Athersys, Inc.

Thank you for standing by, and welcome to the AtherC's Inc. Second Quarter 2022 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star 1. I will now hand today's call over to Ellen Gurley, Manager of Corporate Communications and Investor Relations. Please go ahead.

Good afternoon and welcome to AFRSIS' second quarter 2022 results and business update conference call. Please note that any remarks that management 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 for those indicated by the forward-looking statements as a result of various factors, including those discussed in our forms 10-Q, 10-K, and other SEC filings. We anticipate that subsequent events and developments may cause our outlook to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Adversis's press releases and SEC filing. Also, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, today, August 11, 2022. AFRASIS undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. With that, I would like to turn the call over to Dan Camardo, Chief Executive Officer of AFRASIS. Dan, please go ahead.

Thank you, Ellen, and welcome, everyone, to Ather's second quarter 2022 business update. In the room today are Maya Hansen, our Chief Operating Officer, Casey Rosado, our Interim Chief Financial Officer, and Dr. Robert Mays, our Head of Regenerative Medicine and Neuroscience Programs. And let me start by saying I'm very proud of the hard work demonstrated by the entire athercys team to help transform the company following our recent restructuring. We believe that multi-stem has incredible potential and significant market opportunity in treating patients that suffer an ischemic stroke and potentially several other serious diseases. Under the transformed athercys, we are much more focused, we're more judicious, and we are driven. As such, I'm confident in this team's ability to capture that opportunity and deliver value back to our shareholders. While Athers has faced various challenges during the second quarter, our restructuring provides a roadmap for success that involves a heightened clinical focus on Masters II, operational expense reduction, and de-risking development for multi-step. We have already embarked on the first two, but to move forward, we need to raise capital. We have been evaluating various financing options and continue to pursue potential partnerships that would provide non-dilutive funding and potentially complementary capabilities in regulatory, clinical operations, commercial, and manufacturing. On our call today, I'll share a new vision for AFTISIS and provide a transparent picture of the decisions we've made over the last two months to put us in a position to succeed. Our long-term vision is global, but our journey to get there will be closely measured and focused. I strongly believe that unlocking the full potential of MultiSTEM as a platform is best achieved through a collaborative strategy that builds upon the groundwork of research and clinical data across a growing number of indications. MultiSTEM's unique profile as a cell therapy and proven potential is at the core of everything we do and guides the strategy we've implemented since restructuring the business earlier in the quarter. In terms of today's call, first, I'd like to provide an overview of reprioritized clinical programs, starting with our primary focus, Master's II, our pivotal phase three clinical study in ischemic stroke. Second, I'll review how the restructuring process results in a leaner, more agile actresses, and how it provides a roadmap for deploying our wealth of preclinical data to heighten multi-stems potential that could drive new opportunities through a business development strategy that delivers de-risked, accretive shareholder value. And third, I'll provide an update on our company's financial position and capital strategy. We'll then conclude with a question and answer session that will include questions we received during our annual shareholder meeting back on July 28th. Let me start with our active clinical trials. Our clinical focus is now on MASTERS II, our ongoing pivotal phase three trial in ischemic stroke. As you may recall, MASTERS II is a randomized, double-blind, placebo-controlled clinical trial enrolling up to 300 patients across leading stroke centers in the US and internationally. I'm happy to report that enrollment has picked up in the last two quarters. This is encouraging momentum that's been being driven primarily from news of the treasure study results in Japan, increased levels of engagement with participating stroke centers, and the addition of new trial sites that we've been activating since the beginning of the year, such as in Australia, Taiwan, and key stroke centers across Europe. We have increased our engagement with all sites, and we are working to better understand and address barriers that some sites have encountered with patient enrollment, cell lab collaboration, and staff training. In addition, we are happy to announce the contract manufacturer we've been working with has completed production of all investigational products necessary to complete Masters II under the current clinical protocol. We are currently in the process of discussing the release of remaining products with our contract manufacturer. And while we are encouraged by this progress, we also want to be more transparent on the expected completion window for enrollment. Previously, we stated that Q1 2023 was our target for full enrollment. We are no longer focused on that date for a few reasons. First, we are being extremely prudent with our operational expenses and cost structure, which requires us to take a more measured approach to adding new sites and stroke center engagement. Second, we're in the process of analyzing the recent treasure data to determine whether we should make any changes to the protocol of Masters II in trial design and enhance the probability of success. Importantly, any potential changes we are contemplating will not affect patients already enrolled in Masters II. And once our analyses have been completed, we may engage in dialogue with regulators if necessary. And lastly, our long-term goal is to achieve a successful trial outcome with multi-step. And we are currently in a critical window of time to consider revising protocols, especially with the complete treasure data set in hand. These decisions aren't made hastily, so we're taking time now to conduct a deeper analysis. We look forward to providing more accurate timelines as we conclude these analyses and consider potential trial modifications with regulatory agencies. As we reprioritize our efforts on Masters II, let me address our work in acute respiratory distress syndrome, or ARDS. Based on the significance of the condition and our prior work with MUST-ARDS trial, there was interest in partnering with BARDA on a Phase 2-3 trial in response to COVID or other pathogen-induced ARDS. However, given our financial situation and prioritized focus on ischemic stroke, we plan to suspend enrollment prior to administering the new bioreactor-produced product until we can strengthen development plans through a partnership or alternative funding source. This was a difficult decision because of the results we observed with must ARDS trial and significant unmet medical needs associated with ARDS, but it was a necessary choice to prioritize spending. Since we completed the initial cohort of administering multi-stem cell factory products,