Thank you for standing by and welcome to the Mesoblast Limited 2022 full year financial results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question- and- answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Dr. Silviu Itescu, Chief Executive. Please go ahead.
Thank you very much. Hello, everybody. Welcome to the operational highlights and financial results for the year ended June 30, 2022 for Mesoblast. With me today are our Chief Medical Officer, Dr. Eric Rose, and our interim Chief Financial Officer, Andrew Chaponnel. If we could go straight to slide four, please. This slide is a snapshot of our late-stage clinical pipeline. We have two lead products. Our first generation product is RYONCIL in red, and our next generation product is our immunoselected platform technology, rexlemestrocel-L. Both are stromal cell allogeneic products being developed for distinct indications. RYONCIL is being developed for acute graft-versus-host disease, steroid-refractory, in children, and then to be expanded into adults. It has completed phase 3, and we will talk in great detail about our plans for the resubmission for this product, for this indication.
The second follow-on indication for RYONCIL is an acute respiratory distress syndrome, initially targeting patients with COVID-19 ARDS. The third indication is for inflammatory bowel disease, biologic-refractory Crohn's and ulcerative colitis. rexlemestrocel-L is being developed for local delivery to target inflammation in patients with severe unremitting chronic low back pain due to inflammatory degenerative disc disease. It's currently in phase three development. rexlemestrocel-L is also being developed for inflammatory chronic heart failure in patients with reduced ejection fraction, also in phase three development. If we can go to the next slide, please. Near-term milestones for these two platform technologies are highlighted in this slide. RYONCIL is in line for a BLA resubmission, which we expect to be filed this quarter, for children with steroid-refractory acute graft-versus-host disease.
If accepted, the potential US approval for this product is in Q1, calendar year 2023. Secondly, we're working with Vanderbilt University Medical Center, which coordinates a clinical trial network across 40 sites in the US focused on acute respiratory distress syndrome, to jointly develop a trial protocol, focusing on confirming the previously observed reduction in mortality in COVID-19 patients with ARDS under the age of 65. rexlemestrocel-L has two major upcoming milestones. One is to meet with the FDA in the next quarter under the existing Regenerative Medicine Advanced Therapy designation, RMAT, to discuss with a common mechanism of action in patients with heart failure with reduced ejection fraction, and a potential pathway towards regulatory approval.
With respect to our back pain program, we already have alignment with the FDA on what a pivotal confirmatory study would look like and expect to commence that study by the end of this year in patients with severe unremitting lower back pain due to degenerative disc disease. If we can now move to the financial results. Andrew, could you please take us through the financial results for the period ended June 30th?
Thanks, Silviu. Now turning to slide seven. Total revenue from royalties and milestones increased by 37% to $10.2 million for FY 2022, compared to $7.5 million for FY 2021. Within total revenue, royalties from sales of TEMCELL in Japan by our licensee in FY 2022 were $8.7 million and $9.8 million when adjusted on a constant currency basis. Increases of 21% and 36% respectively versus FY 2021, predominantly due to increased volume of products sold. At June 30, 2022, cash on hand was $60 million, with pro forma cash of $105 million after we raised gross proceeds of $45 million via a private placement in August 2022. We also have up to an additional $40 million available from our existing loan facility, subject to certain milestones.
For the year ended June 30, 2022, net cash usage reported for operating activities was $65.8 million, a reduction of 35% on the comparative period last year. Now, if we turn to slide eight, you can see a chart that details that reduction in our net cash burn. Our quarterly net operating cash burn has been reduced quarter-on-quarter for the last six quarters. We turn now to slide nine, thanks. We can see the P&L result for the year compared to the prior year. Within R&D expenditure, there was a 38% reduction of $20.2 million, predominantly due to reduced spend on clinical trial activities. We continue our steady investment in manufacturing, including production of remestemcel-L inventory to support the potential launch of GVHD.
