Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Athersys third quarter business update conference call. All lines have been placed on mute to prevent any background noise. Should you require any assistance during the call, please press star zero and an operator will come on the line to assist you. It is now my pleasure to turn today's call over to Ellen Gurley, Corporate Communications and Investor Relations Manager. Please go ahead.
Good afternoon and welcome to Athersys Q3 business update conference call. Please note that any remarks that management may make about future expectations, plans and process constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements as a result of various factors, including those discussed in our Forms 10-Q, 10-K and other SEC filings. We anticipate that subsequent events and developments may cause our outlook to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Athersys' press releases and SEC filings.
Also, this conference call contains time-sensitive information that is accurate only as of the date of the last broadcast, today, October 6th, 2022 . Athersys undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. With that, I would like to turn the call over to Dan Camardo, Chief Executive Officer of Athersys. Dan, please go ahead.
Thank you, Ellen, and welcome everyone to Athersys' Q3 2022 business update conference call. As I outlined during our second quarter conference call in August, with our new management team in place, Athersys is more lean, agile and focused. We are clear on the roadmap to success and we're making sound thoughtful decisions to get there. Through transparent communication with our shareholders, we believe our success will be rewarded by implementing a new level of accountability. We've scheduled today's call as an interim checkpoint in our transformation as so much has been recently accomplished. With me today to discuss these accomplishments are Maia Hansen, our Chief Operating Officer, Dr. Robert Willie Mays, our Executive Vice President of Regenerative Medicine and Head of Neuroscience, and Kasey Rosado, our interim Chief Financial Officer.
As many of you know, our recent focus has been on reducing operating expenses, reprioritizing our clinical programs around MASTERS-2, and accelerating our financing and business development efforts. Today's speakers will briefly touch on each of these topics. As you can imagine, the past three months have been very challenging. We've made difficult and timely decisions to completely transform our organization while at the same time maintain focus on advancing our MASTERS-2 trial. We've thoughtfully discontinued activities and expenses not aligned to our core priorities of supporting MASTERS-2 and pursuing new partnerships. In many ways, we are a new company, better positioned to realize the full potential of MultiStem as a platform, and our confidence in the science behind MultiStem is even stronger than before with the recent TREASURE data.
Beyond ischemic stroke, we're confident that MultiStem has potential in treating other difficult inflammatory diseases, but we are not going to make the required clinical development investment alone. This is the reason why we asked Dr. Mays and Dr. Sarah Bush to host a webinar in August to highlight the significant pre-clinical research that's been completed demonstrating the effect that MultiStem could have on a broad range of inflammatory and immune-related diseases. A significant portion of this pre-clinical research was highlighted in various scientific publications, but was never offered or pursued from a business development perspective. This approach is a major difference in our business strategy, and we're excited about the untapped potential that exists based on the extensive research we've completed.
We've gone to great lengths and made significant investments over time to understand how our cells work, why they are unique, and how they can be optimally manufactured at scale. This is why we are so confident in MultiStem as a platform and why we feel the MAPC technology is unique in the cell therapy space, and we aim to realize the full value of this asset and achieve our goal of bringing MultiStem to market. To be clear, we still have a lot of work to do and we expect to be held accountable for executing on our more focused business plan. Our goal for today's call is to highlight the work we've completed in just a few short months to transform our organization and put us on a path to success.
I will now turn the call over to Maia Hansen, who will cover operational improvements we've made recently. Maia.
Thanks, Dan. Over the past few months, we've prioritized and significantly streamlined our organization and operations in a way that extends our cash runway through the end of this year and sets us up as a highly efficient and nimble organization for 2023 and beyond. We are being judicious in pursuing cost-cutting initiatives, which sometimes includes making difficult but prudent decisions which are designed to achieve three critical goals.
