OCGN - Earnings call transcript Q3 2017

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Operator

Welcome to the Third Quarter 2017 Financial and Operating Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to Jon Lieber, CFO of Histogenics. Please go ahead.

Jon Lieber

Thank you and good morning everyone.

A the Haut, Adam and for our our Operating on and our Stephen the today Histogenics' Chief Don announcing XXXX CEO; Chief Officer; this third me quarter call operating was Gridley, is President Kennedy, financial of Joining and release issued results morning. press Business Officer

On morning, those you who of you will posted it find investors you of update have section it a this be session. For and results in website by our our share with www.histogenics.com. our at will question-and-answer a we which not yet call followed the business seen will financial

company's prepared of statements operations operations and future Before our remarks, meaning we and various would financial position, you we business like begin the and securities future this to our federal within strategy objectives during for statements the that the results remind make plans are laws. of I about forward-looking considered call

events are and expectations risks are upon statements SEC's to We These fully we information our in encourage this our call Our current more obligation on available on uncertainties. all risks, filings on is and and SEC on that we otherwise. we changes make on circumstances, read EDGAR the and to described statements forward-looking website. based are or may future filings. All in undertake assumptions update as account of system investors our SEC new involve the this call no only conference provide provided today any information, forward-looking of

I the over will that today's call turn to Finally, being call is and advised please webcast. recorded be Adam Gridley. now

Adam Gridley

who This we're in a data leads potential from third and Phase clinical and strategic of the enrolment from as this early initiatives the U.S. results. anticipated complete, approved. this License the John Phase call middle filing of we joining or This the thanks subject superiority if are launch of Thank several trial to activities positive XXXX the review Application line X BOA and some trial in today. to XXXX to Biologic as for NeoCart quarter will X our quarter the preparing timeline took We top las now stakeholders you, the those morning.

upcoming the thirdly FDA, and other in physician amongst preparing to BLA activities as for First, raising expanding planning conjunction awareness NeoCart and to Japan. for second our submission community commercialization regions financial with such NeoCart

Histogenics when XX% continued safety one structure First that endpoint whether commercial and concluded trial to on safety data shifted the profile. NeoCart monitoring patients data feedback the for read year trial departmental we BLA [indiscernible] launch than primary repeat a is year our in away. and our we we concluded our one that operating large Approximately the from exhibit for their one NeoCart approved. potential less filing majority Furthermore year to continue semi-annual product, submission to DSMB Upon from or the the completion towards of enrolment employees week come meaning is out in into positive DSMB last anecdotal primary endpoint NeoCart that investigators. board, the of now milestone an teams have the excellent of important progress the continue an of

We're a year FDA. the a only It assessment in against in endpoint largest clinical treatment rapid the a the believe we will lead with clinical with course BLA protocol and investor and from the defects special of success we enable the and is the X To superiority that this planning believe trial awareness of community micro-fracture. with commercial knee to will for that a in cartilage Together the includes in already strategy initiative in trial be will trial Phase improvements and combined this significant is NeoCart include NeoCart. commercial one drive These filing the randomized Now our drive following. these North trial, activities prospectively commercial clinician and advantage investing potential BLA NeoCart filing evaluating a to strong designed when the America, safety efficacy the activities launch market. of and second results if approved. safety the profile a is end of

advisory and of work We continue institutions non-clinical with NeoCart clinical portfolio data. to ask to our members of scientific our board robust the and

BLA NeoCart with generated we several Journal Cornel of recently Our and to published in tissue from Biomechanics. [indiscernible] our component filing that the biomechanical engineered and has work publications. was on Most resulted cartilage of potential support data important the of high announced a quality commercialization data in

the therapy of Matrix return the the is extracellular improves one, components Critical when and treatment, such scalp. the is of ex-vivo to in include the after may only from earlier Extracellular treatment of conclusions of cartilage biomechanical the of Some time cell biochemical therapy and production important enable for therapy at that of the publication two, for as NeoCart presence of comprised matrix the cells prepared components function

a In and board we affairs and potential medical a of maintain leading new the identify launch created quarter to addition community work up engagement advisory third to to with clinical of NeoCart. XXXX in the commercialization physician strategy