To date, we have manufactured $28.9 million worth of remestemcel-L inventory in anticipation of launch. This pre-launch inventory will be recognized on the balance sheet if we receive FDA approval. Our finance costs have increased, but I note that interest paid in cash was $6.1 million for FY 2022 and $5.9 million for FY 2021. The increase in our reported finance cost is primarily due to the recognition of a non-cash gain on revaluation of our borrowings in the comparative year due to a reduction in the expected value of future repayments. Now I'll hand the call back to Silviu for the remainder of the presentation.
Thank you, Andrew. If we can move now to slide 11, please, as we start to talk in more detail about our pipeline. Steroid-refractory acute graft-versus-host disease continues to be a devastating disease with a significant unmet need because of its high mortality. The burden of illness continues to be high with about 50% of patients who receive an allogeneic bone marrow transplant developing acute graft-versus-host disease and about 50% of those being non-responsive to steroids. In particular, the more severe forms of steroid-refractory GVHD is associated with mortality rates as high as 90% and significant extended hospital stay costs. The market opportunity, therefore, is substantial.
In particular, we have gained very good insight into how a mesenchymal stromal cell product is likely to be adopted and accepted by the physician community based on the penetration in the Japanese market by TEMCELL, the mesenchymal stromal cell product under license and sold by our partner in Japan, JCR Pharma. We believe that the US market for steroid-refractory, acute GVHD, is likely to be ten times larger than it is in Japan. Given our increased royalties in the last twelve months on products sold in Japan, this provides us very good line of sight for how this product would be adopted if approved in the US. Please go to the next slide, please.
Slide 12 shows the totality of the data that supports the clinical outcomes with remestemcel-L in children with steroid-refractory acute graft-versus-host disease. The product is being evaluated in three different clinical programs. Highlighted in yellow in this table are the outcomes by day 28 response in the first row and by day 100 survival in the second row across each of these three trials. What you see is a very high consistency in survival in patients who received remestemcel-L between 66%-79% across these three programs. In contrast, what you see on the left-hand side is a substantial lower survival in comparative control groups. A placebo group that got a placebo in a randomized controlled trial against remestemcel-L had a 54% survival. The most recent comparative group, the MAGIC cohort, treated with best available therapy, demonstrated a 57% survival.
We're very pleased by these results, and they support the data set that was part of the BLA that went to the FDA. Please go to the next slide, please. More recent data published in Bone Marrow Transplantation last year in a control trial performed by lead investigators at Mount Sinai Hospital in New York showed that when children from our phase 3 program were matched by disease severity with control patients receiving the best available care, the day 28 response levels in those with MAP scores above 0.29, a validated biomarker of high-risk patient population, demonstrated a significant benefit in both day 28 response in remestemcel-L-treated patients on the left, 67% versus 10%.
On the right-hand side, this benefit was also seen more significantly in survival, where we see a 64% versus 10% survival benefit in remestemcel-L-treated patients versus controls. Can we go to the next slide, please.
What is our plan for the BLA resubmission for steroid-refractory graft-versus-host disease? In response to questions raised by the FDA, we have evaluated our potency assays that were in place and that were prospectively analyzed against clinical outcomes at the time of the phase 3 trial. We believe that the key potency assay measuring T-cell activation helps establish a clear relationship between potency and survival based on the phase 3 trial outcomes, and helps establish a clear understanding of the mechanism of action by which remestemcel-L improves GVHD outcomes, in particular survival, since we understand that T-cells are the basis of the disease itself.
Additionally, we've generated data from the expanded access program, EAP275, that followed 241 children over more than 10 years where remestemcel-L was used as salvage therapy. In that program, the existing potency assay targeting T-cells, demonstrating how remestemcel-L targets T-cell activation, has shown that changes in manufacturing, which resulted in enhanced bioactivity of the product, could be predicted by the assay, as could improvements in outcomes, notably survival. These new data will all be part of the BLA that's submitted, resubmitted to the FDA, and we expect to complete that by the end of this quarter.
