Ladies and gentlemen, thank you for standing by. My name is Brent. I will be your conference operator today. At this time, I'd like to welcome everyone to the Athersys February Business Update Conference Call. All lines have been placed on mute to prevent any background noise. Should you require any operator assistance, please press star zero on your telephone keypad. An operator will come back on the line to assist you. Thank you. It's now my pleasure to turn today's call over to Ellen Gurley, Corporate Communications and Investor Relations Manager. Please go ahead.
Good morning, welcome to the Athersys February 2023 Business Update Conference Call. Please note that any remarks that management may make about future expectations, plans, and prospects 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.
This conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 14, 2023. 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, welcome everyone to our first business update conference call in 2023. Over the last few months, we've been hard at work focused on our key priorities of advancing MultiStem in our MASTERS-2 ischemic stroke trial, pursuing business development partnerships, and completing a transformation of our business. We've made significant progress in several areas to put Athersys on a path to succeed, we're excited about the year ahead. This morning, we announced the FDA granted us a Type B meeting to discuss proposed modifications to our MASTERS-2 Phase 3 trial in ischemic stroke. We're excited to further engage with the FDA and share relevant data analysis completed using results from the Healios TREASURE trial and our own Phase 2 MASTERS-1 trial, as well as present an update on evolving standard of care for ischemic stroke treatment.
The Type B meeting is scheduled for late March, and we will plan to provide an update on MASTERS-2 trial status and estimated timing to complete enrollment following our discussions with the FDA. I'm very proud of the progress we've made in a relatively short period of time under some challenging circumstances. Make no mistake, I recognize we still have a lot more work to do. As we sit here today, Athersys is a very different company from when I took over one year ago. Every aspect of our business has been reevaluated and thoughtful and decisive actions have been taken to create a more disciplined, focused, transparent, and accountable organization. On this call, we'd like to share with you some of the progress we've made on our key priorities and highlight what's ahead in 2023.
With me on today's call are Maia Hansen, our Chief Operating Officer, Dr. Willie Mays, our Executive Vice President of Regenerative Medicine and Head of Neuroscience, and Kasey Rosado, our Interim Chief Financial Officer. I'd like to start by turning the call over to Dr. Willie Mays to review progress with our clinical programs. Willie?
Thank you, Dan. I'll give a brief update on our clinical programs and provide a status report on the ongoing trials. MASTERS-2 continues to be the clinical focus for Athersys. Last week, I was at the International Stroke Conference in Dallas, Texas, the world's largest and most important gathering of stroke scientists, clinicians, and nurses, to meet with our MASTERS-2 clinical teams to discuss our plans for the MASTERS-2 protocol and hear their input and better understand their opinions about the conduct of the trial. I've been presenting at stroke grand rounds at clinical trial sites across the country over the last six months and see enthusiasm and optimism from our stroke neurologists about the potential of MultiStem, especially when considering the TREASURE data. Our rate of patient enrollment has continued to increase through frequent trial site engagement and operational improvements.
In fact, the last three quarters of enrollment have been at the highest level since the trial began in 2018. Today, MASTERS-2 is more than 50% enrolled. Looking ahead, we are in the process of adding new clinical trial sites, mostly in Europe, which should further accelerate the pace of stroke patient enrollment. As I stated, there is increased confidence among the clinicians and clinical trial teams about the effectiveness of MultiStem based on favorable interpretations of the TREASURE results that were released last May. However, I would like to address a question we've heard regarding the average age of patients in the MASTERS-2 trial. When Athersys initially received and analyzed the top-line TREASURE data, we commented about the older patient population enrolled in this Japanese study and attempted to explain why age may have impacted the results of that trial.
It was suggested that if you focused on the subjects that were more representative of a younger patient population that we expect to see in MASTERS-2, TREASURE data would have achieved significance for its primary endpoint when extrapolated out to 300 total patients, which is the patient number we are enrolling in MASTERS-2. Unfortunately, it isn't quite that simple. After conducting a deeper analysis with the full TREASURE data set, we observed a clear impact of the older patient population on their ability to achieve success using the primary measure of Excellent Outcome, which is a composite score of NIHSS of 0 or 1 and mRS of 0 or 1 and a Barthel Index of greater than 95. In hindsight, this endpoint was a very high bar to achieve, especially when the trial includes older patients, an older patient population.
