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spk03: Good morning, ladies and gentlemen. Welcome to the Humacyte fourth quarter and year-end 2021 results conference call. Currently, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I will now turn the call over to Lauren Merrick with LifeSci Advisors. Lauren, please go ahead.
spk07: Thank you, Operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience or present expectations. Additional information concerning factors that could cause actual results to differ materially from forward-looking statements made on this call is contained in our annual report on Form 10-K for the year ended December 31st, 2021, and other filings made with the SEC when available. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements except as required by law. Information presented on this call is contained in the press release we issued this morning and in our Form 10-K, which may be accessed from the Investors page of the Humasite website. Joining me on today's call from Humasite are Dr. Laura Nicholson, President and Chief Executive Officer, Dale Sander, Chief Financial Officer and Chief Corporate Development Officer, and Dr. Heather Pritchard, Chief Operating Officer. Dr. Nicholson will provide a summary of the company's progress during the quarter and year-ended December 31, 2021, and recent weeks. before turning it over to Dale for a review of the company's financial results. Following their prepared remarks, the management team will be available for your questions. I will now turn the call over to Dr. Nicholson.
spk11: Thank you, Lauren. Good morning, everyone, and thank you for joining us on the inaugural Humacyte quarterly results call. As the company progresses toward commercial stage, it's our intent to expand our investor outreach and provide regular opportunities for interactive dialogue. We appreciate your attendance and we look forward to our discussion today on future quarterly calls. Humacyte has made significant progress throughout 2021, including the closing of our business combination agreement with Alpha Healthcare Acquisition Corporation and our debut on the NASDAQ, which provided us a strong foundation that we're continuing to build upon in the early part of 2022. As we progress forward, we remain focused on advancing our first-in-class regenerative medicine platform and our lead bioengineered human tissue product candidate, the Human Acellular Vessel, or HAV, towards regulatory milestones and commercialization. I'll spend just a few brief moments summarizing our recent developments before turning the call over to Dale for a review of our financials. I'll begin with our late phase 2-3 clinical trial that is evaluating HAVs in vascular trauma, which is continuing to progress. As a reminder, this trial is a single-arm, open-label, unblinded study evaluating the use of HAVs for vascular repair, reconstruction, and replacement in traumatic injury. Currently, we've enrolled a total of 50 patients, and we are pleased with the results from this study to date. showing a very low rate of infection at approximately 2%. Furthermore, we've had no reports of limb amputation that occurred as a result of HAV malfunction. And we've seen high patency rates of the conduit. Results from this trial are expected to support a filing with the FDA anticipated in 2022 or 2023. We look forward to ongoing discussions about the trial design and the number of subjects to be enrolled with the FDA. And we'll provide enrollment updates and guidance for completion of the trial when finalized. Concurrent with the advancement of our trauma trial, we've continued our strong working relationship with the Defense Department, or DOD, using HAVs to address the unmet need for repair of vascular injuries incurred by military personnel. The DOD assigned a priority designation to the HAV and has provided approximately $7 million in grant support for the continued development of our HAVs for vascular reconstruction and repair. We expect that as a result of this collaboration, if approved by the FDA, Humacyte will supply HAVs for military hospitals to treat injured soldiers and veterans, as well as supply HAVs to be stockpiled for use in areas where military personnel may be deployed. In addition to vascular trauma, we're also evaluating HAVs for arteriovenous, or AV, access in hemodialysis patients. Last month, five-year data from a Phase II clinical trial of patients receiving the HAV for access in hemodialysis were published in the journal EJVES Vascular Forum. In this trial, clinicians observed long-term usability of the HAV during the five-year follow-up period with no reports of infection or immunogenicity, thus further supporting the continued development of HAVs for hemodialysis. To that end, we're nearing the expected completion of enrollment of our Phase III trial designed to assess the usability of the HAV for dialysis in comparison to autogenous fistulas in up to 240 patients with end-stage renal disease. There are currently more than 210 patients enrolled in the trial, and we expect enrollment to be completed this year. Based on the one-year follow-up period built into the study, we anticipate top-line results in 2023, followed by a BLA filing later in 2023. As we progress toward commercialization, We continue to work closely with our strategic partner and major shareholder, Fresenius Medical Care, which is a leader in kidney care services, products and value-based care, and providing valuable market insights and