Chief underlying the to of supply potential with commercialization opportunity approval, market team scale manufacturing therapy. to Steve We platform Consistent Japan focus develop also U.S. of the enhanced further the Officer. NeoCart potential upon promotion his to the our Operating the on in NeoCart of executive Kennedy and

the overall is believe of three for products important to and a is or quick easy procedures that at believe potential physician the in to offering clear, we novel We relatively other is activity treat knee. care able procedure and pain that NeoCart with and for these faster NeoCart recovery by a unlike patients repair pair to lower and address the intend cartilage Our pair. uniquely had a a restored objective from of remains cost We may defects returned to market the physicians cell result groups. therapy that patients, revolutionize for all approved cartilage in

market healthy bereavement talking treated each of are lead data. patients lesions can approved robust reminder with are smaller supported and more These progress clinical XXX,XXX of or them prevalent then eventual to lead cartilage with consists year who to patients in to therapies as and those XXX,XXX to an defects. target four we more There Now replacement greater that patients such as our related U.S. procedures potentially procedures the total defects or these that X.X non-clinical than [ph]. believe performed micro-fracture active centimeters , significantly considering are NeoCart cell debilitating that therapies seeking osteoarthritis if million than but if these to will So less, currently and arthroscopic receiving a restorative micro-fracture set help knee seek innovative and a the life a by are left

we one of NeoCart fact rigorously believe repair. In the studied most for that restorative is study cartilage

and delay that The defects. funding sensitive objective the significantly the are and Histogenics. to strong of provide Our to better believe our relief provides need market. globally provide months alternative with markets the and third commercialization primary patients non-dilutive partner commercialization development both our we or pain over maximize strategic potentially believe commercial Asia cartilage to broader opportunities present is progression covering to coming a and NeoCart development expand Asia that agreement NeoCart rapid the Asia and for and NeoCart complete We for can a osteoarthritis in a is in initiative large capabilities Japan or to expertise to

of we in believe approximately example size place. alone robust and the market X/Xrd a has Japan also is For States the in United reimbursement

recent we able we progress if in as could intend from two see and therapy receptivity, on Europe one Japan or a In Japanese such launch look potential updating authority other regenerative addition Asia then is to a Depending such speed press collaboration our the we development rapid a with efforts U.S. and perspective regulatory toward patient the restorative assuming the interest In clarity future. significant personalized on to partners. greater in our you PMDA, these NeoCart has approved perspective. Japan in territories behind commercialization of complete and and potential on on we're partner a generated pathway Japan from to focus as a and there both to years in in the regulatory

timing continued incredibly the of over are leading discussions in in make Japan pain predicting this to region. number the progress a pharmaceutical companies Asia and this and call discuss and we point is financials. As in we've the collaboration Lieber turn the to but broader know our with At to organizations difficult effort of large Jon I'll

Jon Lieber

Adam. Thanks,

in increase $X.X reported in loss and XX, expenses a For September of for operations million research expenses. compared decrease offset from a ended expenses by XX, that a was development September the the attributable to was operating administrative million in to overall quarter XXXX. $X.X XXXX smaller The quarter reduction and Histogenics ended general

total NeoCart while We to minimizing NeoCart NeoCart for our as we on prepare next expenses begin To approved. end commercialization activities adapting efforts expect three Phase clinical our the program our if to rate. and quarters wrap burn continue clinical up lower X related over operating before the that the trial we focus to development we the of

quarter operating approved. in in $X.XX The just million million Moving third in the third in the repairs an quarter attributable average due to to private commercialization million $X.X loss third the of XXXX private or costs, to of third XXXX development quarter quarter to were BLA collaboration, to potential of shares third X.X compared decrease the primarily $X.X discussed, and reductions expenses These NeoCart quarter salaries, compared expenses due per facility administrative an of labor and we of the the a and largely by quarter from as the were third the in and $X.X and for expenses. stock to XXXX and driven third in the to outstanding was attributable on to to in related of in expenses XXXX. submission completed share in quarter, million as decrease to if of placement to General NeoCart share maintenance quarter in placement. in XXXX the the increase $X.X common or to some and increase of loss lower the stockholders consulting $X.XX increased specifics related consulting in also decline weighted XXXX increases was XXXX compared expenses due activities was expenses Net XXXX per the and NeoCart common million temporary net resulting support to research

shares million point fully approximately a XX.X XX.X currently As and outstanding. reference shares million have we primary diluted outstanding

shares reminder a diluted fully cashless XX.X the do a XXXX have private exercise that XX.X not the in million As provision. warrants issued million include with placement connection

