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Edited Transcript of CYTX earnings conference call or presentation 14-Nov-18 10:30pm GMT

Q3 2018 Cytori Therapeutics Inc Earnings Call

San Diego Jan 8, 2019 (Thomson StreetEvents) -- Edited Transcript of Cytori Therapeutics Inc earnings conference call or presentation Wednesday, November 14, 2018 at 10:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Marc H. Hedrick

Cytori Therapeutics, Inc. - CEO, President & Director

* Tiago M. Girão

Cytori Therapeutics, Inc. - VP of Finance, CFO & Secretary

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Conference Call Participants

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* I-Eh Jen

Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst

* Jason Howard Kolbert

H.C. Wainwright & Co, LLC, Research Division - Former MD & Senior Healthcare Analyst

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen. Welcome to the Cytori Therapeutics Third Quarter 2018 Earnings Results Call. (Operator Instructions) Before we begin, we want to advise you that over the course of the call and question-and-answer session, forward-looking statements will be made regarding events, trends, business prospects and financial performance, which may affect Cytori's future operating results and financial position. As such, statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factor section included in Cytori's annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission from time-to-time. Cytori advises you to review these risk factors in considering such statements. Cytori assumes no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Marc Hedrick, Cytori's President and Chief Executive Officer. Sir, you may begin.

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [2]

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Good afternoon, everyone. Thank you, Ian. Welcome to our third quarter 2018 earnings call. I'm Marc Hedrick, President and CEO of Cytori. Joining me on today's call is our CFO, Mr. Tiago Girão. On the call today, I'll provide an update on the company's Nanomedicine, oncology and Cell Therapy programs, then Tiago will update you on the financial and commercial performance. After which, I'll update on forthcoming milestones and then we'll have time for Q&A.

To begin with, Cytori is developing and manufacturing chemotherapy drug ATI-0918, which is a generic pegylated liposomal doxorubicin hydrochloride intended to be bioequivalent to the European reference drug. As mentioned on previous calls, we intend to position this as a high-quality U.S.-made product with maximal clinical effectiveness primarily targeting breast and ovarian cancers. We have the goal to be the first or second generic on the market in Europe, for the target launch in 2020 via a commercial partner.

Let me give you a few specific updates on the program. The products proposed in this domain is currently under review by the [Union Review] group within the EMA. The product will be available in 10R and 25R vials, identical to the EU comparative drug, and we are currently finalizing the packaging design. The program is in the manufacturing validation phase, and once both manufactures is complete, we will outsource the bulk product for sterile filling, packaging and product finish. The first finished lots will then be placed on stability testing. And the company is in the process of preparing its marketing authorization application to be filed with the EMA. That will happen next year, following 6 months of stability testing and other testing of our validated lots.

The company also continues to actively engage with a number of potential interested commercial partners for ATI-0918, and these discussions are focused outside of the U.S., specifically in Europe, EMEA and the AP. As mentioned previously, the global market for this drug is conservatively estimated to be approximately $400 million to $750 million annually. And specifically, Europe, the estimated annual market opportunity is approximately $120 million to $300 million.

Now let me switch over and provide an update on our ATI-1123 program. 1123 is a Phase II-ready albumin-stabilized pegylated liposomal docetaxel. Protein stabilization enhances both the integration of the lipophilic API docetaxel and the stability of the liposome. The polyethylene glycol on the liposome circuits extends blood circulation time, while reducing mononuclear phagocyte system uptake.

Cytori is developing ATI-1123 to provide key multidimensional enhancements to existing formulations of docetaxel. Specifically, we intend 1123 to improve safety by removing the need for unwanted solvents; reduce morbidity by eliminating requirement for standard pretreatment medications; provide better patient and provider convenience and comfort; require less patient time spent in the treatment center; lower the cost of therapy and enhance docetaxel exposure to the tumor, which may have efficacy benefits.

The company has recently attained orphan drug designation from FDA for small cell lung cancer, one of our clinical targets. Next, the company will seek to update its active IND and seek applicability via the FDA's 505(b)(2) New Drug Application pathway in the U.S. This may offer an accelerated development time line and lower development cost. We currently estimate FDA 505(b)(2) clarity in the first half of 2019.