One, focus activities specifically on what will be needed to ensure successful trials, approval, and commercialization of MultiStem. Two, extend the cash runway to pursue these activities. Three, make Athersys more attractive to both strategic partners and financial investors. So far, we have reduced monthly expenses from approximately $7 million down to approximately $3 million, with a clear path to $2.5 million per month by the end of this year. We achieved this substantial cost reduction by putting into effect four primary mechanisms. We reduced headcount by 80% and concentrated our current workforce around clinical priorities and business development, with an emphasis on goal-oriented execution. We streamlined our network of vendors and partners by more than 100 relationships while restructuring and renegotiating with key vendors such as contract research.
We prioritized product development and R&D activities to support the efforts that are most critical now, making us more attractive to both financial and strategic investors. We are reducing the infrastructure of equipment and real estate required to support our objectives. As an example, we are actively working with a commercial real estate broker to sublet or find alternative options for our 214,000 sq ft Stow facility, which can be used as a distribution center for laboratories or manufacturing. By securing a transaction, we can significantly reduce or eliminate manufacturing-related costs and consolidate our real estate footprint. I will now go into more depth on a few of the more strategic operational challenges that we have been focused on. Our execution on MASTERS-2 is a very high priority.
One important effort that we have been working on is to ensure an optimal network of high-performing sites. To accomplish this, we are closing sites that had meaningful and unresolvable barriers to enrollment and opening new sites with the conditions in place for success. We found that staffing availability, cell lab collaboration, and staff training, among other challenges, impeded enrollment at some clinical trial sites. By increasing our engagement with the sites, we can now better address enrollment barriers and better allocate Athersys resources in order to best meet our internal timelines for enrollment. We currently have approximately 40 clinical sites. We plan to add another 10 by the end of the year, and we will close about the same number. This optimized network of 40 sites will cover 4 continents, including countries such as Taiwan, Australia, the U.K., Spain, and the U.S.
In addition, we are happy to announce our contract manufacturer has completed production of all investigational product necessary to complete MASTERS-2 under the current clinical protocol. We have a strong working relationship with our CDMO, and they've been a great partner in working with us through the current challenges. We've arranged for a modest payment in September to secure doses and allow for uninterrupted support of patient enrollment in the trial and consistent access to product. With additional supply coming from the new 3D bioreactor process in hand, we're also significantly more agile and able to redirect strategically to best support opportunities to advance existing clinical trials, such as our MATRICS-1 study in trauma, in addition to pursuing other trials with partners.
In addition to our healthy inventory of investigational product, we have also been working closely with all vendors along the supply chain to improve how we resupply sites. This includes the logistics suppliers who play a critical role in managing the ultra-cold supply chain required for cell therapy. Finally, as we look toward commercialization in the future, we have made significant progress in several important building blocks, including working closely with the CDMO that produces our master and working cell banks and the regulators to review and approve these banks. The master and working cell banks serve an important function in that from one donor, we're able to create the foundation for expanding the cells into thousands of final doses. We have also gained approval from the regulators to produce our own reference material to support assays and quality control.
In another area, in September, we started winding down ReGenesys, our animal health-focused team based in Belgium, and notified them of the facility's closure by the end of the year. We are still actively exploring potential business development partners for this program, but in the meantime, we have been able to save on operational expenses and better focus our development work. For example, we've sold equipment and identified another company to take over the lease for half of the facility. In another important area, Athersys has a wealth of intellectual property protecting our innovative therapies. As we review our patent portfolio, we're identifying potential licensing opportunities and evaluating time horizons to ensure we get the most value from our investments. These actions can lead to significant savings while still protecting our innovative work. We have made substantial progress in evaluating and reprioritizing our extensive patent portfolio.
We have approximately 400 granted patents and over 100 in prosecution. The strength of our core MultiStem patent and surrounding patents at approximately 170 filed or granted protects us for decades to come. We view the strength of our portfolio as instrumental to future partnership endeavors. Having an up-to-date assessment of our portfolio is a critical component of describing and reinforcing the strength of our competitive edge. In summary, we have made significant changes throughout Athersys and operationally across all divisions to support the three goals I mentioned earlier, which are one, focusing activities on what will be needed to ensure successful trials, approval, and commercialization of MultiStem. Two, extending our cash runway. And three, making Athersys more attractive to both strategic partners and financial investors. With that, I'll turn the call over to Dr. Willie Mays to review our clinical pipeline progress. Willie?
