Organovo Holdings, Inc. (ONVO) CEO Taylor Crouch on Q3 2019 Results - Earnings Call Transcript

About: Organovo Holdings, Inc. (ONVO)
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Organovo Holdings, Inc. (NASDAQ:ONVO) Q3 2019 Results Earnings Conference Call February 7, 2019 5:00 PM ET

Company Participants

Steve Kunszabo - Head-IR

Taylor Crouch - CEO

Craig Kussman - CFO

Conference Call Participants

Ed Arce - H.C. Wainwright

Yasmeen Rahimi - ROTH Capital Partners

Ren Benjamin - Raymond James

Matthew Cross - JonesTrading


Good day, and welcome to the Organovo Holdings Fiscal Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mr. Steve Kunszabo, Head of Investor Relations. Please go ahead.

Steve Kunszabo

Good afternoon, and thanks for joining us. I'd like to welcome you to our fiscal third quarter 2019 earnings call. Joining me on the call this afternoon are CEO, Taylor Crouch; and our CFO, Craig Kussman. Today's call will begin with the discussion of the 2019 fiscal third quarter results, followed by Q&A.

Before I turn things over to Taylor, I'd like to caution all participants that our call this afternoon may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and include statements about our future expectations, plans and prospects. Such forward-looking statements are based upon our current beliefs and expectations and are subject to risks, which could cause actual results to differ from the forward-looking statements. Such risks are more fully discussed in our filings with the Securities and Exchange Commission.

Our remarks today should be considered in light of such risks. And any forward-looking statements represent our views only as of today and while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our expectations or reviews change.

During the call, we'll also be referring to certain supplemental financial measures. These supplemental financial measures are not prepared in accordance with generally-accepted accounting principles. Please refer to today's earnings release for definition of these supplemental financial measures.

With that, let me turn things over to Taylor.

Taylor Crouch

Thanks, Steve, and good afternoon, everyone.

I'll start by noting that we are once again confirming our key clinical development and operating goals through calendar year 2020. We've also improved our net cash utilization for the 2019 fiscal year which along with our cash on hand provides us with enough runway to meet our objectives through fiscal 2020.

From an operating perspective, we're making excellent progress in executing the necessary steps for a successful IND and the start of clinical trials. This includes three additional proof-of-concept studies, dose ranging studies, and all the planning that goes along with chemistry manufacturing and controls, as well as good manufacturing practices preparation. Our initial aim is to provide a bridge to transplant with our 3D bio printed human liver tissue patches for patients with end stage liver disease including a select group of patients with inborn errors of metabolism.

By implanting our healthy tissue patch in these patients who often have limited treatment options, we want to restore function or offset the deficiencies and enzyme abnormalities related to a specific condition. Ultimately, we hope to delay or reduce the overall transplant in these severe unmet disease areas.

As I look ahead to our planned first IND filing in calendar 2020, there are several interim milestones along the way to map our progress. We expect to hold a pre-IND meeting with the FDA in calendar 2019 to focus on the final steps that enable first in human trials. We intend to start our IND enabling toxicity study to support our lead indication in the second-half of calendar 2019. The goal of this key study is to determine reasonable safety for potential use in humans.

We'll also aim to conduct additional proof-of-concept studies that support the further development of our NovoTissues to treat end-stage liver disease, and target it in more areas of metabolism.

Finally, we plan to continue pursuing orphan drug designations where it makes sense. We successfully received an orphan drug designation for our NovoTissues treatment of Alpha-1-Antitrypsin deficiency in late 2017.

Last quarter we submitted a second orphan drug designation application to the FDA, focused on Type 1 Tyrosinemia. In this case the FDA has responded with questions about the predictability of the animal model we're using and whether this is directly translatable to what we might expect to find in human clinical trials. We're evaluating how we move forward to respond to the FDA's comments and depending on the outcome of our internal analysis, we may prefer to wait until we have clinical data before further pursuing this particular orphan drug designation.