Now let me shift over to discuss our Cell Therapy program. In terms of Cell Therapy, our team is awaiting 2 data readouts from clinical trials, the most important of which is in our SUI trial. But also, we are actively conducting a clinical trial in the U.S. for thermal burns. The pivotal ADRESU II trial for stress urinary incontinence in men performed in Japan is fully enrolled and will yield 1 year follow-up data for 45 treated patients.

Last patient, last visit in terms of the follow up for this trial is scheduled for March 2019. Thus far, the trial has demonstrated that the treatment is safe and the primary endpoint readout expected the first half of next year is a responder analysis assessing the improvement over baseline in urinary incontinence. Since the data meets the primary and key secondary endpoints, the company will be prepared to seek expedited approval and reimbursement in Japan for this indication and potentially broaden our development activities.

The company would also likely leverage its current commercial infrastructure in Japan to bring this product directly to market, but we would also consider partnerships as well. As to the market size for this indication, as I mentioned on the last call, according to the Japanese National Cancer Center, over 86,000 men are diagnosed with prostate cancer each year. In a recently published study, up to 42% of those patients undergoing radical prostatectomy subsequently developed stress urinary incontinence, which may profoundly compromise quality of life.

In addition, the same ECCI-50 cell therapeutic has also demonstrated initial promising clinical results in women that have stress urinary incontinence. And then the market is much more sizable with almost 3 million potential patients in Japan.

So our plan is to update shareholders when the last patient's last visit occurs. After the 6 months data from the 40 patients, French investigator-initiated SCLERADEC II clinical trial in scleroderma is expected later this year.

As previously mentioned, there is a smaller version of the U.S. STAR trial, the trial is not powered for efficacy. And furthermore, we now know that the majority of the enrolled patients, about 63%, 25 out of 40 enrolled, have a limited disease. However, if we exhibit positive EU data trends, this data, coupled with STAR trial data, may be sufficient to file or consider filing for conditional EU approval for this orphan indication in Europe. Our plan is to evaluate that once the data set is fully available to us.

Finally, with the protocol amendments for the RELIEF thermal burn injury trial approved by the FDA, the BARDA-sponsored trial is now ongoing and has 5 sites actively screening patients. We anticipate having a maximum of 7 sites bringing patients by year end in a total of 10 sites by the end of Q1. The goal of the Phase I trial is to enroll a maximum of 15 patients and assess patient safety and investigate the feasibility of the intravenous infusion of ADRCs on full thickness burns, partial thickness burns in a skin graft donor sites on these patients.

Since June, Cytori continues the successful in-process review with BARDA regarding this trial. We also have a number of additional investigator trials that are ongoing closest to home in the U.S. Cytori continues to support the Mayo Clinic Rochester FDA-approved investigator-initiated trial of Cytori Cell Therapy for bilateral osteonecrosis of the hip, which is a rare disease that affects up to 20,000 new patients each year in the U.S. Thus far, 8 patients have been treated to date with a target total enrollment of 25 patients.

Now moving on to some brief comments on our commercial and manufacturing activity. In Japan, where we are most commercially active, our solution system of products are commercially approved under the Regenerative Medicine Law for autologous cell therapy and largely used in the aesthetic market to provide natural implant-free breast augmentations and for the clinical benefit in orthopedic patients with debilitating osteoarthritis of the knee who want to avoid total knee arthroplasty.

We saw consistent growth in consumables continuing through Q3. The company remains on track to see continued double-digit year-over-year growth in consumable utilization based largely on Japanese utilization. Tiago will discuss these data and trends more specifically in his remarks.

I would like to just take a couple of minutes and follow up on a couple of points previously discussed regarding Celution, which is product life cycle management and manufacturing progress. These points are particularly important as we work to supply the growing consumable demand and prepare for pivotal trial data in Japan. First to the Celution device. We mentioned last quarter that we've previously completed a substantial upgrade of the Celution system that we call CTX-1. That system is currently being used in the U.S. RELIEF trial. Ultimately, this will be made available commercially based on the outcome of the intended up-classification of our Celution technology in Japan from Class 1 to Class 3 registration, which is currently under evaluation.

