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spk03: Good morning, good afternoon to Nisa Blast Financial Results and Operational Update for the half year ended December 31, 2023. With me on this call, Chief Medical Officer, Dr. Eric Rose, Interim Chief Financial Officer, Andrew Chapanel, and one of our Nisa Blast board members, Dr. Philip Krause. If we could go to slide four, please. A snapshot of the investment highlights of mesoblaster are on this slide. We're developing a novel allogeneic cell therapy technology platform to enable treatment without the need for donor matching or immunosuppression. The lead indications of our two platforms, Remy Stem Cell and Rex Linguistro Cell. Remy Stem Cell is being developed for both pediatric and adult steroid refractory acute graft-versus-host disease. For the pediatric indication, we've completed a single-arm pivotal phase three trial, which successfully met its primary endpoint. Long-term survival data shows durability of survival benefit for more than four years. New data from a second potency assay has been provided to the FDA, and we have an upcoming meeting scheduled during March. For adult steroid refractory acute GVHD, We are collaborating with the Blood and Bone Marrow Transplant Clinical Trials Network, a body responsible for approximately 80% of all U.S. transplants, to conduct a pivotal trial in adults with this condition and patients who've failed second-line therapies and have no approved therapeutics. This potential market is five times larger than for pediatrics. Rexlimistrocell, our second generation immunoselective product, is being developed for heart disease and for inflammatory back pain. In the field of inflammatory heart failure, with low ejection fraction, we've completed the phase three trial. We have an FDA-designated regenerative medicine advanced therapeutic designation for the product in the treatment of the most severe end-stage patients. with low ejection fraction heart failure and the ventricular assist device. And under that RMAT, we had a very encouraging meeting with the FDA during this month that I will update you on further in this presentation. Results from a randomized controlled trial in pediatric congenital heart disease have also been published. And for that indication, we've received a rare pediatric disease designation as well as an orphan drug designation by the FDA. For chronic inflammatory low back pain, Rexlimistrocel has completed a first phase three trial. We've received RMAT designation from the FDA for this indication as well for discogenic back pain. An agreement is in place for a confirmatory phase three trial with a 12-month endpoint on being pain reduction that's potentially acceptable for FDA approval and a pivotal trial with its activities have now commenced. The next slide, five, is a summary of the global intellectual property estate. We are the leaders in intellectual property for the Zincomal stromal cell sector. We have over 1,100 patents and patent applications across all the major jurisdictions. covering compositions of matter, manufacturing, and therapeutic applications. And we've had a very strong track record of managing our intellectual property in terms of out-licensing, working with partners, with collaborators, and in protecting our territories when that's required. Next slide, please. Slide six. We have a commercial scale manufacturing process that is highly scalable, allogeneic, it's off the shelf, that allows us to deliver end-to-end products, frozen, shipped through distribution hubs, ultimately to the end user. The manufacturing process meets stringent criteria of various international regulatory agencies. The FDA has inspected our manufacturing process at the Lonza facility in Singapore and found that that process was acceptable. We have robust quality assurance processes in place to ensure that the final product meets batch-to-batch consistency and reproducibility. And we've got substantial innovations that are under our own patents to meet the future increasing capacity requirements, improvement in yields, reductions in cost of goods. And these step-ups in technology include 3D bioreactors for high volume indications. Moving on to slide seven. This slide is a cartoon of the mechanism of action by which our stromal cells deliver the clinical outcomes that we've talked about across various product indications. The cells that we've developed in mesenchymal precursor and stromal cell populations, first and second generations, have been optimized to express a variety of surface receptors that bind inflammatory cytokines. And when they specifically are engaged by these inflammatory cytokines, they're activated and release a variety of very well characterized mediators that orchestrate the anti-inflammatory responses that are necessary to turn off immune-mediated diseases in various tissues. These mechanisms are now well characterized and underpin the clinical data that we've published and generated and which I can tell you more about in the coming slides. Slide eight is a snapshot of our late-stage clinical pipeline. Remy Stem Cell, our first-generation product, as I said, is being developed for pediatric and adult serotrophic graft-versus-host disease, as well as inflammatory bowel disease. The pediatric indication is in the midst of regulatory filing. The adult indication has a pivotal trial being planned to commence next quarter. Borrex-Lenistrosa, which is our second-generation monoclonal antibody-based selected culture-expanded stromal cell, has generated substantial body of clinical data in two major indications associated with inflammation, heart failure with reduced ejection fraction and chronic inflammatory low back pain. Both of those have completed initial phase three trials and both of them are in final stages of development. Slide nine is a summary of the clinical program milestones that have been achieved and that are continuing