We even have John Hopkins and Duke Medical Centers in our corner.
• Under our license agreement, as amended, with Johns Hopkins University (“JHU”), JHU has granted us an exclusive, worldwide license, under its patents relating to flow sorting of stem cell populations based on a fluorescent ALDH substrate (the “JHU Patents”). Under the terms of the JHU license agreement, as amended, we are obligated to pay a 3% royalty on revenues relating to therapeutic products based on the JHU Patents, and up to 7% on revenues relating to other products based on the JHU patents, subject to an annual minimum of $10,000. We must also pay up to $222,500 in the aggregate upon the satisfaction of specified development milestones. The Company bears all costs to maintain the patents. This agreement terminates with the expiration of the patents in 2016.
• Under our license agreement with Duke University (“Duke”), Duke has granted us an exclusive, worldwide license under its patents and applications that relate to methods for isolating and manufacturing ALDHbr cell populations (the “Duke Patents”). Under the terms of the Duke license agreement, we are obligated to pay up to a 1% royalty to Duke on all revenues relating to the Duke Patents, subject to an annual minimum or $5,000 (which will increase to $25,000 upon the achievement of specified development and commercialization milestones). The Company bears all costs to maintain the patents. This agreement terminates with the expiration of the patents in 2018.
First Stroke Patients in Florida Treated in Miller School Stem Cell Trial
"Yavagal performed Anderson’s study procedure on January 11, making him the second person to be enrolled in the University of Miami/Jackson Memorial Hospital arm of the nationwide trial known as RECOVER-stroke. Approximately 100 patients in the U.S. will be enrolled and randomized within the trial. About 60 of those patients will receive an intra-carotid infusion of stem cells, while the others will receive a placebo. None will know what they received until the trial’s end. Twenty patients are expected to be enrolled in the Miller School trial".
The first two stroke patients have been enrolled in a phase 2 clinical trial of a revolutionary new treatment for ischemic stroke being conducted at the University of Miami/Jackson Memorial Hospital.
The trial, using a patient’s own bone marrow stem cells, is the first intra-arterial stroke stem cell trial in the U.S., and the two UM/Jackson patients are the first in Florida to participate.
Led by Dileep Yavagal, M.D., assistant professor of neurology and neurological surgery, the trial is examining the efficacy of ALD-401, derived from bone marrow, to repair and regenerate tissue following an ischemic event.
James Anderson, a physical education teacher from Maine, is hopeful that participating in the double-blind study will help him recover more quickly. “Stroke is not an easy problem. I liked something that was progressive and I could be involved in.”
Four days before Christmas, Anderson and his wife Barbara had just arrived in Naples to visit his mother-in-law when he suddenly grew very pale. Having run three miles the day before, they had no warning that he was having a major stroke. Anderson was given tissue plasminogen activator (tPA) at a West Coast hospital, but was soon airlifted to Jackson Memorial Hospital, a comprehensive stroke center, because of the severity of the stroke. That’s when Yavagal, who is also Director of Interventional Neurology at UHealth, visited the 58-year-old to explain the study.
Once either tPA is administered to break up a blocked artery or a clot-removal procedure is performed, there are no approved therapies for persisting neurological disabilities seen in a significant number of stroke patients despite treatment and rehabilitation. Yavagal believes ALD-401, which is derived from ALDHbr cells isolated from bone marrow and is injected within weeks of a primary ischemic stroke, has the potential to be one. Manufactured by Aldagen, a wholly-owned subsidiary of Cytomedix, Inc., ALD-401 contains all cell types thought to repair and regenerate tissue following an ischemic event and offers multiple mechanisms of action.
The middle school teacher’s wife, Barbara, said they discussed it with the family and she and James “felt it was right and a way to help others as well…. We really want to be in on the beginning of this so others can benefit.”
Yavagal performed Anderson’s study procedure on January 11, making him the second person to be enrolled in the University of Miami/Jackson Memorial Hospital arm of the nationwide trial known as RECOVER-stroke. Approximately 100 patients in the U.S. will be enrolled and randomized within the trial. About 60 of those patients will receive an intra-carotid infusion of stem cells, while the others will receive a placebo. None will know what they received until the trial’s end. Twenty patients are expected to be enrolled in the Miller School trial.