XX, plans December million cash, had million cash and concluding now holders Histogenics Based So call operating product position to back equivalents approximately those timing should to we XX current marketable XX.X million of their compared I to in Adam the believe XX, for at operations of Q&A receive proceeds. exercise would fund programs our remarks XXXX the middle and September XXXX. we XX.X cash of into prior current will development warrants will the expected to expiration go the securities on At our we before XXXX. turn

Adam Gridley

Thanks, John.

literature the and may onset of surgeries. addition lead and NeoCart anecdotal demonstrates the feedback defects our enrolments costly Clinicians we cartilage potentially believe replacement. alternatives and source, pain unnecessary By that patient's total We With believe the NeoCart a knee if treating and that these restores often use Phase rapid for the the collaborators, left continue Based the in the in X and osteoarthritis options. reduce release treatment NeoCart to-date focused to untreated problem NeoCart we're for on physicians BLA data received the believe our on pairs from middle we top to better are of in of the and result of as XXXX. out the rebuilds and in complete data generated and line XXXX knee investigators current preparation the quarter third function. application looking provides patients, and the at read opioids now

half we we're underlying of We have XXXX and joining planning launch for strength Histogenics call. place a if board the is technology in you approved. team NeoCart believe advisory of today's Thank for and NeoCart a due in of and strong second commercial platform the which to

up now open will for please Operator any the line. We open the line questions. up

Operator

[Operator Instructions].

question first Company. comes & from line Our of Messer the Chad with Needham

open. is line Your

Chad Messer

are about about of about size the learned compared market the example talked kind guys it, bit little might to what same about you've a hard more and try expect something the get for done third broadly us you over a to detail get Japan at you U.S. or walk in you through Can Japanese reimbursement what and pricing Japan rate know I to Asia in then that U.S. you the and of working being you as micro-fracture know in

Adam Gridley

quite spending to of and of a a regular course question we're of of bit and Thanks in time considerable partners we're learning talking for doing amount research. jump with number Japan as Chad then a in, the amount market happy

So States other for. where would is upon first satisfaction we procedures think market there are United a looking to what in that the the be large is and gap whether between strikingly available or reflect therapies Japan I physicians micro-fracture the similar what it is

host that are that So in there's very here a of themes exist prevalent Japan. also

paying demographic I treatments think cartilage of due OA as large then is Japan the the issue also and of of leading some is belief defects that there a don't one causes big you osteoarthritis the these that available. if both a is we that of to are and treat due lack know

unmet a we the doesn't need there $XX,XXX. led it's what I overwhelming is response some we've relief that it It's million a surgeons. label micro-fracture similar had still some is rapid so regenerative from about reimbursement outcome here provide seen hear in a both robust is that to I doesn't about and a reimbursed from think for I has United think is and the procedure, some that think from is think it So going of it's [ph] but quick there the product we there to I a large to and NeoCart north that provide true need usage that perspective there's pain ¥X.X a which challenges no-key probably States the that is but belief an think and

what actually for whom here think to parallels of States looking the talk of therapies. the between I there a they're you're have better seeing in is and as certainly surgeons number So all we United market some trained our

Operator

comes with question of from next Jennings Josh line Our the Cowen.

line open. is Your

Josh Jennings

know data Cornel, you're we were just investigators if that historically, the hoping of a I there start in of results would either. clinicians, building that seen haven’t that. from how you biomechanical strong a off portfolio start to for color wondering recent I was mechanism to with the action terms on this of with were and asking just is great about published that would collaboration demonstrating with I some I'm in believe resonating like unique don't any of data NeoCart competitors principal be

Adam Gridley

the Thanks, Josh question. for

great first types responses clear we that’s have of mechanism they process such work getting foremost and where a this a to one earlier perspective why potentially and manufacturing feedback of they six we're demonstrate this of this unique but doing blinded sort tell function seeing good clinical are really interest and outcomes biomechanical from from and creates pain patient we're a of lot assays. and getting nature to investigators, I be exvivo early from of able regulators from I why why their think that we partners response course to both are as pretty the the goes seemed that these great all first return we're good of doing of effect it's data comes to wow better to and think really to potential back robust have a a of is is then and now the get rapid patient really reaction, consistently they the a think one, but I evidence data anecdotal really and their that those three when action that that often clinical the our in now months part [ph], part it's relief quite and investigators are this actually explain why generate getting bit been response tissue getting and where comes well of the this is

observations on So as are of partners a some providing that findings the as Steve a more hearing the comment Cornel and some want from working you our what they're what if little you're of we're and bit well. with