The potential regulatory designation has no impact on advancing our program toward IND and beyond. And we certainly look forward to availing ourselves of the many other regulatory incentives in the orphan disease, pediatric disease, and regenerative medicine space, throughout the development process.

We also continue to believe that our NovoTissues will likely have applicability across a number of indications and as such we intend to explore the safety profile in patients awaiting transplants who have reached end-stage liver disease from a range of pathways.

To recap our pre clinical strategy, we're moving forward with a proof-of-concept enablement plan aimed to demonstrate how our healthy liver tissue patches can potentially address a broad range of target indications. Using the same healthy liver tissue construct, we're already successfully conducting studies in animal models in two disease areas. In both A1AT and Type 1 Tyrosinemia, our tissue patch had demonstrated extended retention and robust functionality.

In an A1AT model, we've also generated preliminary evidence of reaching some of the insoluble misfolded A1AT variance known as globules that are characteristic of the effects of this disease in the liver. In our Type 1 Tyrosinemia studies, which we published late last year at the liver meeting also known as AASLD, we were able to show an improvement in the median survival rate of treated animals.

Furthermore we have initiated several new pre clinical studies during the fiscal third quarter including a number of additional proof-of-concept studies to assess our liver therapeutic tissue performance and to evaluate new treatment modalities. We remain encouraged by our pre clinical results and will continue to communicate our ongoing scientific and development progress through publications and major industry events.

As we move closer to our IND filings, our pre clinical studies will focus on optimizing our tissue design, dose ranging and proof-of-concept data in new areas. We're also scaling up our liver tissue patches in anticipation of human dosing requirements. And we're opening up new project in other promising disease areas. In addition, we're advancing our operational capabilities to prepare our chemistry manufacturing and controls plan.

Our final objective is to implement clinical scale manufacturing and quality processes well in advance of our first-in-human trials. These steps encompass a wide range of internal functions including documentation, equipment and facilities optimization, process validation and the adoption of stringent manufacturing controls

Of note, we received our first clinical grade liver late last year through our partnership with the International Institute for the Advancement of Medicine, IIAM. You'll recall that IIAM is one of the world's leading organizations for the procurement of organs used in medical research and the development of therapeutic applications. And we expect to receive a series of these compassionately donated organs over the next year as we prepare for our first IND and the start of human trials.

While we're advancing our liver therapeutic tissue, we'll also continue opportunistically to pursue revenue generating projects that leverage our leading 3D bio printed technology. The Organovo platform includes self procurement from my Samsara division, bioprinter placement and licensing opportunities and custom service agreements and grants derived from our tissue generating and modeling capabilities.

We also continue to collaborate with our clients on a variety of custom projects that span from exploring liver disease modeling applications to toxicology studies. For example, in the third quarter, two large pharma clients came back to us with new projects, both of which focused on evaluating a drug toxicity issue. One of our academic partners, UC San Diego, recently shared promising data on the development of our invito non-alcoholic steatohepatitis, NASH disease model, at the NASH-TAG conference in San Francisco a few weeks ago.

In short, we induced NASH like conditions in our 3D bioprinted liver tissue model. These diseased tissues were then treated with two clinical compounds where reduction in the disease phenotype namely fat accumulation was observed in each case. This is an exciting step in demonstrating the potential value of a human translational model in developing treatments for NASH, a liver disease that affects millions of patients in the U.S. and worldwide.

We're grateful to the National Institutes of Health for supporting this groundbreaking work through their grant and to Dr. David Brenner, Vice Chairman for Health Sciences at UC San Diego, who gave a detailed presentation of these results and the potential for advancing drug development in the NASH space.

Our newest board member, Dr. David Shapiro was also present at Dr. Brenner's presentation. I'm pleased that he is engaging his extensive drug development expertise to help us fine tune our first in-human clinical trial design, as well as exploring new and innovative ways to develop the functionality of our liver tissue platform.