Yavagal is a leader in research of the intra-arterial delivery of stem cells for stroke and has been funded for this research over the last four years. He works in close collaboration with Joshua M. Hare, M.D., Director of the Interdisciplinary Stem Cell Institute, to translate the promise of stem cells for stroke patients. He is on the national steering committee of the RECOVER-Stroke trial.
With intra-arterial delivery, the cells are delivered directly to the brain via the carotid artery, avoiding their becoming trapped in the lungs and liver, which occurs when stem cells have been administered intravenously. Yavagal, who is also Co-Director of Endovascular Neurosurgery and a faculty member of the Interdisciplinary Stem Cell Institute, says this trial is “hugely significant” because of its delivery method. Despite the availability of tPA and clot-removal procedures, fewer than 40 percent of stroke patients regain their independence.
Anderson was left paralyzed along his left side but can speak. The first person to be enrolled, a 60-year-old Hialeah man, is using a walker but has lost his speech for now. The study is blinded, so neither patient knows whether they received the stem cells or not. They will receive MRI and CT scans regularly to monitor their progress.
An avid fisherman, Anderson instills exercise as a way of life to his students. For now, he’s receiving occupational and recreational therapy along with speech and physical therapy. He is hopeful that his rehabilitation and the stem cell treatment will decrease his recovery time, allowing him to return to his “regular life” sooner. Anderson says he finds encouragement from Yavagal. “I’m inspired by him whenever I see him and talk to him. He’s progressive and cares about people.”
University of Miami
Cytomedix, Inc. (OTCQX: CMXI) (the "Company"), a regenerative therapies company commercializing and developing innovative platelet and adult stem cell technologies, announced today the signing of an agreement with NIH to collaborate on a Phase 2 clinical study in patients with intermittent claudication (IC). IC is caused by peripheral arterial disease (PAD), a condition causing reduced flow of blood and oxygen to muscles of the leg. The study is being funded by NHLBI/NIH and managed by the Cardiovascular Cell Therapy Research Network (CCTRN), which is also responsible for enrolling patients. The CCTRN is a network that includes seven centers in the United States with experience and expertise in stem cell clinical trials studying treatments for cardiovascular heart diseases.
The Phase 2 PACE (Patients with Intermittent Claudication Injected with ALDH Bright Cells) study is an 80 patient, double-blind, placebo-controlled clinical trial intended to demonstrate the safety and efficacy of ALD-301 (Bright Cells) in patients diagnosed with IC. The primary endpoints of the study are safety and the change in peak walking time at 6 months compared to baseline. Additionally, changes in leg collateral arterial anatomy, calf muscle blood flow, and tissue perfusion as determined by magnetic resonance imaging (MRI) will be examined. These novel MRI techniques are incorporated into the study to assess perfusion, providing a unique set of data potentially supporting the angiogenic mechanism of Bright Cells. The clinical study has received Investigational New Drug approval from the U.S. Food and Drug Administration (FDA) and is expected to begin enrollment in Q1 2013 upon the Investigational Review Board approvals from the participating centers.
Martin P. Rosendale, Chief Executive Officer of Cytomedix, stated, "We are delighted that the CCTRN has chosen to collaborate with Cytomedix on this study. Our February acquisition of Aldagen and the Bright Cell technology has positioned us well to play a leading role in investigating promising clinical paths in regenerative medicine where there exists significant unmet medical need. We look forward to supplying a highly differentiated personalized cell therapy product to the participating CCTRN centers involved with this important PAD indication. Intermittent claudication is a serious consequence of arteriosclerosis which, if left untreated, will likely progress to pain at rest and possibly open wounds. Our experience with the AutoloGel product and the clinical treatment of lower extremity wounds resulting from CLI has provided us with a full appreciation of the difficult clinical outcomes associated with this compromised patient population. We are hopeful that improvements in lower leg blood flow will lead to increased peak walking time which has been accepted as an FDA approvable endpoint in pivotal Phase 3 trials in IC."
