Athersys Inc.s' (ATHX) CEO Gil Van Bokkelen on Q1 2020 Results - Earnings Call Transcript
Athersys, Inc. (NASDAQ:ATHX) Q1 2020 Earnings Conference Call May 7, 2020 4:30 PM ET
Company Participants
Karen Hunady - Director of Corporate Communications and Investor Relations
Gil Van Bokkelen - Founder, Chairman and Chief Executive Officer
Ivor Macleod - Chief Financial Officer
Maia Hansen - Senior Vice President and Head of Operations and Supply Chain
Conference Call Participants
Jason Kolbert - Dawson James
Chad Messer - Needham & Company, LLC
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Athersys’ First Quarter 2020 Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to your speaker today, Karen Hunady. Thank you. Please go ahead.
Karen Hunady
Thank you, Kasie, and good afternoon, everyone. As Kasie mentioned, I’m Karen Hunady, Director of Corporate Communications and Investor Relations for Athersys. Thank you for joining today’s call. If you do not have a copy of the press release issued at the close of market, it is available on the Athersys’ website at athersys.com.
Ivor Macleod, Chief Financial Officer is here to provide us with the financial update and Gil Van Bokkelen, Chairman and Chief Executive Officer, will be providing our corporate update.
Today's call is expected to last 30 to 45 minutes and a webcast of the audio will be available two hours after the call’s conclusion on our website under the Events section. The access information for the replay is also in today’s press release.
Any remarks that we may make about future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements as a result of various important factors, including those discussed in our forms 10-Q, 10-K and other public SEC filings.
We anticipate that subsequent events and developments may cause our outlook to change. While we may elect to update those forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. For the benefit of those who may be listening to the replay, this call was held and recorded on May 7, 2020. Since then, we may have made announcements related to the topics discussed, so please reference our most recent press releases and SEC filings.
With that, I’d like to turn the call over to Ivor Macleod. Ivor?
Ivor Macleod
Thanks, Karen. Good afternoon everybody. I once again thank you for joining today's call. I am Ivor Macleod, Chief Financial Officer of Athersys, and it is my pleasure to give you an overview of the financial results for the first quarter of 2020. We did not recognize any revenue for the three months ended March 31, 2020 compared to $1.4 million for the three months ended March 31, 2019.
The revenues in the prior period were generated from our collaboration with Healios related to manufacturing services performed. We do expect our collaboration revenues to vary over time as we contract with Healios to perform manufacturing services or engage in other activities and as we potentially enter into new collaborations.
Research and development expenditures were $12.1 million for the first quarter of 2020 a $700,000 increase over the $11.4 million expended in the comparable period in 2019. The $700,000 increase is associated with increases in internal research supplies of $700,000, personnel costs of $300,000, outside services of $200,000, consulting costs of $100,000, stock compensation costs of $100,000, and other research and development costs of $200,000. With these increases partially offset by decreases in clinical trial and manufacturing process development costs of $900,000.
Our clinical development, clinical manufacturing, and manufacturing process development expenses vary over time based on the timing and stage of clinical trials underway, manufacturing campaigns for clinical trials, and manufacturing process development projects. We do expect our annual 2020 clinical development costs to increase as compared to 2019.
General and administrative expenses were $3.5 million for the three months ended March 31, 2020, an increase of $400,000 compared to $3.1 million in the comparable period in 2019. The $400,000 increase was primarily due to increased personnel costs, outside services, and stock compensation costs.
Our net loss for the first quarter of 2020 was $15.6 million compared to a net loss of $13 million in the first quarter of 2019. The difference is a consequence of the previously mentioned variances.
During the three months ended March 31, 2020, net cash used in operating activities was $12.1 million compared to $5.5 million in the three months ended March 31, 2019. At March 31, 2020, we had $32.7 million in cash and cash equivalents compared to $35 million at December 31, 2019. It is important to note that our March 31, 2020, cash and cash equivalents balance does not include the receipt of approximately $7 million in connection with the Healios warrant exercise nor does it include the proceeds of our recent public offering, which were $57.6 million gross.
Before I turn the call over to Gil, I did want to address Athersys’ participation in the Paycheck Protection Program, the PPP, established as part of the CARES Act, the Coronavirus Aid Relief and Economic Security Act. Based on the initial guidance issued by the U.S. Department of the Treasury, Athersys met the criteria of a qualifying business and applied for and was approved for a loan of $1.3 million.