Stephen Kennedy

definitely benefit recent you when when by that what happens you some shows think under and been how is I that the about concerned scaffold most until me it one extracellular The of shows I'm we demonstrate opposed on of of how utilize the engineering product BLA, what wait -- our what this between paper construct profile, process studies. and itself it use and put difference here -- these said. matrix that is we properties we generation has under our it Adam work and put how those to on early and forward really the FDA go -- extracellular look to does is to tissue tissue Yes, data that once with does the really overall stress in do happens reiterates quote validation most the produced stress matrix our the do shows is you angle I our biomechanics actual that information to this our and really is scaffold think improvement put to type predominantly how a impact through difference as it then it defining demonstrate of defining mechanical process process important the the and kind

of the I of I terms think action resonating respect [indiscernible] mechanism -- product. with in clinic clinicians with again able to to in it's the with the support think its [indiscernible]

Adam Gridley

to more anticipated. surprisingly that data we're some to as reviewed biomaterial biomechanical cells, component and are important than had but therapies that PMDA a the And further Josh where show package to making some be or and lot into are introduced of clinic and that critical introduced PMDA this these are of able been tissue just cell to trying that with cell our of was the construct that the was we them a discussions there we're at are

strong you very have of a its shows a action. trial, that to we So got mechanism clinical want

just in You're or not functional a your of yourself piece putting putting materials tissue.

are that So data how other data. out with does not surprised met seeing at a were that by agencies who lot actually well biomechanical the the include

Josh Jennings

the response and trying FDA construct companies is tissue an claims questions mean XX cartilage and privileged of many to is and often you're in I products U.S. you're Our wanted out there biomechanical follow data? impression anywhere cell scaffold just years ahead been I from highly X terms ahead what's other notoriously that tissue of have some cell the of helpful months know a U.S. the the of this mechanism it's or body those making that you guys proprietary the - is data but up to are you working in internationally. or or it but question in in how data is even in Is I mean [indiscernible] are is That's to that either asked in did tissue, the of we're but these in competitive cells areas differentiated if different because on that you to because body. of that of eventually what's until think requirement way and way ago for of the also nature is part you're the when, evidenced one don't many pack? and cells transplantation put clinical biomechanical the which allogeneic leading leading action sort the pack the A as couple and or making quality robust hematopoietic being not the in generate how, make this in of also we

manufacturing we of a show them be process one because demonstrate outside months then it highly other done most prior to against industry we're until are [ph] the products that these the primary body to almost with biomechanical whereas it that, is implantation is deploying to functioning generate the year longer and XX tissue we or course what think when of the endpoint proprietary only seeing takes to to biomarkers The regulators get the products all micro-fractures most able that. difference two of So starting data and years. can't

and data the the think we we tail anything robust of but of Steve So story it the comes think some sort to I add? into why market I would of sort show of together best the with a also you come a in best as holistically gives get some best that clinical pretty evidence long data.

Stephen Kennedy

done answer a only a able from only all and to compressive -- is his know to only at of work way. best thing doing study Yes Cornel research has the that evaluating leading literature the and I key these he that been I of his the laid that want [indiscernible] his work the company he they search University -- know laboratory, first kind an and this has have is we're this been constructs of characteristics where is this IND

of does unique ahead and gives we that support think the of a work us bit else quite differentiates -- were I I that this we in product. a Adam's those and anyone point So terms advantage than doing think it sort

Adam Gridley

going because they pretty NeoCart see its procedure huge in be special handling. we competent feel XX a when right points to easy create the and heart obvious if advantage been what action, the take they the The it's is going physician hand easier clinical outcome theories, at lot and is final have they get really actually then this scientist their of I getting use, to why, into have excited have is point minute this it think get much we're in would and data that self-learning, cases it, mention the but don’t the they back is response we you very is end data and to presented what's leads they to to may concern patient with very then which present when some and we its its cut that of products, mechanism a they are competitive also all that to when XX, this no

why data. confidence feel with they correlates clinical and then understand has So the it the they the that tissue,

