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  • ACTC Clinical Update Call 10/15/14

    ACTC Clinical Update Call 10/15/14 4:30pm EST (16:37 min)

    Senior Executive Officers on the Conference Call:

    · Paul Wotton, Ph.D., President and CEO

    · Ted Myles, Chief Financial Officer and Chief Operation Officer

    · Robert Lanza, M.D., Chief Scientific Officer

    · Eddy Anglade, M.D., Chief Medical Officer

    Operator: It is now my pleasure to turn the webcast over to Ted Myles. Ted, the floor is yours.

    Ted Myles: Thank you and welcome to Advanced Cell Technology's call to discuss the recent online publication in the Lancet and also to provide you with a clinical and corporate update. This is Ted Myles, Advanced Cell Technology's Chief Financial Officer and Chief Operating Officer and I am joined tonight by a number of my colleagues: Dr. Robert Lanza, our Chief Scientific Officer and a co-senior author of the study that was published; Dr. Eddy Anglade, our Chief Medical Officer; and Dr. Paul Wotton, our President and CEO.

    Before we get started, I just want to remind you that we will be making forward looking statements as defined under the Federal Securities Laws. Actual results could vary materially. Factors that could cause actual results to vary materially are described in our filings with the SEC. You should pay particular attention to the risk factors contained in documents that we file from time to time with the SEC. These risks identified therein, as well as others not identified by the company, could cause the company's actual results to differ materially from those expressed in any forward looking statements.

    Before I turn the call over to Paul, I just want to state that we won't be taking questions this evening but we look forward to providing you an in-depth update and, of course, we will be reporting on our third quarter results in early November.

    I'll now turn the call over to Paul Wotton, our CEO and President. Paul.

    Paul Wotton: Thank you Ted. Good afternoon everyone and thank you for joining today's call. My reason for joining ACT earlier this summer was because I knew that this company which is at the forefront of regenerative medicine was about to unveil results which as described today by Professor Atala in his Lancet commentary as a 'major accomplishment.' I echo those words completely and I was lucky enough to recognize the potential of the science from the first moment I met with Bob Lanza just over 6 months ago. It is extremely rare that one is able to be part of such an exciting company and I am delighted to lead ACT at this point in his growth. We have a world class group of people here and I would like to acknowledge the contributions of everyone, and I mean everyone, at ACT by thanking them for their commitment and getting us to this milestone moment. We shall continue to make that commitment felt and we dedicate ourselves to bringing this potential therapy to market as soon as possible so that patients can ultimately benefit from this groundbreaking approach to therapy.

    Now, the primary purpose of today's call is to discuss the positive results of our phase I/II studies that were published online yesterday evening in the Lancet, a leading peer-reviewed medical journal. I am going to let Bob and Eddy discuss the results and our plans for the phase II trials in detail but I first wanted to stress the importance of today for our patients, our investigators and to our company and shareholders.

    Overall, the results of the study demonstrated long-term safety in patients using our proprietary retinal pigment epithelium, or RPE, cells for the treatment of Stargardt's macular degeneration, or SMD, and dry age-related macular degeneration, or AMD, as we had hoped for. The publication includes data from the 18 US-based patients who had reached the six months anniversary of their treatment by the time the study was submitted for publication. In fact, the median follow-up period for the 18 patients was close to 22 months. And this gives us added confidence in the safety profile that we have seen.

    We were also very pleased to see evidence of biological activity of the RPE cells with the added benefit of signs of visual improvement in many patients even though the study was not designed specifically to show this. This is very encouraging as we move into the phase II studies. These positive results also represent an important milestone for the company as we transition ACT from a technology platform company into a product development company. The data also reinforces and strengthens our leadership position in regenerative ophthalmology. For patients, these results indicate that transplantation of differentiated RPE cells derived from human embryonic stem cells, or hescs, as a starting point could provide a potentially safe new source of cells for the treatment of a variety of unmet medical conditions such as SMD and AMD. Furthermore, this is the first time that medium and long-term safety has ever been shown for this type of technology in individuals with any disease which puts us in the forefront of this exciting area of regenerative medicine.

    We also have had helpful dialogue with the FDA and other regulatory bodies which has informed our product development planning going forward.

    Before I turn the call over to Bob Lanza, I want to highlight the market characteristics underlying these programs. AMD is a significant market opportunity and a large unmet need exists for novel treatments that can potentially change the way the disease is treated. Currently there is no effective treatment for dry AMD and there are more than 30 million patients in the US and Europe suffering from AMD with dry AMD accounting for 80-90% of this number. SMD, a juvenile form of macular degeneration, is designated as an orphan indication that has a devastating impact by robbing younger patients of their vision and there is no effective treatment for that disease. Clearly, we have a unique opportunity here to make a difference to many people's lives in the future and we are committed to making this happen.

    I now turn the call over to Bob Lanza to review the data. Bob.

    Robert Lanza: Thank you Paul. I first want to echo Paul's comments on how important and exciting these data are to our patients, investigators, and to Advanced Cell Technology. I would also like to thank the patients for their willingness to participate in these safety studies. As I have said on previous calls, diseases affecting the eye are attractive first-in-man applications for this type of therapy due to the immune privileged nature of the eye, thus allowing transplanted cells to be incorporated into the structure, to thrive and to be functional. For those who might be new listeners, RPE cells are nursing cells which maintain the health of the photoreceptors, the cones and rods that we see with. Among their many functions, the RPE recycle photopigments, metabolize and store Vitamin A, phagocytose shed photoreceptor segments, and transport small molecules between the retina and choroid as part of the revisional cycle.

    Degeneration of the RPE leads to photoreceptor loss and sight threatening diseases such as AMD and Stargardt's Disease. Our approach is to replace the lost RPE in these patients with new healthy cells derived from pluripotent stem cells. The procedure involves a simply injection of dissociated cells into the subretinal space. The cells simply attach to Bruch's membrane and there is no need for them to connect or wire up with the cells in the retina or optic nerve. In preclinical models this approach resulted in extensive photoreceptor rescue and improvement in visual performance.

    I would like to now discuss the results published in the Lancet. Both the AMD and SMD trials are prospective open label studies designed to determine the safety and tolerability of human embryonic stem cell derived RPE cells following subretinal transplantation into patients at 12-months, the studies' primary endpoint. The studies included 9 patients with dry AMD and 9 patients with SMD for whom a minimum of six months of safety data was available. The report describes the finding on 3 of 4 dose cohorts tested, including 3 patients each who were treated for both conditions in an ascending dosage format of 50,000 cells, 100,000 cells, and 150,000 cells. Both the SMD and dry AMD patients received a subretinal transplantation of fully differentiated RPE cells derived from the human embryonic stem cells. The median patient age was 77 in the AMD group and 50 in the SMD group. As of the publication, patients were followed for a median of 22 months as Paul had indicated earlier. After the transplantation of the RPE cells, patients were followed by a series of opthalmic examinations including best-corrected visual acuity, or BSVA, visual acuity testing, slit-lamp biomicroscopy, ophthalmoscopy, optical coherence tomography, fluorescein angiography, auto-fluorescence imaging, and electro-retinography. Systemic monitoring included cancer screening, hematological and serotological testing.