commercial launch advantages. During 2021, we successfully deployed our commercial scale manufacturing system for the production of our HAVs. Our commercial scale system is up and running, and is producing HAVs for our ongoing clinical trials. Related to this achievement, positive results from a Phase II clinical trial in hemodialysis using HAVs that were produced in our commercial scale manufacturing system were presented in the Sixth World Congress of the Tissue Engineering and Regenerative Medicine International Society in November of last year. This presentation highlighted 12-month safety and efficacy data that were similar to those of HAVs produced in the legacy developmental scale manufacturing systems. In 2021, the FDA agreed to the use of HAVs produced in the commercial scale system to supply the company's ongoing clinical trials in the United States, thereby reinforcing our confidence in the launch readiness of our commercial scale manufacturing of HAVs. Moving on to our broader pipeline, We're making great progress on our earlier portfolio programs in other indications. HAVs are continuing to be used under an expanded access program, or EAP, which is authorized by the FDA for patients with vascular conditions including critical limb ischemia and peripheral vascular disease, or PAD. To date, we've completed more than 20 implants in the U.S. under this program. The first use of the HAV in the treatment of a patient with an infected prosthetic vascular graft was a procedure performed in 2019 under the EAP and was published in the Journal of Vascular Surgery Cases, Innovations and Techniques in December of 2021. This patient has resumed regular physical activity and has no signs of infection of the HAV. Furthermore, Outcomes of the first series of eight compassionate use cases of HAVs for trauma and critical limb ischemia were highlighted in a presentation at the 46th Annual Winter Meeting of the Vascular and Endovascular Surgical Society in January of 2022. In this high-risk group of patients having no other options for revascularization, five of the bypasses performed with the HAV currently remain functional with follow-up times ranging from 4 to 20 months, and no instances of infection of the HAV have been noted. We believe the positive results highlight the potential of the HAVs for use in vascular reconstruction and limb salvage, where few options exist. With respect to our preclinical programs, Humacyte is investigating HAVs of 3.5 mm diameter as opposed to the six millimeter diameter vessels that are used in our current clinical program. The 3.5 millimeter vessels are being studied in primate models of both coronary artery bypass grafting, or CABG, as well as pediatric heart disease. In January 2022, we presented positive results from our first preclinical study of our small diameter HAVs in CABG at the advanced therapies week. In this study, researchers observed that the HAV maintained patency and exhibited host cell regeneration in a non-human primate model that we believe is highly predictive of human outcomes, thus highlighting the potential of HAVs in CABG. In addition, results from a primate model simulating pediatric heart disease were presented at the American Heart Association Scientific Sessions in November 2021. Researchers observed that each of the HAVs remained patent throughout the study and exhibited repopulation with vascular cells. In addition, we continue to be encouraged by our efforts in developing HAVs as complex organ systems. Our biovascular pancreas, which is an HAV coated with islets and designed to deliver insulin to diabetics in a preclinical model. And these results were published in the Journal of Tissue Engineering last year. We're currently moving into large animal preclinical studies. And we look forward to updating you all on the progress of this exciting program. As we prepare for our next phase of growth and planned expansion of the HAV applications, we're pleased to welcome three surgical key opinion leaders to advisory positions as we announced in December of 2021. Doctors Alan Kipson, Luigi Pascarella, and Todd Rasmussen are experts in the fields of cardiac, vascular, and trauma surgery, respectively. We look forward to their expertise and support to guide the education and clinical advancement efforts of the HAV, as well as help identify opportunities to advance the company's early stage pipeline and platform. And finally, as part of the company's preparation for potential commercial launch of the HAV in vascular trauma and AV access in hemodialysis, market research was conducted with 60 vascular surgeons in the US. Receptivity toward adoption of the HAV was high. According to surgeons queried, approximately 80% of trauma patients requiring vascular bypass would be eligible for HAV if approved by the FDA. Reduced operative time, without an additional infection risk was perceived as being the biggest benefit of the HAV. In addition, surgeons are highly receptive to the HAV for use in AV access if approved by the FDA due to the potential for infection resistance that has been demonstrated to date and the potential of the HAV to reduce catheter exposure in prevalent dialysis patients. We believe there's substantial opportunity for HAVs to deliver value to all relevant stakeholders, especially patients. And we're excited to continue our efforts to plan for approval and commercial launch. And with that, I'll now turn it over to Dale for a review of our financial results and other business developments.