Following the approval of the loan, the Treasury Department issued revised guidance indicating that public companies may not be eligible for PPP loans. As a consequence we did not accept the $1.3 million loan, and the proceeds were returned to the Small Business Administration.
With that, I will turn the call over to Gil for the corporate update. Gil?
Gil Van Bokkelen
Thanks Ivor. Since our last earnings call, held only seven weeks ago, the world has changed in some meaningful and unfortunate ways. At that time, in mid March, there were approximately 180,000 confirmed cases globally of COVID-19 infection and 7,200 confirmed patient deaths. As of today, there have been more than 3.85 million confirmed cases of COVID-19 infection and approximately 266,000 patient deaths have occurred globally. This includes 1.25 million confirmed cases and approximately 74,000 patient deaths here in the United States.
Among active cases of COVID-19 infection globally, the number of patients that are seriously or critically ill is currently approximately 48,000, which represents about 2% of the 2.27 million patients with confirmed and active infection. Among the roughly 1.6 million fully resolved cases where the patient has either successfully recovered and/or been discharged from the hospital or the patient has died, the cumulative mortality rate is approximately 17%.
Both here in the U.S. and internationally, regional and national governments have implemented mitigation strategies designed to slow the spread of infection. These include implementation of shelter-in-place and work from home policies, travel restrictions, mandatory closures or significant operational limitations of businesses, public facilities, schools, and other organizations. This has impacted our lives and the national and global economy in ways that were unimaginable to many people prior to the outbreak.
The mitigation strategy has appeared to have slowed the spread of the virus and the devastating impact of the pandemic, but this has come at a significant cost to many individuals and families. It is also clear to everyone that this problem is not going away any time soon. Ultimately, resolution and containment will rely on the successful development and widespread deployment of fast and accurate diagnostics, effective vaccines to protect people against infection, antiviral treatments that lessen the intensity and severity of COVID-19, and novel therapies enabling treatment of patients that do become seriously or critically ill.
Each of these represents a critical line in the defense against the virus. However, we must remember that no diagnostic will be 100% accurate. No vaccine will provide perfect protection for everyone that receives it nor will antivirals or other interventions be effective in everyone that is treated. We understand this from decades of experience with influenza and other outbreaks, including the coronoviruses that caused SARS and MERS. This experience teaches us that these will all be important steps in the right direction, but nothing provides perfect protection and we will need to remain vigilant.
Some patients will still become seriously or critically ill, and unfortunately some will die. That's where we believe Athersys can make a difference. Our current focus is on treating patients that have become seriously or critically ill following COVID-19 infection and that are experiencing ARDS and other life-threatening complications.
We are informed by our experience from our prior clinical work that provided evidence that administration of MultiStem to patients experiencing ARDS within the first few days of being ventilated might meaningfully reduce mortality, especially in more severely ill patients improve pulmonary function, and help patients achieve ventilator independence, increase ventilator free days, ICU free days, and achieve better quality of life following discharge from the hospital.
In addition, as we've described previously, this exploratory trial fully met the safety and tolerability endpoints, and there were no treatment associated severe adverse events or SAEs that were causally attributed to MultiStem following administration of the product either during the acute clinical assessment, 28 day clinical assessment, or the one year followup.
As we announced in the last earnings call, we began a dialogue with the Biomedical Advanced Research and Development Authority or BARDA in late January that was focused on the potential for using MultiStem as a therapy for patients experiencing ARDS as a results of COVID-19. As we have described previously, BARDA leadership recognized and appreciated several key points, including one, that there is no effective treatment for ARDS currently available and that it is the primary cause of mortality among patients suffering from severe pulmonary dysfunction and inflammation.
Two, the MultiStem acts through mechanisms that are not pathogen or virus specific and therefore it might be broadly relevant in situations where new viral or pathogen outbreaks emerge that cause severe pulmonary inflammation and ARDS, and three, that in contrast to traditional pharmaceuticals or biologic that acts through a single mechanism of action MultiStem is a living cell therapy that has the potential to act through multiple mechanisms of action.
In the days and weeks that followed our initial discussions with BARDA we were invited to present to the corona watch task force, provide other information, and then ultimately submit a proposal to BARDA that laid out our proposed development path, relating key activities and budget. We remain actively engaged, but as this process is ongoing and we are subject to certain restrictions until the process is completed, we are unable to provide additional comments or further details for the time being.