    Moving to the results, to date there have been no serious adverse safety signals detected in these two clinical trials from the transplanted cells. In addition, anatomic evidence confirms successful engraftment of the RPE cells which included increasing pigmentation at the level of the RPE layer after transplantation. Visions improved in most patients after RPE transplantation based on the widely accepted standard for visual acuity testing, the Early Treatment Diabetic Retinopathy Study, or the ETDRS visual acuity exam. Best corrected visual acuity improved or remained the same in 17 eyes out of 18 and decreased by greater than 10 letters in one eye. Eight of 18 patients noted an improvement in visual acuity of greater than or equal to 15 during the first year after surgery which corresponds to a doubling of the visual angle and is generally accepted as a clinically significant measure of improvement. Untreated eyes did not show similar improvements in visual acuity which suggests a therapeutic benefit of the transplanted cells. Additional results are available on the publication today but for today I stop here. Once again, these results are quite promising and provide guidance for the path forward. We look forward to providing more details from these studies at major medical meetings and updating everyone regularly on the progress as we continue to obtain additional data.

    Paul Wotton: Thanks Bob. I now ask Dr. Eddy Anglade to provide a brief update on the status of the development program. Eddy.

    Eddy Anglade: Thanks Paul. I would like to reiterate Bob's comments and as an ophthalmologist with a background in transplantation therapy and product development, I am very excited to be associated with these studies. As an update, regarding the status of the studies being discussed today, we have now treated 38 patients and are dosing at the 200,000 cell level, the highest dosing cohort planned in the three ongoing phase I/II trials. In addition, we recently announced that we completed the patient dosing in the phase I/II safety trial of the hesc-derived RPE in SMD patients, 12 in total, in the United Kingdom. We look forward to extending our understanding of safety in this important dissertation as the data evolves over the next year.

    We are now gearing up to initiate our phase II studies and remain committed to our previously stated goal of initiating phase II before the end of this year. I am pleased to let you know that we have finalized our phase II design and we are strengthening our capabilities and expanding our network of trial sites to support this next phase of [ph] development.

    I now provide you with some highlights about our phase II design and execution plan. First, we plan to start with the SMD trial in the fourth quarter of this year and will initiate the AMD trial in the first half of 2015. The phase II Stargardt's macular degeneration trial will target an enrollment of 100 patients and the goals of the study are to evaluate the safety and efficacy of RPE cellular therapy. Outcome parameters will include assessment of visual function as well as structural changes. In the first half of 2015 we will also initiate a Phase II trial of approximately 50 patients in age-related macular degeneration. The goals of this trial will be to explore the preliminary efficacy of RPE cellular therapy in AMD as well as to optimize the concomitant immunosuppressive therapy required in the peri- and post- transplantation period. We anticipate that enrollment for the 100 patient SMD study will take between 18 and 24 months and take place in approximately 30 sites across North America and Europe. The 50 patient AMD trial will occur in approximately 10 US sites and we expect to complete enrollment by the middle of 2016.

    I am confident that we have designed comprehensive clinical trials and that we will execute them in a timely manner. Given the open label nature of these studies, we are designing interim analyses such that we will be able to update investors at predetermined points as the trials progress. I look forward to reporting updates on a regular basis as we continue to progress the trials.

    I now turn the call back over to Paul.

    Paul Wotton: Thanks Eddy. And what I would like to do is ask Ted Myles to provide a brief corporate update. Ted.

    Ted Myles: Thanks Paul. First of all I want to congratulate Bob and all the contributors for getting this study published in such a prestigious journal. The strength of this data, now in a peer-reviewed journal, is a critical piece to the plan that we presented during this pivotal year for ACT. With these data in hand and the legacy issues removed from the company we can now credibly pursue the fundamentals based institutional capital that can fund our company through some very exiting milestones. To that end, we have asked our shareholders to authorize an increase in the number of shares that we may ultimately issue. On November 12th we will hold our annual stockholders meeting and the approval of that increase in our authorized shares is critical to the eventual pursuit of capital and will give us the opportunity to properly capitalize this company and its product development efforts for the next several years.

    Further to this plan, we recently filed two registration statements with the Securities and Exchange Commission. The first was to register a 100 million dollars worth of securities in the form of a universal shelf. This is a very common mechanism that companies use to provide maximal flexibility for a potential financing and it is a good business practice to have one in place. We view this as a strategic move to help support a future financing effort to the benefit of all our stakeholders and will remain available to us for several years.

    The second registration statement was filed to register the balance of the shares under our Lincoln Park facility. As I have said in the past, our relationship with Lincoln Park Capital has been a very beneficial one in that it provides us with clean financing without warrants or any other features that could be viewed as unfavorable to common shareholders. The continued availability of the Lincoln Park arrangement gives us additional flexibility as we evaluate the capital markets. All of these steps are aligned with our previously stated plan to up list the stock to a national exchange such as NASDAQ. We are tracking well against this plan and I look forward to updating you all in the near future.

    Now I will turn the call back to Paul. Paul?

    Paul Wotton: Thanks Ted. Since I joined the company three months ago I have been continually impressed by the dedicated and smart people that work here at ACT. Clearly, today's announcement is a significant milestone for the company and we shall look forward to updating you all on a regular basis now as we continue to make progress at ACT.

    I would also like to say 'thank you' to the investigators' patience and everyone involved in the execution of the clinical trials and we now look forward, as Eddy said, to commencing the Phase II study before the end of this year. We are all on a mission here at ACT and I expect to be able to report further positive developments in due course as we transition the company to a fully integrated product development company with a focus on regenerative ophthalmology. We all believe strongly in what we are doing here and we intend to be the leader in this field and we thank you all for your continued support. Thank you.

    Ted Myles: Operator?

    Operator: Thanks to all participants for joining us on today. We hope you found this webcast presentation informative. This concludes our webcast. You may now disconnect. Have a good day.

    Tags: OCAT
    Oct 18 7:40 PM | Link | Comment!
  • ACTC Corporate Update Call 6/9/14 5:00pm EST

    Senior Executive Officers on the Conference Call:

    • Ted Myles - Interim President, CFO and COO
    • Eddy Anglade - Executive VP of Clinical Development
    • Matt Vincent - Director of Business Development

    Operator: (instructions) It is now my pleasure to turn the webcast over to Ted Myles. Ted, the floor is you.

    Ted Myles: Thank you and welcome to Advanced Cell Technology's corporate update call. My name is Ted Myles and I am Advanced Cell's Interim President, Chief Financial Officer and Chief Operating Officer. I am joined today by two of my colleagues: Dr. Eddy Anglade, EVP of Clinical Development, and Matt Vincent, Director of Business Development.

    Before we get started, I just want to remind you that we will be making forward looking statements as defined in the Securities Laws. Actual results could vary materially. Factors that could cause actual results to vary materially are described in our recent filings with the Securities and Exchange Commission, most recently our Annual Report on Form 10Q, excuse me, Quarterly Report on Form 10Q as filed on May 8th, 2014, and our Form 10K as filed on April 1st, 2014, and as updated on our Form 10KA as filed on April 30th, 2014. You should pay particular attention to the risk factors contained in those documents we file from time to time with the Securities and Exchange Commission. The risk identified therein, and as well others not identified by the company, could cause the company's actual results to differ materially from those expressed in any forward looking statements.

    Today we are going to give you an update on how we are performing against our previously stated corporate objectives. It's been a little over two months since our last update call and we look forward to discussing our progress with you. We think of our corporate objectives in two categories: business and scientific advancements, and corporate development which includes resolution of legacy issues.

    At the end of the call, we'll take questions, but I do want to reiterate that consistent with our previously announced policy of saying less and doing more, there may be questions for which I will not be able to offer precise dates or predictions on specific objectives. Often the steps required to build sustainable long-term shareholder value take longer than expected, so it can be challenging to predict exactly when something is going to happen.