spk04: Thank you, Laura. We had cash, cash equivalents, and short-term investments of $225.5 million as of December 31st, 2021. compared to $39.9 million as of December 31, 2020. The increase in cash, cash equivalent, and short-term investments resulted from the $242.4 million in proceeds from the August 26, 2021 merger with Alpha Healthcare Acquisition Corp. and the related pipe financing, partially offset by $56.8 million in net cash used in operating, investing, and other financing activities during 2021. We believe that the cash, cash equivalents, and short-term investments are adequate to fund operations through the end of 2024 past our current expected timelines for the two potential approvals of HAV in vascular trauma and AV access for hemodialysis. Revenue was $177,000 for the fourth quarter of 2021 compared to 124,000 for the fourth quarter of 2020. Revenue was 1.3 million for the year ended December 31st, 2021, compared to 1.5 million for the year ended December 31st, 2020. Revenue in all periods related to grants supporting the development of the HAB. Research and development expenses were 16.3 million for the fourth quarter of 2021, compared to 13.2 million for the fourth quarter of 2020, and were 61.3 million for the year ended December 31st, 2021, compared to 54.1 million for the year ended December 31st, 2020. The current year increases resulted primarily by increased personnel, external services, and material expenses designed to support expanded research and development initiatives. the development of commercial scale manufacturing processes, and support of our clinical studies. General and administrative expenses were $5.6 million for the fourth quarter of 2021, compared to $2.6 million for the fourth quarter of 2020, and were $21.1 million for the year ended December 31, 2021, compared to $12 million for the year ended December 31, 2020. The current year increase resulted primarily from non-cash stock compensation expense related to hiring leadership personnel, increases in professional fees and insurance costs related to the completion of the merger and transition to being a public company, and additional personnel and the recruiting costs associated with company growth. Other net income or expense was $64.2 million in net income for the fourth quarter of 2021 compared to $0.5 million in net expense for the fourth quarter of 2020 and was $54.7 million in net income for the year ended December 31st, 2021 compared to $1.9 million in net expense for the year ended December 31st, 2020. The current year increase in other net income resulted primarily from non-cash gains related to re-measurement of the contention earn-out liability associated with the merger. Net income was $42.6 million for the fourth quarter of 2021, compared to a net loss of $16.2 million for the fourth quarter of 2020. Net loss was $26.5 million for the year ended December 31, 2021, compared to a net loss of $66.5 million for the year ended December 31st, 2020. The current year increase in net income for the fourth quarter and decrease in net loss for the year 2021 resulted from the increase in other net income. With that, I'll turn it back to Laura for concluding remarks.
spk11: Thank you, Dale. To conclude, we've made exciting progress over the last quarter and year. significantly advancing our clinical and our preclinical programs. We look forward to providing continued updates throughout the year and through the next several quarters as we move toward regulatory submissions and commercialization. Operator, we're now ready to take questions.
spk03: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Josh Jennings from Cowan. Your line is now live.
spk12: Hi. Good morning, Lauren Dale. Thanks for taking the questions, and it's great to be on your first public earnings call. I wanted to just ask about just the – clinical trial enrollment environment. No COVID presented some headwinds over the past 12 plus months. But just thinking about the enrollment pace for the Phase 2-3 vascular trauma trial and the Phase 3 AV access for human dialysis trial, any updates just in terms of the number of centers or any strategies to enhance the enrollment pace for those two trials?
spk11: Yeah, Josh, this is Laura Nicholson. We are strongly focused on that, as you might imagine. In fact, our clinical team just returned from Israel last week where we opened up a total of four new clinical sites for the B005 trauma trial in efforts to spur enrollment by adding additional sites. So we've currently increased our total site number in the U.S. to 20 with four additional new sites in Israel. We're also really leaning into sites that are located in population areas that see a higher amount of civilian trauma, and we're offering to support them with logistical help as necessary. That said, enrollment has started to pick up in recent months as COVID has receded, and we're seeing that actually in both of our phase three trials in trauma and in dialysis access.