In closing, we're off to a good start in calendar 2019 with a keen focus on achieving the clinical development milestones that we've laid out over the next 12 to 18 months. I look forward to speaking with you again soon.

With that, I'll turn it over to Craig for a more complete financial review.

Craig Kussman

Thanks, Taylor, and good afternoon, everyone.

I'll start by reviewing our key profitability and cash flow metrics for the fiscal third quarter and will then summarize our liquidity profile at the market or ATM financing activity and future capital requirements. I'll wrap up my thoughts with quick recap of our income statement trends.

We posted a fiscal third quarter net loss of $6.4 million, a 22% improvement over the $7.8 million net loss we reported in the year ago quarter. Similarly, our net cash utilization improved to $4 million versus the $6.5 million in the prior year period. The considerable progress in these bottom line figures is primarily due to a 19% reduction in total costs and expenses related to a streamlining of our operations and R&D programs; and in the case of our net cash utilization, a favorable working capital swing during the quarter.

At the end of December we had a cash and cash equivalents balance of $35.2 million, which included net proceeds of $1.9 million from the issuance of 1.8 million shares of common stock in ATM offerings. In addition, we've already raised $1.8 million thus far in calendar 2019 through ATM trades. As circumstances and market dynamics permit, we'll continue to use our ATM facility opportunistically to extend the cash runway for the business.

With approximately $41 million of funds available under our ATM facility, we have access to $76 million in capital to carry out our IND development plans. We now forecast an improved net cash utilization rate between $20.5 million and $21.5 million for fiscal year 2019. And we believe we have sufficient funds to meet our operating and capital requirements through fiscal 2020. The material reduction in our net cash burns versus the last two fiscal years will continue to be driven by thoughtful management of our R&D programs and supported by revenue from our commercial opportunities.

Moving now to our income statement and focusing first on operating expenses, research and development expenses were $3.8 million, a 6% year-over-year decrease largely resulting from lower employee costs related to our organizational restructuring and the prioritization of our R&D projects. We reported $3.4 million in selling, general and administrative expenses during the fiscal third quarter, a 30% year-over-year reduction primarily due to lower employee expenses.

As we consider our expense trends over the next several quarters, there are two important drivers I'd like to reinforce. First, we have the right head count level today to take us through calendar 2019 to our IND filing with the FDA. We'll continue to rebalance our effort as we gear up our liver therapeutic tissue development and we'll partner with leading clinical research organizations and topical expert consultants to keep a good balance of fixed versus variable costs.

Second, we expect to continue increasing the R&D spend in our therapeutics line of business as we move toward our IND enabling toxicity study for our lead program and closer to our first IND in 2020. On the top line, Organovo generated fiscal third quarter total revenue of $0.8 million, which declined 32% from the prior year period.

Total year-over-year revenue decreased primarily due to lower grant revenue and fewer active contracts for liver tissue research services in the quarter. As we've shared before, we continue to expect the revenue profile for this part of our business to be unpredictable partly due to the custom usage of our model.

In conclusion, we're gearing up activity to ready our supply chain, manufacturing processes and quality systems for our first IND in calendar 2010, and are moving ahead with the necessary pre clinical studies to facilitate a successful pre-IND meeting with the FDA this year. I look forward to updating you on our progress in the months ahead.

With that, I'll turn things back to the operator for the Q&A portion of this afternoon's call.

Question-and-Answer Session


[Operator Instructions] Our first question today comes from Ed Arce with H.C. Wainwright. Please go ahead.

Ed Arce

Congrats on continued progress in the quarter. So I have a couple of quick questions here and perhaps I'll get in the queue for follow-up. Just on your IND filing and the IND enabling talks that you're looking forward to do later this year, perhaps you could give us an update or confirm previous discussions around the basket approach that you're looking at in terms of this lead program. I know your thinking about it more holistically and sort of across the inborn errors of metabolism and how we can think about the types of activities that would be involved to capture a number of those diseases for that work? And then the other question was, if you could just give us any updates on the activities around the scaling up and the optimization of that tissue design?