We continue to manufacture Celution devices in our San Diego facility for the time being. As to Celution consumables, given the substantial growth experienced in that market over the past few quarters, we have outsourced Celution consumable manufacturing. This move will reduce the cost, improve the gross margins and enhance our supply capabilities for this product. The first sterilized consumables will be available for distribution to Japan and Europe in Q4. In parallel, we are managing customer demands with the current inventory on hand, and we're in the process of resolving all existing backorder situation.

Finally, in terms of the obligatory enzymes involved in the Celution process sold as part of the consumable bundle, namely Celase and Intervase, we're in the process of developing an alternative supply chain to ensure a consistent future supply of product while attempting to reduce the cost. This program is an 18-month and 2-year project but we currently have sufficient inventory to adequately supply our customer demand while we bring the new supply online. Now I'd like to turn the phone over to Tiago for his comments. Tiago?

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Tiago M. Girão, Cytori Therapeutics, Inc. - VP of Finance, CFO & Secretary [3]

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Thank you, Marc, and good afternoon, everyone. As mentioned, our primary business focus is obtaining approval for our ATI-0918 product and bringing it to market in Europe through a commercial partner, while targeting investments in advancing ATI-1123 to Phase II. Additionally, we are managing our Cell Therapy business for ongoing growth while we obtain the forthcoming data readouts in the pivotal ADRESU trial. We believe shareholder value can be best achieved in these targeted mixed activities.

In parallel, we continue to make incremental progress in cash management and operating performance improvements. Specifically, despite the additional new investments in our recently acquired oncology assets, operating cash burn was managed down to $2.6 million in Q3 2018 as compared to $4 million in Q3 2017. The reduction in cash burn was mostly related to reductions in net losses adjusted for noncash items of approximately $1 million, coupled with working capital improvements of approximately $400,000. For the 9-month period ending September 30, 2018, operating cash burn reduced to $9.5 million compared to $13.9 million for the same period last year. The reduction, again, driven primarily by reductions in net losses adjusted for noncash items were $4.1 million.

Net losses totaled $2.3 million in Q3 2018 or $0.27 per share. Q3 net loss includes a $1.7 million credit related to a change in fair value of warrant liability. This compares with the $4.8 million net loss or $1.39 per share in Q3 of 2017. For the year-to-date period, net losses totaled $10.4 million or $1.49 per share. The year-to-date net loss also includes a $1.7 million credit related to the change in fair value of the warrant liability. This compares with a net loss of $18.4 million or $6.22 per share for the same period in 2017. Note that the net losses in 2017 do include a noncash charge of $1.7 million recorded associated with the IP R&D charge for oncology asset acquisition.

On research and development expenses. In Q3, our R&D expenses, excluding share-based compensation, were $1.9 million as compared to $3 million in expense in Q3 of 2017. On the same basis, the year-to-date period, our research and development expenses were $6.3 million as compared to $9.2 million in 2017. The decrease in R&D spending during both periods are attributed primarily due to the completion of our STAR clinical trial activities and efficiency improvements.

While these reductions were partially offset by our investments into ATI-0918 manufacturing activities in our San Antonio plant as well as our investments in the RELIEF clinical trial. As a percentage of overall spend, and when excluding share-based compensation, our R&D expense for Q3 and year-to-date periods were approximately 50% of total operating expenses. This is in line with our plans and indicative of our focus into these programs.

Now on our sales and marketing. Our sales and marketing activities and related expenses decreased this quarter to approximately $442,000 as compared to $812,000 in Q3 2017. On the same basis, for the year-to-date period, our sales and marketing expenses were $1.6 million versus $3 million in expense in 2017. The decreasing expenses during this period are related to refocusing of our efforts to the most profitable near-term business areas.

G&A expense, excluding share-based compensation, was $1.4 million this quarter as compared to $1.7 million in Q3 2017. And it was $4.4 million compared to $5.6 million for the year-to-date period, when excluding share-based compensation payment as well as $600,000 related to a onetime lease termination fee this past January.

The continuing tightening of our G&A expenses was related principally to ongoing improvement efficiencies, discretionary spend reduction and previous reductions in headcount from the September 2017 restructuring. Now with respect to our revenues. Q3 total revenues were $1.3 million as compared to $1.8 million in the third quarter 2017. Year-to-date, our total revenues were $4.5 million compared to $4.9 million for the same period last year, a revenue total results from both products and contract revenue. As it relates to product revenue, we have seen an increase of approximately 400k or over 80% in Q3 2018 as compared to 2017. And that increase was driven by an increase of approximately 90% in consumable realization in Japan quarter-over-quarter.