In parallel, our team has worked very hard with our clinical experts and advisers, our Contract Research Organization and the FDA to define a pivotal study to evaluate the efficacy and safety of administration of MultiStem to treat patients experiencing COVID-19 induced ARDS. It is important for everyone listening in today to understand just how rapidly things have progress and how much work has been done.
In the span of only a few weeks we designed a study, submitted it to the FDA for their review, responded to questions, comments and request for additional information, received FDA authorization for the trial, screened initial clinical sites for the study, obtained IRB approval, successfully launched the trial and enrolled the first patients into the study. All of this was achieved while a statewide lockdown was in effect and during which many of our employees worked remotely.
We overcame enormous obstacles to get this done and I am immensely proud of the team and individuals that are responsible for making it happen. It is also important for everyone to recognize that we remained very optimistic regarding the potential contribution we and our technology can make in helping patients during this pandemic. However, this is an ongoing process and there is a lot of additional work to do. In the meantime, we have continued to advance other important initiatives.
As we've recently announced, we have obtained FDA authorization to initiate our planned clinical trial to treat trauma patients. Working in collaboration with the University of Texas Health Science Center at Houston or UT Health and Memorial Hermann Texas Medical Center and with support from the Department of Defense, MTEC and the Memorial Hermann Foundation.
We have also continued to advance our ongoing MASTERS-2 Phase 3 clinical trial to treat patients suffering a debilitating stroke. Despite the disruptions that have impacted normal operations in clinical trial support at many hospitals that have slowed or even halted many trials. We have continued to support our partner in Japan Healios as they approach the completion of two important clinical trials, the ONE-BRIDGE study evaluating administration of MultiStem for the treatment of ARDS and the TREASURE trials for the treatment of patients that have experienced meaningful disability from the occurrence of ischemic stroke. Healios has stated publicly that they insist that they are completing enrolment for both trials this year.
We also advanced our ongoing discussions with other potential partners regarding working jointly to further advance the development and commercialization of MultiStem in key indications in geographies of interest. In addition, we also meaningfully strengthened our financial position. This happened through two key events recently. The first was the decision by our partner Healios to fully exercise their warrant to purchase an additional 4 million shares of stock resulting in more than $7 million in proceeds as Ivor described.
The second was the financing we recently completed that resulted in gross proceeds of $57.6 million. Upon completion of the financing in April, we had approximately $89 million on the balance sheet and we have not debt. These events put us in a solid and stable financial position with the ability to further advance key programs and initiatives and operate through and beyond important milestones.
In closing, there is no question that this is a challenging and exceedingly difficult operating environment for everyone, including us, our collaborators, and many of the key service providers that we work with and rely on. The pandemic has had a devastating impact on individuals, families, businesses, and other institutions across the United States and around the world, clinically and economically. But in many ways it reinforces the importance of what we are committed to doing. Despite all the chaos, uncertainty and obstacles, our focus and our commitment have never wavered and our belief in the potential of our technology remains as strong as ever.
I think our progress since January shows that we know how to get difficult things done even in a very challenging environment and unusual and chaotic circumstances. Our commitment to helping patients in areas of substantial unmet medical need and to delivering substantial value to our shareholders remained as strong as ever.
Before I move on to addressing a few questions, I'm pleased to introduce a recent addition to our executive team, Maia Hansen. Maia joined us in March and from her most recent role as a Senior Partner at McKinsey & Company. Maia brings with her decades of experience in operations, strategic planning and commercial supply chain management. Partnering with other members of the executive team, Maia will help us continue to establish, implement and develop the organizational capabilities Athersys needs as we continue to advance towards potential commercialization of the MultiStem product.
And with that, I'd like to have Maia briefly introduce herself. Maia?
Maia Hansen
Thanks Gil and good afternoon everyone. As Gil mentioned, I joined Athersys team in mid-March of this year as the Senior Vice President of Operations and Supply Chain. Prior to joining Athersys I had the opportunity to get to know members of the company leadership team quite well and develop an understanding of the company vision and long-term objectives and I'm very excited to now be part of that.
Prior to joining Athersys, I was a Senior Partner at McKinsey & Company. Over 22 years at McKinsey, I worked across several industries with a particular focus on life science companies, including major pharma companies, large and small molecule manufacturers and distributors, OTC companies and others. I played important leadership roles building McKinsey's global operations practice and leading the Cleveland office as the Managing Director.