    We have a terrific set of assets at ACT and there is a very smart, dedicated and talented team of employees, managers, directors, partners and trial investigators who are tasked with creating shareholder value by advancing those assets.

    Our incentives are aligned with yours and we are working hard to build ACT into a world-class biotech company. Now let's begin.

    Business and scientific items:

    Substantial progress has been made shifting our company so that we can continue to advance our stem cell technology while also advancing lead products through clinical development. To this end, we have established a clinical capability within the company under Dr. Eddy Anglade's leadership. In a few minutes I'll ask Eddy to provide an update on clinical development and regulatory matters.

    We position the company to become the leading regenerative ophthalmology company. We see important synergies across many aspects of clinical development and regulatory affairs by focusing our efforts in the ocular space. We already have a significant leadership position in this area with more than 30 patients treated in our AMD and SMD trials. We also have many of the leading US and UK eye hospitals participating in our current trials and many more top surgeons interested in participating in our phase II programs. The opportunity is there for us to leverage this expertise with our clinical stage therapies and to move aggressively and thoughtfully to helping to meet patients' needs.

    In further support of our regenerative ophthalmology strategy and based on our continued excitement about the results in our RPE program, I am very pleased to announce that we have initiated our myopic macular degeneration, or MMD, trial at Jules Stein Eye Institute at UCLA. The early results we have observed in our AMD and SMD trials gives us the confidence to invest further into our RPE franchise. Taken together, we will have the opportunity to be the only company with promising therapy for three major degenerative macular conditions, AMD, MMD, and a leading position in an important orphan indication, SMD.

    Our RPE cell therapy platform program along with our preclinical neural cell programs, which include a potential photoreceptor replacement therapy, position us to become the leading regenerative ophthalmology company. Now, I'll ask Dr. Eddy Anglade, our Executive Vice President of Clinical Development, to describe the MMD trial and to provide an update on our AMD and SMD trials. Eddy?

    Eddy Anglade (4:23 min): Thanks Ted. The MMD trial is a single site open-label study that follows the design of the company's ongoing US and United Kingdom studies for dry AMD and Stargardt's macular degeneration, or SMD. The MMD trial will enroll 12 patients with cohorts of 3 patients each in an ascending dosage format , that is - an increasing number of RPE cells being transplanted.

    The primary focus of the open label study will be to evaluate the safety and tolerability of transplanted RPE cells in patients who have progressed to fairly severe forms of myopia, the type which results in damage to the native RPE. Myopia is the most common cause of refractive error and its prevalence is increasing. Myopic macular degeneration, an extreme form of the condition, occurs in a subset of these patients and can occur as early as the second decade of life. So the potential impact on patients' life may be profound. We anticipate an initial read of safety and tolerability in this important patient population during the first half of 2015.

    With respect to our AMD and SMD trials, the US trials are poised to start enrollment of the highest dosage cohort of 200,000 cells in these initial trials of safety and tolerability of human embryonic stem cell derived retinal pigment epithelial cells.

    The UK SMD trial, the safety review of the data from the first subjects already treated with 200,000 cells will soon take place by the independent data safety and monitoring board. Upon their comprehensive review of the data to date, a recommendation will be made regarding the enrollment of the remainder of the cohort. The DSMB process has been designed with an abundance of caution - in mind given the "first in human" nature of these studies. In phase II safety will continue to be at the forefront of the goals for the program; however, given our current understanding of safety it is likely that the process will be more efficient then it has been in Phase I and we expect to increase our rate of enrollment in Phase II.

    With regard to our Phase II development planning, our discussions with the MHRA in the UK provided us with excellent feedback that was generally supportive of the proposed development strategy and gives us confidence as we are poised to have interactions with the FDA shortly. In anticipation of an informative and productive discussion, it is further anticipated that we will announce our Phase II development plan thereafter and maintain the previously stated corporate objective of moving into Phase II, i.e., starting enrollment, in Q4 of this year.

    Importantly, in the lead up to the scheduled regulatory meetings we have also received enthusiastic feedback from our current investigators as well as potential new investigators about the promise and potential of the program. Back to you, Ted.

    Ted Myles (7:33 min): Thanks Eddy. In addition to the great progress on the clinical programs, there are also positive developments in our pre-clinical programs. On Thursday, June 5th, Stem Cell Reports, the official and peer-reviewed Journal of the International Society for Stem Cell Research published a study that we completed with our collaborators at the University of Connecticut. We are proud of this work and we believe that it further validates our hypothesis that ACT's human embryonic derived MSCs may be superior to MSCs made from cord blood or adult sources, such as marrow or adipose tissue. Our previously stated strategy is to advance our MSC program through proof-of-concept and to demonstrate our cells advantages so that we can partner the program with a company, or companies, that have expertise in clinical development in areas outside of ophthalmology.

    We have a small but very talented team of scientists driving our MSC program forward and as they continue to generate excitement and credibility in the scientific community, it is my hope that we will be successful in attracting the non-dilutive funding that will be necessary to bring those programs into the clinic.

    Everything that we discussed so far during this call has been about advancing the fundamental elements required to build a successful biotech company. Unfortunately for many years, ACT has been hindered by serious legacy issues. The legacies of previous management teams have included SEC investigations, civil actions, litigation and harmful financial instruments. Until these matters were closed, the fundamental progress of ACT simply wouldn't be properly recognized in the financial markets. Open litigation from transactions that occurred several years ago is too challenging for an institutional investor to understand, and there have been too many risks - not related to the science - for institutional investors to become engaged in a meaningful way. Our goal is for ACT to strengthen its balance sheet, up list to a national exchange, and to advance, in fact, accelerate our clinical and pre-clinical development efforts.

    With this in mind, on June 4th 2014, we settled the litigation with Aronson and Gorton. Pursuant to the terms of the settlement agreement, ACT has issued to Aronson and Gorton and their designees a total of 384 million shares of common stock. Additionally, as we announced last month, we settled the debenture with Camofi, thus removing an unfavorable financial instrument from our balance sheet. With these items behind us, we believe we are poised to pursue our plan as described. Make no mistake about it, resolving these issues of the past has been unpleasant and expensive. However, the alternative was to continue to incur significant legal fees and continue to be hamstrung in our business building efforts while litigating a matter which we had substantial risk of losing.

    We remain committed to executing our reverse split, reapplying for listing on a national exchange in the near term. These steps will enable us to credibly pursue fundamental based, institutional biotech investors who could help augment the tremendous support that our many retail investors have provided for so many years.

    In addition to these financial objectives, we remain committed to our previously stated corporate goals of advancing our AMD and SMD programs into Phase II, publishing the Phase I interim data in a peer-reviewed journal and partnering our non-core assets.

    Now I would like to open the call for questions.

    Questions and Answer Session (11:00 min)

    Operator: (instructions) We will be pausing for a few moments to compile the queue roster…

    Ted Myles: I think operator, while you compile calls, I'll take a couple of online questions. One question here relates to our planned up-list for the year.

    As I mentioned, it is a corporate objective. The work that we have done over the last couple of months helps to clear the way for that up-listing. Of course, as I said before, there is a lot that goes into properly up-listing stock, reversing the stock, and bringing in the proper capital. And we continue to view those activities as really one set of linked objectives. So, we are committed to pursuing that by the end of the year. It is a corporate objective and we are very focused on it.

    Operator: And at this time we are still pausing to queue up the Q&A roster.