spk12: Excellent. Thanks for that. And just two quick follow-ups, one on the vascular trauma program. It's hard to understand the FDA is requiring 75 patients, but I think you're in negotiations with the FDA. Is there a chance that that 75 patient number can be reduced? And anything you can share just in terms of next steps? Are there any meetings on the calendar with the FDA to kind of finalize the clinical trial plan? And then the second follow-up is just, on the ABE Access Clinical Development Program and just Fresetius' role, you know, they are an investor and partner. And what is their role in the clinical development program and regulatory efforts and how are they collaborating in these early stages with Humacyte? Thanks for taking these questions.
spk11: So, yes, in response to your first question with respect to the size of the trauma trial, The guidance that we've given previously is that we estimate that approximately 75 patients will be required. But to your point, we're continuing discussions with the FDA that have been quite active, trying to nail down that final number. Unfortunately, I don't have any more specific guidance to give you at this time. So I think we're still estimating 75 patients, but certainly when we get more clarity from our regulatory colleagues, we'll pass that along at the appropriate time. As far as the Fresenius role in the dialysis access program, it's certainly true that for our V007 trial, which is our phase three trial in dialysis, we actually have a number of sites that are Fresenius affiliated with whom we have excellent relationships with the trial coordinators as far as trying to coordinate and speed enrollment. We're also working with Fresenius and the databases that they have, both in the US and in Europe, trying to understand which patients are the most difficult to care for or the most expensive to care for or who suffer the most complications with respect to their dialysis access. As you might imagine, the bulk of dialysis patients have somewhat uncomplicated courses, but there are some patients who have larger numbers of complications with maintaining access for dialysis. And we're really working with Fresenius to identify those patient cohorts who we think will benefit most from the HAV and really trying to be targeted as we think about our next steps in commercialization and marketing.
spk06: Thanks again. Thank you.
spk03: Next question is coming from Ryan Zimmerman from BTIG. Your line is now live.
spk02: Good morning. Thanks for taking the questions. And again, let me echo the sentiments. Congrats on your first public call. I guess I want to ask a few questions, Laura, about you have the Luna system kind of up and running now, you know, producing your commercial scale HAVs. Can you just talk about kind of the benefits that that can afford over time? Certainly not today necessarily, but, you know, as you start to think about commercialization, you know, what kind of scale and benefits that could afford? And then I have a couple of follow-ups.
spk11: Well, Ryan, you're right in that we were pleased in 2021 to submit a what is effectively a complete module of the biologics licensing application to the FDA that describes our commercial manufacturing methods. And they signed off on that as far as using HAVs that are made in our current commercial system in our ongoing trials. So we view that as an important and potentially de-risking event for gaining eventual FDA approval for the HAV. Currently, we have the capacity in the building to grow approximately 8,000 HAVs per year, which we anticipate will be sufficient to address the first one or two years' worth of demand post-commercialization. But importantly, in the building, we also have a large amount of square footage that is shelled out and that is ready for essentially the installation of more of these modular manufacturing units. We have room in the building actually for about 40 modular units, which we call Luna 200 units, and each unit can produce 1,000 vessels per year. So in the building where we currently reside, we have capacity to produce 40,000 vessels per year, which we believe should lead us through at least the first several years of commercialization. So we really feel very well positioned from a manufacturing standpoint that we can meet demand and that we've tackled many of the technical risks that can commonly afflict cell therapy companies or biologics companies.
spk02: Got it. That's helpful. And then just two follow-ups from you. One, in the compassionate use cases, I'm just wondering if you could talk a little bit about kind of who the users are from a surgeon perspective who are seeing these patients with critical limb ischemia and whether those are similar to, say, the trauma, you know, the vascular trauma surgeons that you may be working with and how that does potentially benefit or help de-risk maybe that launch there. And then the second question just for Dale is just, Dale, I appreciate your comments on the cash position for the company, but if you could just give us your thoughts about kind of cash burn in 2022, it'd be much appreciated. Thank you.