My background before McKinsey includes four years as an officer in the Navy and an educational background in engineering and business. I'm excited to join Athersys for several reasons. The therapies are meaningful to patients and clinicians around the world. The company is at an important point in its growth and the leadership team is talented and focused on building a strong culture and lasting set of capabilities.
In my first weeks on the job I have broadened my experience with supply chain management, sourcing, manufacturing and data analytics to support the advancement of successful clinical trials and help prepare us for commercial readiness and subsequent growth. Over time I look forward to working with other members of the team and to building a commercial scale end to end supply chain that is high quality, efficient and flexible.
Once again, I am delighted to be part of Athersys and to be with you on the call today.
Gil Van Bokkelen
Thanks Maia. And with that, we would like to first address a few questions that were submitted by shareholders before we open it up for questions from the analysts and other institutions.
The first set of questions relate to our ongoing discussions with BARDA. People have asked whether we are still pursuing BARDA filing. What the status is? Do we believe that we will be successful in this effort and how long will it take?
I've already addressed most of these in my earlier comments, but just to be clear, we are still actively engaged with BARDA and we remain optimistic, but we are unable to provide further comments for now.
The next question relates to recent activity from other companies developing innovative therapies for treating COVID-19 or complications, including those focused on development of antivirals, anti-inflammatories, and even other cell therapy companies. While we closely monitor a range of other companies and initiatives, including the emergence of new data and results from trials, we never probably comment on them.
Unlike others we don't comment on or hype observations from compassionate use administration of potential treatments. Instead we are committed to conducting properly designed double-blind, randomized, placebo controlled trials. This is the most appropriate and reliable way to effectively evaluate the therapy for potential FDA or other regulatory approval and make it available to all that may need it instead of just a few compassionate use cases.
We believe our technology has unique relevance and potential in addressing patients with COVID-19 induced ARDS and potentially other complications as well. We also believe that we have important advantages and scalability and our ultimate ability to deliver MultiStem as an off the shelf cell therapy commercially to hospitals and patients around the world.
As we've already described, we are committed to conducting proper clinical trials to further evaluate the effectiveness, safety and tolerability of MultiStem. And we are the only cell therapy company that has clinical data for the treatment of ARDS from a randomized, double-blind, placebo controlled trial, and also the only cell therapy company that has Fast Track Designation from the FDA for treating ARDS.
The next question has to do with the eligibility of patients for our ongoing MACOVIA trial. People have asked, will patients that have received other treatments be eligible for enrollment in our trial.
If patients are enrolled in another clinical study that precludes them from participating in another trial, they will not be eligible for inclusion in our study. However, patients that have been treated under standard of care or that have received treatments that did not prevent disease progression and these treatments were completed or discontinued, including certain treatments that might be administered on a compassionate use basis. If the patient is subsequently diagnosed with ARDS, requires ventilation, and meets our other inclusion and exclusion criteria, they would be eligible to participate.
This reflects our belief that we can play a unique role in treating patients that have become seriously or critically ill from COVID-19, and that require ventilator support. It also reflects our belief that MultiStem may be administered on top of standard of care, which is essential when patients continue to deteriorate and become seriously or critically ill.
Other people have asked about the effect of operational disruptions at hospitals participating in our ongoing clinical trials like MASTERS-2, specifically will these disruptions impact our study timelines.
It's clear that many hospitals have been disrupted by the operational constraints implemented in light of the COVID-19 pandemic. The FDA has recognized this, and they have been very pragmatic about allowing companies and participating study sites to make adjustments in light of the challenging circumstances that hospitals, clinical staff, patients and companies are operating in.
We remain committed to completing enrollment of our trials as quickly as possible, and we expect a complete enrollment of the MASTERS-2 study sometime next year. But at this point, it's too early to give a precise timeline or estimate. Strokes are still happening and sites in our study continue to enroll patient. That people should recognize that many clinical sites are limiting clinical trial participation or activity in light of the current restrictions and operational environment and that's understandable. We can't say when things will return to normal in the hospital environment or elsewhere, and accordingly, we're all taking it one step at a time.
With that, we'd like to open it up for a few additional questions from analysts and others.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Your first question here comes from Tom Wilson [ph] with SMBC Nikko Securities. Please go ahead. Your line is now open.