    Ted Myles: Another online question on how we plan to fund operations in 2014 and 2015. I think this sort of is a natural extension of the prior question. Up-listing the stock, reversing the stock, fixing the corporate structure - again we view that all as part of attracting fundamental based, long-term oriented institutional biotech investors. And that is what we are looking to do toward the end of the year, to shore up the cash balances so that we can fund the company through the next group of milestones.

    And one of the other questions on the line was about milestones for the upcoming three and six months. If you think about what this company could be by the end of the year or shortly thereafter, we would hope that we have our Phase I interim data published; we 'd be well into starting our Phase II programs; we'll have good, well, some patient flow on the recently initiated MMD trial. So that would give us, hopefully by the middle of next year, a read toward how our cell therapy applies to one of the leading causes of blindness in Asia. And, of course, as we sit today, a clean corporate structure. So, we think that is a lot of value- add over the next year or so.

    Operator: And your next question comes from the line of John Redaelli. Your line is open.

    John Redaelli: Thank you for taking my call Ted. I have a few questions if you don't mind. Is there a connection with Pfizer, Roslin and ACTs RPE cells? Has any thought been given to a future rights offering for existing ACT shareholders? Are multiple blebs being used now or contemplated for future use during clinical trials?

    Ted Myles: Ok, so…I'll answer in reverse order, the multiple blebs are not currently being used and looking to Eddy here, I don't think we plan on using them in the future.

    Eddy Anglade: No, that is not the plan. And, obviously we are in the midst of working through the kind of Phase II program that we are going to be initiating this year, but a single bleb administration is what we are planning at this time.

    Ted Myles: One of your other questions was about any connection between us and the Pfizer - Roslin relationship. And no, we are not involved in that relationship. And forgive me, I forgot your other question.

    John Redaelli: The rights offering for ACT share holders.

    Ted Myles: No. not at this time. We are evaluating a number of financing options. I am not going to rule out a rights offering but I don't want to make any firm commitment in that direction, either.

    Operator: And your next question is from Ed Rimkes. Your line is open.

    Ed Rimkes: Could you reassure us long-term investors that bankruptcy is not on the table? And if so, how are you going to finance Phase II?

    Ted Myles: Ok, so… we believe that the steps that we just took to clean up our company profile get us further away from a bankruptcy option. I can't sit here and provide absolute assurance but it is not part of our vernacular here. What we are focused on at ACT is getting away from all the legacy issues and building a successful biotech company. We believe that the steps we have just taken make us significantly more fundable. And by more fundable, I go back to the objectives of reversing the stock, up-listing to a national exchange and attracting fundamental based, you know, long-term shareholders who are investing on the merits of our science and our clinical programs. And, if we are successful in those items, we should be very far from bankruptcy, we should be more in company building mode, which is where we are really committed to being.

    Operator: And at this time we are pausing to queue the phone questions… (instructions)… And your next question comes from Jason Kolbert. Your line is open.

    Jason Kolbert: Hi Ted. I have a couple of questions. Can you just walk us through the clean-up and the two transactions that you mentioned, and can you let us know what the outstanding share count is? And then clinically, can you help me understand a little bit on exactly what the sequence is of trials that you will be running and the dose cohorts because that was a little bit fast. I just want to get a better understanding on the timeline.

    Ted Myles: Ok, Thanks Jason. I'll go first and then pass it to Eddy for the second question. So, the two big issues that we resolved last week and last month, let me go with Camofi first. As everybody knows we had these convertible debentures outstanding for quite a while and they had the right to convert. They issued us a conversion notice back in early March. It happened to be in a period where we were looking at -- we were approaching a decision to potentially restate our financial statements. We couldn't, being on the right side of the Securities Laws, we could not issue them stock at that time. We had pretty unfavorable agreements with them and they wanted their stock immediately. We got into a discussion, we tried to resolve things amicably, and they ultimately called the note, so we paid them back. We look at that as, while it was not comfortably parting with so much cash, it was a little over a million five, it did remove the instrument from our balance sheet. So, it took a significant step toward cleaning our balance sheet. So, we feel good about that.

    In terms of the Aronson Gorton matter, again these are transactions that were entered into many, many years ago. It was a very unusual warrant arrangement. And we looked at another year of litigation with significant risk. It could have gone much worse. In the meantime our business plan would have been largely on hold versus settling and putting this behind us. And we believe that that was the best decision for the company and for all of its stakeholders.

    So, I now pass to Eddy to discuss the clinical portion.

    Eddy Anglade: Thanks Ted. So, thanks very much for your question. Sorry to go quickly. So, in terms of sequencing at least at it relates to what I just talked about for the trial that was just initiated, myopic macular degeneration that is targeting a large and increasing problem. That is going to be a single center trial based at the Jules Stein Eye Institute. It's a dose ascending three patient cohort, three patients per cohort that is, and the target enrollment in that trial is 12 patients. So, I am anticipating that we will have an early read of safety and tolerability during the first half of 2015. So, that is a newly initiated initiative by the company based on the faith that we have in the technology.

    So, were Phase I is concerned, you know of course that we have two indications that we are pursuing: Age related macular degeneration and Stargardt's macular degeneration. For the US, the current enrollment is halted at the "150,000" patients, the safety data is being reviewed by the Data Safety Monitoring Board and we anticipate that they will render their decision about proceeding to the next and highest dose cohort of "200,000" patients shortly.

    We have also, as you know, a Stargardt's Macular Degeneration trial ongoing in the United Kingdom. The first patient at the highest dose cohort of "200,000" patients has been treated and the review by the Data Safety Monitoring Board is imminent. So, the two, actually, approvals by the DSMBs are being anticipated shortly. They are either in the midst of the review or we'll be receiving the information where the UK is concerned, for example, very shortly to render their decision about proceeding. Does that answer your question?

    Operator: And the next question is from Jim Kuhn. Your line is open.

    Jim Kuhn: Thank you. Appreciate you holding this call Ted, and appreciate that you taking my questions. I have three of them for you, if you don't mind. The first one is, at the end of 2013 you spoke about strategy of doing this kind of two-step funding process, where the first step would be about raising some funds post SEC settlement and pre NASDAQ up-listing. And then the second step would be, I think, a larger raise in conjunction with the reverse split and up-listing itself. Can you tell us if that two-step process is still the thinking?

    Ted Myles: You want to go through your other questions and then we, I, can answer all three?

    Jim Kuhn: Ok, that's the first one. The second is a real quick one. You mentioned here on this call that the reverse up-list target would be the end of this year. I just want to see if you could reconcile that with the proxy authorization to reverse up-list by 9/30/2014, so I just wanted to see if you anticipating needing to extend that 90 days? And then the third question has to do with the authorized share limit. You know, with the 384 million going to Aronson/Gorton, and then with the pending shares going to raise the capital that you spoke of prior, it seems apparent that you are going to raise the authorized shares fairly soon. My question is, is the thinking to increase the authorized [shares] before the reverse split, or perhaps in conjunction with the reverse split, so that the company has headroom, once up-listed on a national exchange?

    Ted Myles: OK, good questions. So let me go through in order. We had been, back at the end of 2013, we had been thinking about a two-step process. You know, the legacy issues that we were wrestling with, you know frankly, they took longer, and they consumed more bandwidth and more effort, and were more of a burden than we had thought. Fortunately, they are all behind us now. So now we are looking at, the number one objective is, how we best capitalize the company. So, whether it's a two-step program or a one-step program, we are working with our Board, we are working with financial advisors, to think about these things and position the company for the best possible outcome. So, I don't want to confirm that we are absolutely committed to a two-step process or necessarily a one-step, we really need to, sort of as we have just done, kind of clean things up. We want to get the Phase I interim data out there as soon as we are successful in landing a publication and getting it out in the public domain, and use these assets to fuel a good financing and with a good outcome for investors and the company.

