Athersys (ATHX) Q4 2021 Earnings Call Transcript

Athersys (ATHX -2.22%)
Q4 2021 Earnings Call
Mar 15, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good evening. Thank you for attending today's Athersys year-end 2021 results conference call. My name is Selena, and I will be your moderator. [Operator instructions].

I would now like to pass the conference over to our host, Karen Hunady, with Athersys. Please go ahead.

Karen Hunady -- Director of Corporate Communications and Investor Relations

Thank you, Selena, and good afternoon, everyone. I'm Karen Hunady, director of corporate communications and investor relations for Athersys. Thank you for joining today's call. If you do not have a copy of the press release issued at the close of market, it is available on the Athersys website at athersys.com.

I'm pleased to introduce Dan Camardo, who started as our chief executive officer on February 14. I'm also here with B.J. Lehmann, our president and chief operating officer; and Ivor Macleod, our chief financial officer. A webcast of the audio will be available three hours after the call's conclusion on our website under the events section.

The access information for the replay is also in today's press release. Any remarks that we 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 important factors, including those discussed in our Forms 10-Q, 10-K, and other public 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. For the benefit of those who may be listening to the replay, this call was held and recorded on March 15, 2022. Since then, we may have made announcements related to the topics discussed, so please reference our most recent press releases and SEC filings. With pleasure, I'd like to introduce you all to the new CEO of Athersys, Dan Camardo.

I'll turn it over to you now, Dan.

Dan Camardo -- Chief Executive Officer

Thanks, Karen. I'm excited to be leading Athersys at such a pivotal time as I believe we have the potential to be a global leader in cell therapy and regenerative medicine and effectively treat various diseases with significant unmet medical needs. I'm also well aware of the challenges the company has faced over the years, and I'm prepared and eager to meet those challenges head on while capitalizing on the opportunities ahead. Please allow me a minute to share some of the highlights of my background before joining Athersys on February 14, 2022.

I've come to Athersys after more than 25 years in the pharmaceutical and biotech industry with experience of having delivered numerous successful therapies to market, a privilege that brings with it dual satisfaction of both helping patients and creating shareholder value. I enjoy building effective teams, growing businesses, and launching innovative products, especially in disease areas that are difficult to treat or have few or no approved therapeutic options. Most recently, I was executive vice president and a member of the executive committee of Horizon Therapeutics, where I was part of an executive team that transformed a small specialty pharmaceutical company with a $2 billion market cap in 2015 into a global biotechnology leader with 11 in-market products and a market cap approaching $23 billion. During my six and a half-year tenure, we developed exceptional commercial capabilities that enabled us to build a diverse and highly profitable portfolio of rare disease products and to grow the business by acquiring undervalued assets and repositioning them in the marketplace.

I'm also proud of the high-performing results-driven culture that we created, driven by our core values of transparency, collaboration, and accountability. My other significant commercial experience was at Astellas Pharma, where I spent 11 years starting with the U.S. market entry of Yamanouchi Pharma America in 2003. During my time with Astellas, I had a chance to participate in the commercial build-out of the company following a merger with Fujisawa and the launch of several innovative products.

I played a leadership role in a number of successful co-promotion and licensing deals, most notably, Vesicare for overactive bladder with GlaxoSmithKline and Xtandi for castration-resistant prostate cancer with Medivation. When I left Astellas in 2014, the company reported more than $3 billion in U.S. net sales. And we had built a broad portfolio of specialty products in the areas of urology, oncology, immunology, and hospital care.

Now many people have asked me why I would be leaving my role at Horizon, where I was one of the top executives with responsibility for Horizon's successful and highly profitable inflammation and rare disease businesses and give up the financial rewards that come along with scaling a business to a valuation of $23 billion to join Athersys, a company with a market capitalization of less than $200 million. First, let me say that I was not looking for a new job nor to leave Horizon. But when the Athersys board reached out to me, I researched the company and quickly became intrigued. In particular, I saw a company with deep scientific expertise in stem cell biology and the passion and commitment demonstrated by the company's employees to bring MultiStem to market and help patients suffering from serious life-threatening diseases such as stroke, acute respiratory distress syndrome, and trauma.