to plan for it to be delivered on during the coming months. As you can see here, these milestones are linked to each product by indication. And we set out a number of deliverables that were laid out at our AGM. And I'm pleased to say that we've achieved all of the deliverables during the first quarter of this year. And we have a number of planned activities for the next quarter and the rest of the year. And as you can see, in particular, with respect to Remy stem cell for adult and pediatric GVHD, we achieved the expected delivery of additional potency assay data, which was provided to the FDA. We have scheduled an upcoming meeting with the FDA. That'll be held in March. We've achieved completion and submission of a protocol for the adult program. And we plan to initiate enrollment in the next quarter for this adult trial. With respect to the cardiovascular program, we achieved a very encouraging meeting with the FDA under our RMAT regarding the potential pathway to approval in adults based on our LVAD and DREAM heart failure trials. And we further plan to meet with the FDA in the next quarter regarding our congenital heart disease program, following results of the randomized control trial that have been published. Regarding back pain, we achieved the startup of activities with investigators, trial sites, and the contract research organization for our pivotal trial. And the trial is active and we'll be screening and enrolling patients throughout the coming year. Slide 10, the regulatory status for Rioncil in pediatric patients with steroid refractory GVHD. We have an upcoming meeting scheduled for March with the FDA. We have provided the agency with new data from a second potency assay for Rioncil, providing the additional product characterization as requested by the FDA. The new data show that the Rioncil product made with the current manufacturing process, which is undergone successful inspection by the FDA, demonstrates greater potency than the earlier generation product and provides providing context to its greater impact that we've observed on survival. Next slide, 11. About the pathway to approval for Rioncil in adults with still diffractory acute GVHD. Survival in adults with this terrible disease who failed at least one one additional agent beyond steroids, and the only approved agent for this disease is ruxolitinib. If you fail ruxolitinib and other agents, survival remains as low as 20% to 30% by day 100. This patient population has no other approved therapies, and this dismal outcome needs improvement. In contrast, use of our improved remy stem cell product, Lyonsil, has shown 100-day survival of 67% when used under expanded access in 51 adults and children with steroid refractory GVHD who otherwise fail to respond to at least one additional agent beyond steroids, including ruxolitinib. We intend to commence a phase three trial of Rionsel in adults and adolescents who are refractory to steroids and to a second-line agent such as ruxolitinib where there is no other approved therapy. Mesoblast is collaborating with the Blood and Marrow Transplant Clinical Trials Network, a body responsible for approximately 80% of all U.S. transplants, to conduct this trial. We expect to initiate the program next quarter. Slide 12. What is our plan for pathway to approval now in patients with chronic heart failure with reduced ejection fractions? including in-state patients with a left ventricular assist device. We had a very encouraging meeting with the FDA regarding the regulatory path to approval, and that was based on multiple elements of data for VASCOR, which has shown the potential to reduce major adverse cardiac events or MACE, such as heart attack and cardiovascular mortality in high-risk patients with this disease, heart failure with reduced ejection fraction, and with inflammation. Revazco has also shown the potential to improve major outcomes in high-risk patients with the most severe end-stage disease, where there's excessive inflammation and the presence of left ventricular assist devices. We met with the FDA this quarter, addressing potential pathways to bring this product to approval under our Regenerative Medicine Advanced Therapies designation. The discussion covered both class 2-3 EFREF ischemic patients with inflammation from the 565 patient dream trial as well as those patients with end-stage disease and an LVAD implant with inflammation from the 159 patient LVAD study. We discussed with FDA the mechanism of action by which Revascor is able to improve major outcomes including mortality across the continuum of heart failure with inflammation and In follow-up to the encouraging meeting, we expect to receive the minutes of the meeting from the FDA in the coming month. Slide 13. What about pediatric congenital heart disease? In particular, a rare disease called hyperplastic left heart syndrome. During the quarter, FDA granted mesoblast product Revascor both rare pediatric disease designation and orphan drug status. This followed submission of the results from a randomized controlled trial in children with hyperplastic left heart syndrome, which is a potentially life-threatening congenital heart condition. The results from this investigator-initiated study from surgeons at Boston Children's Hospital was a blinded randomized placebo-controlled study were published in the December 2023 issue of the peer-reviewed journal of thoracic and cardiovascular surgery, OPEN. As noted in this publication, there appears to be an increase in the proportion of children following treatment with Revascor who have an enhancement in the growth of the left ventricle, at least by size, and are able to better tolerate so-called recruitment surgery. We intend to have a discussion with the FDA in the next quarter around the potential regulatory path for advanced police children. Now, let's move to the financial results for the half. Andrew, would you please take the next few slides?