Unidentified Analyst
Congrats on the progress first. So, I will have one first and then a couple of follow-ups here. So could you provide a little bit more color on the open-label safety cohort for the ARDS trial, the COVID-19 [technical difficulty] and do you plan to assess safety at 4 and 24 hours post dose as was done in the Phase 2 ARDS trial?
Gil Van Bokkelen
Yes, so the two small dosing cohorts that represent the initial part of the study are essentially designed to confirm safety in this distinctive patient population, because we've never specifically looked at COVID-19 patients up to this point. And this is something that we've done in numerous clinical trials that we've conducted previously.
So, it's just several patients in each of these two initial cohorts to confirm safety if you will at two different dose levels that we're looking at. And after the first cohort, the DSMB reviews the data, then they move on to the second cohort, they do the same thing. And from there, we progress into the main body of the study, which is the large, randomized, double blind placebo controlled pivotal study.
And we will be looking at the same things that we looked at previously in terms of looking at acute and also safety over the duration of the primary clinical assessment as well as part of the one year follow up. So again, we’re applying the same rationale, the same analytical framework that we've looked at previously.
Unidentified Analyst
Oh okay, thanks for the clarification. So, aside from that safety cohort, is there any other gating factor to start the placebo-controlled part of that trial? Like, will we wait for other things?
Gil Van Bokkelen
We wouldn't be required to wait for anything else. So, it basically is doing those - completing those first two cohorts would essentially from a regulatory perspective, all that we would need to complete before we move into the main body of the study.
Unidentified Analyst
Okay, okay great. That's helpful. So, I got a last one here, as some competitor is rolling out their own trials with this ARDS in COVID-19, would you like avoid a site where the trial is active like what about your comments on if there are any concerns about competing for patients?
Gil Van Bokkelen
Yes, so that's a good question. So obviously, there is a lot of clinical trial activity going on out there right now focused on treating patients with COVID-19. Some of these are focused on patients that are hospitalized, but they are not yet -- it's not yet a requirement that they be ventilated. There are other trials that are for patients that are considered seriously ill, but again they're not necessarily on a ventilator, they might be getting other forms of support.
So, one of the things that I think is important for people to recognize is, first off, there is a lot of sick patients out there right now, and that can accommodate a meaningful number of trials that are actively ongoing.
The other thing that I think is important for people to understand is we've been inundated with requests from clinical sites that want to participate in our study because they've seen the power of our data and the impact that we've generated from the exploratory Phase 2 study that we completed, how we showed consistent safety and compelling clinical evidence of benefit, which is supported by the biomarker data that we generated.
So there is a lot of interest in terms of sites that want to participate in our trial. And obviously, we're kind of at the beginning part of the process now. We've moved incredibly quickly as I was describing earlier to get the first of the sites up and running. We're in an active process with additional sites that we're working with, and we continue to kind of take it one step at a time from there.
I'm not terribly concerned about competition with respect to other trials. There will be other activity ongoing out there, but I like our position both from what I think we can achieve therapeutically, but also from a scalability perspective and where I think we can be commercially, that's our strong suit.
As we've talked about in the past, as we've talked about some of the other technology that we've been developing, whether it's the CP [ph] technology or other things, we have an end-to-end plan that revolves around delivering this in a scalable manner to hospitals around the world. And one of the reasons why I think Maia, I don’t want to put words in your mouth Maia, but I think one of the reasons why Maia was so excited about joining us and same thing for Ivor is because they could see that we are really at the cusp of something that is really exciting in terms of the things that we've thought through, have been planning for, and are now executing against in terms of being able to deliver this in a scalable, consistent, and a very robust way. And I think that puts us ahead of a lot of other folks out there that frankly haven't even really begun to think about some of the challenges they're going to have to face as they make that transition.
Unidentified Analyst
Okay, great, great. Thanks for that.
Gil Van Bokkelen
Thanks, Tom [ph]. I appreciate it.
Operator
Your next question comes from the line of Jason Kolbert with Dawson James. Please go ahead. Your line is now open.