These diseases are not only difficult to treat but can be devastating to individuals and families and result in significant healthcare costs. And although cell therapy has more recently become a growing area of interest in our industry, Athersys has been studying the effects of MultiStem and the scientific basis for its mechanism of action for more than 15 years. While all of this was interesting, I would not have taken the job unless I was satisfied with my own due diligence into the company. So let me share with you some of the due diligence that I completed before I agreed to accept the position as CEO of Athersys.

First, I met with every member of the board of directors and ask pointed questions about the opportunities and challenges facing the company. Second, I met with every member of the senior management team to understand the internal capabilities as well as the company's future needs as it continues to work toward commercialization. Third, I reviewed all preclinical and clinical studies, especially MASTERS-1 in detail. Fourth, I studied the various research papers about the scientific basis for MultiStem's mechanism of action.

And I also spoke with several physicians who treat stroke and acute respiratory distress syndrome. And lastly, I spoke with several consultants in the gene and cell therapy space to better understand the manufacturing and regulatory challenges facing this evolving area of the industry. My due diligence not only confirmed my initial interest but got me excited about the prospects for Athersys with a new leader in place. I resigned from Horizon and accepted the job at Athersys in full recognition of the challenges that the company had faced and with the conviction that we have a unique opportunity to become a leader in regenerative medicine, treat patients who have been suffering from these very difficult-to-treat diseases, and generate substantial shareholder value.

Since joining the company on February 14 and learning more about MultiStem's unique properties, meeting the internal team, and better understanding the business opportunity, my conviction has become even stronger. Specifically, our branded multipotent adult progenitor cells, or MAPC therapy, provides us with a highly attractive platform with significant growth potential across different inflammatory diseases as well as neurological and immune disorders. From the clinical trials already completed, more than 400 patients have received MultiStem. Most importantly, the results of all those trials and analysis have consistently demonstrated safety and very good tolerability.

And like more conventional drugs in biologics, the MultiStem product candidate is cleared from the body over time, which we believe may enhance the product safety relative to other types of stem cell therapy. There have been more than 80 scientific publications on MAPC, which is a distinctly different cell type from an MSC, or mesenchymal stem cell. And we hold more than 450 patents related to our technologies, providing us with IP protection in the U.S., Europe, Japan, and other areas. Over the last year, we have made significant investment and progress in our ability to manufacture and scale MultiStem in a predictable and efficient manner, which, as many of you know, can be a challenge with other stem cell therapies.

In addition, I've been impressed with both the technical and executive teams at the company, which includes several new members who have started over the past year or so with proven experience in process development and manufacturing, capabilities that will help further support commercialization plans for both Athersys and our Japanese partner, Healios. As the new leader of Athersys, I know it's my responsibility to earn the trust of all key constituents, employees, shareholders, and commercial partners. My style is to be completely transparent and say it like it is. When I set expectations, they will be what I believe to be both ambitious and achievable.

And we will all work as diligently as we can to meet or exceed those expectations. And with that in mind, I'd like to address expectations on the timing to complete MASTERS-2 enrollment. Over the last couple of years, this trial has experienced challenges in its clinical site initiations as well as patient screening and enrollment due to the COVID-19 pandemic and supply disruptions among other things. We've undertaken initiatives intended to accelerate new site openings in the U.S.

and abroad and increased patient enrollment at sites that are currently opening, including addressing site operational issues and local product supply constraints. These actions are intended to enable the company to finish enrollment of the MASTERS-2 study by the end of 2022 or as soon as possible thereafter. Another area I would like to address today is corporate partnering. I have a lot of experience in building healthy, mutually beneficial and successful corporate partnerships.

This is a particularly important element of the strategy for a developing biotech company. It is critical to structure these partnerships in accordance with the overall corporate strategy, align interests among the partners, and execute on a win-win formula for each company. It's fair to say that Athersys has had a mixed record so far with corporate partnerships, and we intend to fix that. I'm pleased to see that following the execution of the cooperation agreement in February 2021 and the comprehensive framework agreement in August of 2021, the relationship between Athersys and Helios has dramatically improved.

In fact, I can report that both companies are working very closely together as true partners in a mutually supportive way on regulatory matters, manufacturing, and preparations for commercialization in Japan. I'm confident that we can build on this progress and continue to deepen our relationship to ensure a mutually beneficial partnership with Healios. We are approaching several important milestones with our Healios collaboration, including a potential regulatory filing for ARDS, the unblinding and release of the TREASURE trial results for stroke, and preparations for a potential commercial launch in Japan. Athersys will be working closely with Healios every step of the way to assist and support success on every one of these important initiatives.