    In terms of reconciling the timing, thank you for bringing that up. We look at the 2014, the 2014 corporate objectives are at the end of the year we hope to be a NASDAQ listed company with a lot of cash in the company's coffers that can fuel, fund the company through the next group of milestones. We are abundantly aware of the September 30th deadline for the reverse split and we are working with our advisors and our lawyers to figure out the best approach to effectuate the split and line up a financing. I talk about the reverse split, the application to NASDAQ and the pursuit of institutional financing as kind of a singular event. It does not mean that they are all happening at exactly the same time but they need to be all considered together and mapped out in a plan. And the backdrop of that plan should be continued fundamental business progress like the publication of the Phase I data and initiation of Phase II, etc. So again, it's hard to pinpoint the exact timing for all these things but these are all the pieces that we are considering in maximizing the opportunity here. Along those lines goes authorized share count and we are looking at that as well. So, I continue to update everybody as we define these plans. Thanks for your question.

    Operator: Your next question is from Michael Brombacher. Your line is open.

    Michael Brombacher: Hi there, we haven't heard an update really on the INADs on the [ph] MSCs and I was wondering if you could tell us a little bit more about that.

    Ted Myles: You know, it's preclinical stuff, and so we don't typically comment on the results of pre-clinical programs until they are published. A good example of that is last week's publication. There is a lot of work that happens below the surface before a publication like that pops. Commenting on preclinical stuff feels a little bit premature. You know we continue to be encouraged by the MSC program and the excitement generated around that. So, more to follow as circumstances dictate.

    Operator: And your last question on the phone is from Louis Small. Your line is open.

    Ted Myles: Hi Louis.

    Louis Small: One of the questions was affected by a statement earlier, I think by you Ted, you talked about going it alone for the MMD technology. That is question number one. Question number two had to do with the balance sheet. You have a reserve that was set up for the settlement with the Aronson suit. Not sure of the amount, whether it was $13 million or not, but for the purpose of this question, let's assume it is. How does that affect the cash balance of the company? Does that put that cash back in play for the organization to use? And the third question is how much additional cash and additional availability on Lincoln do you have?

    Ted Myles: Ok, so… The accounting treatment of the Aronson Gorton reserve, or the Aronson Gorton accrual, was about 13 million dollars. That was our estimated exposure, and of course, the high end of that estimation was much higher than that as we disclosed in the financials. That is a noncash accounting entry. So, now as we close Q2, we will value the ultimate settlement and take a charge for the delta, I think it is somewhere a little bit north of that- it's probably around 20 million dollars. And we'll flush the accounting through and it will be removed from the balance sheet. So, it does not free up any cash. What it does, it removes a major hurdle to fund raising and attracting additional cash down the road.

    In terms of Lincoln Park, you know we are running towards the end of it. We've got some runway left and we are evaluating options. Again, the removal of the Camofi note and the Aronson Gorton overhang really clears the deck for future financing. So, we'll update everybody as those plans come together.

    Operator: That was our last question on the phone at this time.

    Ted Myles: Ok, So I'll just wrap up with a few final comments that, hopefully, capture other questions that we did not get to. You know, when I think about the condition of the company a year ago, or even more so, two or three years ago, I am really impressed by the perseverance of our many loyal shareholders. There have been a lot of decisions made by prior management teams that had a long tail, cast cloud over the company for a long time.

    Now, you really look at the corporate profile and boil it down to the basics - the basic fundamentals-what do we have? We have a leadership position in stem cell technologies that is protected by a very broad and strong intellectual property estate. We have encouraging results from more than 30 patients treated in AMD and SMD trials - AMD being one of the largest unmet medical needs of our time. We got the support and broad partnership of top eye surgeons in the US and the UK to help us drive into Phase II and expand the trials into MMD, another large unmet medical need. We have a clean balance sheet, free of legacy issues and, with putting together this plan we can turn this into a very strong balance sheet with the proper financing. We got brilliant employees who are dedicated to making this company a success and a world-class Board of Directors who provide the necessary guidance to management. We have a loyal base of shareholders who persevered together to get us to where we are today. So, we all think that these are the ingredients required to create a long-term sustainable shareholder value. We thank you for your support as we continue to develop game changing cell therapies for patients in need. So, thank you very much and have a good evening.

    Operator: Thanks to our presenters and thanks to all our participants. We hope you found this webcast presentation informative. This concludes our webcast. You may now disconnect. Have a good day.

    Tags: D
    Jun 10 10:36 PM | Link | 1 Comment
  • Navidea - Pipeline Restructuring Conference Call (5/16/14)

    Navidea - Pipeline Restructuring Conference Call

    Friday 5/16/14 8:30am EST

    On the Call:

    Brent Larson - Chief Financial Officer,

    Michael Goldberg - Interim CEO

    Tom Tulip - President and Chief Business Officer

    Brent Larson: Thank you, Jessy. Hello everyone and thank you for joining us today. My name is Brent Larson and I am the CFO of Navidea and I'll be moderating this morning's call. On today's call with me are Michael Goldberg, Interim Chief Executive Officer, and Tom Tulip, President and Chief Business Officer. At the end of the call we will hold a brief question-and-answer period.

    Before we get started we'd like to remind you that during the course of this call management may make projections or other forward-looking remarks regarding future events or the future financial performance of the company. It's important to note that such statements about Navidea's estimated or anticipated future results or other non-historical facts are forward-looking statements and reflect Navidea's current perspective on existing trends and information. Navidea disclaims any intent or obligation to update these forward-looking statements.

    Actual results may differ materially from Navidea's current expectations depending on a number of factors affecting Navidea's business. These factors include among others, the inherent uncertainty associated with financial projections, timely and successful implementation of strategic initiatives; the difficulty of predicting the timing or outcome of product development efforts and FDA or other regulatory agency approvals or actions; market acceptance of any continued demand for Navidea products; clinical and regulatory pathways; the impact of competitive products and pricing; patents or other intellectual property rights held by competitors; the availability and pricing of third-party source products and materials; successful compliance with government regulations; and such other risks and uncertainties as detailed in Navidea's periodic public filings on file with the Securities and Exchange Commission.

    Now, I would like to turn the call over to Dr. Michael Goldberg , Interim Chief Executive Officer of Navidea. Michael?

    Michael Goldberg: Thank you Brent. Good morning and thank you all for participating in this call. For those of you who may know me from the perspective of portfolio manager at Platinum Montaur I want to make certain you know that I ended my formal relationship with Platinum Partners at the end of 2013. While I no longer have any portfolio management responsibilities for Platinum, and am completely independent from their decision making, I continue to share positions in many of the companies that I invested in while at Platinum. Navidea is one such investment.

    As I take on the role of Interim CEO I am representing myself and hopefully the interests of all Navidea shareholders. Let me start by saying that I am extremely excited by the Navidea assets and the actions we just announced are designed to better align our assessment of the assets and the share price which we believe does not come close to properly valuing the company.

    Lymphoseek sales are the top priority for Navidea and the actions we are taking today are designed to make certain that Navidea takes the appropriate steps and makes the necessary investments so that Lymphoseek sales reach their potential as quickly as possible.