spk11: So Ryan, you're correct. The majority of the surgeons with whom we've been working in the clinical sphere are vascular surgeons. But as far as the care of trauma patients and vascular trauma, in the American medical system, there's actually a lot of overlap between vascular surgeons and trauma surgeons. And there are some surgeons who are board certified in both areas, in vascular and trauma surgery. And because of our extensive reach with vascular surgeons in our various AV access and PAD trials, as well as the 20 level one trauma centers that we're at in the U.S. for our trauma trial, we're really seeing that we have connections with large numbers of vascular surgeons, but also trauma surgeons as well. In answer to your question, as far as who's reaching out for the expanded access cases, that's mostly vascular surgeons. In some cases, or in many cases, they're treating patients with really critical limb ischemia who are facing amputation and who have no other options for care. We have, on occasion, treated severely injured trauma patients, patients who have suffered gunshot wounds or really severe industrial accidents. And so typically we have a combination of trauma surgeons and vascular surgeons reaching out in those situations.
spk06: And then just the cash.
spk04: Yeah, Ryan, from a cash flow point of view, we haven't given specific guidance, certainly not. You know, kind of the average burn over the next three years can be extrapolated by our comments around round runway, but clearly the vast majority of our cash burn in the upcoming years is focused on R&D, including, you know, currently the late stage programs in trauma and AP access, as well as our earlier stage pipeline in CABG and vascular pancreas for type 1 diabetes. And obviously R&D will shift over the course of the next three years with trauma and AV access winding down, and we expect human trials in cabbage and ultimately BVP, the pancreas program, ramping up. A portion of the burn obviously coming up is also geared towards our planned market launches and trauma and AV access, including ultimately a ramp of the sales and marketing expenses and manufacturing readiness. But that's probably as as detailed as we'll be at this stage until we start providing more specific guidance.
spk06: Thank you.
spk03: Thank you. Our next question today is coming from Brooks O'Neill from Lake Street Capital. Your line is now live.
spk05: Good morning, Laura and Dale. I just wanted to ask a couple of bigger picture questions. I'm curious if there's been any significant change in your expected timing for commercialization of your big programs? And if so, you could just describe what's caused that change.
spk11: Yeah, we are not projecting any big changes in the timing of our BLA filings for trauma and dialysis access. You know, the previous guidance that we've given is that We anticipate filing a BLA in late 2022 for trauma or perhaps early 2023. Obviously, this depends on the total number of patients that need to be enrolled in this pivotal trauma trial. And we're continuing discussions with the FDA regarding that total patient number. But as of today, we have no specific guidance from the FDA that would make us change this projection of BLA filing in late 2022 or early 2023. With respect to dialysis, our phase three trial in hemodialysis access is more than 90% enrolled. As other analysts have mentioned earlier in the call, COVID has certainly provided headwinds for dialysis enrollment over the last two years. There have been time periods where dialysis operations were simply canceled at the vast majority of medical centers in the country because they were viewed as sort of discretionary operations. So enrollment there has been slowed by COVID, but I would say it's starting to pick up. And we would anticipate completing enrollment in the VO7 trial our dialysis trial later on this year. Since we have a 12 month endpoint after that trial, I would anticipate that 12 months after completion of enrollment, we would have top line results that would support a filing in dialysis access late in 2023. Right.
spk05: And then I'm just guessing based on your earlier comments that your relationship with Fresenius continues to be quite strong. Any comments or update there?
spk11: Well, I'll let Dale comment on this as well. But I would say that Fresenius and Humacyte have really mutually embraced each other on several projects over the last year, year and a half. As I mentioned earlier in the call, we're working with Fresenius to really identify those patients in the U.S. and Europe who suffer a lot of complications from their dialysis access site. And it's really these patients who, in a commercial sense, ourselves and Fresenius would like to target in the U.S. and Europe as far as potentially benefiting from the HAV. In addition, we're also discussing with Fresenius the design of a pivotal PAD trial, which would be based in Europe, but which might also include sites in the U.S., The design of this pivotal trial will probably be preceded by some phase two work and perhaps by some registry work that we're planning in Europe right now. So this is still in the planning stages, but I would say that Fresenius and Humacyte are working very closely on a variety of projects in several different markets, and it's been synergistic for both of us.