And finally, I'd like to make some comments on the status of manufacturing. The first-generation cell factory manufacturing process that the company has been using up to this point for a clinical product has experienced various issues and delays over the years. With improvements to this process and FDA approval of our second-generation bioreactor process, we believe that the company will have sufficient product and inventory to support all ongoing clinical trials by the end of second quarter. We intend to start building with Helios the initial product necessary for a potential commercial launch in Japan.

And our intention is to transition over to the larger-scale bioreactor production process, which can yield substantially greater volumes to support the future potential growth in Japan as well as the requirements for potential launch in the United States, Europe, and the rest of the world. The initial test runs with a large-scale bioreactor process have been successful. And we will be working to build out this production platform for larger commercial needs based on the timing and results of upcoming clinical and regulatory milestones. And now I'd like to turn it over to B.J.

Lehmann, who will provide an update on our active phase 3 program in stroke as well as our phase 2, 3 clinical program in ARDS, and our phase 2 trial in trauma. B.J.?

B.J. Lehmann -- President and Chief Operating Officer

Thank you, Dan. In our stroke program, we have ahead of us important milestones demonstrating the therapeutic benefit of MultiStem treatment. First, the upcoming announcement of data from the Japan TREASURE study, followed ultimately by completion of our larger MASTERS-2 study being conducted in the U.S., Europe, and other regions. In the near term, we are looking forward to the results from the TREASURE study being conducted by our partner Healios in Japan.

The study is evaluating intravenous MultiStem treatment of over 200 patients with moderate to severe strokes and is well powered to detect efficacy in this population. The last patient follow-up is expected this month, meaning that data cleanup and analysis can be completed over the next several weeks. As we have communicated previously, the TREASURE and MASTERS-2 studies have similar designs, meaning that the TREASURE study would be a strong indicator of the potential results from the MASTERS-2 study. Based on our prior MASTERS-1 results in the study design, we are optimistic about the results and their potential for demonstrating therapeutic impact for stroke patients.

Additionally, the data would enable us to confirm our MASTERS-2 strategy and design and make any necessary adjustments. We will continue to work closely with Healios to support the application process in Japan and to further establish manufacturing capacity for initial commercialization. Naturally, Healios' regulatory and commercial progress would benefit us, providing confirmation regarding the quality and sufficiency of the application package and, ultimately, certain milestones and royalty payments. We continue to make progress in enrolling our MASTERS-2 study.

In prior periods, as Dan mentioned, we've faced challenges to clinical site initiations as well as patient screening enrollment due to the COVID-19 pandemic and supply interruptions, among other things. As COVID-19 case numbers decline and supply has stabilized, we have undertaken initiatives intended to accelerate new site openings in the U.S. and abroad and increased patient enrollment at open sites, including addressing site-specific operations and inventory management issues. These plans are intended to enable us to finish enrollment of the MASTERS-2 study by the end of '22, as Dan mentioned, or as soon as possible thereafter.

However, timely completion depends on the success of these initiatives, the impact of the TREASURE results and site activity and the possible resurgence of COVID-19. We would expect, for instance, that favorable TREASURE study results would have a positive effect on site initiations and patient accruals as success drives further interest in and focus on the study among investigators and clinical research groups. In recent months, we have initiated 10 new sites, including in Australia, Taiwan, and Europe, bringing us to more than 30 sites. And we've also had our first patient enrollments outside of the United States.

We expect to continue the vigorous initiation of additional sites in the U.S. and outside. We believe the contributions of these new sites will be important to efficient enrollment of the MASTERS-2 study. On the regulatory front, we have utilized our RMAT designation to have frequent discussions with the FDA about our development plans.

We are pleased to report that we have reached agreement with the U.S. and European regulators to defer our pediatric development plans for stroke. This is an important development because it means that we will not have to complete pediatric development prior to applying for marketing approval. But we can address such development following approval.

Turning to our other programs. As we have stated in recent communications, we have amended our MACOVIA study to include a more general ARDS patient population, not just COVID-induced ARDS, which is consistent with our longer-term development plan in this area. Our operations plan for MACOVIA study is to work to complete the phase 2 part of the study by the end of 2022, depending, among other things, on COVID pandemic incidents and site level activity. Given changes in standard of care for ARDS patients in light of the COVID pandemic, we plan to take stock before proceeding with the phase 3 portion of the MACOVIA clinical program.