Taylor Crouch

Your first question referred to what we've called our basket approach and indeed we feel this is a very interesting and promising way to tease out the capabilities of our tissue. The concept based on the fact that we are planning normal healthy functioning tissue that provides a broad range of function just like the liver does itself.

Our strategy to tapping into this is to start with a broad group of patients who are on the transplant list with end-stage liver disease. These patients have reached that list through a broad variety of disease conditions including several of inborn errors of metabolism diseases of interest.

So we think this is a clever strategy to test our drug in an important arena, the end-stage liver disease, where there really are no other treatment options but also begin to explore patients within phenotypes that have gotten to that list from a range of disease areas, most importantly Alpha-1-antitrypsin deficiency, which we would hope to get some very early data on in that first trial.

Your second question regarding scale up, we've done most of our work so far in rodent animal models, which involved obviously much smaller tissue patches in order to facilitate transplant into that environment. The human version of the tissue will involve the same structure, composition and bio printing strategy but just scaled up to a much larger size.

And we have had good experience now in scaling up our tissues to what we envisioned to be a human scale level and we're already talking to surgeons, radiologists and others who are involved in the transplant field about how we would place these patches in a human environment, what approaches make the most sense and how we might model this and get comfortable with these approaches well in advance of our IND filing, all of which we believe will serve as well for launching clinical trials after the IND process.

Ed Arce

So just a quick follow-up and I'll jump back in the queue. The size of the scale up I think you had referred to previously intended for human use as $0.5 size or something like that?

Taylor Crouch

Yes, we're building up from square based units that we can print out, stitch together in various configurations. The final size of our human patch we've not publicly disclosed but you can envision it being somewhere in the range of a dollar bill perhaps closer to square than rectangular and basically just comprised of the same units that we're looking - that we're using in our animal models, just many more of those units.


Our next question comes from Yasmeen Rahimi with ROTH Capital Partners. Please go ahead.

Yasmeen Rahimi

Two questions, question number one is given the fact that the liver is very regenerative tissue, there is quite inner patient variability when it comes to actually Bioprinting and implementation. How are you currently modeling and thinking about that before we’re taken into human.

And then my follow-up question is specifically in regards to our in vitro tissue platform. Can you walk me through obviously the last 12 months have been quite exciting year for the NASH space many direct developers have come into the play. How many - if you could quantify how many additional potential biotechnological partners have you attracted and what are you projecting as we're moving forward in 2019? Thank you.

Taylor Crouch

Thanks Yasmeen and thanks for those questions. One of the reason we focused on the liver in addition to the fact that it’s an area of significant unmet need is that it's a regenerative organ. And at the heart of our patch premise is that we put in healthy functioning patches. They ideally will show regeneration in human, in human environment and perhaps help to signal healthier regeneration in the host liver. Both of these are effects that we want to explore in the human models.

Unfortunately in animal models, it’s very - it’s not expected to see regeneration and indeed so far we've not seen evidence of it as we would not have expected. So the encouraging results that we've seen in our A1AT model and in the FAH model that we’ve used and presented most recently at the AASLD show very important human functioning of the tissue delay or positive impact on disease onset and the case of the FAH model an actual increase in life expectancy of those animal.

But we would expect the regenerative signals only to be seen once we get into the human environment and that will help us address dosing considerations or answer the question would one set of implants do the job or would one want to do this more than one time depending on patient outcomes.

With regard to our NASH research, we're obviously very encouraged that Dr. Brenner who really is a luminary in the NASH space on a panel which I believe Dr. Friedman was sitting at presented a lengthy presentation on relevant model for predicting drug functionality in the NASH space in the preclinical environment.

And probably more than half of his life were Organovo's lives focused on the progress we've made demonstrating various drugs performing in our disease tissues and modulating the disease. We also continue to have clients joining us to look at this each client typically has asked us to look at a custom version of the model either involving feeding conditions or chemical induced conditions relevant to what they want to treat with their mechanism of action or even more recently starting to look at combination drug strategies.