Thank you, Maia, and good afternoon, everyone. I'll give a brief overview of our clinical programs and provide a status report on our ongoing trials and preclinical thinking. Regarding MASTERS-2, we're proud to announce that we've significantly improved our rate of patient enrollment in our MASTERS-2 stroke trial. This is in part due to more effective site management that Maia described, as well as increased confidence by the clinicians in the effectiveness of the MultiStem product based on the stroke community's favorable interpretations of the TREASURE trial results released in May. Since the release of the TREASURE trial results, our rate of enrollment has more than tripled from prior years. This is a significant improvement, and I want to emphasize this point as it stands in stark contrast to the perception that some investors have regarding the results of the TREASURE trial.
We've also been more actively engaging our clinical sites through in-person visits and presenting at neurology grand rounds with at least five more engagements scheduled at our MASTERS-2 clinical sites in the fourth quarter. These clinical site visits also consist of meeting new stroke neurology residents and clinical fellows, and having discussions and updating principal investigators on clinical data generated in the TREASURE trial, and discussing observations and updates from other clinical sites participating in the MASTERS-2 trial. We look forward to providing additional updates on enrollment progress throughout the rest of this year and into 2023. When it comes to MASTERS-2 trial design changes, we conducted analyses of results from the MASTERS-1 and TREASURE studies to generate statistical models and then align the insights from these modelings to the MASTERS-2 trial design.
We are evaluating all aspects of the MASTERS-2 trial design to enhance the prospect of a successful outcome. Later in this fourth quarter, we will be holding a meeting with key opinion leaders and clinical industry experts to review the data and the modeling results and determine if any protocol changes should be made. Once we receive input from these experts, we will consult with the FDA and EMA on any potential recommendations to modify the MASTERS-2 trial design. At this time, we expect Healios to participate in this fourth quarter KOL panel, as this information will likely inform their path forward for pursuing stroke approval in Japan. Healios will be presenting the complete TREASURE data set at the World Stroke Congress in Singapore in late October, and we look forward to their presentation and further collaboration with them.
The MATRICS-1 trauma trial is actively enrolling, evaluating MultiStem in treating patients following resuscitation from a hemorrhagic trauma. The trial, of course, is named MATRICS. It's in phase two at The University of Texas Health Science Center at Houston and Memorial Hermann Hospital, which is the leading level one trauma center in the United States. This trial is funded from an MTEC grant with additional funding from Memorial Hermann, enabling the conduct of this trial to proceed at minimal costs to Athersys. The first cohort has been completed, and we previously announced that, and cohort two is actively enrolling patients at this time. Notably, cohort two patients are being dosed with cells manufactured under the new 3D manufacturing process, marking the first patients anywhere to receive cells generated under this protocol.
This will provide us with safety data for 3D-treated patients and also comparability data with the patients treated with the traditional 2D product from cohort one. We expect enrollment in cohort two to be completed by the end of calendar year 2022. Finally, I just wanted to discuss the recent preclinical webinar and the R&D awareness that we've been trying to manifest in the investment community. We recently held a webinar directed at potential prospective MultiStem partners, highlighting some of the preclinical programs and translational opportunities for utilizing the MultiStem product. We continue to identify partners that may be interested in co-development opportunity in these indications as well as others. I remain confident in the depth of the preclinical work that has been conducted across these disease indications and expect this work will provide new opportunities for Athersys.
The willingness to partner on these early-stage indications was never the focus of our corporate business model until now. As we open dialogue with potential partners, we're excited about where this could lead from a business development standpoint.
We look forward to continuing discussions and showcasing MultiStem's clinical potential. Next week, I will be presenting at the Alliance for Regenerative Medicine Cell & Gene Meeting on the Mesa. We intend to share highlights from the conference and potential partnering discussions during our third quarter earnings call. With that, I'd like to turn the call over to Kasey Rosado to discuss our financial outlook. Kasey?