Importantly, with recent approval from the FDA, we are able to use the bioreactor manufactured product in the study. This will enable us to generate valuable clinical data with our next-generation bioreactor based product and lay the groundwork for subsequent clinical work with our larger scale bioreactor format. In August 2021, a Helios reported top line data from its ONE-BRIDGE study in Japan for pneumonia-induced and COVID-induced ARDS patients. The data from the ONE-BRIDGE study is consistent with our data from the MUST-ARDS study, demonstrating favorable trends with respect to impact on pulmonary function, for example, in ventilator-free days, mortality, and quality of life.

Even though some recent improvements in ARDS standard of care have been made, this remains an area of high unmet clinical need. Due to the high treatment cost of ARDS, a successful cell therapy could be expected to generate significant savings for the healthcare system by reducing the number of days on a ventilator and the ICU and, importantly, could reduce mortality and improve quality of life for those suffering from the condition. Following the ONE-BRIDGE top line readout, Healios and we have conducted thorough analysis of the data from the MUST-ARDS and ONE-BRIDGE studies. The studies have comparable patient populations receiving the same MultiStem dose amount shortly following an ARDS diagnosis.

Between the studies, excluding the COVID ARDS cohort in the ONE-BRIDGE study, 60 ARDS subjects were enrolled in the studies, 40 receiving MultiStem treatment, and the remaining 20 receiving placebo or standard of care. On a pool basis, strong trends were observed in ventilator-free days, or VFD, survival, improved quality of life, and reduction of key inflammatory biomarkers. For example, MultiStem treated subjects had, on average, 5.5 more ventilator-free days in the first 28 days following diagnosis than nontreated subjects with a p-value of 0.07. And on a median basis, 10.5 more ventilator-free days during that 28-day period.

Further, there was also strong evidence of favorable impact from treatment on mortality and quality of life metrics. This combined data gives us further confidence in the potential for MultiStem treatment to have a substantial positive impact on ARDS patients. Helios continues its consultations with the regulatory authorities to prepare for the potential application for manufacturing and marketing approval. We are working closely with Healios to prepare the regulatory applications for approval and for potential commercialization in Japan, which, if successful, could allow them in 2023 to achieve marketing approval.

We look forward in late March to the preapplication consultation announced by Helios. As we noted in the previous call, we also plan to continue evaluating and exploring opportunities for governmental support for the program such as BARDA, where there is a fit with our development strategy. In trauma, we are conducting a phase 2 clinical trial evaluating MultiStem cell therapy for the early treatment of traumatic injuries and the subsequent complications that result following severe traumatic injury. This first-ever study of a cell therapy for the treatment of a wide range of traumatic injuries is being conducted by UT Health at the Memorial Hermann Texas Medical Center in Houston, Texas, one of the busiest Level 1 trauma centers in the United States and is supported by grand funding, including from the federal government.

As is the case with the MACOVIA study, with recent approval from the FDA, we are using the bioreactor manufactured products in this trial. The MATRICS study builds on therapeutic elements relevant in our other critical care programs such as the modulation of the severe inflammatory response generated by ischemic, infectious, or traumatic events and the reshaping of the immune system response to improve the recovery path. We believe the MultiStem therapy should have great potential to benefit accident victims, battlefield casualties and others suffering traumatic injury by improving recovery, survival, and quality of life. Finally, I would like to provide an update on our collaboration with Healios, building on Dan's comments.

In 2021, we amended and approved our collaboration arrangements with Healios to better align and drive optimal investments and efforts in manufacturing, regulatory activities and ultimately, commercialization in Japan. In general, both parties intended to create a framework for strong Athersys support regulatory supply and manufacturing were beneficial. Mechanisms for Helios to take on greater responsibilities for manufacturing and supply over time, and opportunities and incentives for full development and commercial success in Japan. I'm pleased to confirm that these changes have led to much improved joint efforts to develop the MultiStem programs in Japan.

We are working closely with Healios to provide support in the regulatory processes to assist Healios in establishing manufacturing capacity for initial commercialization and a plan for longer-term commercial supply and development of the Japanese market. We look forward to the upcoming TREASURE study data and to continued progress by Healios in the regulatory and applications process, which represent important milestones in the development of the MultiStem platform. With that, I will now hand it over to Ivor for the financial update. Ivor?