In addition, during the quarter, we performed a mock inspection, pre-approval inspection of our GMP manufacturing facility in Singapore, and we were pleased with the outcome of that, comprising both on-site and virtual inspections by external auditors since the inspection of the site is one of the outstanding items as part of the BLA resubmission. All of these new data will be provided to the FDA, primarily addressing the CMC outstanding items as requested in the CRL response. The additional new clinical data will form part of the resubmission. If accepted, CBER will consider the adequacy of the totality of the clinical data and the enhancements of our potency assays in the context of the data as part of the resubmission outcomes. Next slide, please.
Now let's move to the next program, which is a follow-on for remestemcel-L, the use of remestemcel-L as an anti-inflammatory agent for acute respiratory distress syndrome due to COVID-19. We've completed the first study in about 220 patients, where the strong signal of efficacy was observed in an exploratory subset of patients who were on dexamethasone and were under the age of 65. As you can see here on the left-hand side is a survival curve in these 73 patients. You can see a hazard ratio of 0.23 in terms of a significant reduction in mortality through 90 days.
You can see on the right-hand side that in terms of secondary endpoints of improved respiratory function, significantly was seen through day 14, 21, and day 30 in those who received remestemcel-L in combination with dexamethasone. On the basis of these data, we've entered into a memorandum of understanding with Vanderbilt University Medical Center. Next slide, please. A coordinating body working together with 40 sites across the United States that focuses on studying ARDS and other critical illnesses.
We will be working with Vanderbilt over the next few months to establish and design a collaborative study focusing on the younger patients at high risk of mortality to develop a protocol that we would then take to the FDA for their review and agreement to move forward into a pivotal trial design that potentially could support an emergency use authorization. Let's move on to slide 17, please. Now, looking at our second technology platform, rexlemestrocel-L, immunoselective cells developing allogeneic therapeutics for direct injection into sites of severe inflammation. Here we are focusing on chronic low back pain due to degenerative disc disease. This is an extremely high unmet need that affects over 1 million people across the US and similar number across the EU5.
We're talking about patients who have anatomic abnormalities with progressive degeneration of the disc, and these are oftentimes people in their forties and fifties, fairly young people whose quality of life is severely affected. As a result of the degeneration of the disc, there's substantial secondary inflammation. It's that inflammation that results in severe pain, unremitting pain and that is not responsive to typical conservative measures, including non-steroidal drugs. Ultimately, it's the number one cause for prescription opioid usage. 50% of opioid prescriptions are for chronic low back pain due to degenerative disc disease. We all understand the complications of chronic opioid use, including overdosing, et cetera. This is a major area of focus for us, for government, for reimbursement agencies, ultimately for FDA.
Next slide, please. This slide 18 shows the patient treatment journey as exists today, for patients with chronic low back pain from degenerative disc disease, and where we think rexlemestrocel-L could actually fit and make a difference. As you can see here, after conservative treatments, really it's opioid analgesics that are the most widely used. Moving on from that is interventional therapies, including epidural steroid injections that are off-label, not approved for this indication. A variety of interventions such as spinal cord stimulation and radiofrequency ablation. Ultimately, a few percent of these patients are going to have surgery that requires spinal fusion or disc replacement.
Really what the objective here is to intervene as early as possible, within months to a year or so after conservative treatments have failed and before people require opioid analgesics or other interventions. In fact, if we go to slide number 19, that's exactly where we saw the maximal treatment benefit in our recently completed phase 3 trial. This is a snapshot of the subgroup of patients who were treated within the first five years of pain and, which was the median duration of patients in this study. While we achieved a reduction in pain, significant reduction in pain in all 400 patients in the phase 3 trial, the greatest reduction in pain was seen in those who were treated within the first five years.
You can see here, the outcomes by mean change in pain over up to 36 months. In green, the placebo group. In blue, those patients who were treated with cells alone. In red, those patients who were treated with cells plus hyaluronic acid. In an earlier phase 2 study, we demonstrated that hyaluronic acid by itself did not have properties that by itself improved pain over and above placebo. However, in combination, our cells with the carrier HA seem to have a synergistic benefit, and there's a scientific rationale for why that's the case and why in fact the two were used together in our phase 3 program.
