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Aastrom Biosciences (ASTM)

Q1 2013 Earnings Call

May 08, 2013 4:30 pm ET


Brian D. Gibson - Principal Financial Officer, Chief Accounting Officer, Vice President of Finance, Corporate Secretary and Treasurer

Dominick C. Colangelo - Chief Executive Officer, President and Director

Ronnda L. Bartel - Chief Scientific Officer


Chad J. Messer - Needham & Company, LLC, Research Division

Stephen G. Brozak - WBB Securities, LLC, Research Division

Kaey T. Nakae - Ascendiant Capital Markets LLC, Research Division

Jason Kolbert - Maxim Group LLC, Research Division



Ladies and gentlemen, thank you for standing by, and welcome to the Aastrom Biosciences First Quarter 2013 Conference Call. [Operator Instructions] I would like to also remind you that this call is being recorded for replay.

I would now turn the conference over to Brian Gibson, Aastrom's Vice President of Finance

Brian D. Gibson

Thank you, Tyrone, and good afternoon, everyone. Welcome to our first quarter 2013 conference call to discuss our most recent financial results and the progress of our development programs. Before we begin, let me remind you that on today’s call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995, and all of our projections and forward-looking statements represent our judgment as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.

With us on today's call are Aastrom's President and Chief Executive Officer, Nick Colangelo; our Chief Scientific Officer, Dr. Ronnda Bartel; and our Chief Business Officer, Dan Orlando. We are also pleased to have a special guest speaker with us Dr. Nabil Dib, a world-renowned interventional cardiologist and Director of Cardiovascular Research at Mercy Gilbert and Chandler Medical Centers in Phoenix, who will discuss his participation in Aastrom's Phase IIb ixCELL-DCM clinical trial. Following our prepared remarks, we will open the call to your questions. I will now turn the call over to Nick.

Dominick C. Colangelo

Thank you, Brian, and good afternoon, everyone. Since our fourth quarter conference call in March, we've taken several important actions to advance our company and the development of our lead product candidate, ixmyelocel-T. But first, we implemented an R&D strategy focusing our clinical efforts and resources on our dilated cardiomyopathy or DCM orphan disease program, which we believe provides a streamlined path to commercialization for ixmyelocel-T and represents a substantial commercial opportunity for Aastrom. Second, we enrolled and treated the first patients in the ixCELL-DCM study, which is now well underway at a number of U.S. clinical sites. The objective of this study is to evaluate the efficacy and safety of ixmyelocel-T in the treatment of patients with advanced heart failure due to ischemic DCM. Dr. Dib will share his perspective on the urgent medical need for these heart failure patients and the potential use of ixmyelocel-T in this indication in a few minutes. Third, we filed an S-1 registration statement to sell $25 million of common stock in a fully marketed follow-on offering to support the Phase IIb DCM clinical program and other corporate activities. We believe that this is the most appropriate structure in timing for the financing, as a successful offering will provide a capital required to complete the ixCELL-DCM study and obtain the data supported -- to support advancing the program into Phase III clinical testing. In focusing on the development of ixmyelocel-T to treat advanced heart failure due to ischemic DCM, we're targeting an area of major unmet medical need in a highly compelling commercial opportunity for ixmyelocel-T. Heart failure remains a leading global health issue. Approximately 5.5 million people in the U.S. suffer from heart failure and there are an estimated 550,000 new cases in the U.S. each year. Medical cost to treat these patients now total more than $25 billion annually and this figure is expected to more than triple over the next 20 years. DCM, which is characterized by weakening of the heart muscle, enlargement of the heart chambers and an inability to sufficiently pump blood throughout the body is the third leading cause of heart failure and the leading cause of heart transplantation. A majority of the advanced heart failure patients, who are refractory to medical therapy, which is more than 0.25 million patients in the United States have DCM and approximately 60% of these cases are of ischemic origin due to atherosclerotic cardiovascular disease. These patients typically have maximized their use of prescription and device therapies and are no longer candidates for further revascularization procedures such as angioplasty and bypass surgery. At this stage of the disease, they have very limited treatment options, including placement of left ventricular assist devices or LVADs and heart transplantation. This is a well-defined patient population at a well-defined point-and-disease progression, which makes these patients optimal candidates for treatment with ixmyelocel-T. There's also a strong preclinical and clinical rationale for developing ixmyelocel-T in this indication. Preclinical results have demonstrated that ixmyelocel-T significantly and reproducibly reduced cardiac tissue damage and had additional cardioprotective effects in relevant disease models. Further, our Phase IIa clinical results demonstrated that ixmyelocel-T was well tolerated in patients with DCM and consistent positive efficacy trends were observed in ischemic DCM patients treated with ixmyelocel-T.

Finally, we believe that the refractory ischemic DCM market represents a significant commercial opportunity for Aastrom for several reasons. In addition to a growing patient population, we have a leading position in this indication and an opportunity to make ixmyelocel-T the first approved product for the treatment of ischemic DCM. We also have a potentially streamlined regulatory pathway based upon ixmyelocel-T's U.S. orphan drug designating for this indication and a strong for pharmacoeconomic rationale to support premium pricing based on the limited availability and high cost of treatment involving LVADs and heart transplantation for these patients.

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