As an example, if there was a 90-year-old patient in that study who had limited mobility and was already walking with a cane prior to the stroke onset, no matter how efficacious MultiStem was in treating the deficits of the stroke in that patient, that individual would never reach the criteria defining a successful score in Excellent Outcome in the TREASURE study, even if the patient made a complete recovery back to the level of mobility they were living with prior to the onset of the stroke. The MASTERS-2 primary endpoint is not Excellent Outcome. It's about quantifying the shift in modified Rankin Scale, which is a disability scale. As part of the screening protocol in the MASTERS-2 trial, we make sure that enrolled patients have little or no disability before the stroke onset to ensure that any MultiStem-mediated benefit will be observable.
The novel mechanism of benefit through which we believe MultiStem cells provide benefit should not impact mRS shift analysis in the elderly. mRS shift was the primary endpoint in trials that validated the efficacy of tPA and has been used as the primary endpoint in the majority of acute stroke treatment trials over the last 20 years. To be clear, after years of discussions with stroke clinical trial experts, the FDA, along with other regulatory agencies, no one identified ARDS as potential pitfall for the MASTERS-2 trial design. We felt this was an important point to clarify. Now, clinical trial results evaluating MultiStem in ischemic stroke patients, including those from TREASURE and MASTERS-1, suggest cell-mediated efficacy that is comparable to other approved ischemic stroke treatments, such as tPA 90 days after treatment when compared to placebo.
Late last year, we convened a key opinion leaders panel, and following those discussions and additional analyses of the data from MASTERS-1 and TREASURE, we believe there is clear evidence of meaningful clinical benefit for stroke patients at 365 days after MultiStem treatment. This is an exciting and novel observation for acute ischemic stroke therapies. Meaningful long-term improvements in patients' recovery are the cornerstone of our hypothesis about how MultiStem cells may provide benefit. It is what we have observed in multiple preclinical animal models of neurological injury, and it is why we built day 365 endpoints into the original MASTERS-1 trial design. We have confidence in the ability of MultiStem cells to provide continual recovery benefit in stroke patients and eventually other injuries as well.
However, when limited to a 90-day evaluation window, the full potential of the MultiStem cell treatment is likely not fully realized. Earlier this year, a paper in Nature Reviews Neurology authored by Dr. Sean Savitz and Dr. Chuck Cox of UTHealth Houston synthesized results for more than 20 years of animal studies and provide an updated hypothesis regarding how cellular therapies may work to offer therapeutic benefit in a number of neurologic injury models. This review highlights several MultiStem or MAPC-related publications and is consistent with our understanding of MultiStem and why we have an 18-36-hour administration window available in our stroke trial. This review also supports the rationale for why we have seen continued benefit of MultiStem-treated patients over longer periods of time across our two stroke measures when compared to placebo treatment.
In light of this information, along with changes to the standard of care for treatment of ischemic stroke that have evolved since the initiation of the MASTERS-2 trial, we decided to engage the FDA regarding potential modifications to the MASTERS-2 protocol. We shared our proposal with the FDA earlier this year and requested a Type B meeting, a request they have granted. This Type B meeting will be held in late March, and we look forward to sharing the outcome soon afterward. We've also submitted a similar proposal to EMA and hope to engage with European regulators in parallel to our discussions with the FDA.
I'll quickly conclude with an update on MATRICS-1, the phase 2 trial evaluating MultiStem in patients following resuscitation from hemorrhagic trauma, which is being conducted at the University of Texas Houston and Memorial Hermann Hospital, which is the busiest level 1 trauma center in the United States. We recently announced complete enrollment for both cohorts 1 and 2. Cohort 2 was meaningful in that we dosed patients with cells manufactured using our proprietary 3D bioreactor process for the first time. Patient data is now being collected, and analysis of this data is expected to be completed by the end of this month. Our next step is to work with regulators on approval to move into cohort 3, which will treat approximately 140 patients and will also use cells from the 3D bioreactor process.