    We have learned a lot over the first few months of Lymphoseek sales. The existing markets for sentinel node mapping had been poorly penetrated due to the limitations of the existing products which do not function well for their intended purpose. Lymphoseek offers a significant number of advantages but the regulatory driven limitations to marketing those advantages as well as the overall market dynamics result in a long and complex sales process.

    Our marketing distribution partner Cardinal has been a great help of getting into many accounts and provides the logistical support necessary to detail this type of product. We have seen remarkable stickiness in the accounts that tried the product with remarkably high adoption and reuse after the institution becomes familiar with the technology. We have heard anecdotal reports from some accounts that Lymphoseek is now being used by 100 percent of the surgeons utilizing sentinel node mapping in these institutions. We belief this represents confirmation that once used, the properties and attributes of Lymphoseek enables it to essentially continue to sell itself.

    We are seeing no invitations of our existing sales efforts in many of the cancer centers who do their own isotope preparation and, therefore, are not clients of Cardinal's radiopharmaceutical sales efforts. Working with Cardinal, we have developed new contacts at a few of those institutions. Part of the reason for the actions that we are taking today is to augment the effort that led to the successes we have had to date and we are rapidly and extensively pursue those extremely valuable large accounts.

    We have also seen the benefits of directly interacting with the surgeon in addition to the radiopharmacy reps, and want to built on those successes. In June, we have a very important event, the PDUFA date for the head and neck sentinel node label expansion for Lymphoseek. As we have shared with the market already, Lymphoseek performed extremely well in the Phase III study. Should we get the label extension in June, we believe our sales efforts will be materially enhanced as we can now open up a new market. In addition, in my opinion much more important, the new label will also enable us to approach surgeons in other specialties and alert them to the fact that a sentinel node imaging agent is approved and available for use, that Lymphoseek is the only such agent approved for such sentinel node mapping based on its successful prospective study in head and neck cancer. Remember, many breast and melanoma surgeons, and even some other cancer surgeons, have been using lymphatic mapping agents for years in an attempt to hopefully identify the sentinel node. Should we get the expanded label for Lymphoseek, Lymphoseek will be the first agent labeled for sentinel node mapping, and in combination with the mechanism data for Lymphoseek, we believe our ability to more deeply and quickly penetrate the broader surgical oncology market place will be enhanced.

    We believe sentinel node mapping will become much more widespread than just breast, melanoma and head and neck cancer. We have initiated studies with Lymphoseek in colon cancer and anticipate doing so in certain gynecological tumors and other types of cancers. We'll seek to expand those efforts. Post approval we have been approached by a number of interested parties seeking to collaborate on using Lymphoseek in a variety of new indications. We expect interest to accelerate once we have the new label.

    The actions that we are taken today are specifically intended to make certain that the funding is there for the advancement of these efforts to built the Lymphoseek platform so that it more rapidly becomes the cash generating engine that we believed in when we at Platinum first started investing in Navidea, then called Neoprobe, in late 2007 and 2008. I first became involved in Navidea after the phase II results convinced me and my partners at Platinum that Lymphoseek had the potential to be a major commercial product in that it met a large unmet medical need. Based on the data from the phase II, Platinum was convinced that the product would likely work. But our decision to invest was based on our assessment of it as a commercial product. They, actually 'we' at the time, invested solely on the potential of Lymphoseek. Platinum believed then, and to my knowledge, still does now, as I surely do, that sentinel node mapping will be routine in properly staging most solid tumors. Based on our research we concluded that the existing use of nonspecific imaging agents for sentinel node identification was limited only by the fact that the available agent was very crude, did not perform very well, were difficult to use properly, and had numerous side effects. We concluded that the fact that surgeons were using these agents at all was an indication of the significant potential for a specialty-built effective product.

    Once Platinum invested in Navidea, work began with Navidea to plan on how to leverage the unique skill set to build a bigger, more robust business. We concluded that Lymphoseek would be the first new radiopharmaceutical developed and approved in many years, and therefore, the skill set would be unique to the market. Management went out and successfully leveraged that skill set by identifying two exciting radiopharmaceutical compounds that required the specialized skill set that Navidea developed while working on getting Lymphoseek approved.

    The fact that Astra Zeneca, a large multinational pharmaceutical company with tremendous skills and successes in drug development entrusted Navidea with the development of their radiopharmaceutical is a testament of the value of the skill set that Navidea developed. I believe Navidea has clearly proven that the confidence that Astra Zeneca had in Navidea is well placed as Navidea has navigated the complex regulatory and logistic pathways and advanced the Alzheimer's product into both a phase III and a critically important phase II designed to demonstrate the unique properties of NAV4969. This will, in our opinion, differentiate the product from first-generation products and just like with Lymphoseek offers the potential to replace inferior existing products, expand the market significantly due to the product's unique properties and significantly higher resolution.

    Similarly, with the Parkinson's product, Navidea has proven its unique skill set by advancing this product as well into phase III.

    Two things changed from our initial projections on Navidea, though. The first was a lengthy delay in getting approved for Lymphoseek, and the second was the emergence of the potential for the manocept platform. The delay in Lymphoseek approval created an imbalance in our cash flow projections making the commitments to fully fund the development of the two in-licensed compounds on the initial timeline unworkable.

    On the other hand, the emergence of the manocept platform provides the potential to create a very full pipeline of high value products at a very low cost to Navidea. All of these resulted in the decision to refocus our priorities to maximize Navidea's potential.

    We are taking steps to prioritize: #1 Lymphoseek penetration, and thus sales and cash flow; #2 to cut the burn so that Navidea can achieve its objectives without needing the additional equity financings, especially, not anything approaching the current share price.

    I consider myself to be first and foremost a shareholders' representative on this Board. I joined the Board to make certain the company had a shareholder centered representative on the Board and at the table when decisions are made regarding financing the company. Navidea is blessed with more opportunities than the current funds can support. The decision to appoint me as interim CEO is designed to provide our shareholders with the comfort that their interest will have a priority in decision making concerning the spent and project prioritization. The recent weakness in the share price is inconsistent with our sense of the current value of the company and the confidence we had in the potential for Lymphoseek.

    We believe that it is better to let Lymphoseek sales drive value and not force a financing at these low prices just so that we can more rapidly advance our other Pipeline products. The market has not only not rewarded Navidea for its pipeline, but we believe we are being punished for the spent on pipeline products. Therefore, we are cutting the burn on certain pipeline programs in order to allow the Lymphoseek sales ramp to continue. At the current rate, with the reduced spent, we fully expect that we can realign the spent with revenues in 2015. We believe that our two neuro in-licensed products have been significantly enhanced by the work we have done by advancing the phase III studies. At this stage, Navidea's unique skill set is less relevant for their completion and, primarily, these programs require funding to bring them across the finish line. We will conserve our cash by decreasing our investments in these products while we seek to partner them to companies that are longer on cash and shorter on opportunities than Navidea.

    We'll cut internal cost accordingly with the goal of preserving our capabilities to re-accelerate the program if partnered or if cash flow from Lymphoseek supports a more aggressive development effort.

    As announced yesterday, I'll be taking on the role of interim CEO with the primary responsibility of overseeing the reorganization and certain external interaction until the appointment of a new CEO. We have initiated a search for an experienced CEO with commercial product development experience specifically in sales and product line extension. The Compensation, Nominating, and Governance Committee has initiated that search. Until that position is filled, the entire Board has committed to assisting management on these initiatives. We have a tremendous breadth of experience and contact on the Board, ranging from sales, general management and business development, to clinical research and development. Mark Pykett has graciously agreed to continue to oversee the operation and to head the development of the manocept platform. I can think of no one better to lead that effort. We have a number of potentially significant near-term opportunities with partners for this platform - and Mark will oversee those efforts. In fact, Mark could not make this call because he is working on a very exciting deal based on the manocept platform.