On the year-to-date, consumable growth in Japan is over 70%. Growing clinical utilization under the current Regenerative Medicine Law is primarily occurring in the aesthetics and orthopedic market. We believe under the current approvals and current regulatory up-classification, there is a meaningful upside revenue opportunity for the company in the near future.

As guided, we once again achieved double-digit consumable growth for the quarter in Japan and anticipate that trend to continue. Currently, Japanese consumable revenues represents over 80% of total product revenue in that country, for both quarter and the year-to-date period.

On our government contract revenues that is specifically related to our activities with BARDA, these activities decreased by approximately $800,000 this quarter as compared to Q3 last year. And this is due to the transition from the trial preparatory activities that were taking place last year to actual enrollment of the RELIEF clinical trial now, occurring at this time.

Turning to the balance sheet. As of September 30, we have approximately $6.8 million of cash and $13 million in debt. Last month, we received our first $1 million royalty milestone from Bimini Technologies related to gross profit on the Puregraft product. Puregraft is a patented market-leading fat grafting product that was divested to Bimini back in 2013. Cytori retains continued royalty rights and certain other potential future economic benefits for this product.

We plan to balance our near-term ongoing capital requirement through a mix of activities. Specifically, these include revenue growth, business development and strategic opportunities, continuing operational efficiency measures, tight working capital management and careful assessing the capital markets via our existing equity line and ATM facilities. And with that, I'll turn it back to Marc.

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [4]

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Thank you, Tiago. Before we go to Q&A, let me just update you on key forthcoming milestones as there are a number of that could possibly impact the company. First of all, we intend to complete the ATI-0918 development program and the manufacturing activities required just so we can complete the marketing authorization application to file with the EMA with anticipated commercialization plans for 2020.

We anticipate that we'll receive 505(b)(2) pathway feedback regarding the ATI-1123 product from the U.S. FDA in the first half of 2019. Also, in the first half of 2019, we intend to report 6-month and 1-year Japanese ADRESU clinical trial data for postsurgical male stress urinary incontinence, and make the requisite filing with the Japanese regulatory authority based on the data. We also hope to achieve and receive Japanese regulatory feedback on the pending up-classification from Class 1 and Class 3 on the Celution System in Japan.

Soon we intend to fully activate all U.S. RELIEF clinical trial burn enrollment sites as mentioned on the call and enroll 15 patients in the BARDA-funded trial. Finally, we can evaluate and report investigator-initiated SCLERADEC II clinical trial data anticipated for later this year.

Now with that, I'll turn it over to Ian for any questions from the floor. Ian?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Jason Kolbert from H.C. Wainwright.

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Jason Howard Kolbert, H.C. Wainwright & Co, LLC, Research Division - Former MD & Senior Healthcare Analyst [2]

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I got a bunch of questions for you, guys. First, can you talk a little bit about what the EU filing for scleroderma might look like, and what the implications are for driving the U.S. program? Previously, I had those programs in kind of synch. And it looks to me like if something is going to happen in Europe, it will happen way ahead of the U.S. So help me understand the timing for ADRCs in Europe versus the U.S.

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [3]

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Jason, so with respect to the European trial, remember there's 2 parts to that trial. The first is the data as it relates to safety and efficacy and has the 3 and 6 months, and that will be the initial readout and the expectation is we'll get that by the end of the year. That's an investigator-initiated trial, as I mentioned. For now, we don't have the same line of sight in terms of timing that we would have if it was a Cytori-sponsored trial. But that's the timing there. There's also a second set of data that we're expecting back from that which is the data on the cryopreserved. Recall that in that trial, the patients that were randomized to placebo, will get another of that with cryopreserved cells and then data would be coming downstream from that. So the thing that could potentially drive a decision to push this forward in Europe would be once we get the 3 and 6 months data. I mean, based on that, we'll just play, read and react to the data. It's hard to know at this point where that will go until we get the data. And also we would suppose that if we do, do anything, that will be packaged with the data that we've already collected in STAR in the U.S.