We don't give guidance in terms of number of clients, but we are hardened by the fact that clients that have not worked with it for a couple of years often show up over the trends we just mentioned that to two such large clients starting to work with it again just this past year albeit that was in a more with a tox questions than a NASH question. And we expect to continue see traction along these routes.

Yasmeen Rahimi

Thank you so much for inviting me ask one last question congratulation on the addition of Dr. Shapiro to the Board. Will his involvement ne mostly on the NASH in vitro tissue capabilities or would he also be involved in the sort of development in the therapeutic space?

Taylor Crouch

We're very lucky that he actually had deep expertise in both of the areas you mentioned. First and foremost as we wanted to buy and a add a talented drug development physician with deep knowledge of liver drug development onto the board. The fact that he has most recently been Chief Medical Officer at Intercept who is a leader in the NASH space its obviously quite a nice bonus for us because he is also able to look at our in vitro modeling and strategies and provide important insights - having been a client but also having studied this space intensively. So the answer to your question is we look forward to him engaging and providing useful board level insights on both areas of the business.


Our next question comes from Ren Benjamin with Raymond James. Please go ahead.

Ren Benjamin

I guess just going back to the manufacturing Taylor can you just provide a little bit more color in terms of where you are in terms of the scale up. Obviously were you hope to be a year from now what's kind of the progress been there and should we be thinking about different amounts of tissue fuel when we we’re thinking about the rear deficiency type patients versus those where we might need to be thinking more along the bridge to transplant or are they both kind of one and the same, maybe just a little bit more color on how we should be thinking about that?

Taylor Crouch

First I should mention that we are fortunate that it Organovo we spent 10 years developing our abilities to print up viable tissues for broad range of purposes. And most of that expertise is in printing up liver tissues which we've used in our in vitro modeling and increasingly over the last couple of years in implanting into animal.

So our ability to procure isolate cells through our Samsara subsidiary, expand them put them through the bioprinting process and print them in various configuration is really a deep skill set shared across a broad range of the scientists here at the company.

And therefore the process of taking this to a larger scale while it involves a lot of CMC and GMP planning work scientifically it is tapped on the exact same skills that we built in and developed expertise on in-house. In terms of overall volume kind of metrics I think we’ll start to see some of our operating expense lines expand as Craig had mentioned as we move towards the clinic related to consumption of materials, but our current bioprinter capabilities and the staff that we have in-house we believe is more than sufficient to meet the scale of the clinical trials that we've currently outlined.

Ren Benjamin

Okay. And then sorry go ahead.

Taylor Crouch

And you would ask the question sort of relating to dosing and I would say right now - as I mentioned earlier we're working with a transplant physician hepatologist folks that perform laparoscopic surgery. To answer the questions how much material IDR patches can we deliver to the liver and in what kind of configurations and then we’ll work with the FDA to discuss what are meaningful doses and approaches to this. We have fine-tuned these questions we believe quite well through an expert discussions and obviously are preliminary interactions with the FDA over a year ago or yes I guess it was over a year ago.

So we believe that we have a good plan for our dosing. I believe for our initial trials we expect not to have a huge variability in terms of smaller versus larger doses, but these are things that will work out in the final steps of the FDA.

Ren Benjamin

And can you just help me understand a little bit in terms of the duration of function for the tissues that you produce in these preclinical models. So what's the longest that you've been able to follow this function out for and I guess where I'm going with it is could it one day not necessarily serves the bridge transplant but really potentially just take over the function and that you could live with that patch?

Taylor Crouch

So we’ve published data to 128 days which is really quite remarkable given that this is human liver tissue patches transplanted on to the surface of rodent livers. Our hope is that we will see at least that level of functionality in human and arguably one might expect the duration to shoot past that because they'll now be in a much more familiar environment.

Certainly with regard to bridge to transplantation and effect measured in months start to have a really meaningful benefit for patients waiting in shortage of livers and many of whom never actually get to a transplant.