As a reminder, this trial was funded by a grant from MTEC and the Department of Defense in partnership with UTHealth Houston and Memorial Hermann Hospital. We look forward to starting this final cohort soon and providing updates on enrollment later this year. With that update, I'll turn the call back over to Dan.
Thank you, Willie, for providing more background on how we arrived at the proposed modifications to MASTERS-2 trial and why the longer time horizon may provide a more accurate characterization of MultiStem's benefits. I would like to add a bit more detail on the market opportunity for MASTERS-2 and stroke, why we believe MultiStem, if approved, could redefine the treatment paradigm for ischemic stroke. Since the MASTERS-2 trial began in 2018, the use of mechanical thrombectomy has become more sophisticated and more widely available, driven by advancements in new technology. Many of the leading domestic and international stroke centers have experienced a significant increase in the use of mechanical thrombectomy, which is now standard of care for many ischemic stroke patients.
There still exists a significant number of patients that fail to meet criteria for tPA or mechanical thrombectomy, which is why our MASTERS-2 trial is designed to be used with or without prior thrombolysis. Keep in mind that MultiStem has a completely different mechanism of action than either tPA or mechanical thrombectomy, and is intended to reduce the negative aspects of inflammation caused by the acute injury and promote healing by modulating the immune system. Based on our newly proposed trial design and understanding of the potential long-term benefits for stroke patients, we engaged an outside consultant to conduct a market assessment and forecast for MultiStem. This exercise confirmed there continues to be a significant high unmet need for a new therapeutic option, which would either complement tPA and mechanical thrombectomy or be an alternative treatment option if a patient wasn't eligible for thrombolysis.
More than 700,000 people suffer an ischemic stroke annually in the United States, and nearly 70% of these patients are considered moderate to severe. Based on current market factors and a relatively conservative estimate on MultiStem units priced and reimbursement, we're estimating MultiStem has the potential to be widely accepted as a meaningful treatment option for ischemic stroke in the US and around the world. While I'm proud of our accomplishments on the operational and clinical fronts, we remain steadfast in seeking business development opportunities and are actively involved in several conversations. This process takes time, and we are taking the necessary steps to find the right partner who shares the same level of confidence and enthusiasm that we have for MultiStem and is willing to work closely with us to realize the significant potential that exists with this therapy.
Any deals need to make sense for our business and for our shareholders. Our goal remains to secure either a global partner or a regional partner to advance MultiStem and ischemic stroke, as well as identify co-development partners for pre-clinical and early-stage indications. We are also exploring licensing interest in other non-core areas, including animal health and our proprietary patented SIFU technology, which Maia will touch on later in the call. In addition to these efforts, we are exploring a range of other possibilities to maximize MultiStem's value. We recently engaged with the Biomedical Advanced Research and Development Authority, or BARDA, through a request for information process to explore the use of MultiStem for acute respiratory distress syndrome, or ARDS, and other COVID comorbidities. We intend to take the next step with BARDA and participate in a request for proposal process.
As a reminder, we have a few hundred clinical doses that were produced for our previous phase two ARDS trial called MACOVIA, which we suspended last June as part of our restructuring. We have valuable data from MACOVIA and from Healios' ONE-BRIDGE trial that demonstrates MultiStem as a potential treatment option for ARDS. To our knowledge, MultiStem is the only development-stage cell therapy that targets ARDS, which is a pneumonia-like condition that leads to severe illness and death among COVID-19 patients. MultiStem is also the only therapy that has received Fast Track designation from the FDA supporting ARDS, and in 2020, BARDA designated MultiStem, quote, highly relevant as a potential therapy for COVID-19. For these reasons, we're encouraged by this opportunity to re-engage with BARDA and explore working together.