"This is the first randomized clinical trial to look at the benefits of autologous stem cell therapy in PAD patients with IC. It will collect important mechanistic and clinical information on the efficacy and safety of the direct injection of Bright Cells into these patients. It will also evaluate the utility of advanced imaging endpoints that could be used in the future to further understand the impact of novel therapies in this patient population," added Lem Moyé, M.D., Ph.D., professor of biostatistics at the University of Texas School of Public Health, Houston, and co-author of the study protocol.
PAD is a major unmet medical need affecting approximately 8 to 10 million patients in the U.S. IC is a significant subset of the PAD population and is characterized by pain in the lower legs while in motion that resolves upon rest. Critical limb ischemia (CLI) is the advanced form of PAD, and is associated with poor clinical outcomes and increased morbidity. An important goal of medical intervention is to attempt to prevent the progression of patients from IC to CLI. This clinical study builds on the strong data showing increased blood flow and improved clinical status from Cytomedix's previous Phase 1/2 study of ALD-301 in CLI published last year ("A Randomized, Controlled Study of Autologous Therapy with Bone Marrow-Derived Aldehyde Dehydrogenase Bright Cells in Patients with Critical Limb Ischemia" Catheterization and Cardiovascular Interventions 2011). In the PACE study, ALD-301 will be delivered in the same manner, via direct, intramuscular injection in a grid pattern of the affected lower limb. Cytomedix will be responsible for manufacturing ALD-301 for the clinical trial and will have certain rights to data generated during the trial.
About ALD-301/ALDH Bright Cells
ALD-301 is a population of autologous pluripotent stem cells isolated from the patients' bone marrow using Cytomedix' proprietary Bright Cell technology. These adult stem cells express high levels of the enzyme ALDH, an indicator of biological activity in heterogeneous early stage stem cells. Preclinical research suggests that ALD-301 may promote the repair of ischemic tissue damage by producing signaling molecules that are involved in cell recruitment, cell adhesion, and angiogenesis
Sentiment: Strong Buy
2013 the year of return...
Cytomedix (OTC: CMXI) Q1/13 Results – BUY, this is the year for growth and return!
Fri 4:14 pm by Henry McCusker
Net loss of $5.33 M, or $0.05 per share
A net loss of $5.33 million or $0.05 per share in Q1/13 compared to a net loss of $4.73 million or $0.07 per share in Q1/12.
Total revenues were $2.3 million, a decrease of approximately $700 K compared to Q1/12 revenues of $3.016 million. The decrease was mostly due to license fee revenue of $1.3 million recognized in 2012 with respect to an option agreement with a top 20 global pharmaceutical company. Product sales in the quarter were $2.3 million, an increase of 34% compared $1.686 million in Q1/12.
Cost of revenues= cost of sales of $1.267 million versus $848.4 K in Q1/12 and royalties of $5.134 K compared with zero (o) in Q1/12 with a total cost of revenues of $1.272 million and resulting in a gross profit of $1.044 million compared with Q1/12 numbers of $2.168 million.
Gross margin on product sales decreased to 44% from 50%. Sales on lower margin products, specifically Angel machines sold to international distributors, made up a more significant portion of the product mix. The medical device excise tax took effect in 2013, resulting in a decrease in gross margin on product sales. Overall gross margin decreased to 45% from 72%. The license fee recorded in the first quarter of 2012 had no associated cost of revenue and was the primary reason for the decline in overall gross margin year over year.
Q1/13 cash margins on product sales were 52% while cash margins on disposable products were 56%. CMXI defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales.
R&D expenses were $900 K, an increase of $544 K or 152% year over year. The increase was primarily due to R&D costs related to the ALD-401 P2 clinical trial. SG&A expenses were $5.1 million, an increase of 14% over the $4.5 million from Q1/12.
Total operating expenses in the quarter were $6 million an increase of $1.1 million or 24% compared to $4.88 million in Q1/12. Thus a loss from operations was $5 million versus $2.719 million in Q1/12. Cash used in operating activities during Q1/13 was $4.2 million. Shares used in computing the net loss were 99.1 million in Q1/13 compared to 63.26 million in Q1/12. There were 104.3 million shares of common stock issued and outstanding as of 3/31/13.