Ivor Macleod -- Chief Financial Officer

Thank you, B.J. Good afternoon, everybody. I'm Ivor Macleod, chief financial officer of Athersys. I'd like to thank all of you for joining today's call.

First, I'll give an overview of the fourth quarter of 2021 and then follow it with the financial results for the full year. Revenues were 722,000 for the three months ended December 31, 2021, compared to 1.3 million for the same period in 2020. The revenue is related to the ongoing services that we provide to our partner Healios, supporting our collaboration in Japan. Research and development expenses were 18.7 million for the three months ended December 31, a minor increase of 58,000 compared to the expenses for the comparable period in 2020.

General and administrative expenses decreased to 3.4 million for the three months ended December 31, 2021, from 4.3 million in the comparable period in 2020. The decrease in the fourth quarter of 2021 was due primarily to lower outside service, legal and professional service fees of $874,000 and lower stock compensation costs of $336,000, offset by increased personnel costs of 255,000. The net loss for the fourth quarter was $21.7 million in 2021, compared to a net loss of 22.2 million in the fourth quarter of 2020. I will now turn to the results for the full year.

Our revenues were $5.5 million in 2021, compared to 1.44 million in 2020 primarily related to our ongoing collaboration with Healios. Our collaboration revenues currently fluctuate from period to period based on the delivery of goods and services under our arrangement with Helios. Research and development expenses were 71.1 million in 2021, compared to 63 million in 2020. The increase in expenditures is primarily related to an increase in clinical trial and manufacturing process development cost of 5.3 million, an increase in personnel and associated costs of 3.2 million, partially offset by a decrease in other costs of 0.4 million.

The increase in these costs overall is primarily related to our progress in large-scale bioreactor manufacturing and the expenses related to our ongoing clinical trials. Our overall R&D expenses will continue to vary over time, based on clinical trials underway, the number of manufacturing campaigns we run and our continued process development activities as well as other initiatives. General and administrative expenses were 20.1 million in 2021, compared to 15.9 million in 2020. The 4.2 million variance is primarily related to increased outside services, legal and professional services of 1.7 million; personnel and associated costs of 2.5 million, which includes stock-based compensation of approximately 890,000.

In 2021, it's important to point out we experienced significant onetime expenses related to executive severance as well as professional fees associated with the past litigation with Helios and the subsequent consummation of our comprehensive framework agreement. In aggregate, these onetime expenses were in excess of $5 million in 2021. Our net loss was 87 million in 2021 compared to a net loss of 78.8 million in 2020. The $8.2 million difference reflects the aforementioned variances.

In the 12 months ended December 31, 2021, net cash used in operating activities was $76 million, compared to $62 million in the 12 months ended December 31, 2020. At December 31, 2021, we had $37.4 million in cash and cash equivalents, compared to 51.5 million at December 31, 2020. Our cash burn in 2021 varied between 17 and $20 million per quarter, with the burn in the fourth quarter being just over 19 million. We do feel we have adequate cash to fund our near-term priorities through and beyond the publication of Helios' top line stroke data.

While we continue to have access to our equity line with Aspire Capital, positive top line stroke data could provide us with several options for raising further capital. With that, I'll turn the meeting back over to Dan for Q&A. Dan?

Dan Camardo -- Chief Executive Officer

Thank you, Ivor. We'd like to take time now to address questions that were sent in ahead of this call before we open up questions from our analysts. And we've had several questions surrounding our financial position and the current stock press. So I'm going to ask Ivor to address these items.

Ivor Macleod -- Chief Financial Officer

Thank you, Dan. I'll first address the questions about our current stock price. We continue to believe that our stock price is severely undervalued, especially for a biotech company in late-stage development on the cusp of what we believe will be a significant data readout from our partner Helios in Japan. That being said, the overall sentiment in the capital markets this year, particularly in our biotech sector, have been extremely poor.

The XBI Index, which our stock tends to follow, is down approximately 28% this year. The XBI Index represents the biotech segment of the S&P Total Market Index. The NASDAQ is off 20% and the S&P 500 approximately 12%. Macroeconomic factors continue to weigh heavily on overall sentiment.

The Fed meeting is occurring today and tomorrow. 0.25% rate increase is almost guaranteed, but more important is their outlook for the year. particularly on inflation, which they're greatly underestimated in December at 2.7%. There's also the geopolitical crisis in Ukraine and the uncertainty around not only the outcome but the permanence in nature of the various economic sanctions imposed against Russia.