spk05: Great, fantastic. I'll just ask one more, and I just love any comments you have about, are you seeing anybody else doing anything significant in terms of competition, overlap with the broad outlines of the work you guys are doing? It just helped to kind of get a sense for what else you might be seeing out there in the marketplace right now.
spk11: Well, in terms of engineered tissues, I would say that the situation has remained essentially unchanged, certainly over the past year, in that there are a small number of smaller startup biotechnology companies who are making attempts to mimic to a degree what Humacyte is doing. Just looking objectively at where those other smaller companies are, there's probably a 10-year gap as far as development pathway between where these other potential competitors are and where Humacyte fits. Of course, there's a continuous evolution of new synthetic products, whether they be degradable or non-degradable or electrospun, but there's a continuous evolution of new synthetic materials that are being tested in the vascular system. That said, But the fact remains that Teflon and Dacron are the two synthetics that have been used widely in the vascular system for 30 or 40 years. And despite a continuous march of new materials being brought forward, none of them has really gained significant clinical traction.
spk05: Great. Fantastic. Thanks a lot. Keep up all the great work.
spk03: Thank you. Next question is coming from Matthew O'Brien from Piper Sandler. Your line is now live.
spk14: Morning. Thanks for taking the questions. Laura, is there any way to just talk a bit more about the discussions with FDA? Because I thought that we would have the full design buttoned up by now, you know, the actual number of patients kind of buttoned up for vascular trauma, and I don't think we're there yet. So, you know, is there some sort of pushback that they're giving you? Is there any kind of commentary that makes you concerned about, you know, what you're doing with your clinical study, or is it just more the agency is busy with a lot of things at the moment?
spk11: Well, I think the agency is very busy. I do not perceive any fundamental difficulties with Humacyte and our technology with respect to the regulators. I actually think that from a technical standpoint and a scientific and clinical standpoint, we have a great relationship with the FDA. And I think that's illustrated by the fact that they've reviewed our commercial scale manufacturing system and have agreed that we can use it in ongoing clinical trials. So we have a good working relationship with the FDA, but this is, first of all, this is a fundamentally new product. And I think regulatory bodies tend to be more cautious with fundamentally new technology, although we're working through that. And I think secondarily, even though we sort of feel like a device, we're regulated as a biologic. So we're regulated by the Center for Biologics at the FDA, which, as we all know, has been caught up in the COVID maelstrom for the last two years. So between the huge distraction that COVID has provided to the biologics group, combined with the newness of our technology, and also combined, frankly, with leadership changes in the FDA, as we all know, Rob Califf came in as the commissioner only a few weeks ago after a long hiatus with an interim commissioner. So I think there are a lot of factors that are contributing here. But what I don't see is fundamental problems between the agency and our company with respect to the technology or the medicine or the science.
spk14: Okay, that's great to hear. How do we think about the relationship with the DOD here? When you do, knock on wood, get approval for the HAVs? I mean, how quickly can they start purchasing the product and using it?
spk11: You know, I'm going to ask Dale to field that question because I think he'll have a better answer for you than I will.
spk04: Yeah, thanks, Matt, for the question. I mean, certainly we appreciate the support we've had from the DOD, the order of the ongoing trial and trauma, and probably more importantly, have been key in our discussions with the FDA in terms of their advocacy for the product. I think we expect, from a commercial point of view, their support to manifest itself two ways. One would be from a pure military perspective, point of view, stockpiling the product so that it can be forward deployed to wherever our forces are deployed throughout the world in the event of conflict. Because obviously in vascular trauma, the product needs to be nearby at the point in time of injury to expeditiously treat the patient. Beyond that, we also expect, based on our ongoing discussions, that this would be heavily used within the VA hospital system. And in fact, when you look at our history of compassionate use cases, many of those have been veterans that have been treated for severe limb ischemia. So we think there's clearly going to be a stockpiling from the Department of Defense post-approval. In terms of exact timing right now, a little bit difficult to comment on that as any aspect of timelines are, but we'll be able to give more guidance, I think, as we get closer to the actual approval date.