spk02: Yes, thanks, Sylvia. Please turn to the financial highlights for the half of the year on slide 15. At that December 31, 2023, cash reserves were 77.6 million US dollars after completion of an institutional placement and entitlement offer of 60.3 million Australian dollars in the period. During the period, we also delivered on our planned cost containment strategies, which reduced our cash burn for operating activities. In the three-month period ended December 2023, our cash burn for operating activities was $12.3 million, which is a 25% reduction on the comparative three-month period in FY2023. In the six-month period ended December 2023, the cash burn was reduced by 14% on the comparative six-month period in FY2023. We are also pleased to report the 21% reduction in our loss after tax of $32.5 Turning to slide 16, you'll see we are reporting a reduction in all our key categories of expenditure and an improved loss after tax for the half year ended December 2023. Our revenue of $3.4 million is predominantly from royalties on sales of Tencel in Japan. and our manufacturing expenditure reduced by $6 million, or 47%, for the six-month end of December 2023. The costs being incurred in the current period for manufacturing relate to generating new potency and characterization data for our Remy Stem Cell L product for children with acute graft-versus-host disease, This data has been submitted ahead of our upcoming meeting with the FDA next month. Our finance costs include US$6.9 million of non-cash expenditure for the six months ended December 2023. I'll now hand the call back to Sylvie for the presentation. Thanks, Sylvie.
spk03: Thank you, Andrew. Let's continue with our operational update. Slide 19, please. Pseudorefractory acute graft as a host disease is a devastating complication of a bone marrow transplant. More than 30,000 allogeneic bone marrow transplants are performed globally per year, of which approximately 10,000 are performed in the US. 1,500 of these 10,000 are in children. And for children, there are no approved therapies at all. for adults, for adolescents and adults over the age of 12, ruxolitinib is the only approved therapy. And 45% of those who receive ruxolitinib are non-responders. For the non-responders, there are no approved therapies. If we go to slide 20, please. This slide summarizes the three studies that have been provided to the FDA on the outcomes for remy stem cell in children with steroid refractory acute GVHD. And in these three studies, you'll note that day 100 survival ranged from 66% in the most severe conditions under an expanded access to 74% and 79% in both the randomized controlled study and in the open label study, 001. where great CD disease accounted for 89%. In contrast, in each of these last two studies, control arms, either a randomized control arm or an external control arm of matched patients demonstrated substantially lower survival outcomes of 54% and 57% respectively. If we go to the next slide, this graphically shows a comparison of survival on the right-hand side in our phase three trial 001, where at six months we see 69% survival, and by two years, 51% survival of children, where, as I mentioned earlier, almost 90% had the worst form of disease-grade CD disease. In contrast, on the left-hand side, we see two-year survival outcomes in 128 children with steroid refractory GVHD treated at major center across the US, and you see a dismal 35% survival at two years in this patient population. Next slide. Slide 22 shows the long-term survival outcomes from the children in our pivotal study 001. Of these 51 children, of whom almost 90% were grade CD disease, You can see that by the end of the fourth year into year five, almost 50% of children maintained survival. And really survival through year five indicates curative outcomes. And those children who arrive at year five are really living normal lives. And we have children who are now medical students, for example, thriving in the communities. In contrast to this long-term outcome with Remy stem cell, you see the outcomes in five publications in children and adults treated with alternative therapies, including ruxolitinib. And you see that across the board in each of these studies, year one survival is in the 40% range. Year two survival is in the 20% to 30% range. And there are no reports of survival outcomes beyond year two. We think the long-term survival outcomes with remestempto from a pivotal phase three trial is unparalleled with other therapies that are available today. Slide 23. So what is the regulatory status and pathway for Rionsel in children? As I've mentioned earlier, we have an FDA meeting scheduled and upcoming for March with the FDA where we have provided the agency with amount of new data from a second potency assay for our product Rioncil, providing additional product characterization as requested by the FDA. The new data show that the Rioncil product, the optimized and improved Rioncil product, made with the current manufacturing process that has undergone successful inspection by the FDA, demonstrates greater potency than the earlier generation product. It used to be called the early generation product, what's called Prochymal. which provides context to the greater impact on survival of our improved product, Rayoncil. And