And in China, while COVID cases are low by global standards, the zero tolerance policy is leading to lockdowns and potential further interruptions to the global supply chain. Against this backdrop, the biotech IPO market has somewhat dried up with a low single-digit number of IPOs this year compared to 78 in the corresponding period last year. Follow-on similarly have been in the single digits compared to 175 in the comparable period last year. While here at Athersys, we continue with managing our priorities, which we mentioned earlier in the call, rather than our stock price, we do expect the near-term catalysts, particularly the release of the TREASURE data for stroke from our Japanese partner, to provide a boost to our overall valuation.

Regarding our cash situation, as I said earlier in the call, we feel we have adequate cash to get us through our near-term catalysts, including getting to the other side of the publication of the top line TREASURE data. Following what we believe will be positive data, we anticipate multiple opportunities for us to raise additional capital on what would be much better than current terms. We also continue to have access to our equity purchase agreement with Aspire. While we are hesitant to sell at the current price level, we have lowered the floor price to $0.50, which gives us the flexibility should it be required.

With that, I'll give it back over to Dan.

Dan Camardo -- Chief Executive Officer

Thank you, Ivor. We've also received several questions relating to our MACOVIA trial for the treatment of ARDS, specifically about our progress on Cohort 2 and how this may affect our plans for Cohort 3. So B.J., if you wouldn't mind providing some more insight for us?

B.J. Lehmann -- President and Chief Operating Officer

Sure, Dan. I'm happy to. So I mentioned a few minutes ago, based on our research and recent clinical data, we are very positive about the potential for MultiStem therapy to help patients with ARDS. In addition to providing information to confirm the design of our Cohort 3 portion of our study, we have planned in Cohort 2 for our bioreactor manufacturer product to be used.

And with the recent FDA approval, we are integrating this product now into the study. In addition, we will be adding some more clinical sites, and we hope, as I mentioned before, the complete enrollment of this Cohort 2 by the end of the year. With that data in hand, we would confirm our Cohort 3 design to ensure that we have the best design for success before moving forward potentially next year. So, Dan?

Dan Camardo -- Chief Executive Officer

Great. Thank you, B.J. Another topic that comes up relates to MASTERS-2. And based on the number of sites open in MASTERS-2, why do we think we'll be enrolled by the end of this year? And I'm happy to take this one.

As B.J. mentioned, we now have over 30 sites open, initiating 10 new sites in the United States, Europe, and Asia just over the last several months as COVID-19 hurdles have diminished and we plan to initiate more sites shortly. Now these sites are all leading stroke centers and are often high-profile research institutions with the most advanced technologies, stroke care, and clinical research capabilities. Importantly, while we are nearly completed with the clinical supply manufacturing for this trial, which will enable us to be more aggressive in our clinical operations, and we've put in place several actions to improve enrollment at open sites.

The next set of questions we received was around the upcoming treasure data readout. What are our expectations and what does this mean as it relates to our current MASTERS-2 study? So B.J., if you won't mind taking this question.

B.J. Lehmann -- President and Chief Operating Officer

Sure. No, as I just discussed a few minutes ago, and we've talked about in the past, in particular, in our presentation earlier in February, we remain very confident with respect to the potential for MultiStem in ischemic stroke, based on our observations from our MASTERS-2 trial plus all the research we conducted before that. Importantly, both the TREASURE and MASTERS 2 studies are similarly designed based on the results and learnings from the MASTERS-1 study and are well powered for success. We believe that favorable results from TREASURE will read through to MASTERS-2, meaning that we would have high confidence in the success of MASTERS-2.

Dan?

Dan Camardo -- Chief Executive Officer

Thanks, B.J. There's another topic that I'd like to cover, if you don't mind, B.J. We received several general questions related to our bioreactor manufacturing process. So can you provide an update on progress on this front?

B.J. Lehmann -- President and Chief Operating Officer

I'm happy to do that. First, as we're saying, we continue to make very good progress in developing our bioreactor manufacturing process and capacity to serve the commercial markets following potential approvals by us or our partners such as Helios. As I mentioned earlier, and importantly, we have recently received approval to use product manufactured using our bioreactor platform for clinical trials. Additionally, we are transferring our next-generation, larger-scale bioreactor technology to establish GMP manufacturing capacity.

