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Executives

Brian Gibson – VP, Finance

Timothy Mayleben – President and CEO

Daniel Orlando – Chief Commercial Officer

Analysts

Steve Brozak – WBB Securities

Megan Down – McNicoll, Lewis, & Vlak

Boris Peacker – Oppenheimer

Jason Napodano - Zacks

Aastrom Biosciences, Inc. (ASTM) Q3 2012 Earnings Call November 8, 2012 4:30 PM ET

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Aastrom Biosciences Third Quarter 2012 Conference Call. At this time, all participants are in a listen-only mode. After opening remarks we will open up for questions. Instructions for queuing up will be provided at that time. I would also like to remind you that this call is being recorded for replay.

I would now like to turn the conference over to Brian Gibson, Aastrom’s Vice President of Finance.

Brian Gibson

Thank you, Pablo, and good afternoon everyone. Thank you for joining us to discuss our most recent financial results and the progress of our development programs.

Before we begin, let me remind you that on today’s call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995, and all of our projections and forward-looking statements represent our judgment as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

Joining us on the call today are Aastrom’s President and Chief Executive Officer, Tim Mayleben; and Dan Orlando, Aastrom’s Chief Commercial Officer. Following our prepared remarks we will open the call to your questions. So, let me start with the review of our financial results.

For the third quarter ended September 30, 2012, Aastrom had a net loss attributable to common shareholders of $7.3 or $0.17 per share compared to $1.9 million or $0.05 per share for the third quarter of 2011. The increase in net loss attributable to common shareholders was driven substantially by two large non-cash items. The first of which is a change in the fair value of our outstanding warrants which accounted for $3.3 million of the change in net loss.

As a reminder early in the third quarter, we completed a loan exchange program for the December 2010 warrants which eliminated all but 300,000 of these 10 million warrants from our capital structure. This reduced our warrant liability by over $10 million and will substantially reduce the impact of warrants on our income statement going forward.

The second non-cash item is the accretion of our Series B Convertible Preferred Stock, which increased our net loss by $1.2 million from the prior year. As a reminder the shares were issued in March 2012 and thus did not impact the prior year.

Our operating loss for the third quarter of 2012 which excludes both the impact of the warrants and preferred stock with $8.3 million or $0.19 per share compared to $7.4 million or $0.19 per share a year ago. R&D expenses for the quarter were $6.1 million versus $5.8 million in 2011. The increase in R&D expense was primarily attributable to the Phase-III revised CLI clinical program and the start up for the Phase 2b XL DCM program.

General and administrative expenses for the third quarter increased to $2.1 million from $1.7 million a year ago. The increase is primarily due to non-cash buy back compensation expense and slightly higher legal and consulting cost.

Aastrom ended the third quarter with $21.1 million in cash and cash equivalents. Our cash used for operations was $7.6 million during the third quarter which was in line with our forecast of $7 to $8 million. Looking ahead we expect our cash spent for the fourth quarter to again be in the range of $7 to $8 million as we continue to accelerate enrollment of the Phase-3 revised CLI study and begin enrollment for the Phase-2b XL DCM study.

That completes my review of our financial results and I will now turn the call over to Tim.

Timothy Mayleben

Thanks Brian. Since our last call we’ve made good progress on several key fronts. We launched the Phase 2b XL DCM clinical trial in patients with ischemic dilated cardiomyopathy or DCM, we increased the number of patients, clinical investigators and sites participating in our Phase 3 revised clinical study in patients with severe peripheral arterial disease or CLI. We reduced the number of fully diluted shares outstanding through the exchange of nearly 10 million warrants and we announced some important management changes.

First, for the Phase 2b XL DCM study, I want to remind you that we are enrolling a 108 patients with ischemic DCM at 20 US clinical sites. Patients are going to be randomized to receive a single administration of ixmyelocel-T or a placebo via another catheter with the primary efficacy measure being major adverse cardiac events at 12 months.

The secondary end points include imaging to assess heart structure and function as well as test to look for improvements in quality of life and heart failure symptoms. We’ve initiated our first sites and expect to screen our first patients this month, and we expect enrollment will be completed next year with top line results expected in 2014.

Now, with respect to the pivotal Phase 3 revised study, it’s well underway now and we have 26 patients enrolled today. So, let me just say that again. In the revised study we’ve got 26 patients enrolled to-date, I’m pleased to report that enrollment is accelerating but I want to make clear that we are not nearly satisfied with our progress on enrollment in this pivotal trial. We have a number of initiatives underway and we are working closely with existing and new study sites to continue to accelerate this momentum and we can certainly provide additional commentary on this during the Q&A.