Thank you, Willie. Let me start by highlighting the steps we have recently undertaken to strengthen our financial operations as part of our overall restructuring effort. Since I joined Athersys in early August, we've strengthened our internal capabilities to improve operational budgeting, enhance cash flow management, streamline cross-functional reporting, and stabilize vendor relationships. Through these efforts, we have gained greater understanding and control of our finances, and have positioned the organization to capture both short-term and long-term cost savings. In tandem with our reorganizational efforts, we completed a financing transaction, providing the company with immediate liquidity and financial flexibility. In mid-August, we raised approximately $12 million in gross proceeds with a large institutional investor that has expressed support for our business direction and the long-term value of MultiStem. Given other financing options and current market dynamics, that initial agreement provided immediate liquidity with attractive terms.
The recently announced amendment to the securities purchase agreement provides the company with more flexibility, making both the standstill period and the future participation rights more favorable for the company, while committing the investor to participate in future financing if requested by the company, in exchange for issuing the investor an additional 2 million warrants with an exercise price at the original deal price of $6.38 per share. The goal of conducting this financing was to help address the immediate cash need. While we still require additional liquidity, we are taking a measured approach to raising capital to complete the MASTERS-2 trial and achieve our other business and strategic objectives. We are evaluating additional opportunities for thoughtful equity-driven approaches in parallel with our pursuit of non-dilutive options.
As part of stabilizing our financial position, we are grateful to have received shareholder support to implement a reverse stock split in order to satisfy Nasdaq continued listing requirements. As such, on August twenty-ninth, we implemented a 1-for-25 reverse stock split, which was necessary to ensure that our common stock will continue to be listed on Nasdaq. Additionally, we are pleased that our relationship with our partner, Healios, is going very well. We recently received a payment from Healios of $1.9 million, which was the net milestone payment of $3 million, less a refund of $1.1 million that Athersys owed Healios from prior activities.
Before I turn it over to Dan, I would like to highlight that since joining the company in early August, my approach has been to take an objective and comprehensive view of our financing strategy of meeting short-term needs and accomplishing the key initiatives that will support our long-term success. By applying best practices, a disciplined budget, and improved transparency, we are elevating our organization and being more accountable to all of our stakeholders. With that, I'll turn it back to you, Dan.
Thank you, Kasey, and thank you, Willie and Maia, for expanding on each pillar of our recent progress in repositioning Athersys to best capitalize on the tremendous potential we have with MultiStem. As you've heard, we've made significant progress in turning Athersys around, streamlining operations, and putting the organization on a more solid path for success. While I'm proud of the work we've completed over the last three months, we fully understand and accept that there remains much more to do, and that will fall heavily on business development. As I mentioned, we're taking an expanded approach to business development to explore all potential indications and ways of partnering beyond a commercial license for stroke for a single region. We are continuing to seek strategic partnership opportunities that maximize shareholder value through advancing our MultiStem platform while offering the potential to provide non-dilutive funding.
These include seeking a global partner for stroke, as well as co-development partners for all of our preclinical and early-stage indications and our animal health assets. In addition, we are actively seeking partners to license our proprietary patented SIFU technology, which is a cryogenic storage and thawing device that we believe has the potential to significantly improve the storage and handling of cell and gene therapies in the last mile to the patient. Our efforts are resulting in multiple conversations with new potential partners, and although it's too early to announce anything, I'm encouraged by the conversations we're having and expect that we'll be able to realize MultiStem's broader therapeutic potential based on the significant work that's already been completed by our preclinical research team.
Before we answer a few questions, I just wanted to sum things up and again reiterate that we've made significant progress in transforming our business, addressing non-critical activities and expenses, appropriately rightsizing our operating budget, and creating a leaner and more focused organization. Our priorities are clear. Number one is to continue advancing MASTERS-2. Number two is to accelerate our business development activities, and number three is to strengthen our balance sheet. We'll continue to be transparent and provide timely updates as we make progress on each of these priorities. I'm now gonna answer several questions that we received via email. One of the first questions that I wanted to cover is asking us to provide an update on Healios' status with ARDS and TREASURE and the discussions with PMDA.