Building on our successful regulatory interactions for the initial bioreactor process, we will continue to work with the regulators to determine data necessary to demonstrate comparability of the product made with the larger-scale, Gen 2 process, including possibly even doing clinical bridging work. So there'll be more information on that as we move forward.

Dan Camardo -- Chief Executive Officer

Thank you, B.J. And lastly, we've also received questions around our partnership discussions and licensing opportunities, and I'll be happy to comment on this. Previously, the company engaged in licensing discussions with several well-established pharmaceutical companies focused on countries outside the United States and primarily in Europe. These discussions continue and will be influenced by upcoming data results.

As we further evaluate our overall business development strategy for MultiStem, we will seek to reengage potential partners for stroke and other possible indications across any region, including the United States. Thanks, everyone, for those of you that submitted questions ahead of this call. At this time, we would be happy to take questions from our analysts.

Questions & Answers:

Operator

Thank you. [Operator instructions]. The first question comes from Greg Harrison with BofA Global Research. Please proceed.

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

Hi, guys. Good afternoon. Thanks for taking the question. So with respect to the cash runway, it sounds like it would end in 2Q at current rates.

So first, is that accurate? And if so, what is the financing strategy if the TREASURE data doesn't lead to a near-term partnership with an upfront payment?

Dan Camardo -- Chief Executive Officer

Take that, B.J. -- sorry, Ivor?

Ivor Macleod -- Chief Financial Officer

Yes. Thanks, Greg. Yes. So with a run rate -- or with a cash burn of between 17 and 20 million, of course, we do have the ability to dial it up, dial it down.

But you're correct, we have enough to get through at least the end of the second quarter. As I had mentioned, we do have access to our equity line, which could provide financing. If the data does not lead to a successful partnership, we have explored other means of financing, which I don't really want to give the details just yet. We have not pulled the trigger on it.

But suffice to say, we have not so far accessed the debt markets. And there are other possibilities that we're exploring. But our intention is to proceed with our discussions on the partnership. And we do anticipate the readout to be positive.

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

Got it. And just as a quick follow-up. In your discussions that you are having with potential partners, is it feasible to have a deal struck within that short of a time period? Or could they even be under discussion now pending that data? Just want to get a sense of when we could expect to see something if the data are positive, when that could be announced?

Ivor Macleod -- Chief Financial Officer

Yes. It's another great question, Greg. As you know, the larger the pharma, the slower they move. What I can say is on the Athersys side, we're nimble.

We move very, very quickly, and we would like to consummate it as quickly as possible. But our experience with the big pharmas, the large due diligence teams, these types of things, even though we are down in the past with certain -- we expect it to be months, but it's difficult to put a firm date on it.

Dan Camardo -- Chief Executive Officer

So the only thing I'll add, Greg, is we will be actively looking at opportunities. So improbable before maybe the TREASURE data comes out, but we will be ramping up efforts to explore those opportunities.

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

Great. Thanks again for taking the question.

Ivor Macleod -- Chief Financial Officer

Thank you, Greg.

Operator

Thank you, Greg. The next question comes from David Hoang with SMBC. Please proceed.

David Hoang -- SMBC Nikko Securities -- Analyst

Dan, welcome to the company, and we're all glad to have you aboard. So I just had a couple. First one, in terms of the potential partnership, you, I think, outlined it a little bit for us. It sounds like you are considering geographies broadly.

But could you just give maybe a little bit more color as to with you at the helm now, how do you kind of think about the ideal partner? And what exactly are you looking for in the partnership? What would constitute success from your point of view?

Dan Camardo -- Chief Executive Officer

Sure. Yes, happy to answer it, David. I think first, our attention has been on making sure that our Helios partnership is a success. And so a lot of work has been going into that partnership over the last year.

And we'll continue to look at ways for us to be successful, both with stroke and ARDS. I think outside of that, we're going to take a step back and really look at all the areas that MultiStem may be appropriate. So we know we have a platform opportunity in MultiStem. And rather than just approaching it by looking at regions, I think what we're going to do is undertake a process that explores potentially other indications, other uses of MultiStem with various partners.

And so it's not something that we've started right away, but it's something that we are going to be putting in place quickly.

David Hoang -- SMBC Nikko Securities -- Analyst

Great. That's very helpful. Thanks for that. And, Dan, I just wanted to ask in terms of any milestone payments from Helios that we may expect this year, do you expect to receive any -- for example, when the ARDS regulatory filing is completed in Japan or on first commercialization of products in Japan?