What you can see is that when cells with the HA carrier were used, we see roughly approximately a 20-point improvement as early as 12 months, relative to controls in green. These slides show mean change in pain with 95% confidence intervals around them. Highly significant reductions in pain at 12 months, 18 months, 24 months and 36 months at every time point studied between cells with HA versus saline injection into the disc. Just to put into context, the use of opioids gives you roughly a reduction in pain that is similar to what we see in this study with the saline placebo control.
The 20-point or more improvement in pain on a VAS score from where o f zero to 100, where the entry point was an average of about 70, represents quite a stunning improvement in pain that is clearly durable from a single intervention of our cells. This will form the patient population that will be studied in a confirmatory study that we expect to commence by the end of this year. If we go to the next slide, please. This slide is a snapshot of market access and pricing insights of various agents that are used in the U.S. for back pain. On the left-hand side, you see the sort of range of various nonsteroidal anti-inflammatory drugs or opioids.
What you see on the right is this significant increase in pricing and reimbursement for biologic agents, including anti-TNF agents that are used in some inflammatory disease patients with back pain. These are guides to where we see the commercial opportunity, and we believe that our product should achieve in the upcoming trials significant reduction in pain and in secondary endpoint of function will obviously feed into this paradigm. If we can go to the next slide, please. We're preparing now for the next phase 3 trial in chronic low back pain. We have alignment with the FDA's OTAT office on the primary endpoint, which is what I just showed you, mean pain reduction over 12 months.
With secondary endpoints showing improvement in function and quality of life measures as well as potential reduction in opioid use, because we've demonstrated that to be the case in the previous trial. It will be an important objective to show a durable reduction in pain and position rexlemestrocel-L as a potential opioid-sparing agent. In addition, because of our partnership within Europe, we have an agreement to include at least 20% of the subjects in this trial to be enrolled in the EU to support submissions, not just to the FDA, but to support submissions for approval to EMA. Active discussions are now ongoing with our key investigators and advisors in order to complete the final protocol design and submit for clearance by the FDA.
Moving along to slide 22 is our final major program, chronic heart failure, in patients with low ejection fraction. This continues to be a major cause of mortality in Western countries. More than 6.5 million people suffer in the US with chronic heart failure. Mortality approaches 50% at five years, and mortality from heart failure with low ejection fraction in particular remains a major problem that existing and new drugs have not addressed adequately. There are a number of new drugs that have been approved. They're predominantly volume-reducing agents, and they impact symptomatic heart failure, shortness of breath, and hospitalizations from volume overload and shortness of breath, but do not have a major impact on the major adverse cardiac events of cardiovascular mortality, heart attacks or strokes.
That's where we think that rexlemestrocel-L has a unique opportunity to create its own space. Next slide, please. This is the patient treatment journey today for chronic heart failure, and where we think that rexlemestrocel-L can make an impact. As you can see, in early-stage disease on the left, Class one, Class two, a variety of pharmacologic drugs are used to improve symptomatic heart failure. Newer drugs, including the Entresto drug and including SGLT2 inhibitors, are now approved for Class two-three patients, again, for symptomatic improvement, predominantly reducing volume-related symptoms. However, we think that our product rexlemestrocel-L, as a single intervention, can be used in combination with any of these agents in patients with Class two, three, or Class four disease, even in patients on LVADs, for which we've got an RMAT designation.
Because the general mechanism of action of our cells is to increase left ventricular systolic function, which then has an impact on longer-term major cardiac event outcomes. Next slide, please. Slide 24. Recently, we announced that in fact from the phase 3 trial of 560 patients, that so-called DREAM-HF trial, we observed that in all treated patients, 537 patients, a single injection of rexlemestrocel-L resulted in a 52% greater increase in systolic functional recovery as measured by ejection fraction from baseline to 12 months compared with controls. In absolute terms, we saw a 5-point improvement in ejection fraction versus 3.3-point improvement in controls when they both started at roughly similar numbers of 28.7 and 28.6.