Jason Kolbert
Thanks, Gil. Congratulations, and must feel good to have a lot of cash in the bank. It looks like a great raise. One of the questions is, can you talk a little bit about what institutions were involved in the raise, and as we look towards the transition and regenerative medicine, I also would like to ask a bunch of questions around COVID, both in the U.S. and in Japan. Talking a little bit about what might be different mechanistically versus what you saw on the prior ARDS trial versus treating COVID patients while they both have ARDS, the way they get there is very different. Let's start there, and I'll give you a follow-up.
Gil Van Bokkelen
Yes. So on the first question, we did see very good participation in the financing with some high quality institutions, some that have either had current positions in the stock or previous positions in the stock and we were glad to see that. During that particular window and it's still true to a certain degree, there is a lot of market chaos and a lot of uncertainty on the financing front. And I think that the process, even under those chaotic and very challenging circumstances, went exceedingly smoothly.
Now, obviously, with all the challenges in the backdrop, we had this offer through certain things and be pragmatic and flexible about certain things. But I'm actually pretty satisfied with the transaction that we got done, and how the team and the institutions that we worked with to get it done, all worked together to achieve it under some pretty unusual circumstances. Ivor, I don’t know if you have anything to add on that front.
Ivor Macleod
No.
Jason Kolbert
Sorry.
Ivor Macleod
Yes, I got your echo. Okay, I apologize. Go ahead please.
Jason Kolbert
I understand it's very, very difficult circumstances, but it seemed like a much more fundamental raise than some of the other raises I've seen. And so, my sense is that there is a transition occurring in the regenerative medicine space. Maybe COVID is accelerating things in many industries and many sectors from working at home, and maybe to regenerative medicine. And so, maybe the raise is a little bit of a litmus test that we're seeing in that transition. And I guess that's a good…
Gil Van Bokkelen
Yes.
Jason Kolbert
Thank you. Sorry.
Gil Van Bokkelen
No, no, I think you're right about that. I think there is an important inflection, and I think it relates to what we're doing specifically at Athersys, but but I do think it applies a little bit more broadly than that. Now, I'll also point out that there are probably, there are some companies that are getting left in the wake of that. I mean, there's a lot of really difficult circumstances and I know quite a few companies out there that would like to be able to raise capital and just aren't going to be able to do it any time soon.
I think one of the nice things about the situation that upon the completion of the raise and the other things that we've been able to do is, first off from an operational perspective, we are in a stronger position than we've ever been in, both from a leadership team and throughout the organization in terms of the capabilities and the talent that we have. And the commitment is stronger or certainly as strong as it's ever been, but I think people are just tremendously excited about what we can do. From a financial position, we have the resources now to be able to do some of the things that we have to hold back on.
And in fact, we've got quite a few questions from people who said, why would you raise money now? Why? Well, the short answer is that it was important for us to do that so that we could move more efficiently and get some of the really important things done while we're continuing to have discussions with others about how they can tangibly support, and accelerate our efforts in areas that are really important, other institutions or partners that we're engaged in discussions with. We didn't want to have to wait for all of that, and let the clock basically be working against us.
Jason Kolbert
Now you hit the nail on the head. Your ability to partner with a year to two years worth of capital runway changes the terms vary dramatically, and we'd all much rather see, an aggressive partnership that gives you the things you want to assure market penetration and do that from a position of strength than weakness. So I think that makes total sense. I also think it's interesting to me because I look at what's happening in regenerative medicine and in ARDS and I see a very sharp increase in valuation among all the players.
I think the raise may have hiccupped you, but that's very, very temporary. And that's why it becomes so critically important to see what the effect is here among these patients. And of course, I'm a believer, but I also see different sets of comorbidities that bring patients into a position where they're on a ventilator. So could you talk a little bit about, I have a patient, they're on a ventilator, they're going through a cytokine storm, they're getting flooded in their lungs. If I smash them with steroids, I can reduce the inflammation, but I'm not clearing the virus. So why is MultiStem different versus in my tool belt and mechanistically to address specifically the inflammatory response in the lungs that are killing these patients, but without interfering with viral clearance?
Gil Van Bokkelen
Yes, it's a great question. So, and there's kind of multiple layers to the answer if you will, but so first off, the administration of steroids or other kind of blunt instruments immunosuppressive have not worked, and in fact in some cases are making things meaningfully worse. One of the things that we know about MultiStem is that the cells, they're not just dialing down the hyper inflammatory cascade, which is a bit on overload in these patients. That's what's causing the complexity and the severe dysfunction in their lungs. But these cells are also stimulating other key mechanisms that are reparative in nature.
