. Typically, it's a small discount to kind of the market price at the time we do the transaction.

Gil Van Bokkelen

Well, and -- just to add color to that, I mean, one of the nice things about this vehicle, Greg, is that we have the ability to use it at our discretion, right? So if we think that market circumstances and other conditions actually justify pulling the trigger and doing something, then we can do it in small amounts, or if circumstances permit, then we can do it in larger amounts as well. But we don't see it as the be-all and the end-all for fundraising strategy. We see it as a component. And I think we've announced publicly already that we used the vehicle to raise over $10 million this year as part of our capital management strategy. And I think if you look at the average price of that, which is I don't remember off the top of my head, but it's in some of the regulatory filings that we've made.

William Lehmann

Yes, it's about $1.70 per share.

Gil Van Bokkelen

Yes, so it's at or north of where we -- in various times, it's been higher and so it gives us the ability to flexibly get access to capital so that we can maintain a balance sheet where we want it to be, and still do the things that we need to be doing.

Operator

And there are no further questions at this time. I'll turn the call back over to the presenters.

Gil Van Bokkelen

Great. Well, I think that just about covers it. It was a great call. We appreciate your time and interest in the company and what we're doing, and we certainly look forward to keeping people updated and apprised of events as they occur. And we're excited about, not only the rest of this year, but next year in particular as well. So, thanks, again, for all your time, and we'll be doing this again soon.

Operator

This concludes today's conference call. You may now disconnect.

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