Even more strikingly, the entire treatment benefit was in patients with evidence of inflammation at baseline as measured by positive CRP levels. In the 301 patients who had elevated CRP levels, we saw an 86% greater increase in ejection fraction at 12 months from a rexlemestrocel-L injection compared with controlled saline. Here we see that the absolute change was 5.6 points at 12 months versus 2.9 for the controls, which was very meaningful, we think, biologically. In fact, in following up patients long term, these changes in ejection fraction early are highly predictive of reduction in long-term MACE events, as you can see in the next slide 25.
On the left-hand side, we look at all treated patients, 537 patients, and we see that the rexlemestrocel-L group showed a 33% reduction over a mean three-year per-period of follow-up in the 3-point MACE of cardiovascular death, non-fatal MI, and non-fatal stroke versus controls. If you really look at the figure on the right, that benefit is amplified in patients with baseline inflammation as measured by CRP levels above two. Here you can see that in this group of patients, rexlemestrocel-L reduced the 3-point MACE event outcome by 45% over a three-year period of follow-up. Conclusion is that early improvement in systolic function as measured by ejection fraction is highly predictive of subsequent reduction in MACE outcomes.
Mechanistically, that, the two make very much sense because if you can reduce the inflammation in the myocardium in heart failure patients early, you protect the heart muscle cells, you improve their perfusion, you prevent their death, you improve systolic function, and all of those should have a major impact on long-term major cardiac events, including cardiovascular death. If we move to the final slide, these are our major clinical and regulatory milestones for the next 12 months, and they're substantial. For remestemcel-L, as I've mentioned earlier, FDA filing for the BLA, for the resubmission of our BLA, is expected this quarter. It's a major event for the company. If accepted, FDA approval is, would be planned 6 months after filing with a potential launch in Q1 of calendar year 2023.
In addition to that, we're working with Vanderbilt University to build a trial protocol that would go to the FDA to confirm the previously observed reduction in mortality in COVID-19 ARDS patients. Finally, with rexlemestrocel-L, we're particularly excited about the commencement of a pivotal trial in back pain to reduce pain with a 12-month primary endpoint. For our upcoming proposed meeting with the FDA to discuss under the RMAT designation, a common mechanism of action in patients with inflammatory heart failure, both class two, three, and four with LVADs and the potential pathway towards approval. I'll leave it at that. Thank you very much, and we're open to questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you're using a speakerphone, please pick up the handset to ask your question. The first question today comes from Louise Chen from Cantor Fitzgerald. Please go ahead.
Hi, team. This is Wayne Rothbaum for Louise. Congrats on the progress this quarter, and thank you for taking our questions. We would like to ask, what are the current survival outcomes in acute GVHD, and how does Mesoblast view the unmet need? Thank you.
Thank you very much. That's a very, very important question. I think it's clear to see in various publications that over the past two decades survival outcomes in steroid-refractory acute GVHD have not materially changed. That's despite many different approaches therapeutically, prophylactically. Once you don't respond to steroids, the likelihood of death from steroid-refractory disease is very high. In particular, in the most severe patients, those with grade C or D disease or more recently, patients with a new validated biomarker, the so-called MAGIC score above 0.29, which appears to be more sensitive to predicting disease severity than those grading by clinical scores. Those kind of thresholds are highly predictive of severe mortality.
The patients with severe disease have survivals that are very dismal in the order of about 20%, despite all the various therapeutic approaches that have been tried. In particular, the only drug that's been approved to date for GVHD is ruxolitinib, and it was approved on the basis of a single open-arm study when it subsequently did a randomized controlled trial, as it was required to do it in a post-approval commitment. There was no survival benefit in steroid-refractory GVHD disease. The unmet need continues to be there, particularly for the more severe cases with GVHD. We have shown high survival rates across multiple studies of remestemcel-L in children.
We have more recently, or our collaborators, independent investigators published a significant survival benefit with remestemcel-L in children with the highest risk for mortality, where survival in controls was of the order of 10%, and survival in remestemcel-L treated children was of the order of 64%. I think what we're seeing here now is the ability of a very potent immunomodulatory therapeutic remestemcel-L to impact on survival outcomes in those children who have the greatest levels of inflammation and the greatest risk for mortality. The unmet need continues to be in children, absolutely, because there are no drugs approved in children under twelve at all for this devastating disease.