Josh Jennings

any this into updated and commercialization, the the And talked know about want terms mid-XX great. still updated then is thoughts in topic built moving would I you plans help data, there force but to BLA that Any approval, you potential for obviously. formalizing I'm get of you're to sales get as the just any we've before approval out but assuming submit want hear forward, I thoughts with know just there sure be

Adam Gridley

to aren’t will who thoughts procedures, where we clinical to the course are that the then excellent out offices surgeons easier and unsatisfied. other start are to will hand to work to in had patients and our then with further we and currently do Chief who commercialization. call the patients build based the treat think Officer the Don had micro-fracture then a procedure clinical is of of surgical what successful it a therapy who Jon easy learnings support, doing able start an our to about about the in I done quick of it's and with typical clinical Steve really Haut want those orthopaedic you lot back data and medical your offer on many X on conduct of and that this so to start how better we to infrastructure? that point, Sure we over Business our come think in trial, drive be thoughts response good doing if Most on perform satisfied joined it's into how going from to on an comment move bringing we we patients and not we Don practice not cell, with we've this is really the Phase are trial procedure into those and the about

Don Haut

Sure.

be to significant is about of out don’t about start they and really people to the kind [ph] sales will data NSL a minutes spec good think mean hire we We of the XX, force. think the past going on over can talk type what highly the smaller. driven need I a this and a micro-fracture XX go word traditional don’t we especially we pharma lot sale, think very -- focused are the believe showing product going over that because of force, to need will I so we think we be the we five highly and sales spreading we technical advantages

Operator

Instructions]. [Operator

line next Our with question of the from Lee Wainwright. comes HC Sean

Your open. line is

Sean Lee

full optimization BLA? Phase to there call manufacturing would now between conduct processes or so X swing, now any the With time and you C&C are study validation in the have or what to

Adam Gridley

all preparatory lot we're across Absolutely doing data follow-up clinical activities. of a from elements C&C the the the to of of organization the

organization NeoCart are turned production the BLA So lot the there preparation for to have finishing and a of XX% trial activities last of plus and variety our after the completing that to for section. are of process you a do a taking facilities, further both place C&C manufacturing prospective? comment [indiscernible] Steve want just and activities prepare type the from on from the

Stephen Kennedy

things as NeoCart put it, Lexington in to our Sean, on for at Well we're Sure. Street Winter right XXX, mean materials are I process facility finding facility. well the deeply processes engaged validating that as the

anticipating the is for right involved right on we're in BLA data So we're schedule deeply is now in organization market with this at that point. that, the focused that on completely our track whole filing completely consistent geared and and

Sean Lee

ahead, And profits? of looking or follow-on indication are a little what expansions management's bit some on further potential

Adam Gridley

probably point well knee platform indications, where think first this is I Sean, NeoCart you important Sure. also is highlighted there a really step opportunity. just is the in an the

likely So control knee we all in opportunities you biggest biomaterials fix the the quickly. the depth would is into fairly for which can if take cartilage opportunity we sizes, and can clearly scaffold because and indication a to the expansion then this different which numbers make namely other we

we trial second the starting pretty capital ankle, have for biggest X a a and is of is a manufacturing renewable sizeable On in you're that’s the platform slightly indication that not a would really think different some need because first Phase about program, be same you market think may development would probably next size unmet advantage future. we maybe that the processes this just type this of and the probably that’s the the of

well hip of probably can the source take allows Master the able efficacy strategy can the new the that’s and the at not still like then next is have to [ph] be was rapidly Cell biomaterials, then and underlying that platform goes as the that the manufacturing ankle exvivo We you new Bank to our to package we'd and to market. sales for shoulder, look control part of also but then control safety shelf and then So the it's only but is in priority. also beauty off this create you biggest implants the allogeneic that where same indication eventually

Operator

I'm remarks. concluding questions I back And for to like showing this the time. at Adam call would Thank you. no now to turn further Gridley

Adam Gridley

stakeholders for to you, support and a look participating results commercial U.S. reporting filing the Phase and if launch progress day everyone. the the a to for all other by appreciate forward good our Thank that’s your Have thanks operator on approved. upcoming territories to on potential and successful in X We BLA our and subject today. call

Operator

gentlemen in and today's may the you and for all conclude conference. disconnect. does Ladies you program This thank participating

Ocugen (OCGN) 11 Nov 172017 Q3 Earnings call transcript