As a reminder the primary objective of the study is to assess the effective treatment with ixmyelocel-T in patients with severe peripheral arterial disease or CLI and also with existing tissue loss. We are going to use amputation free survival at 12 months post injection to measure the effect of this of our therapy as compared to placebo.

So, in addition to our ongoing clinical development work we’ve also recently undertaken several activities to support the commercialization of ixmyelocel-T in patients with severe PAD.

On this front I want to highlight several market research initiatives which will support these commercialization efforts of ixmyelocel-T in patients with severe peripheral arterial disease, both in preparation for commercial loss when our pivotal studies are complete and successful and facilitate discussions with potential partners. Our new chief commercial officer Dan Orlando is managing these efforts and has brought valuable experience and perspective to these commercial activities.

Dan joined us in August from Takeda Pharmaceuticals where he was vice president of business development for the Americas after having led both marketing and sales, and of course previously he was with Abbott Labs.

I would like to turn the call over to Dan to review some of our recent market research findings.

Daniel Orlando

Thanks Tim. First, I want to say how excited I am to be at Aastrom and working on autologous cell therapy for patients with severe chronic ischemic vascular conditions. As each day passes I’m more convinced about the impact ixmyelocel-T can have for patients with severe PAD and DCM. To that end I’m happy to be able to share with you the results of some market research that we recently conducted. We initiated this market research to learn more about the clinical needs of patients with severe PAD, the interest of physicians who treat these patients and a willingness of payers to cover cell therapy for these conditions.

We interviewed over 30 physicians and a dozen payers but decision groups that we included in the research were vascular surgeons, interventional cardiologists, podiatrists, and endocrinologists. The payer group included medical directors of large managed care organizations. Now, having done hundreds of months of research studies over my career, I found the results of this recent month of research to be very encouraging and I would like to highlight the reasons why.

Our first finding was that vascular surgeons expressed a clear need for alternatives the standard of care revascularization options as not all procedures are successful or are appropriate due to comorbid conditions or are likely to have a positive outcome in refractory patients who have chronic non-healing wounds.

Second key finding was that per study protocol which includes quality of life measurement, physicians and payers agreed that ixmyelocel-T was well positioned as a logical reimbursable therapy for patients who are unsuitable for revascularization. Third significant finding was that there is clear interest in ixmyelocel-T's unique profile of M2MSC cell therapy, which targets reducing inflammation while encouraging angiogenesis. Interestingly it was these activities that spurred physicians in an unaided basis to express a desire to utilize ixmyelocel-T as an adjunct to revascularization.

Now this of course is beyond the REVIVE protocol, but it’s an encouraging finding that once a target product profile for ixmyelocel-T is shared with target physicians that they envision expanded indications themselves.

Our final finding that’s significant is that there is an opportunity for Aastrom to take a leadership position in educating physicians about cell therapy, [inaudible] and differentiation as there is a fair amount of confusion in the market place about cell sources and utility of cell therapy.

So, in summary, our findings validate the significance of our clinical end points for the revised trial, they also indicate how important education about the MOA of ixmyelocel-T will be for physicians and patients, and how this unique product with a successful Phase 3 outcome will demonstrate a reduction in both amputations and improvement in survival that these benefits confirm and translate into justifiable reimbursement from payers.

The months of research also taught us a lot about the target physicians and those who are most likely to deliver ixmyelocel-T to other patients or severe PAD patient. For competitive reasons we are going to not disclose that at this time.

In closing I’ll say that as someone who has conducted a lot of market research I’m very encouraged with our findings and optimistic about the commercial opportunity for ixmyelocel-T and patients with severe chronic ischemic vascular conditions.

Now, I’ll turn it back to Tim.

Timothy Mayleben

Thanks Dan. As Dan indicated we are very excited that these early market research results confirm many of our anticipated value propositions for ixmyelocel-T and also reinforced our belief that we are very well positioned to deliver these messages to our marketing and other outreach activities. These findings and the results of additional research will also help us prepare our marketing strategies and our clinical and patient education materials and programs and obviously also give potential partners a clear sense of a commercial opportunity available with ixmyelocel-T.

With Dan’s arrival and the recent appointment of Bob Zerbe as our Chairman, I believe that Aastrom is in very good hands with a bright future as we search for an executive to succeed me as president and CEO. Of course I’m going to continue to serve in this position until we find a successor and I’m going to remain a director of the company thereafter.