In adults with high degrees of inflammation, such as with high MAP scores and continued high mortality, we think is the obvious place where remestemcel-L would be a potential treatment of choice.
Thank you. That's very helpful. Thank you.
Thank you once again. To ask a question, please press star one on your phone. The next question comes from Jason McCarthy from Maxim Group. Please go ahead.
Hey, guys. Thank you for taking the question. This is Michael Okunewitch on the line for Jason. I guess for my first question, I'd like to ask a bit about the strategy in heart failure, because you do have late-stage data in two populations, the advanced and the LVAD patients. Could you kind of highlight how you're looking at the strategy for each population? And then what are the possible outcomes we could expect from your upcoming interactions with the regulators?
Yeah, Look, I think it's. You don't want to be anticipating outcomes from upcoming FDA meetings until you've had them. You need to have those discussions in a fulsome way. What has become quite evident to us is that a continuum of heart failure from class two through class four and even on LVAD, the common thread is degree of inflammation in the myocardium and the ability of rexlemestrocel-L to respond to that inflammation by turning off the inflammatory stimulus and improving left ventricular systolic function. You can measure systolic function several ways. You can measure it by ejection fraction when you've got earlier stage disease.
You can measure it by the ability to come off a left ventricular assist device, so-called weaning, in patients who are dependent on a ventricular assist device. I think that the message is that in the setting of inflammation, rexlemestrocel-L improves left ventricular systolic function. Depending on the target population, the longer-term outcomes, the clinical outcomes that are a consequence of poor left ventricular function are different and are impacted. In the class two, three population, the improvement in systolic function at 12 months is associated with long-term reduction in MACE events, cardiovascular death, heart attacks, strokes. In the LVAD population, the ability to improve systolic function is associated with other outcomes, including GI bleeding, including hospitalizations, et cetera.
I think the way to look at this is an underlying mechanism that is consistently seen with rexlemestrocel-L in the setting of inflammation, and how to think about its potential use and approval in these particularly high-risk patient populations. That's really the basis of the discussions with the agency.
All right. Thank you. That was very helpful. I'd like to follow up and just ask a little bit about the chronic low back pain program, and in particular, at what stage or time point following failure to manage on conservative management are you looking for rexlemestrocel-L to fit in? If I recall, surgery is generally considered within as little as six months. Would this be a similar timeframe, given that patients qualifying for surgery, and as we learned [audio distortion] , their physicians may be particularly open to a cell therapy as an alternative for these patients?
Yeah. I wouldn't look at this as an alternative to surgery. I mean, the patients who are presenting with severe pain to the pain physicians don't necessarily have a surgical lesion that's amenable to fusion or disc replacement, which is really the surgery that we're talking about. I mean, we're not talking about discectomy, which are used for nerve root compression. We're talking about patients who don't have nerve root compression, that have early stage radiographic degeneration, but have severe pain as a result of the inflammation that occurs there. Those patients will go on for years, really, with opioids and other approaches before they seek surgery. We're looking at patients early as opposed to late.
Your point is right, however, the sooner that they present with a diagnosis of discogenic back pain, the sooner they should get an injection of our cells. It's clear that the earlier the intervention, the more likely it is for the cells to have an effect in terms of turning off the inflammatory cascade and resulting in a durable long-term reduction in pain, for as long as at least three years, is what we've seen. We will focus on an outreach that accesses patients as early as possible after a diagnosis is made, so they're not suffering, they're not taking opioids, they're not focused on other interventions. Therefore, we should be very early in the patient journey.
All right. Thank you. I appreciate you answering my questions.
Thank you. The next question comes from Edward Tenthoff from Piper Sandler. Please go ahead.