In Japan, we continue to work closely with Healios to determine the path forward for both ARDS and ischemic stroke. This has taken time to determine based on several meetings with PMDA. We remain fully committed to working with Healios to bring MultiStem to market in Japan. More details will be shared as progress is made. I'd now like to turn our focus to operating improvements we've made across our business and turn the call over to Maia Hansen to provide an update. Maia?
Thanks, Dan. Good morning, everyone. As Dan mentioned, over the past year, Athersys has undergone an extensive organizational transformation during which we have clarified the value of our core opportunity and structurally refocused the company to achieve success. In evaluating which activities support this core focus, we've made difficult but prudent decisions, including restructuring the organization, modifying vendor relationships, and pausing certain R&D efforts. Today, I will highlight several actions from our restructuring and provide an overview of approaches we are taking to monetize non-core assets. Over the last eight months, our team has been hard at work on multiple fronts. Last summer, we made the difficult decision to reduce staffing. Since then, we have continued to make adjustments to our organization, reducing our headcount by 80% since June 2022, while carefully augmenting the team with contractors who bring in specific skills.
In parallel, we wound down our operations in Belgium, including closing the facility, eliminating headcount, and selling equipment. We will retain a legal entity in Europe to support key business activities. In support of our intellectual property, we have reviewed and optimized our patent portfolio and ongoing maintenance by focusing on patent families and trade secrets that support our core technologies, indications, and manufacturing processes. This effort has allowed us to be more efficient with our budget while also better articulating our assets and enhancing discussions with potential partners. On the operational side of our business, we have completed manufacturing of clinical product. We currently have sufficient inventory to complete our two active trials and supply potential new trials. While we have been wrapping up clinical production, our manufacturing team has taken the time to review our manufacturing strategy and opportunities to optimize our manufacturing processes.
We're actively working with our contract manufacturer, and they have been very supportive as we go through this process. We are also working together with Healios to determine how our commercial manufacturing strategy could support both Japan and the rest of the world. With respect to our clinical trials, we have improved our approach to clinical operations, becoming more efficient while increasing enrollment in our active trials. As Willie noted, we announced in early January of this year that we were more than halfway enrolled in the MASTERS-2 trial. The last three quarters have been the highest enrolling quarters in the history of the trial, and we expect this trend will continue. We have taken several steps to achieve this.
We have worked to optimize our network of MASTERS-2 clinical sites by using data on enrollment trends and site characteristics augmented with site visits to identify the sites that are most set up for success. We have increased support to high-performing sites, including providing more best practice sharing and coaching and increasing on-site inventory of clinical doses to reduce downtime between enrollments. We closed sites with unresolvable barriers to enrollment, such as staffing issues or changes in the number of stroke patients received at the site. We have also identified and qualified new sites to be opened in the first half of 2023, including three this quarter in the U.S. and another eight or nine sites in Europe in the second quarter.
In addition to becoming more efficient, these changes provide a better mix of geographic regions and patient demographics across our network while reflecting the current range of ischemic stroke standard of care in key countries. I'm very proud of our team and what we have accomplished over the last eight months. We have remained focused on our most important priorities and transformed our organization, all while managing cash flow and working closely with critical vendors. As a result of our prioritization efforts, we have identified two areas that are non-core to our business, yet we believe have value if licensed or spun out to the right partners. The first area is in animal health. Building on our knowledge of cell therapies for human health, we have valuable intellectual property and technical knowledge in animal health that could fit well with a partner in this space.
We have a combination of patents and trade secrets in this area related to manufacturing processes and characterization. Based upon the demonstrated mechanisms of action of MAPC cells and a favorable and consistent safety profile demonstrated in both animal models and human clinical settings, MAPC cell therapy could provide meaningful benefits to animals, including those suffering from serious conditions with unmet medical needs. For example, two indications where we see promise are in canine osteoarthritis and equine tendonitis. With the right partners, these therapies could move into clinical trials and to commercialization. In addition to animal health, another non-core area where Athersys has built value is our Secure Integrated Freezer Unit or SIFU. This was originally designed to solve a logistics issue for MultiStem, but upon reevaluation, we recognized SIFU overcomes major challenges that many next-generation cell and gene therapy companies face regarding cryogenic storage and handling in a hospital setting.