for adults, as I've mentioned earlier, our commercial strategy is to progress as rapidly as possible to adults who failed both steroids and a first-line agent, such as ruxolitinib, which accounts for about 45% of all patients currently on ruxolitinib. For these patients, mortality is dismal, Only 20 to 30% are alive by 100 days. And we've seen a 67% survival in this patient population with Rioncil. We are collaborating with the BMT-CTN to initiate and conduct a pivotal trial in this patient population in the second half of this year. Let's move to heart failure. Slide 26. Congested heart failure remains a major cause of mortality in the Western world, with 50% patients dead at five years after diagnosis. We have a substantial amount of promising initial data, including data from over 500 patients in the DREAM heart failure phase three trial, which demonstrated early strengthening in the left ventricle by measurement of the left ventricle ejection fraction, and more importantly, long-term reduction in major adverse conditions cardiac events, including heart attacks, strokes, and mortality. The key finding is that inflammation, which is seen in about 50% of these patients, is both a predictor of severe outcomes and a predictor of therapeutic benefits in response to rex lamistrosa. We met with the FDA very recently and had a very encouraging meeting under our existing RMAT designation to discuss the potential pathway to approval for patients with this devastating complication. And we expect to have FDA formal minutes due later in March. But I think if you look at slide 27, the message is we're targeting the continuum of disease of patients with the most severe forms of inflammatory heart failure, low ejection fraction. It is these patients who are in class three, class four, as well as end stage who ultimately end up on artificial heart devices or requiring transplants or die. And the continuum of this disease reflects in large parts ongoing severe inflammation. We've identified precisely those patients who are most likely to respond to our therapy based on a mechanism of action that we think is critical to the ability of these cells to make a difference in the lives and outcomes of this patient population. And just as a reminder on slide 28 of some of these outcomes that have been published, this slide is from a paper in the Journal of the American College of Cardiology published last year And you can see on the right-hand side, across the 301 patients out of the 560 patients who had severe inflammation, the impact on heart attacks demonstrated an 88% reduction in the incidence of heart attacks, almost a flat line in blue in patients who received a single injection of Rexlamystrozo compared to in red, progressively increasing incidence of heart attacks. And of course, having heart attacks on top of severe heart failure is a recipe for progression and ultimately death. If we can move on to slide 29, which brings the same mechanism of action by which injection of our cells has the potential to reduce inflammation, to improve blood vessels, and prevent scarring. That same mechanism was the impetus for a study of these cells in little children with congenital heart disease, in this case, hyperplastic left heart syndrome. This was an initiated study by investigators at Boston Children's Hospital with the hypothesis that an injection of these cells might increase the size and the pump function of a left ventricle. There was that was congenitally small. And the results were very encouraging and were published by the investigators in December in the Journal of Cardiothoracic Surgery. The results showed that, if we can go to slide 30, that a single injection into the left ventricle of these children at the time of surgical anatomy restructuring improved congenital over 12 months the size of the left ventricle and it improved the ability of the surgeon to perform a definitive procedure that allows the heart to pump more effectively the blood around the entire circulatory system. On the basis of these results we filed with the FDA for a pediatric rare disease designation and an orphan drug designation and received both of those and we We'll continue to interface with the FDA over the coming months to discuss the potential pathway to approval for this ultra-rare orphan indication. It's important to note that the benefits of having a pediatric rare disease designation is that on FDA approval of Revascor for the indication, we may be eligible to receive a priority review voucher that can be redeemed for any subsequent marketing application or may be sold or transferred to a third party. Finally, let's move to the other blockbuster opportunity, the use of Rex, lenistrosol for treatment of chronic low back pain due to inflammatory degenerative disc disease. Slide 32. This is another very large unmet opportunity, unmet need. Over seven million patients across the US are estimated to suffer from inflammatory chronic low back pain due to degenerative disc disease. And really, for these patients, if we can go to slide 33, the patient journey is really very limited. Other than non-steroidal anti-inflammatory drugs and opioids, the only other options for these unfortunate patients are interventions that are invasive and that are involved with either implants