So we believe in that environment a handful of months is meaningful. We would hope to see what you suggested which is a longer-term effect maybe even the possibility of obviating the need for transplant. But these are all things that will just have to wait and see what transpires in our human clinical trials. The good news is we've got evidence that would suggest that the duration of effect that we're seeing now would be meaningful clinically and with regard to our commercial opportunity in these patients.

Ren Benjamin

And I guess just one final one from me I was actually a little bit surprised to hear that the FDA push back on the model that you were using for hereditary Tyrosinemia. As I guess have you gone back kind of look at all the other models that you're doing to make sure that those would in fact be acceptable by the FDA. I think you mentioned that there quite a few new preclinical studies that have been initiated can you just provide us with a little bit of color so would hope to learn from those.

Taylor Crouch

Sure the two components to your question I’m going to start first with the fact that we met with the FDA very extensively in our pre-pre-pre-IND meeting based on a briefing book that had extensive animal data of the kind that we submitted for this orphan drug designation application. At that meeting the FDA was very encouraging about the animal modeling approaches we were using and the path that we felt would take us to the clinic based on that data. So the big take-home is that we're building a strategy to the clinic on solid animal modeling work.

Very separate from that the FDA chooses to grant orphan drug designation and certain benefits to the cost and timelines for those recipients. And the threshold they are using their primarily they like to see the space on human data we were lucky our first time around that we had a compelling set of data in the off one Tyrosinemia model such that they granted us the designation upfront. This is the same tissue that we use in the second animal model which is not exactly replicating the human disease condition but provides good evidence of the kinds of functions we would want to argue for going into clinical trial in that area.

That's why I said there questions and concerns about granting the designation now have really no bearing on the animal evidence or the applicability towards an IND they would just like to see more data specific to that the human disease before they grant the orphan designation and will certainly have more bites at that apple and we may choose to go back and challenge them or provide more data now. We’re justified that we may sit on this and just wait until we are in the clinic and go back for that particular designation.


[Operator Instructions] Our next question comes from Matthew Cross with JonesTrading. Please go ahead.

Matthew Cross

Just first off I wanted to ask - I don't make too much out of this response from the FDA regarding the designation for Tyrosinemia but reaching back to Ed's question on this basket approach to an IND, does this response from the FDA kind of give you any pause as far as the strategy with the agency kind of signaling that these liver IEM's we viewed as having discreet concerns to address?

Taylor Crouch

Matt I think that that's a great question. And I do think that our discussions in the pre-IND - primarily in pre-IND meeting will revolve around how quickly do we branch out, what pre clinical and to what degree do separate clinical plans need to be developed for each IEM. One reason why we're excited about the strategy of going and looking at end-stage liver disease is that and we've had several transplant surgeons tell us or hepatologist tell us that once a patient put on a liver transplant list, the focus is on the functionality of the liver and not how they got there and indeed in many cases they don't even know I mean they haven't even diagnosed whether the patient maybe has one of these IEMs as the underlying cause that got them to this point.

That said, we believe we'll be exposed to patients who've reached the list from a range of indications that have lead to cirrhosis and diminished function. And this is going to give us experience in those patients and allow us to build up arguments for expanding our clinical investigation in those patient groups.

In parallel, as I mentioned we're starting a series of proof-of-concept studies in other areas as well as drilling into areas of interest in and around that space I just described to provide as much data to the FDA as possible, showing the functionality and the nuances that how our tissues respond in various disease states in these animal model.

So we believe we'll be armed with a great set of data to convince the FDA that this is a strategy that can quickly branch into multiple opportunities.

Matthew Cross

I appreciate that detail around the directions and you actually kind of led into my next question which was, I was hoping you might be able to give us a little more detail around those proof-of-concept studies you're running in these collection of animal models. Basically I'm trying to understand what conclusions you're hoping to reach from these studies and how that may slot into the pre-IND process with enough time still to prepare before CMC review, talk studies and the like or if you really envision these as kind of preclinical studies as avenues for future expansion post IND filing to move beyond these live IEMs?