We believe SIFU is a meaningful, untapped opportunity for us and a potential platform for the industry. The current state of cryogenic storage and handling is cumbersome and expensive, relying on cell labs equipped with large liquid nitrogen freezers. These cell labs require specially trained staff, unique and expensive ventilation and controls, and a regular supply of liquid nitrogen. This results in barriers for many hospitals to offer these new therapies. For the hospitals that do have cell labs, they often experience logistical challenges coordinating operations across cell labs, pharmacies, and patient care. The SIFU technology addresses these pain points by providing cryogenic storage without the use of liquid nitrogen. It is a user-friendly device that can provide 24/7 access to therapies in a limited footprint and with controlled access. SIFU automates and simplifies the cryogenic logistics process with one device and an easy-to-use interface.
We have presented this technology at several conferences and received interest from potential partners, as well as clinicians and other cell and gene companies who recognize the unmet need. We're currently in talks with multiple parties to license or sell the SIFU technology. What started as an innovation we built and kept to ourselves is now gaining appreciation for its value in an underserved market. I'm proud of the operational improvements we've made in shaping Athersys for the future and making us a more focused and effective organization. I'd now like to turn the call over to Kasey Rosado , our interim CFO. Kasey?
Thank you, Maia. As you've heard over the past several months, our restructuring efforts have been focused both at the operational and clinical level. Streamlining our operational cost structure and reducing the cash burn has been an essential pillar to our more recent success. I'm happy to report that we accomplished our goal of reducing operating expenses below $3 million per month while still supporting our key business priorities. While we're pleased with the marked decrease in cash burn, we recognize that to bring MultiStem to market, we need to remain opportunistic about securing funding for immediate cash needs and eventually start to build for the future. We have been open with shareholders that to bring in needed capital, we are taking a thoughtful and measured approach as we execute on our plans to reach a meaningful milestone.
We continue to evaluate all our options while being deliberate in seeking non-dilutive opportunities. We will remain resolute and disciplined in how we allocate capital and operate judiciously in support of Athersys' top priority, MASTERS-2. More detailed information on our finances will be available when we file our 10-K, which is planned for mid-March. With that, I turn it back to Dan.
Thank you, Kasey, and thank you, Maia. I'd like to also acknowledge changes we made to our organization, starting with our board of directors. For many companies, a board of directors is a source of valuable insight, guidance, and support for management teams, and ideally, a board should be structurally sound, diverse, and aligned to be an effective resource. Last year, we reduced the number of directors by half from 10 directors to 5 in order to be more nimble and efficient. At that time, Ken Traub, an acting director, was nominated to represent Healios, and with Ken's resignation last October, we had the opportunity to augment desired capabilities and add specific areas of expertise. I'm excited that we were able to add Joe Nolan to our board earlier this year.
Joe is a seasoned leader in cell and gene therapy with extensive experience in business development, commercial strategy, and raising capital. With over 30 years in managing high-value global assets, launching multiple successful products, and leading large-scale commercial operations, Joe recognizes the global potential of MultiStem and is a welcome addition to our board. We've also made significant changes in our senior leadership team and other areas of our organization with the goal of becoming leaner, more focused, and effective. In areas where we require a specific skill set or technical expertise, we've looked to hire a consultant or contractor in order to allow for greater flexibility and efficiency. One example is our recent engagement of a consulting chief medical officer who previously held a similar role at a large global pharmaceutical company and is now assisting us with the critical FDA communications to support our MASTERS-2 trial proposal.
Going forward, we will continue to evaluate our organizational needs based on relevant experience and size to achieve our objectives and work toward becoming a leader in cell therapy and regenerative medicine. In closing, over the past year, we've transformed Athersys by creating a new leadership team, a leaner organization, increased focus on clinical priorities, demonstrated financial discipline, and raised accountability and transparency. We are operating with an open mindset and working to identify strategic partners that share our vision for MultiStem and the potential benefit we can offer patients. We take full responsibility for executing on our current plan, and we remain committed to being careful stewards of invested capital and building shareholder value. With that, I'd like to turn the over to a QA portion of the call.