    Navidea is loaded with underappreciated gems. We have a best-in-class US approved product that we expect will get an expanded label making it the first sentinel node imaging product approved in the US. The scaffold for our lead agent Lymphoseek is manocept which we believe is a platform useful for many applications ranging from improved imaging with different imaging modalities that link to a variety of existing and to developed important detection agents, to other diagnostic and potentially even therapeutic products. This will extend the existing market and open up much higher pricing opportunities. The underlying agent has been approved and demonstrated safe and effective. Mark and his team have demonstrated numerous potential applications for this scaffold and we are going to focus on leveraging this asset much further. Manocept is a linear chain like chassis engineered to be of sufficient molecular weight with multiple link or sites enabling it to carry many differently linked entities as a payload delivery system while not losing its very specific targeting capabilities. As a complex scaffold, it shares many of the difficulties and attributes of polymer products like heparin, low molecular weight heparin, and [???]. These types of products are difficult to get approved but once approved are extremely difficult to copy. So developing generics is expensive and time consuming, and we believe this creates a tremendous barrier to entry.

    The approval of Lymphoseek, the first product derived from the manocept platform is so important to Navidea's manocept business development efforts, in that it paves the way for many different product opportunities. The benefit of having a scaffold with a linker approved enables Navidea on its own and with partners, to more rapidly identify and ultimately develop multiple new innovative products in parallel and at a fraction of the cost and time compared to developing similar products with an unapproved, undeveloped scaffold.

    As an investor in small cap healthcare companies, I see a lot of opportunities. There are no perfect companies. Every company goes through growing pains, and I have never seen a company manage to perfectly time their product development. The skill set necessary to take a company from stage to stage is often very different and management changes are often necessary to optimize performance. In the case of Navidea, of the time that I have invested, we have seen great progress. David Bupp was CEO when I first invested and he must be commended for acquiring the rights to Lymphoseek and getting the product into testing and through phase II. Mark Pykett did a fantastic job navigating difficult regulatory pathways and getting the product approved in the US, advancing it to the cusp of approval in Europe, and managing a very successful launch. He along his team have advanced two in-licensed products into phase III and advanced an entirely new product pipeline here at Navidea via manocept.

    Now Navidea needs a new skill set. Lymphoseek will soon be generating significant cash flow and we want to maximize those revenues by further and more rapidly extending both the indication and the markets for Lymphoseek. That will ensure that we can fund our significantly expanded pipeline from our self-generated cash, and not do highly dilutive financings.

    The anticipated cash flow will justify a market value that in our view is exponentially higher than current prices based on Lymphoseek alone. We do not want to raid our current cash cow and squander shareholder value by spending our precious cash on future cash generating programs until the market is going to start giving us credit for an exciting pipeline. We are committing to you, our shareholders, that we will husband our cash, that we focus on efforts that are already underway to continue the growth of Lymphoseek. We have no plans to do any dilutive financing to fund our pipeline. Cash flow from Lymphoseek will have to be adequate. Based on our projections, we will have ample cash flow to fund our expanded pipeline but the timing of those investments will be better scheduled to coincide with cash flow periods. We believe in time our pipeline is just too groundbreaking not to be recognized. We will continue to move the pipeline forward as best we can. We just will need to ensure that it's funded without the need for further dilutive financings.

    I thank you for taking the time to get updated on Navidea's story. I look forward to sitting down with the analysts and reviewing the budget in detail. I look forward to meeting with and speaking with the amazingly loyal and passionate investors that supported Navidea over the years. And I look forward to going out on the road soon and sharing this great story with new potential investors as well. Finally, I look forward to speaking with you all again in about a month after the next critically important event in the Lymphoseek story, our upcoming PDUFA date on the sNDA.

    I will now open the call for questions.

    Q&A session

    Operator: Thank you…[instructions]... Our first question on the line is from Kevin DeGeeter from Ladenburg Thalman.

    Kevin DeGeeter: Good morning guys. Thanks for holding this call. Just one question from me. Can you provide some context as to how we should think about a revenue run rate on Lymphoseek that may bring the company to cash flow break even based on your updated budget, but not necessarily a point estimate but a reasonable range to think it out. Thank you so much.

    Michael Goldberg: Brent can you just provide Kevin with what, I guess, we told the market right now for what our projections are?

    Brent Larson: Sure, I think we've told the market right now our projections are for $5-6 million of revenue in 2014. The other guiding piece of information I think that is probably relevant here is that it is anticipated that by midyear next year, that it will be at about a 50% plus market share in the Lymphatic mapping market as it exists. So, I think the combination of those two would indicate to Kevin, just understanding what the number of procedures and the penetration rate that I think we do of lymphatic mapping right now, giving him a pretty good idea…given the pricing and so forth that we have talked about so far.

    Michael Goldberg: Kevin, let me add that clearly one of the issues that we want to address is that, while we talk about the existing sulphur colloid and other lymphatic mapping products, we believe that that is a fraction of the market. When we talk about a 50% penetration, that is only of the existing market. We think that a receptor taken today, or designed, can dramatically expand the market. We believe, as I have indicated in the prepared remarks that we are shooting for expanding this to most, if not all, solid tumor surgeries. In terms of the numbers, I think it is instructive if you look at the numbers in terms of what we reported so far, and the projection that the company is comfortable giving for year-end numbers, you can see that the run rate is going up relatively nicely. And we don't see any reason why that rate should not continue. So, you could say that by around year end - early next year, the monthly revenue rate will go a long way to cutting our burn. So, our target is to get the burn down so that by year end, early next year, we have relatively low burn and then, if revenues continue to track as they have been tracking, we should get into a pretty good cash generating mode earlier rather than later in 2015.

    Kevin: Great. Appreciate the feedback and thanks again for the call.

    Operator: Thank you. Our next question is coming from the line of Steve Brozak with WBB Securities. Please proceed with your question.

    Steve Brozak: Well, good morning Dr. Goldberg. I obviously want to congratulate you on coming in and representing the shareholder. You mentioned one item - and it is something that struck me - when you said the crude difference in between what was the state of the market when you so astutely invested in Neoprobe, Navidea, and what you saw as the potential for Lymphoseek. Can you describe how that (indisernable) difference is even greater today and what you think the opportunities are? And I have one follow-up question after that.

    Michael Goldberg: Thank you Steve. Look, the issues that got us excited - when actually you were the one that brought us that deal, thank you - the issues that got us excited was the fact that doctors where using a product that didn't actually stick in the sentinel node. So, there was a whole bunch of issues that when you are looking at this you are making clinical decisions based on a product that was rapidly transiting through a node and we did not know if that was where the sentinel node was or it was you just a node you happened to find by the time we did the right imaging. So, the fact that such a high percentage of physicians were looking for these and trying to make clinical decisions based on a very, very imperfect product got us excited. The beautiful thing about Lymphoseek is you can dose it and know when you are finding it, it stuck in the first node, or the sentinel node. The other piece of this is, there is a certain attributes from the perspective of how to prepare the material, the ease, the pain-free nature of this. We got some studies underway that we hope to be able to use in furthering the marketing of this product. So, there are many,many attributes to these that actually lead to conclude that we now have a sentinel node agent, and we now have - which we did not have when we made the investment - which is the phase III results in head and neck, which shows at least in that tumor, that we are clearly identifying the sentinel node. But if I am a physician and I am looking to make a clinical decision based on what has transpired in the nodes, in my opinion as a former lab surgeon if you will, I would not count on any other agent other than Lymphoseek simply because of what I know with Lymphoseek - it sticking in the first node. What I know about the other agents is, who knows where they went and came from and which node we are looking at. So, if I want to make a decision, the nice thing about Lymphoseek is, it gives you the opportunity at the time the surgery to do a very careful, detailed analysis of the note that you pulled and, I believe that is why this product will take over the market.