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Jason Howard Kolbert, H.C. Wainwright & Co, LLC, Research Division - Former MD & Senior Healthcare Analyst [4]

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And so Marc, can you switch gears with me and focus a little bit on Japan and help me understand what the data from the ADRESU trial means? And if the data is good and meets its primary and secondary endpoints, what does the time line for filing in Japan look like? And then what is the business model in Japan, will it be consumables plus system? Will it be a therapeutic-based pricing? Help me understand what you're thinking in that scenario.

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [5]

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So Jason, the important thing to emphasize with respect to that program are the following. First of all, there's no proved treatment for these patients in Japan, unmet medical need. Number two, it's an underappreciated, underdiagnosed clinical indication, as I mentioned in my prepared remarks. The -- unlike trials that we have been asked to perform in the U.S. or -- including scleroderma, this trial is essentially a responder trial, so there's no placebo group. The average of the urinary leakage volume as measured by the leakage is based on the improvements over baseline at 52 weeks after treatment. So it's a very different trial. It's constructed in a different way and we think the bar is certainly achievable. Now in terms of the business model. We -- it's a unique situation. So the nuance here is that this approval, if the data supports it, would be as a Class 3 device. And so it really is within the current historic devices regulatory approvals in Japan, the goal is to move our -- up-classify current technology, and then later on claims for stress urinary incontinence. And as I mentioned, we anticipate having that data likely Q2 time frame and then immediately applying for expedited approval, which we're already in communications with the authorities about that. And then that, I think, the appropriate timing would be, we figure, about a year to approval, perhaps less with the expedited time line. And then also we would hope to receive reimbursement shortly thereafter. We've done an analysis of historically approved, although now off-the-market treatments for stress urinary incontinence. And the price point between $5,000 per treatment or more is something in the ballpark that we're looking at. That's not inconsistent with our current ASP for self-pay markets. And then that model will be based on the sale of the consumable bundle, not as a therapeutic.

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Jason Howard Kolbert, H.C. Wainwright & Co, LLC, Research Division - Former MD & Senior Healthcare Analyst [6]

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Okay, understood. Tiago, can you talk a little bit about the share count, both the weighted average shares and the fully diluted shares? I see the share count stepped up. I also note there's been preservation of capital in the quarter. I assume that means that you're using the ATM facility. And then can you close with me a little bit about your plans to retain the NASDAQ listing?

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Tiago M. Girão, Cytori Therapeutics, Inc. - VP of Finance, CFO & Secretary [7]

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Sure, Jason. So on the share count, just to clarify, we had a significant increase on the share count right now because of the financing that took place in July. There were a significant number of conversions of the Series C that were issued, and they were about 50% converted by the end of the quarter. So if you consider the current issue, then outstanding share count that was just filed on the 10-Q, is 13.2 million. If I consider all of the shares on a net debt converted basis from the series B and Series C that are still outstanding, I'll get to approximately 18 million common shares outstanding. I'd also add to that the warrants and options that are outstanding for a total share count on a fully diluted basis of 27 million shares. But that's what we have when you add about $9.5 million -- 9.5 million shares of warrants and options. You are right that the company has used its ATM as well as the Lincoln Park facility that it has currently put in place. It functions like as an ATM but we can leverage one or the other depending on the quality of the volume of today. We plan to continue to utilize those programs to maintain a stable balance sheet throughout the balance of the year and 2019. On your last point as it relates to the NASDAQ listing, the company has until about February, and then we'll likely be able to obtain an additional 6-month extension that would put us into the Q3, Q4 territory. And we will plan on balancing that -- those activities. And depending on the readouts of these data, if the share prices don't resolve in itself and the performance of its own, we have been able to address that with NASDAQ in the past, and we'll continue to ensure that the listing is preserved for the company.

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Jason Howard Kolbert, H.C. Wainwright & Co, LLC, Research Division - Former MD & Senior Healthcare Analyst [8]

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One last question. Can you just give us some hints as to how active the BD is around ATI-0918? Clearly, there's a hope to monetize that asset and bring nondilutive capital into the company. Can you just give us some idea of how the progress is going in terms of that effort?