Taylor Crouch

Well, there's probably two categories in general to look at. One is, showing the broad range of functionality of our base tissue in a range of conditions. Those conditions can involve sicker animals, placement of the tissues in different position and different doses in those animals, different surgical conditions one might use.

This is all aimed at providing the surgeon or the treating physician a broad range of avenues to explore for inserting healthy functioning tissue into their specific patient. And that's important because it's a creative group and there's a lot of heterogeneity among patients liver shape and conditions and we want to have as much functional clarity and examples as possible show in our proof-of-concept.

The other area is to explore the drug, I mean the patch in animals that have been purposely bred deficient of each of the various enzymes - emitting enzymes in these inborn conditions and explore in each condition how our patch might provide an effect. We're able to measure the human production of these enzymes in all of our animals in certain conditions but obviously you'd like to see how it would perform in an animal that's completely deficient of the animal version of that enzyme. All of this gets pretty tricky and probably gets a little bit back to the question the FDA asked us on the particular animal model we were using to show the Type 1 Tyrosinemia potential effect.

You can't create that human disease the exact way we would want to study it in animal. So all you can do is come at it around the edges the way I've described. And so we're not concerned about their response. We knew that we were honing in on evidence that should allow the FDA to conclude, yes, this is a good basis for studying the drug in humans. The group that determines ODD grants or evaluations is separate from that and they, our senses prefer to have human data.

We are heartened by the fact that at the AASLD meeting last November in the rare disease panel, we were one of the very few pre clinical companies asked to present amongst a number of luminaries presenting cutting edge therapies late in the clinic are already commercially available and we were there presenting our pre-clinical data on Type 1 Tyrosinemia, and it was an extremely enthusiastic response from that audience or the experts.

And so again I think showing the potential ultimately to create enough confidence that we now have a benefit worth exploring in humans that that's what we're trying to shore up with as much proof-of-concept data as possible going into these FDA meetings.


Our next question is a follow-on from Ed Arce with H.C. Wainwright. Please go ahead.

Ed Arce

So I just wanted to ask a question about this announcement you recently entered into with IIAM. It sounds like this clinical sourcing agreement with them is at least in part to source whole organs and so perhaps cells and tissues as well but you mentioned the whole organ recently received and so I'm wondering how does that perhaps compliment the liver cells, the liver cells that you get from your own internal division Samsara, the bio-wing that you use and sort of the stem cells also that you use, how does all of that work together especially as you think about continuing to optimize your tissue design and scaling up? Thanks so much.

Taylor Crouch

Sure, that's an important question. So let me start with IIAM. They are a not-for-profit group that works with and I believe it's the 58 organ procurement agencies spread across the 50 U.S. States. This group of Organ Procurement Organizations or OPO's are the groups that provide organs for the transplant world here in the United States. Those organs that are not deemed applicable for various reasons is could just be timing or a lack of patience or other reasons, those organs are not deemed applicable for a transplant than are directed for research use.

And IIAM is at the forefront of procuring these organs and getting them to where the research causes. And our announcement was quite strategic because we are delighted to be working with them as the largest group focused on making sure every compassionately donated organ has the most potential to affect human condition. And the fact that we now will have a steady supply of those is really quite an endorsement of what we're doing here and the potential of how we might affect these serious diseases.

What we do is we isolate cells from donated organs. Those cells are the building blocks that our Samsara group uses to provide to the research community and increasingly now to our own tissue platform. And those tissues comprised of these cell that ultimately come from high quality donated organs that are not - that cannot be used for transplant but certainly can be saved and repurposed and ideally through our model brought back to treating patients really provide kind of a second cycle of life in this very important transplant field.

So hopefully that explains the significance of that relationship.


This concludes the question-and-answer session as well as the conference. Thank you for attending today's presentation and you may now disconnect.