    Steve Brozak: Ok. And the follow-up to that is obviously a little bit more granularity on the sales and -quote-unquote- the repeat sales. I think there was some misunderstanding when facilities were ordering and then had some sort of hiatus. Can you explain how it wasn't a situation where they were not reordering, it was just a function of fact that in some small facilities, there is a difference on how they do procedures? And I'll jump back in the queue. Thank you.

    Michael Goldberg: Right. So, when we say its near universal reorder, we can't say it's everyone has reordered because there are some small institutions that don't order every month or don't do these procedures that frequently. So, we have some institutions that, you know, we see that they order and then it may take a few months before they order again. So, some of the newer institutions, the smaller ones who have ordered, we just have not seen the reordering rate. So, we can't say with 100% certainty that we get reorders every time but we see a very, very high reorder rate.

    Steve Brozak: Great. Thank you, and good luck with everything.

    Michael Goldberg: Thank you.

    Operator: Thank you. Our next question is coming from the line of Steven Dunn with LifeTechCapital. Please proceed with your question.

    Steven Dunn: Good morning guys. Just to put, I guess, a finer touch on exactly what Navidea is now. Would it be a fair characterization to say that it is now a CD206 mannose receptor company and Lymphoseek was its first product?

    Michael Goldberg: Yes, Steve, I think that is reasonable. Clearly, we are excited by the scaffold and, yes, we think that having an approved scaffold, especially, as you know from the chemistry, it is very complex to get these molecules approved. And the potential for this product is significant. But I would not dismiss the skill set that we developed in getting radiopharmaceuticals approved. So, if I had to bet on one clearly I am betting on the pipeline - I mean platform - over the skill set, because I think on a return basis that is a much better return for us, which is why we think that the two neuro products why we think they are tremendous, tremendous commercial products. We don't have any further significant differential advantage because, right now, all they need is funding. All the hard work and the specialized skill set, we have accomplished. So, on the manocept side, there is a lot of interest, a lot of potential collaborations, where we could leverage what we have already done without having to invest significantly, and still capture a very significant market opportunity based on providing them with this platform technology.

    Steven Dunn: Ok. I guess we are talking about cutting the burn, especially, the CNS imaging program, are you going to formally suspend all those trials, slow them down, or what exact mechanism are you going to do to reduce that burn.

    Michael Goldberg: We are going to dramatically slow them down with the goal of being in a position to either speed them up with a partner, or once we get our cash flow up, hopefully in the first half of 2015.

    Steven Dunn: OK, So in Q1 of this year our cash flow was a little over $9 million. How would we envision cash burn going forward, just kind of a feel for it, are we going down $2 million a quarter, a million down a quarter, what should we think going forward on the cash burn?

    Michael Goldberg: We sit down with you in a little bit to go through that and in a lot more detail. For now, I think what we want to leave it with is, based on cash that we have, based on the burn that we are going to adjust to, and our projections for revenues, we are making ourselves very comfortable that we will not need to raise any cash to meet our spent and our revenue projections.

    Steven Dunn: Ok. My last question. Michael, are you getting any extra compensation as interim CEO?

    Michael Goldberg: No, I am not doing that for compensation. I am a large enough investor that I will be more than well compensated by the closing of the gap from where the current valuation is to where I believe it should be. That being said, I will be happy to keep on working on this project and bringing some additional support to this, and we will do whatever we can to make sure that this company gets its value to where we believe it should be.

    Steven Dunn: Ok Great. Thanks guys so much.

    Operator: Thank you. Another reminder ladies and gentlemen… (instructions) ….Our next question is from the line of Mark Nordlicht with Platinum Partners. Please proceed with your question.

    Mark Nordlicht: Ok Michael. Thank you for doing this. I just want to take this opportunity from Platinum just to thank Mark Pykett for all his efforts and we are certainly glad that he is continuing to help us out and oversee the manocept platform. Michael, can tell you us a little bit if there will be an opportunity at some point in time to raise the price of Lymphoseek, and can we do that without crimping demand?

    Michael Goldberg: Well, first of all Mark, I want to echo your comments again, I don't think we can say enough for the contribution that Mark has made and for how well we expect him to do in running this manocept pipeline. We are very, very excited about that and I look forward, hopefully sooner rather than later, in updating you on some interesting developments in that area. With respect to pricing that is always under discussion, under review. I'd rather not be specific in answering that question except to say that when we get the - as soon as we get the- sNDA next month, clearly that should be first and foremost on our agenda to begin to explore with our partner Cardinal, both in the US and around the world, what impact that should have on pricing because we have a differentiated, unique product and I don't think it is unrealistic to expect that we could consider price increases as time goes on.

    Mark Nordlicht: Ok, and just one follow-up, I guess. In terms of, obviously, the pricing affects the size of the market opportunity for us, but also you spoke a little bit about your expectation that this is a greater market than the existing sulphur colloid market. Expanding beyond breast and melanoma, perhaps you can give us an idea, even within breast and melanoma, how much larger can the market be than the existing sulphur colloid market?

    Michael Goldberg: What is interesting is that there are a number, prior to Lymphoseek approval, there were many leading institutions that specialize in treating cancer that had close to 100% use of an agent, and sometimes a combination of agents, sulphur colloid and blue dye, in every surgical procedure that they did. Around the world, people are using various lymphatic mapping agents, but clearly not a product that works as effectively as Lymphoseek, for all different types of cancers. And pricing is pretty significant around the world. So, we know that this is a product that has significant utility and now that we have a product that actually works and works for its intended purpose and does so safely and effectively, I don't think that there is any reason why we don't expect to dramatically penetrate close to the entire markets where it is already being used. I think this will be standard of care, and I believe as well, based on some work that we are doing and that others are doing around us, that other solid tumors - 2.5 million solid tumors that are being operated per year in the United States - a large percentage of that should be amendable to better staging with an agent that actually can identify the sentinel node.

    Mark Nordlicht: Ok, thank you very much.

    Michael Goldberg: Thank you, Mark

    Operator: Thank you, the next question is from the line of [indiscernible], a private investor. Please proceed with your question. [caller did not come on line]… Ok, we'll move on. And it appears there are no further questions at this time and I would like to turn over the floor to management for any additional concluding comments.

    Michael Goldberg: I just would like to conclude by, again, thanking all of you for taking the time today to learn more about Navidea. I look forward to communicating regularly with you as we have many, many upcoming events that I believe will help us move this program, and move the company forward. And I can tell you that the Board, the management team, the employees and everybody involved in this company are excited by the opportunities that we are presented with and are eager to generate real value for you, our shareholders. Thank you very much.

    Operator: Thank you ladies and gentlemen. This does conclude our conference call, Thank you for your participation and you may disconnect your lines at this time.

    May 18 11:44 AM | Link | 4 Comments
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