But I think this is a natural step in our company’s evolution and are confident that we are going to find a very talented CEO with the requisite skills and experience to guide Aastrom to the next level of clinical, regulatory and commercial success.

That concludes our prepared remarks, now I would like the operator Pablo to open the call to your questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question is from Steve Brozak of WBB Securities, your line is open.

Steve Brozak – WBB Securities

Look, with the addition of a commercial officer we are not talking about a transition into something that obviously all companies want and that obviously is how do you go out there and provide for the transition from research development firm to an actual commercial operations firm. Can you guide us through what some of the differences are that we can – and I’m not going to obviously hold this to you that we can start to expect and I’ve got a follow up question after that. Obviously this is something that most companies want but a lot of them never achieve.

Timothy Mayleben

Sure. Dan, do you want to provide some comments on that.

Daniel Orlando

Sure. Steve, thank you. First of all we are taking the information that we have from science and the very – you know, initiation of market research is a good example of that. Where we want to take that great science especially the cell therapy science which is not very well articulated in the market and figure out how to best translate that to physicians, patients and payers. Although we are just initiating Phase 3 now, there is a lot of investment that needs to take place to complete this program and to talk to your potential partners, etc. So, a lot of it is just packaging for specifically for CLI, packaging what we have and translating that into what will be commercial success. So, that’s a lot of the activity that we are doing today for CLI.

For DCM, it’s more of a forecasting and competitive natures. You know, there is much more activity in Phase 2 and a little bit in Phase 3 or not necessarily in DCM but [inaudible] so there is a bit more forecasting competitive description which patients are going to be most likely to be in our therapy versus others, and again that’s just kind of ground work for commercial investments as well as partnerships and things like that. So that’s our thoughts right now.

Timothy Mayleben

And Steve, I would just add a couple of things to what Dan said. I think the emphasis at Aastrom has been from a development standpoint to do things, what we have described as the right, and so as Dan said, we started a Phase 3 trial, it’s an incredibly robust design for a Phase 3 study, it’s a large study, we’ve negotiated special protocols with the FDA to significantly reduce any regulatory risk associated with the study, so part of the emphasis on – as Dan said, translating our science and clinical data into commercial activities is pretty high confidence in the way that we are doing things and we are going to do the same thing from the commercial standpoint that is to do things the right way, so that by the time our product, our therapy is through development and through regulatory approval that we’ve already laid the ground work for physicians to understand what the benefits are to them and their patients.

Steve Brozak – WBB Securities

Actually that brings me to the follow up question and I will jump back in the queue after that. You are talking about your future commercial product versus current technology, current standard of care, I just want to highlight the fact that how robust your system would be versus current standard of care, and I’ll hop back in the queue after that. What kind of potential you might have with potential partners on that. Could you just briefly touch on that?

Daniel Orlando

Really, sort of the target patient that we are talking about there isn’t a clear definition of standard of care. These patients have other than – they’ve been through a series often of either bypass or endovascular procedures, and they’ve been on therapies but they – a lot of these patients started therapies for claudication, cholesterol, hypertension, etc, before they even got to the vascular surgeon. What’s motivating a lot of these patients get to advanced I’ll say procedures more so than therapies is the wounds that won’t heal. So, they end up going from wound care center where they make several attempts and if you call it a current therapy, I guess it would be. But really these patients are running out of options and are looking for a cure. So, we are a new modality if you will that’s going to fit into this wound therapy as well as to the intervention of vascular procedure as well. So, defining that in both the vascular surgeons mind as well as the wound care center’s approach is what we have to best define as how we are going to be executing commercially.

Fortunately, as we talk to both of those treatment groups, they are frustrated, they are looking for new solutions and it’s not a big leap of faith for them to picture how they would implement, how they would utilize the therapy. In fact we were really impressed doing months of research how easily – once they’ve figured out the MOA and how the product works, etc. how easily and readily they found patient types or how to be executed within their current paradigm. So, we felt good about that.

Operator

Next question in queue is from Jason Napodano - Zacks, your line is open, please go ahead.

Jason Napodano - Zacks

Tim, just listening or looking back at your transcript from second quarter call and I saw there was about 10 patients enrolled in REVIVE at that time versus 26 now, 16 patients over three months. Like you said, I know you guys aren’t happy with that pace. But, maybe you can give us a chance of how many centers are active now versus centers that were active back in August, and then how many more centers do you expect to come online in the next few months and then maybe we can – I’ve got some kind of follow-ups after that.