spk14: Got it. And then just last one for you, Laura. Everybody's focused on vascular trauma and AV access and maybe a little bit on PAD, but It seems like there was some other updates. I don't know if cabbage was really the other update that was a little bit newer and maybe a little bit more progress than the last time that we spoke. So outside of those kind of three indications, can you just maybe highlight one area where you've made some real progress that you really want to emphasize here today? Thank you.
spk11: Yes, if you're asking me to choose between our cabbage development program and our diabetes development program, it's sort of like choosing between two children. But I guess I'll go with cabbage. We've been working on developing this animal model for a couple years. As you might imagine, doing heart bypass surgery on a non-human primate is actually a non-trivial set of experiments. But they're well underway now at Duke University, which is a leading primate research organization, and they're just down the street from Humacyte, and so that makes this development program a lot smoother. We currently, so we reported in January six-month results of a human-sized coronary artery bypass conduit that had been studied in non-human primates. and we really saw very favorable outcomes and good patency and good remodeling and good biological functioning of the graft. So we're very encouraged by these results because as I've mentioned in prior meetings, we believe that the non-human primate model, particularly the baboon, is very highly predictive of what we've seen in patients. We did all of our preclinical work in baboons prior to going into AV access, and this was more than a decade ago. And the results in baboons were very predictive of what we went on to see in humans. So the fact that we're getting positive results in baboons in a coronary model, for me, is very encouraging. We're going to continue to do more coronary work in baboons this year and expect to progress to a pre-IND filing on CABG.
spk06: Got it.
spk11: Got it.
spk06: Perfect. Thank you so much.
spk03: Thank you. Next question today is coming from Suraj Kalia from Oppenheimer. Your line is now live.
spk06: Good morning, Laura, Dale. Can you hear me all right? Yes. Perfect.
spk01: Hey, so Laura, thanks for the clarification on a bunch of endeavors. Laura, if I may, the production capacity with the Luna, where are we in terms of quality sampling rates today? And how do you envision the 40,000 units? What would be the normalized quality sampling rate?
spk11: Suraj, that's an excellent question. And I might have to be supported by our COO, Heather Pritchard, who's also on the phone call with us. But we haven't really shared the sampling rates in the public domain as of yet. You can expect though that our sampling rates currently, because we're still in the fairly early phases of commercial scale production, are higher than they will be in the long term. I can say in the long term I would expect that the sampling rates would be well under 10%, but I would ask Heather also to weigh in on those projections.
spk10: Sure, Laura. What we're predicting, as Laura said, is our sampling rates are somewhat higher now, but we predict by commercial year one or two to have it similar to other biologics products, so in the rates that Laura was speaking to.
spk01: Fair enough. Hey, Laura, I know you provided or at least you referenced your efforts with Fresenius, you know, in identifying the dialysis target market and whatnot. Forgive me, I'm drawing a blank, Laura. Are there any contractual minimums post-commercialization, or is this more of a best-efforts basis post-commercialization, post-approval?
spk11: I don't believe we have any... set minimums that are built into our commercialization agreement with Fresenius. As you may recall, Fresenius is charged with leading commercialization and marketing for AV access and trauma and PAD in Europe, while Humacyte will lead those analogous efforts in the US.
spk01: Fair enough. And last question from my side, Laurel. It's interesting, you guys are following the non-human primate model, right? So, Laura, whether it's diabetes, whether it's cabbage, you know, or any other target segment that you're exploring, is there enough body of evidence, apples to apples in, let's say, baboons, you know, to eventually sort of have a smooth, whatever the data shows, right, to have a smooth sailing through the FDA? And the reason I ask, for example, in cabbage, right, Most of the preclinical data, if you look at literature, it's more centered around calves, pigs, sheep, so on and so forth. I would agree, it makes sense, but I'm just curious how the FDA would view that, and how are you all doing risk mitigation overall? Thanks for taking my question.