or surgery. We have alignment with the FDA on the appropriate pivotal phase three study that, if positive, would support and confirm results in the first phase three trial, which is to substantially reduce pain through a 12-month period. So 12-month reduction in pain is a primary endpoint of the pivotal trial. And we have agreement with the FDA that that could support a label of pain reduction in these patients. In addition, we've completed manufacturing and potency assays are in place for product release. The pivotal trial is now underway across multiple sites with the CRO engaged to recruit patients across the U.S. We have an RMAT designation, if we can go to slide 34. We have an IMAT designation for this indication as well. And given that this is not an orphan indication, I think it gives you a sense of the importance of this disease, both in terms of the morbidity that's associated with it, but also with the fact that it's the number one cause of opioid usage in the Western world. 50% of opioid prescriptions are for patients with chronic low back pain. We have shown in the first phase three trial a reduction in opioid usage in patients who were responders, and we showed a substantial reduction in pain through as long as 36 months of follow-up. And based on these data, the FDA granted us the RMAP, which I think is an indicator of the importance that they place on products that are being developed for this patient population. Slide 35. shows the data that was generated in the first phase three trial, which shows in red the reduction in pain at 12 months, 18 months, 24 months, and 36 months. And at all those time points, the substantial difference between a single injection of our cells with the hyaluronic acid carrier is evident versus in green, a saline injection. If we can replicate these data in the current pivotal phase three trial, This is an approval endpoint as early as 12 months post an injection. And I think on that basis, I'll leave it there. And if there are questions, I'd be happy to take them. Andrew would be happy to address any questions related to finance. Our Chief Medical Officer, Dr. Rose, can address any of the clinical questions you may have and any regulatory questions, Dr. Krause would be happy to address as well. Thank you.
spk00: Thank you. If you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Louise Chen with Cantor Fitzgerald. Please go ahead.
spk01: Hi. Congratulations on all the progress and thanks for taking my question. I wanted to ask you on the pricing for the pediatric opportunity for Remy Stemcell. I think last time that I spoke with you, the pricing was potentially better than I had anticipated. So just curious what you're thinking there. And then I also wanted to ask you about cash runway. I know you gave the cash balance, how you're thinking about the push and pulls. And then lastly, just OpEx for the remainder of the year. Is this first half of the year a good proxy for that? Or is there something else happening in the second half that we should consider? Thank you.
spk03: Okay, thanks. Thanks, Louise. So with respect to pricing, as you can imagine, we're not able to disclose publicly what we expect to charge for the product for pediatric graft resuscities. But I would point you in the direction of the CAR T-cell therapies as precedents for similar patient populations. And you want to look at the totality of the disease in terms of morbidity and mortality and the durability of the effect. We've demonstrated at least five years of survival outcomes. And I think some of the gene therapies that are providing that kind of curative outcomes charge some value. Pretty remarkable prices. I would say that we would see that the pricing for this product is somewhere between the CAR-T products and the curative gene therapy products. With respect to burn rate and I think runway, we've indicated that in the last quarter our financial spend and our burn was reduced significantly. 25% relative to the comparative period. And I think we're very comfortable that we're going to maintain that kind of quarterly burn, perhaps even tighten our belts further beyond that. And that allows us to complete both the adult GVHD program that we are planning to do with the BMT-CTN group as well as the pivotal back pain trial. So the current spend anticipates those programs being funded internally. On that basis, we think we've got about at least 12 months of cash. You know, we expect and are currently in discussions with strategic partners for some of these indications where we... If we enter into strategic partnerships, particularly in the U.S. market, we would expect that our cash flow or cash balance would be substantially altered and would extend our runway well beyond that. Does that address your question, Louise?
spk01: Yes, it does. Thank you very much.
spk00: That brings us to the end of today's call. I'll now hand it back to Dr. Ed Eskew for closing remarks.
spk03: Great. Well, we hope that we've given a good update on our operational activities, which have been substantial at least over the past quarter. We will continue to update the market as we deliver on the near-term and mid-term catalysts as we've laid them out. And thank you very much for participating.
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