Great. Thank you so much for taking my question, and it really looks like a pretty exciting period coming up for the company. Besides, I just wanted to ask sort of how partnering fits into your go-forward strategy. I know you guys have been successful in the past, and these are, you know, major blockbuster indications. Just to kind of articulate, what is sort of the priority to keep, and where do you think maybe a partnership may best help maximize the value either around remestemcel-L or rexlemestrocel-L? Thanks.
Yeah. Those are both complex questions. I think with respect to remestemcel-L, we see the value driver for this company as having a first product approved and launched.
Yeah. [crosstalk]
In the U.S. market. We're anticipating doing that ourselves. We've got a strong commercial team. Our COO is heading the commercial launch plans, building a targeted sales force, stage-gated investment in sales, marketing, and distribution network. I think a first product approval with getting through the regulatory framework as a first allogeneic cell therapy will be seen as a huge benchmark.
Agreed.
The reimbursement for that product, we think will be similar to some of the CAR T products that are already out there, given similar target patient populations. I think it makes a lot of sense for us to focus on the first product delivery to commercialization on our own. There's potential, obviously, to unlock great value in that product in multiple additional indications, including ARDS, including other inflammatory conditions, both in children and adults. I think post-approval, we will be focusing on strategic partnerships for that product, in various indications on a perhaps an indication by indication basis in areas that we would not have the commercialization channels available to us at this point in time.
With respect to, I think rexlemestrocel-L, which is currently in late-stage phase 3 development, similar kind of considerations exist in that the market potential in blockbuster areas like inflammatory back pain or inflammatory heart failure are so large they will require commercial distribution channels that partners can bring to the table that we wouldn't want to be in a position to invest in at this point in time. The question is more of timing rather than it's more of timing is really the issue. We have alternative opportunities in front of us in terms of access to capital to complete some of these studies that may not require strategic partners to be involved with until approval is close at hand.
I think the strategies for commercial partnerships in late stage are a little bit different than the way we would look at things if we were earlier in phase 1 or phase 2, for example. They're different for an approved product, which has a follow-on series of indications, than for a product that is about to complete a pivotal phase 3. Does that make sense?
It makes a lot of sense. Thank you very much, Silviu.
Thanks.
Thank you. At this time, we're showing no further questions. I'll hand the conference back to Dr. Silviu Itescu for any closing remarks.
Look, before we close, I'd like Dr. Rose to give his view on the exciting prospects in front of us with products like rexlemestrocel-L for back pain. Eric, would you like to just give your view on how you see that as a potential value driver for the company beyond our GVHD asset?
Sure. Obviously it's a point of entry into a very large marketplace. We think the data that are there in randomized trials already show a very substantial benefit to patients with pain duration relief, duration of relief that is years as opposed to months, which is all that's been achieved with previous pain medicines, using the standard for FDA trials that has been pursued for pain in general and back pain due to herniated discs in particular. Let me go back, though, to GVHD. To say that we're not excited about this would be the understatement, I think, of the century. We are very excited about GVHD because one, it's a lethal disease.
Two, the quality adjusted life years that can be added to the life of the beneficiary of our therapy is substantial. Three, the market has shown it's even orphan drugs in this space command considerable value in the marketplace. There are drugs that have been approved recently without randomized trials in general for these indications, for the indication of chronic GVHD, which is essentially an extension of acute GVHD, with now two companies, I believe that have achieved more than millions, billion-dollar valuations, with that indication. We think we're gonna be right in that range, as a company in terms of our value and in terms of the benefit that we provide to patients. This is a whole new class of therapeutics.
There is no off-the-shelf stem cell or any cell product as far as I know, aside from blood transfusions, that's approved by the FDA for therapeutic use. The company stands at the precipice of a breakthrough in this regard for a class of therapeutics that I think will have wide usage in multiple diseases. We believe it will be appropriately valued for that as well once GVHD is hopefully approved. Let me stop there.
All right. That's very insightful. Thanks, Eric. Really appreciate those comments.
Sure.
Look, on that note, I wanna thank everybody for participating on today's call. We're very excited. I think this is gonna be a transformative year for the company, and we look forward to updating everybody in short order on our upcoming milestones. Thank you, everybody.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.