spk11: Yeah, Suraj, that is a good question, and certainly very early in hemocytes development, more than 12 or 15 years ago, Humacyte looked at using pig models or canine models to evaluate our products. However, these are human engineered tissues comprising human extracellular matrix that's not cross-linked. And because of that, when we implant the HAV into a pig or to a dog, over a period of weeks or months, that HAV rejects. The human matrix is eventually recognized by these lower animal models and is rejected. And so because of that, it's not a high fidelity model for the human. Certainly we have experience with the FDA in terms of providing them primate data, which we did in advance of our AV access program and also in advance of our Phase II PAD program in the U.S. So certainly the numbers of animals that tend to get utilized for these types of preclinical packages are smaller. You know, typically less than 20 animals is what we've submitted to the FDA to support phase one work. But again, the FDA realizes that these non-human primate models are very high fidelity. So we have never encountered any difficulty with them questioning the body of preclinical work.
spk06: Fair enough. Thank you. Thank you.
spk03: Next question is coming from Bruce Jackson from Benchmark. Your line is now live.
spk13: Hi. Good morning, and thank you for taking my questions. With regard to the compassionate use data, which looks great, with the compassionate use program, do you have any plans to expand that And maybe you could tell us a little bit about what's required to get that expansion and why it might be an indication of support for your product from the clinicians.
spk11: Well, in terms of the EAP program, there actually has been an expansion that is obviously affiliated with Humacyte but is not Humacyte-driven. So Dr. Todd Rasmussen, who is a former military surgeon, was a colonel in the Air Force and was deployed as a vascular surgeon to the Middle East multiple times, has now left the service and he is a, in addition to being a long-term advisor for Humacyte, he's now a vascular surgeon operating at the Mayo Clinic in Rochester, Minnesota. Recently, Todd initiated a compassionate use protocol with the FDA, which is a Mayo-sponsored IND. And under that protocol, Dr. Rasmussen will be enrolling compassionate use patients on a more regular basis. That program is underway, and we're not at liberty to share those results as of yet, but we're very encouraged by the fact that the Mayo has taken up this program.
spk13: Okay, great. And then a question for Dale about the operating expenses for 2022. In terms of research and development, should we look for levels that are similar to the fourth quarter? And will there be any change for the quarter in the cadence?
spk04: Yeah, you cut out on the second part, Bruce, but I'll address the first part first. Yeah, I think in terms of any expansion of our expenses with the kind of the advancement during this year heavily in terms of CABG and the vascular pancreas, we'll see a slight uptick or somewhat of an uptick in R&D expenses. That's about as much as the guidance we've given so far. And I think you cut out a little bit on the second part, or at least I didn't. You cut out for me, Bruce, on the second part of the question.
spk13: Oh, yeah, so sorry about that. In terms of the quarter-to-quarter variance, is it going to be a fairly straight line pattern, or will there be any kind of, like, differences in the calendar quarters, quarter-to-quarter?
spk04: Yeah, I mean, individual components can change. I think on an overall basis, you'll see relative consistency from quarter-to-quarter. My only qualification of that is as we get late in the year You know, depending upon the very specific timeline of the DLA filing for trauma, you know, associated with that, you'll start seeing an uptick in marketing and, you know, sales preparation expenses for the planned launch.
spk13: Okay. All right. Well, thank you very much for taking my questions, and congratulations on all the progress in 2021. Thank you.
spk03: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.
spk11: Well, this is Laura Nicholson. I'd just like to say that I'm very grateful to the Humacyte team, which has really executed beautifully during 2021 and during the first quarter of 2022. We have a lot of irons in the fire in terms of multiple clinical development programs and also preclinical development programs, as well as growing our commercialization efforts and also growing our communication efforts with analysts and with investors. So this has been a time of tremendous growth, but also tremendous stick-to-itiveness from our team. And we really look forward to 2022 being very exciting as far as further advancing our clinical milestones and also regulatory milestones. Dale, I'd like to ask, do you have any final comments?
spk04: No, I mean, clearly 2021 was a very pivotal year. We've been greatly supported by our legacy Humacyte shareholders that supported us during the private period, and we've been pleased to add public shareholders as part of the transaction that we completed in August. So clearly we appreciate the support of our shareholders and wouldn't be able to
spk06: improve patient care without that level of support.
spk03: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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