So we know that these cells stimulate non-inflammatory macrophages for example, or other cell types that help clean up the damage, restore structural integrity to the tissue that's been compromised, and restore balance to the immune system. So it's dialing down the things that are really bad and dialing up the things that we need more of earlier in the disease process that otherwise wouldn't happen on their own.
And that makes it fundamentally different from traditional pharmaceuticals or you mentioned corticosteroids or other things that people would be – have looked at. And so, I think that what we've realized is a couple of important things. One, the blunt instrument type approaches really are not effective. And then they can as I said, they can be counterproductive and even harmful in some cases.
But the other thing that's really interesting is there's more and more evidence about a range of different types of complications that are being caused by the virus. In fact there was a really good article today in the Wall Street Journal that talked about this at length, and pointed to the impact not only on the pulmonary system, which is clearly driving a lot of the downstream cascade of things, but some of the other things that are happening. So for example, we see average body activity in these patients that's leading to strokes or microemboli and other things that are going on.
And the interesting thing is that with MultiStem, we have meaningful evidence that shows that these cells can actually restore balance where it's needed in a multi dimensional way. It's not just doing one specific thing and then that's it, the way a traditional pharmaceutical or for example, I'm not trying to pick on IL-6, but say a cytokine inhibitor or IL-6 inhibitor or something like that would be. Those things may help, but they're not going to provide an effective, comprehensive solution.
And I think the thing that makes cell therapy and I know I'm preaching to the choir here, because you've written about this for years, and you pointed to this, that the multidimensional effect of cell therapies is distinctive and critically important, particularly in these types of critical care situations where you need help fast, and where you want to do more than just one specific thing. So, we have a lot of evidence and a lot of clinical data and a lot of mechanistic support, including biomarker data that shows that when we administer MultiStem, they're achieving all of those things. And that's one of the reasons why we are so confident, and we are so optimistic about the position that we're in. And frankly, where we think we're going to be in the not terribly far off future.
But you asked earlier part of the initial question number two that you asked was about, what's going on in Japan and what's going on here and what's happening globally. So obviously, this is something that's become another focal point for our partnership with Helios. They announced not too long ago that they're planning on running a kind of a mini cohort, if you will, a few patients looking at COVID-19 induced SARS alongside the ONE-BRIDGE study that they're actively working towards completing.
And I think that they recognize and they appreciate as do the clinical experts that they're working with in Japan, although it's not as big a problem in Japan as it is in other parts of the world. And that's because of the culture and some of the practices over there that have maybe been natural factors mitigating the spread of the virus or mitigating some of the things that have gone on.
But nonetheless, it's a problem everywhere. And I do think that that there's a general recognition that and I know the regulators are certainly interested in that, because they've just announced today that I think they were providing expedited emergency approval of remdesivir for – as a treatment option to try and get that out there so they can have an impact. These are all appropriate and I think encouraging steps that the regulator's are taking because it bodes well for companies like us, because we generate more data and are able to really continue to strengthen our position. Frankly, I think they're looking for things that can really have an impact on the critically ill side of things in particular. And I think we've already shown that's where we can have an impact.
Jason Kolbert
So you're 100% right, except that things are much worse in Japan than what the U.S. media reports. You know that I'm very dialed in there and we watch the Japanese media. So the opportunity to treat patients who are on ventilators in Japan, it's a huge opportunity, and I'm sure that the Japanese are very interested. So, that could be a surprise. And I think one of the other things you said that was so important was that clinical timelines have not been decimated. And I know that Healios had been talking about, hopes this year for both TREASURE and ONE-BRIDGE.
And I think it's more than reasonable to say, you'll reevaluate MASTERS, but there's still hope here for data next year. So and by the way, that to me makes the stock more attractive because we get to see the outcome on COVID-19 potentially before we do on stroke and I think that becomes transformative. So with that, coupled with cash and the management team, I'm so excited. Thank you very much. Really look forward to continuing to watch the company evolve, right? It's been a long road for all of us and so…
Gil Van Bokkelen
Yes, yes.
Jason Kolbert
I'm so glad that you're there and you're driving it?
Gil Van Bokkelen
Yes, well thank you, Jason. We really appreciate the support.
Jason Kolbert
Thank you.
Operator
Your next question comes from the line of Chad Messer with Needham. Please go ahead, your line is now open.