Cash and cash equivalents were $7.2 million at 3/31/3.
In 2/13, CMXI entered into financing transactions for up to $27.5 million overall, which included a tranched $7.5 million senior secured term loan facility, a $5 million equity raise, and a $15 million committed equity facility. Approximately $9.5 million of gross proceeds was received upon closing with commitments for up to an additional $18 million.
The Centers for Medicare & Medicaid Services (CMS) granted formal approval of the protocols for AutoloGel TM under Coverage with Evidence Development(CED). CMS issued coding and reimbursement claims instructions for AutoloGel in non-healing chronic wounds;
The Angel® Concentrated Platelet Rich Plasma (cPRP) System was approved for marketing in Australia;
A 3 year agreement with Vibra Healthcare, LLC, an owner and operator of Long Term Acute Care (LTAC) hospitals and Inpatient Rehabilitation Hospitals (IRF). This agreement will facilitate the use of the AutoloGel System for the treatment of wounds at Vibra Healthcare facilities throughout the US;
Steven A. Shallcross, CPA, was appointed as EVP, CFO, Secretary and Treasurer.
The Bottom Line: Revenues decreased $700 K – a license fee recognition issue – happens. Cost of revenues increased resulting in gross margins decreased. But, SG&A expenses increased 14%. R&D jumped but on the basis of the ALD P2 trial costs which are important to the future. The cash raise was successful in traunches for $18 million. CMXI will have sufficient cash to sustain itself through 2013. This is a consolidation and focus quarter setting CMXI’s gears to move exponentially forward. CMXI also expects to begin treating Medicare beneficiaries with AutoloGel shortly and will be recording revenues for those AutoloGel treatments soon after the CED implementation date of July 1st 2013.
Product sales continued a steady growth trend, with total sales of $2.3 million in Q1/13 – Angel sales of $2.1 million were particularly strong, up 40% year over year. Both Angel and AutoloGel achieved double digit increases sequentially over Q1/12 with more than 500 Angel Systems on a worldwide basis. Over 40,000 patients are currently being treated with the Angel System on an annualized basis. Reimbursement is the most important milestone for any device – AutoloGel will be covered initially by CMS under the CED program – when CMS formally approved the clinical outcomes in the protocols submitted in response to the NCD memo. CMS has also issued coding and reimbursement instructions to its regional contractors.
The Bright Cell technology pipeline continues to move forward; the clinical development plan includes completion of enrollment in the RECOVER-Stroke Trial with top-line data available in the first half of 2014, and beginning enrollment in the P2 PACE study with ALD-301 in patients with intermittent claudication. The RECOVER-Stroke trial is currently enrolling at 10 sites. The first 30 patients have been enrolled, and CMXI expects to have the planned DSMB review soon. On the whole I am giving credit to Martin and Ed – but caution on cost and expense containment - isn’t that what a new CFO is for!
CMXI closed at $0.47 on 5/9/13. The 50 day moving average is $0.50 compared with the 200 day of $0.63 – the needle needs to be pushed! Investors should compare CMXI to Cytori (CYTX) who is trading at $2.59 as a good hybrid comparable. Let’s watch the statistics – short interest if low ! The issue is visibility which is being addressed in the upcoming Q’s.Expectation is “murky” how perception will be – post earnings but I project a … BUY
Sentiment: Strong Buy
sure looks that way...LMAO!
Q1/13 Cytomedix Facts...No Spin Zone...
Thank you Michael. Good morning everyone and thank you for joining us today. With me today is Steven Shallcross, our new Chief Financial Officer. As most of you already know, Steve was announced CFO of Cytomedix beginning of April and his appointment becomes effective today. For that reason, we felt it was important that he’d be on the call this morning, but because it is his first official day. I plan to discuss the company’s financial results during this call. Steve?
Thanks, Marty. I’d just like to say that I’m fortunate to have joined Cytomedix in a time when there are so many exciting commercial and clinical opportunities. By positioning itself with two product platforms, that offer clinical solutions for difficult to treat wounds and a therapeutic platform from the ADLH Bright Cell technology that has the potential to become a leading treatment for skin, stroke and other cardiovascular diseases.