Unfortunately, at this point, we don't have any new information to share regarding conversations between Healios and PMDA, other than to say that conversations are in fact occurring. We continue to work closely with Healios to support their efforts, and as soon as we do have something to communicate, we will be sure to inform everyone. Another question we received was how much cash do you have on hand, and what are your plans for future financing? Now, we can't comment on our cash balance today, but I will say that we've been very prudent with managing our cash, particularly after our recent financing, in order to provide as much runway as possible while we execute on our business development plan. Our approach, which is different than what was done previously, is to utilize financing in a responsible manner, primarily to bridge us to a potential non-dilutive transaction.
Our most recent financing is a good example of how we're thinking about financing differently by identifying a strategic long-term investor that understands our business plan and the sizable opportunity we have with MultiStem. These are the type of investors we're working to attract while we execute on our business development plan. Another question we received is, can you provide more information on the timing of the reverse stock split and the other options you explored? As you might recall, we received a notice of delisting from Nasdaq in mid-March with a deadline date of September fourteenth to trade for 10 consecutive days above $1. We went to great lengths to encourage shareholders to support the reverse stock split so we could bring our share price into a more attractive range and improve our chances of engaging mid to large biopharma companies in business development discussions.
This higher share price range of $4-$5 is also important to engaging institutional investors. Now, following our second quarter earnings statement and subsequent financing, we spoke with Nasdaq about requesting an extension, and it became clear that this was not a preferred option. We considered making a request at risk, but without certainty on the timing of a business deal or other positive news, we decided to implement the reverse stock split in order to satisfy Nasdaq's requirements. Now, I fully understand that our share price has declined since that point, due to no real substantive news, which is what we're working hard to change. Another question we received is, have you had any interest from partners on continuing MACOVIA in ARDS since suspending the trial? The answer is yes.
We are having discussions with interested parties, including participation in a RFI that was recently introduced by BARDA. These talks are in very early stages, so at this point I would say there is a lot more work to do before we'd feel comfortable with any kind of commitment. There is interest based upon how far we had advanced the MACOVIA trial and the significant unmet need that still exists with ARDS. Keep in mind that we have produced a few hundred doses of 3D product that has already been approved for clinical use by the FDA for MACOVIA. At this stage, we're just looking for the right partner to assist with continuing development, further exploring MultiStem treatment in ARDS. We'll continue to keep you updated as we make progress in this area.
Another question we received is, can you provide a timeline to complete enrollment in MASTERS-2 and any changes being considered in the trial design? As Willie mentioned, we have conducted extensive analysis with outside experts using data from MASTERS-1 and TREASURE to better estimate the probability of success with our current MASTERS-2 trial design. We felt this was the responsible approach to take, seeing how we had data from the recently completed TREASURE trial with 206 patients. We intend to share this analysis with key opinion leaders and other industry experts at a roundtable event we're planning in Q4. It's worth noting that Healios has also been working with us on this analysis and is planning to participate in this expert panel event.
I can't go into specific details on the trial design, but rest assured we are looking at all aspects of the design in order to better determine our options to achieve a successful outcome. Any trial adjustments we'd consider would still need to be discussed and approved by both the FDA and EMA. This step is really about utilizing all available data to determine our options, and then would make a decision to consult with regulatory agencies. Until we complete this process, we won't have a clear date of when the MASTERS-2 trial will be completed. We are, however, continuing to enroll patients at an increasing rate, as Willie pointed out earlier. We expect to have a better sense of timing to complete the trial in the first quarter of 2023 after we've held the expert panel and consulted with regulatory agencies.
Now in closing, I'd like to say thank you to all the shareholders who submitted questions and remained patient in our progress as we've gone through our recent transformation. If we were unable to answer specific questions that were sent in, we will follow up with our responses directly over email. Or if the questions are financial in nature, we'll look to cover these questions during our third quarter earnings call. I hope you found this business update informative, and we will continue to keep you apprised of our progress as we execute on our priorities. We look forward to speaking with you again during our third quarter earnings call, which we expect to be held in the first half of November. In the meantime, I wanna thank you and hope you have a nice evening.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.