Dan Camardo -- Chief Executive Officer

B.J. do you want to take that?

B.J. Lehmann -- President and Chief Operating Officer

Yes. Yes. David, thanks for the question. We haven't disclosed the specifics of milestone payments, but we do expect milestone payments from Helios this year based on our expectations for activities and development.

So we can't really say much more than that, but that's kind of built into how we think about the year.

David Hoang -- SMBC Nikko Securities -- Analyst

OK. I appreciate you sharing that. Thanks for taking questions.

Dan Camardo -- Chief Executive Officer

Thank you.

Operator

Thank you, David. The next question comes from Gil Blum with Needham & Co. Please proceed.

Gil Blum -- Needham and Company -- Analyst

Hello, everyone. And hello, Dan, it's great to have you on board. Maybe a first question directed toward you. So considering your experiences in rare disease commercialization in Horizon, we feel this translates well with MultiStem.

I mean it seems a bit more relevant in the ARDS space, but stroke is kind of a large indication. If you can give some color on your experience?

Dan Camardo -- Chief Executive Officer

Sure. Sure. My experience kind of spans specialty markets as well as rare disease. I think it really depends on the therapeutic area that we'd be looking at for MultiStem.

And the approach essentially is taking a look at the market, the available patient population and just kind of understanding what target market is most appropriate. The one thing I will say, too, is there's been significant advancements in our manufacturing capabilities, which we've highlighted on the call today. That gives us, I think, a significant advantage. And so as we look at the available markets going forward in my experience with rare disease, I think we have an opportunity to engage constituents in each market, be it stroke or ARDS or even trauma in this case and make sure that Athersys in particular is viewed as a potential treatment option with MultiStem and a partner in that space.

And so some of the activities that we would look at in rare disease, I think, translates over well to what we're looking at for MultiStem.

Gil Blum -- Needham and Company -- Analyst

All right. Thank you for the added color. Maybe another question here. Is there a potential for regulatory divergence in Japan approvals versus U.S.? Usually, the bar for approval in Japan is quite different than that in the U.S.

So I can definitely envision a situation in which you will see MultiStem improved in stroke in Japan but might not reach the same sort of bar you would expect for U.S. approval?

Dan Camardo -- Chief Executive Officer

B.J. do you want to take that?

B.J. Lehmann -- President and Chief Operating Officer

Yes. Yes, sure. That's an insightful question. There is the possibility of some divergence between Japan and the U.S.

and for that matter, some divergence between Japan and other jurisdictions in the U.S. and other jurisdictions more generally. It's true, as you know, I'm sure that in Japan, they have established favorable regulation and laws with respect to regenerative medicine products. And that might create some opportunities for approval of products that have not yet completed large-scale pivotal efficacy studies.

We see that as an opportunity for our partner Healios. We benefit from that if they're able to take advantage of those regulations. In fact, we're confident though that the larger TREASURE study is going to read out in a way that we hope would give them an opportunity for full approval. But you're right, there could be some divergence.

We've spent quite a lot of time in trying to work across the geographies, led by our head of regulatory -- and making sure that we're approaching these things in a common way, that the packages and information is developed in a common way, that the studies that we're running in the different geographies have relevance in the other geographies as well. So we're doing everything we can to manage this across geographies, to really optimize the outcome for us. But you're right on, there could be some divergence at the end of the day with the Japan market. But we'll take advantage of that, and I think our partner would benefit as well.

Gil Blum -- Needham and Company -- Analyst

OK. Excellent. Thank you for providing some clarity on that. And congrats on your progress.

B.J. Lehmann -- President and Chief Operating Officer

Thank you, Gil.

Dan Camardo -- Chief Executive Officer

Thanks, Gil.

Operator

This concludes our Q&A, and I will now turn it over to Dan for closing remarks.

Dan Camardo -- Chief Executive Officer

Thank you very much, and thank you all for listening to our earnings call. We value your support of the company, and we are looking forward to a very exciting year ahead in 2022. Thank you very much.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Karen Hunady -- Director of Corporate Communications and Investor Relations

Dan Camardo -- Chief Executive Officer

B.J. Lehmann -- President and Chief Operating Officer

Ivor Macleod -- Chief Financial Officer

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

David Hoang -- SMBC Nikko Securities -- Analyst

Gil Blum -- Needham and Company -- Analyst

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