The company is ideally situated to take advantage of the (inaudible) potential near and long-term value creating opportunities. I look forward to working with Marty and his impressive team to help unlock stakeholder value and to address these large existing market opportunities with clearing unmet medical needs. Marty?
Welcome aboard Steve. We’re glad to have you part of the team. Turning back to our update. I’m pleased to report to-date Cytomedix’s made significant progress into its commercial operations and corporate programs. And we continue to see positive advances in our research and development projects during the first quarter. Specifically, product revenues continue their steady growth with total sales of $2.3 million during the first quarter of 2013.
We were especially pleased to report a 40% year-over-year growth in Angel sales. The growth has been driven by the unique ability of the Angel system to adapt to clinical requirements and product an appropriate therapeutic. There is no other device that can boast the same degree of flexibility or clinical convenience to support the requirements of our physician customers and their patients.
Both Angel and AutoloGel achieved double-digit sequential quarter-to-quarter growth with Angel up 11% and AutoloGel up 14% compared to the prior quarter. Sales of Angel in international markets have been particularly meaningful to the products overall revenues. And this past February, we launched Angel in Australia, where there is significant growth opportunity for PRP.
We are fortunate to have Medtel, a leading supplier of medical equipment and devices as our partner in Australia. In addition, we are continuing to ramp up our sales infrastructure, to that end. We have hired Dr. Richard Kowalski to lead our medicine information group supporting our customers. I’ve known Rich, since working with him 13 years ago, when we launched a new immune system diagnostic product together.
He’s an excellent addition to our team. We currently have 10 full-time sales managers up from eight last quarter, and we are committed to driving sales and increasing shareholder value. We have now placed more than 500 Angel systems worldwide, and over 40,000 patients are currently being treated annually. The ability of Angel to process topology of the bone marrow, given the 510K clearance we received last November, has attracted a number of potential strategic partners interested in supply and distribution agreement for the orthopedic applications of the technology.
We are encouraged by the ongoing interest and enthusiasm of these potential partners and we remain optimistic that we will reach an agreement that will drive significant additional value for the technology. During the quarter, we also continue to see significant progress and our efforts to facilitate the reimbursement of AutoloGel.
As most of you know by now, the Center for Medicare and Medicaid Services agreed last year to provide coverage to patients under their Coverage with Evidence Development or CED program. CED is a determination made by CMS that their medical product is reasonable and necessary based on the best available clinical data, but CMS wants to be able to monitor ongoing evidence of effectiveness of the therapy.
In March, CMS issued reimbursement coding and claims guidance to its regional contractors for the use of AutoloGel in chronic non-healing wounds. This was an important milestone. The assignment of a healthcare common procedure coding system code, establishes the reimbursement mechanism for physicians and other providers submit claims for services provided to Medicare beneficiaries.
Receipt of the HCPCS code along with the protocol approval, we received under the Coverage with Evidence Development program brings up closer to the realization of the commercial reimbursement for AutoloGel. The new HCPCS code G-0460 is a temporary code that will be used to process claims for reimbursement of the products and service provided. In addition to the code, Medicare claims related to AutoloGel will include an identification number specific to AutoloGel and the appropriate protocol.
Under the reimbursement coding and claims payments instructions. Medicare contractors will pay claims for services provided in the number of settings including hospital outpatient department, skilled nursing facilities, rural health clinics, comprehensive outpatient rehabilitation facilities, federally qualified health centers and critical access hospitals.
We expect to begin treating Medicare beneficiaries with AutoloGel shortly and we will begin recording revenues concurrence with the July 1st, implementation date for the coverage. We are of course, pleased with these developments and our productive interactions with CMS will continue to engage in ongoing discussions with CMS regarding CED and the related guidance they publish and we will provide you with updates as appropriate.
Our conversations with potential partners for AutoloGel continue. Those conversations are moving forward and while we have nothing definitive to announce at this time. We can tell you that, the potential partners we have been talking with over the past months remain interested and enthusiastic. Based on their continued interest and our discussions, we are very optimistic about the possibility of a partnership that builds value for shareholders.