As we did in our last conference call, I'll summarize and then answer several questions we received and common themes from different investors. Starting with the first question, "What are the current prospects for a business deal that provides enough capital to conclude current trials, including trauma, and support application to the FDA in manufacturing and marketing of MultiStem for stroke and/or ARDS?" As mentioned, we have a number of options available, including levers on our cap table we can turn to for financing options. As Kasey stated earlier, non-dilutive capital is our first preference. We're being very thoughtful about financing as we continue to engage with potential partners, and we'll be in a much better position to evaluate our options following the FDA meeting in late March, and we'll plan to share an update at that time.
Question number 2, "What are you telling prospective partners that you believe is likely to encourage interest in Athersys' future, particularly in regard to status of trials and timing of results? What is Healios' status on the application for ARDS and/or stroke?" As Willie mentioned, the totality of data we've gathered from our various clinical trials across multiple indications, and especially ischemic stroke, puts us in a unique position in the industry and has sparked interest from a variety of potential partners. We are also far along in our phase three trial, which we know is unique compared to other cell therapy companies, and we still hold the rights to MultiStem everywhere in the world except for two indications licensed to Healios in Japan. As mentioned previously, we're in active conversations and can't go into great detail until a potential partnership is secured.
We remain committed to finding a partner that aligns with our mission of bringing MultiStem to market and pursuing a deal that is in the best interest of our shareholders. With regard to Healios, we continue to work closely with them as they engage with PMDA on a path forward for both ARDS and ischemic stroke. Last quarter, Healios reported a letter of intent with Mitsubishi UFJ Capital to jointly develop MultiStem for ARDS in Japan, which should help support funding if an additional trial is required by PMDA. Keep in mind that MultiStem has an orphan regenerative medicine designation in Japan for ARDS. In ischemic stroke, we've shared with Healios the data analysis completed with outside experts regarding the TREASURE trial results and discussed our proposal to engage with the FDA and EMA regarding modifications to MASTERS-2 trial.
We continue to work closely with Healios to engage regulatory authorities in determining a path forward in Japan, including potential filing and approval under their SAKIGAKE designation. Soon as more information becomes available, we will provide an update. Question three, "Do you expect that the endpoints of MASTERS-2 will be modified before completion of the trial, and what effect will modification have on completion date?" This is a critical question that we expect to answer following our upcoming Type B meeting with the FDA. Having enrolled more than 50% of patients in MASTERS-2, we're at a pivotal point to bring forward new information observed in the TREASURE trial and have a conversation with regulators.
Regarding the enrollment timeline, in the third quarter of last year, we suspended guidance of, on when we would complete enrollment due to our restructuring and the need to conduct a more complete data analysis of TREASURE trial results. This analysis will be discussed with the FDA in late March, we'll be in a more informed position to update our enrollment timelines after that discussion. In the meantime, we continue to enroll new patients in the MASTERS-2 trial under the current protocol. The last and fourth question is, "What are the next steps for your SIFU product?" As Maia mentioned, SIFU represents a strong possibility to bring in additional revenue for Athersys. We presented this technology at several conferences and received significant interest from potential partners, many of which are more suited to bring this technology to market for a broader application than just MultiStem.
As Maia mentioned, we're currently in talks with multiple parties to license or sell the SIFU technology. This technology is a great example of an innovative asset with significant potential that exists within the company beyond MultiStem that we are treating differently to realize its full potential and value. We will keep you updated as we make progress. In closing, I'd like to thank all shareholders who submitted questions and for continued support of our efforts. If we were unable to answer your questions, we will try to follow up directly over email. I hope you found today's business update to be informative, and we look forward to keeping you apprised of our performance as we make progress. Thank you again for joining us, and I hope everyone has a nice day.
Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.