Timothy Mayleben

Yeah. So, maybe I can give you sort of an overall sense. When we put this study together we worked with the leading KOLs and sites out there to develop a estimate for what – how many patients per site, per month we should expect, and you know, I think we also had an expectation going into the study of how long it would take to wrap after that. I think as we talked about both in May and in August we said there is a natural wrap to these clinical trials, but they are not – they don’t start out at a 45 degree angle from the start, thinking about an upward slope in line that they tend to be adding some tie back, in a sense that they start out low and then ramp up quite steeply that they – slope of the line of the enrollment graph, if you will, gets steeper over time. Both as the sites get more familiar with the protocol and identifying patients, as well as I think as you highlighted the increase in the number of sites.

We continue to add sites to answer that question I think we’ve got about another dozen sites that we’ve added over the last three months or so that are working with us and we expect that to continue to increase, and then from there again we won’t get into all the specifics because I think as we mentioned on the last call, there is a level of granularity here for competitive reasons that we don’t want to be – I guess to – two other folks that either are or may have ambitions to get into the space and to compete for patients if that’s their desire over time. So there is some information that we won’t be disclosing. Despite the fact that I know – Jason I know you and certainly others you guys are data hogs as much as we are data hogs, we love the data and we want to know more, we always want to know more.

But having said that we set a goal for the sites on an average basis, again so many patients per site per month to enroll in this trial and that target, which again I won’t mention the specific number but I can say that we have a handful of sites that are at or above that number. But most of the sites have yet to achieve that target site per patient per month goal that we established. And that’s really the key to the success of this trial. So, most of our efforts in the last two or three months and over the next several months will really be devoted to taking the sites that are active and getting them to that goal. Getting them at or above that goal of enrolling patients. Because we can continue to add sites – just to help you understand the logic, you know, we can continue to add sites for ever, there is a cost of that, but unless those sites are performing at goal then we are not getting a good return on our investment there and we are certainly not making a progress in the study that we would like to see.

I think the guidance that we have got – as you probably know, there haven’t been a lot of CLI trials that have been done, the guidance that we’ve gotten from those that have participated or led some of the prior CLI trials is that it takes nine months or so to get these studies performing or the sites in these studies performing at a high level and we hope and expect the next time that we are talking to you that we are talking about hell of a lot more patients enrolled in the study than what we are seeing now. Again we are, as I said, we are not satisfied, we are disappointed in the level of enrollment so far. But we are also trying to make sure that there is a whole lot of things that we could be doing but we really have the thing here focused on doing those things that are going to yield the best results. Again, because we don’t want to confuse activity with results. We want to make sure that any activity that we are undertaking actually produces a result, the result being, the desired result being significant and dramatic improvement in enrollment and that’s where we are focused.

Jason Napodano - Zacks

Got you. This may be something that you are not willing to get into. But, can you give us a sense of the screening of patients versus the actual enrolling of patients. How many patients are you screening versus enrolling and whether or not your independent adjudication committee is accomplishing the things that you wanted accomplished or their adjustments that you can kind of make on the fly to that.

Timothy Mayleben

Yeah. Those are good questions. I think from our standpoint – let me just answer the last part of your question first. So, the eligibility review committee is working very well with the sites. We haven’t had a whole lot of issues either with transferring images or – not to say we haven’t had some but we haven’t had many, and we are also not seeing the eligibility review committee really getting in the way of the sites actively screening and enrolling patients. Again, there have been some issues here and there but not anything that we would say that’s really a concern for us.

I think the things that – with respect to the screening versus randomization, we are continuing to see that improve, and again without getting into specific numbers – what we had expected is that – it would start out with that fraction, it would start out relatively low and improve as the sites gained experience with the protocol, and that’s exactly what we are seeing.

So, the number of patient that we are screening to get patients randomized over this last three months or so has improved nicely. Again I know that that doesn’t help you a lot because I’m not giving you quantitative numbers. But we are having to screen fewer patients to get the 16 additional patients that we enrolled in the study.

Jason Napodano - Zacks

Got you, that’s helpful Tim, thank you.