Now before I get into our pipeline and other projects, we have going on. I’d like to provide you with some more detail regarding our financial results for the quarter. As I mentioned earlier, total revenues were $2.3 million in the three month ended March 31st, 2013. The majority of this was comprised of Angel and AutoloGel sales. There was a decrease of approximately $700,000 compared to the same period last year.
I would stress that this decrease was entirely due to license fee revenue of $1.3 million recognized in 2012, with respect to an option agreement with a top 20 global pharmaceutical company that we were in discussions with at that time. Product sales increased by 34% compared with the $1.7 million reported in the same period last year. Gross margins on product sales was 44%. This compares with 50% reported in the same period last year.
Sales on lower margin products, specifically Angel machines sold to international distributors, made up a more significant portion of the product mix. This is now surprising, given the need to establish a strong core and base of business in the international markets. This along with the medical device excise tax, which took effect in 2013 as a result of the Affordable Care Act, resulted in the decrease in gross margin on product sales.
Overall gross margin decreased to 45% from 72%. The $1.3 million license fee recorded in the first quarter of 2012 had no associated cost of revenue and was the primary reason for the higher gross margin in 2012. First quarter cash margins on product sales were 52%. Cash margins on disposable products in the quarter were 56%. Cash margin is a non-GAAP financial measure, most directly comparable to gross margin, but should not be considered as an alternative to the GAAP accounting measure.
Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales. Research & development expenses were $900,000, an increase of $544,000 or 152% year-over-year. This increase was primarily due to research and development cost related to the ALD-401 Phase II clinical trial.
Selling, general and administrative expenses were $5.1 million during the quarter, an increase of 14% over the $4.5 million reported in the same quarter in 2012. It is worth noting, that there was a one-time $1 million non-cash charge included in this quarter’s SG&A expenses. Due to the modifications in terms of the contingent Aldagen acquisition consideration. After this charge, year-over-year, SG&A expenses were lower.
In total, operating expenses in the quarter were $6 million, an increase of $1.2 million or 24% compared to the same period in 2012. Net other expenses in the quarter decreased by $1.7 million or 83% to $330,000 compared to the first quarter last year. The decrease was primarily due to approximately $1.5 million recorded in 2012 related to a non-cash inducement expenses associated with common stock issued to Series D preferred stockholders as well as a $413,000 positive non-cash change in the fair value of the derivative liabilities.
The company recorded net loss of $5.3 million or $0.05 per share in the three month period ended March 31, 2013. Compared to a net loss of $4.7 million or $0.07 per share in the comparable period in 2012. At March 31, 2013 we had approximately $7.2 million. In February, we strengthened our balance sheet by entering into several financing transactions providing up to an aggregate of $27.5 million in capital.
These included at equity raise, a tranched senior secured term loan facility and a committed equity facility. We received approximately $9.5 million in gross proceeds with commitments for up to an additional $18 million. This capital effusion provides us with a necessary capital to fund our priority activities in 2013, which includes the launch of AutoloGel under CED, sales expansion for the Angel cPRP system. RECOVER-Stroke Trial, clinical trial activities as well as business developments and partnering activities.
Now I’d like to take a minute, to address the recently issued special shareholders meeting proxy statement. The company with (inaudible) from our board financial advisors, has decided to ask our shareholders to authorize a reverse stock split that can only be executed in connection with an uplifting to a major trading exchange such as NASDAQ.
Cytomedix currently meet all of the requirement for such an uplifting with the exception of our stock price. The purpose of the proposal (inaudible) will be to raise the per share trading price of Cytomedix’s common stock, to meet the requirement for listing on the NASDAQ capital market exchange. We feel strongly that increasing our price per share, decrease in the number of common shares outstanding and uplifting to a major exchange will likely make the company more attractive to potential new investors and strategic partners.
In fact, we have received direct feedback from a number of key institutional investors, who have expressed interest in becoming shareholder, who are currently unable to invest in CMXI because we trade and over-the-counter basis. And uplifting to NASDAQ will eliminate that barrier. While this spilt, is over to curve would not change the underlying value of Cytomedix. It would permit us additional flexibility in seeking funding and as I just mentioned, would allow some key investors in the by-side to consider adding CMXI to their holdings.