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [9]

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Yes. Hinting about BD is always risky and problematic. But there's a lot of interest for that particular drug in Europe. You can imagine that there's, as I mentioned, about $120 million to perhaps to well over $200 million a year market opportunity with that drug. We think there is the opportunity to the be first or second generic. If we can monetize it in a way that we think it's [fair to the] opportunity in shareholders in the near term, we'll do it. However, we think that the longer we go and the closer we get to the goal line that the opportunities for that may be improved as with the competition potentially for partners. So we are out there in the market aggressively talking about European licensure, but we'll wait for the right deal comes along. There's also interest in, call it, tertiary markets regarding that drug in the high-quality U.S. maker of drugs that have had a lot of stumbles we made in -- outside of the U.S., even in the U.S. There's a real opportunity to position that for use outside of Europe and there's some opportunities related there. So we're actively engaged in weekly discussions with potential partners in due diligence related to that.

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Operator [10]

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(Operator Instructions) Your next question is from the line of Yale Jen from Laidlaw & Company.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [11]

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And I only have 2 here. Number one is a housekeeping one that you -- in this quarter you have a beneficial conversion for the convertible. Is this the onetime item? Or this will be a continual element in the P&L?

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Tiago M. Girão, Cytori Therapeutics, Inc. - VP of Finance, CFO & Secretary [12]

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Yale, thanks for the question. It's Tiago here. And that is a onetime hit to the P&L related to the beneficial conversion feature that exists on the Series C. Those shares were immediately convertible and as a result of that, all of that charge was booked on the quarter, no more on a go-forward basis.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [13]

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Okay. What about that change in the fair value of the warranty liability, would that be a more continuous element?

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Tiago M. Girão, Cytori Therapeutics, Inc. - VP of Finance, CFO & Secretary [14]

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Yes, that is a continuing element. The warrants that was issued as part of the rights offering this past July included antidilution provisions and full ratchet provisions that caused these warrants to be classified as liability. And those are mark-to-market every reporting period until they either get exercised or expire.

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I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research & Senior Biotechnology Analyst [15]

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Okay, great. That's very helpful. Maybe one last question here, which is ATI-1123. Could you talk a little bit sort of market potential in the United States, particularly for this generic or these drugs?

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [16]

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Yale, it's Marc. So I think the 2 frameworks to look at that opportunity. The first framework, and I'm lifting this from my prepared comments, and we've mentioned this in more detail in previous calls as we brought that drug online is that we saw orphan status for that as a potential second-line therapy that we think can be better and the only approved drug, which is Topotecan. So the second-line therapy orphan small cell lung cancer our competitor, Topotecan, which has a very -- extremely high, grade 3 and grade 4 neutropenia rate. That's probably about a $50 million to $80 million a year revenue opportunity. So relatively narrow, but a direct and targeted rate of market. The other framework to look at that which is as a competitor to Taxotere or docetaxel on the ATI. There's several reformulations of docetaxel whether under development oral or phenyl sensitive other nanoparticle formulation. So right now, we're in the process of doing a very detailed market analysis and we're trying to determine which indications are the most promising for that drug outside of small cell lung cancer. We'll have that data by the end of the year, and we'll begin talking about that around that in January 1. At the same time, we're completing that very detailed market analysis, we're working with our external consultants on the 505(b)(2) pathway. And so we'll plan on bringing those 2 work streams in terms of detailed market analysis and 505(b)(2) feedback from the FDA forward and hopefully, around the end of that first quarter, early second quarter. And then we'll provide a much more detailed development plan for that drug outside of small cell lung cancer.

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Operator [17]

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At this time I'm showing that we have no further audio questions. I'd like to turn the floor back over to Dr. Hedrick for any additional or closing remarks.

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Marc H. Hedrick, Cytori Therapeutics, Inc. - CEO, President & Director [18]

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Thank you, Ian. And just to those who are still on the call, on behalf of the board and management, we just want to thank you for your time this afternoon and for your participation. The company is very appreciative of those that continue to follow us. We're very appreciative to the increasing number of patients and doctors and now customers that trust us and our products, and of course, to our hard-working and dedicated employees in Japan, San Antonio and San Diego. Thank you, and have a good evening.

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Operator [19]

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Thank you. This does conclude today's conference call. Please disconnect your lines at this time, and have a wonderful day.