Timothy Mayleben

Again, I think we may have talked off line a few weeks ago, and I can’t recall, I think we did – and we were just saying that – we know it’s a little bit frustrating for everybody at this point because we are at the relative inflection point from the study, everybody in the market is from Missouri as we would like to say and so we got to show people that we are actually being effective in enrolling these patients, and we understand that. We are measured by – we are going to be measured by how well we enroll the study and so we’ve got a lot of focus on that. But until we show folks we understand that folks want to know that, they want to see the results.

Jason Napodano - Zacks

All right, thanks Tim.

Operator

Thank you. Our next question is from Megan Down of MLV & Company, your line is open.

Megan Down – Mcnicoll, Lewis, & Vlak

We’ve got a little bit more along the same here. Have you kind of experiencing a disconnect if you will between how the ixmyelocel-T was presented in the marking study which sounded like adoption would have gone very nicely, the docs were excited about the product, and are they experiencing more difficulty than you are expecting in actual environment. Has there been any feedback from them on the frustrations they are experiencing or not experiencing.

Timothy Mayleben

I don’t know, Dan if you want to make a few comments, I’m looking at data here. I’ll have him started on that question Megan, and then maybe add a few things after he comments.

Daniel Orlando

So, back to that earlier discussion of standard of care Megan, the trial defined a standard of care that isn’t consistent in the market place at all. But, via the FDA criteria, etc, it’s wound size, it’s how many days they have had the wound, it’s the criteria that a patient in essence have to walk through a window and qualify to be screened and randomized.

In the market place when we talked to physicians about it, again these aren’t necessarily the academic vascular surgeons that we went to, their opinion was much different, right. First of all they don’t all use the same techniques, nor do they have all of the same techniques available to them. So, it’s very interesting when you even try to apply a concept of standard of care to endovascular procedures or to wound healing per se.

In the market place the physicians kind of get there a lot faster because they say, yes. You know, you describe this patient who has attempted a procedure in their back within a short period of time where their wound didn’t heal, etc. they very readily say yes, I know these patients – I do everything I can, they are very motivated to win, if you will and not send the patient off for amputation.

In the clinical trials it’s a bit different though, because they have to meet a variety of parameters to be able to walk through that window. It’s not like – I’ll just say, you know, in diabetes which is in fact one that I’m familiar with where there is very well known established criteria for what control looks like or what a patient type is and what standard of care therapy is, and things like that are extremely to me relatively well defined versus the surgical world where it is so dependent on the physician’s capacity, what’s available to them in their center and what the individual patient presents with.

So, that’s fairly accurate description, is that consistent with your question Megan.

Megan Down – Mcnicoll, Lewis, & Vlak

Kind of, I’m really just curious as to the marketing study that you are doing. Was it presented with the same restrictions that the doctors experience in real life and during the clinical trial and what those restrictions would be almost a little too restrictive to be able to keep enrollment going.

Daniel Orlando

Yeah. So, in the market research we used a target product profile that would be consistent with the label. However, the physicians don’t necessarily apply all of those diagnostic criteria at all. Even the description of what is critical in ischemia, a lot of physicians just use, well, I look at the wound, how long have you had it, what’s your history and based on the severity of the wound and the chronic nature of it they just assume CLI, they are not doing angle pressure, toe pressure, the oxygen pressure as well. So, they are just making a observation diagnosis. So, that is a much broader population than how strictly we are defined in our clinical trial.

Megan Down – Mcnicoll, Lewis, & Vlak

Okay, great. And then as a follow-up, you know, obviously this great limiting stuff seemed to be making an impact on enrollment. Can you give us some updated guidance on when you expect to close physician enrollment?

Timothy Mayleben

Yeah, I’m glad you asked that question. Because I think we’ve been talking about it internally, and we feel like – you know, we are not quite ready at this point to give updated guidance on this projected enrollment fort study. But, by the one year anniversary which will be late February, early March that – so I think probably by the time we have our Q4 call we may be in a position, not maybe, we’ll be in a position to give some guidance on where we think the estimates are going to be for the trial.

Megan Down – Mcnicoll, Lewis, & Vlak

Great, thanks so much.

Timothy Mayleben

Yeah, thank you Megan.

Operator

[Operator Instructions] Our next question in queue is from Boris Peacker of Oppenheimer.

Boris Peacker – Oppenheimer

Yes, I just wanted to follow up a little more on the patient recruiting process specifically. Can you comment what recruiting criteria is causing the most exclusions?

Timothy Mayleben

That’s a good question, I don’t have it at my finger tips.