Ultimately, management and the board are dedicated to growing shareholder value, and their proposed reverse split is one of the options that we are considering to achieve that goal. This action requires a shareholder vote. We look forward addressing it in annual shareholder meeting at the end of this month. Now turning to our pipeline, our bright cell technology pipeline continues to make progress.
We have two phase, two studies ongoing. The first is the RECOVER-Stroke Trial designed to treat ischemic stroke. It is a 100 patient double-blind sham control study. We are now in the open enrollment period and have randomized the first 30 patients. We expect to have to top-line data released in the first half of 2014. 10 clinical sites are now up and running and the queue up sites working to get into the study is active.
We expect 15 or more sites to be enrolling patients before long, but the first 30 patients randomized. We are preparing documentation for the scheduled DSMB review and expect the results shortly. The PACE study is an 80 patient double-blind placebo control clinical trial designed to look at the safety and efficacy of ALD-301 in peripheral arterial disease. Specifically patients diagnosed with intermittent claudication.
This is the first ever randomized clinical trial look at the benefit of autologous stem cell therapy in this indication. The clinical study has received investigational new drug approval from the FDA and is expected to begin enrollment this quarter, upon the investigational review broad approvals from the participating centers. The study is fully funded by NIH and will be conducted by the Cardiovascular Cell Therapy Research Network, the CCTRN.
So there will be very little out-of-pocket cost for Cytomedix aside from what we will incur in manufacturing the therapy. Duke University and Medical Center is also conducting a Phase I clinical study with ALD-451 and patients that have been treated for Glioblastoma, brain cancer. This open label study will enroll up to 12 patients and is intended to demonstrate the feasibility and safety of ALD-451 when administered intravenously and patients with grade IV Malignant glioma following surgery, radiation therapy and chemotherapy.
One patient has been enrolled to-date in this study. In closing, the first quarter of 2013 was a period of strong growth and exciting milestones. Our products continued to well received and our pipeline is on track. With the recent financing transactions, we are confident that the company has sufficient cash with the near term and we remain excited and optimistic about the future.
Before we take questions, I’d like to take just a minute to address some of the questions that I have been getting from investors that have been calling lately. First of all, with respect to the reverse split. We understand clearly, the concerns about our reverse split. We’ve seen the data that demonstrates when a reverse split is done defensively, it can lead to lower value in the company that evaluation loss can be 25% even 30%, but again that’s when it’s done from a position of weakness and done defensively such as to maintain a listing on a major exchange.
If you look at the data that demonstrates, what happens when a company does a reverse split strategically? For instance to gain an uplifting, most often and most company who gain value, anywhere from 5% to 10%. Our plan is to facilitate a reverse split, only in the context of doing, of completing an uplifting to NASDAQ. We meet all other requirements for that uplifting, in every way except the share price.
In addition, we expect to have additional milestones that we’ll meet this yet, that will also support our valuation and continue to increase shareholder value. Now I’d like to point out that we requested from our shareholders last year, the same authority to do a reverse split under specific strategic conditions. Now those conditions were not met last year and being responsible in very strategic and the way we make these decisions, we chose not to implement that reverse split.
This year, we are asking for the same authorization from our shareholders to conduct a reverse split, only in the context that they said of an uplifting NASDAQ. This is a strategic move and based on the data that we reviewed, this is a move that should increase value for the company, by allowing additional shareholders to invest, increasing our liquidity and driving that value.
The other question that I’ve been getting frequently has to do with the partnership discussions that we have going on. And that question is, are we talking to the same potential partners today that we were talking with at the end of last year. Certainly the concern there is, that the partners have been coming and going and we are talking to an entirely different group today. That is absolutely not the case, these discussions take time. The companies have to get comfortable with one another, the potential partner has to get comfortable with our systems, our quality systems, the quality of our product, our ability to scale and so forth.
The potential partner, that we are talking with today, are the same partners that we’ve been talking with, they continue to be enthusiastic and excited about the opportunity. So I just wanted to make sure, that was clear
Sentiment: Strong Buy