Chad Messer
Great, thanks good evening, and let me add my congratulations to just the unprecedented pace of progress. I guess that's matches with the unprecedented times. Wondering if you could maybe, since you're out there on the frontline with regulators and the government, and the medical community, may be talk a little bit about what you're seeing about sort of the ecosystem of COVID drug development out there? I mean there's a lot of unprecedented things happening and sort of the normal way of thinking about getting things done has been, sort of its been thrown out the window, yes thankfully?
Gil Van Bokkelen
Yes well, I think from a regulatory perspective, I can say that the FDA in particular has been incredibly engaged and remarkably responsive. They as much as anybody understands the need for speed so to speak. And I mean, we were - as we were working together to finalize the protocol, we were going back and forth, sometimes several times a day with the FDA, either covering on specific points, answering questions or asking questions and getting very responsive feedback from them. So I just want to take one more opportunity to thank the FDA and the team. They've redeployed a lot of effort internally to try and help expedite things.
Now, I know some people are a little bit frustrated by that because as the FDA just as hospitals and other institutions, redeployed a lot of their internal personnel and resources to focus on the way that it was occurring it did come at something of an operational costs on other fronts.
But I think we're sensing now that at least some of that is now heading back in the other direction. And I think people feel like, okay, it's been very challenging. There are obviously a lot of patients in the hospital, a lot of patients have gotten really sick, a lot of patients who got seriously or critically ill. But I think that the mitigation strategies have definitely had a positive impact. Some of the hospitals are beginning to kind of redeploy people back to where they were or where they need them to be on other fronts. And I personally see that as a real positive.
So in terms of the broader landscape, we've all had to make adjustments and you're absolutely right at that. I mean, if you think about where we were just a little over three months ago, hardly anybody was thinking about the things that we're all now talking about and living with every single day. And the fact that we've been able to move so quickly and get so much stuff done is a testament to I think the broader ecosystems willingness to work together, get things done that are critically important.
Now, I will say in some of the clinical trial activities, there is a fair amount of noise out there. There are some things that are out there that frankly, don't really make any sense, don't really have a strong basis for putting resources into it or for putting a lot of muscle into those things. That is driven I think in some degree by the sheer desperation that a lot of people have been experiencing as loved ones or family members or people they know, have become really sick and they've had to do things.
But I expected what's going to happen over the next several months and even out further beyond that, is that we're going to start to see some clarity emerging from the things that have the strongest evidence base, the things that are the most rational and well founded. Those are the things that are really going to rise to the top. Some of the things that we were hearing about just a few weeks ago that people were pointing to based on anecdotal evidence or things that at first might sound kind of promising.
The evidence at the end of the day is what wins that argument. Sometimes those things might actually stand up, and sometimes they don't. But the point is, is that clinicians are not going to waste time with the things that don't make sense. They're going to emphasize the things that they see real promise and real potential for and that's where I think we come out ahead. It's not going to happen instantaneously, but I'm confident that's where we end up.
Chad Messer
Yes, and I mean, absolutely, the conditions that got us here aren't optimal, but there are some amazing things going on there that I find very encouraging and you guys are definitely part of that. So I appreciate [indiscernible].
Gil Van Bokkelen
Excellent, thanks, Chad. I really appreciate the support.
Operator
Thank you. That concludes our Q&A session. And I'd now - I'd like to turn the call over to Dr. Van Bokkelen for closing remarks.
Gil Van Bokkelen
Thanks, Kasie. Well, as always, I'd like to thank everyone for taking the time to listen into the call today and for your continued support. We remain fully committed to advancing our programs and achieving our goals and we look forward to making additional announcements and providing updates as we move forward from here.
Operator
Thank you, ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
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Comments (8)
We are currently in discussions with BARDA regarding the finalization and implementation of a potential collaboration.
“Discussions between Athersys and BARDA are continuing, and our full proposal submitted to BARDA was rated as acceptable. We are currently in discussions with BARDA regarding the finalization and implementation of a potential collaboration.” Versus the language in the 8K from April 15
“Discussions between Athersys and BARDA are continuing regarding a potential collaboration for which Athersys has submitted its formal proposal. However, there can be no assurance that BARDA will elect to pursue such collaboration with us, or as to the amount of funding, if any, that we might receive in connection with any such collaboration.” BARDA very soon!Take care