Daniel Orlando

Yeah, I can share it, by far the number one is End Stage Renal Disease. I will say that we went back to the steering committee, we had discussed it and we looked at all the epidemiology data we could find on patients who are in these trials who – or potentially in these trials or could be in, what’s the likelihood of being able to delineate the impact of the trial, the drug for its control versus the complications associated with ESRD. Unfortunately, everyone we have gone to has reached the same conclusion that if you – you should study that patient at some time. Because they are at need for this therapy. Clearly, it’s a strong need. But, they shouldn’t be included in the trial and it should be on its own study population, smaller trial for safety on its own. So, that’s the number one.

Boris Peacker – Oppenheimer

And is there a close second or third or that’s primarily the one.

Daniel Orlando

I would say that that’s the number one and the others are more variety.

Boris Peacker – Oppenheimer

Okay. Just a question in terms of the market research. Could you specify exactly what product profile you were using, the key criteria that you gave to these market research participants?

Daniel Orlando

Sure. We kept the product profile consistent with what we projected to be the label. Which is, in patients who really have three things, they are refractory for an endovascular procedure because they have recently failed one, they have a comorbid condition that limits their access to one or in the physician’s judgment they lack confidence that the net endovascular procedure will be effective. And that’s where there is a bit of this gray what is standard of care and what applies there. So some of the terminology that they were challenged with were terms like no option, these physicians are very proud of their ability to correct the issues – endovascular issues in these patients. So they – some of them said they have never met a no option patient if you will, so we defined it very specifically of those three criteria and then we started to gain some momentum in the dialog, and physicians are pretty quick to readily identify that group of patients. By far the motivator that gets the patient into the vascular surgeon’s purview is that non-healing wound. They are either referred to the physician from the wound care center, they are referred from surrounding recommendation of physicians, but that target profile also consisted of our introduction of autologous therapy safe which they really reacted to very positively, as well as M2MSC therapy, the idea of reducing inflammation and promoting angiogenesis.

Earlier on, I talked about how quickly they jumped to – can I use this with my endovascular procedure, because they immediately put the two MOA together with their correction method. They are proving for fusion, but yes sometimes it fails. So with these difficult patients they assume it’s not the corrective action nature that failed, it’s what’s going on in the inflammation, the angiogenesis is not occurring even though they have improved circulation to the limb. So, they immediately put those two together which we were a bit surprised by.

That’s the description of the target product profile and the reaction we got to it. Is there anything else that you…

Timothy Mayleben

Boris I was just going to emphasize something that Dan said. I think probably what surprised us from an expectation standpoint is when physicians were reviewing the target product profile, they immediately recognized the safety and the preferability of an autologous cell therapy. Again, this is from a physician standpoint. I think you know you covered the spacing, you’ve covered both autologous and allogeneic companies. So, I don’t want to make too much of this, other than, you know, we hear a lot about the convenience of allogeneic therapy, but I think the important thing that – just to differentiate the important thing that we discovered by talking to the actual document said, or treaty stations is they saw the value of the autologous therapy, because it comes from the patient and the perception of safety is it’s just really high. Of course in these frail patients that’s really important.

Boris Peacker – Oppenheimer

In your product profile you described very clearly and I appreciate that. In terms of the patients that would be targeted, I’m just curious what you’ve discussed with them in terms of efficacy or perhaps you learned from them what would be meaningful from the clinical perspective.

Daniel Orlando

Basically they said about 25%, 30% improvement over placebo was acceptable, as well as payers. 50% improvement, may consider it to be a home run, and we heard that from both physicians and payers.

Timothy Mayleben

And if you remember Boris I think the – if we go back to the Phase 2b Restore results, we saw a – in the patients with tissue loss we saw a 60% reduction in amputation free survival, and so we – we felt pretty good about the comments from the physicians and payers with respect to what would be meaningful here, because obviously that’s well below what we saw in the phase two and of course the objective of our Phase 3 study here is to demonstrate that in a larger patient population for approval purposes.

Boris Peacker – Oppenheimer

Okay. Well, thank you very much for these profound comments. That’s very helpful.

Operator

Thank you. I’m showing no further question in the queue. I would like to turn it back to Tim Mayleben for any further comments.

Timothy Mayleben

Yeah, thank you Pablo, and I just want to take a moment to thank all of our callers and listeners for – callers for your questions and everybody that was on the call for listening and your continued interest in the company. Of course we look forward to updating you on our next call which will be in the first quarter. Thank you so much.

Operator

Thank you. And again we want to thank you ladies and gentlemen for joining today’s conference you may now disconnect, have a great day.

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