Good morning, ladies and gentlemen, and welcome to the Humacyte Second Quarter Results Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference is being recorded. I'll now turn the call over to Laura Marek with LifeSci Advisors. Please go ahead.

Thank you, operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, except as required by law. Information presented on this call is contained in the press release we issued this morning and in our Form 10-Q, which after filing may be accessed from the Investors page of the Humacyte website. Joining me on today's call from Humacyte are Dr. Laura Niklason, President and Chief Executive Officer; Dale Sander, Chief Financial Officer and Chief Corporate Development Officer; and Dr. Heather Prichard, Chief Operating Officer. Dr. Niklason will provide a summary of the company's progress during the quarter and recent weeks, and Dale will review the company's financial results for the quarter ended June 30, 2023. Following their prepared remarks, the management team will be available for your questions. I will now turn the call over to Dr. Niklason.

Thank you, Laura. Good morning, everyone, and thank you so much for joining our second quarter 2023 financial results and business update call. As we enter into the second half of 2023, we continue to be excited about the progress we've made so far this year in advancing our universally implantable bio-engineered human tissue product candidate, the Human Acellular Vessel, or HAV, in multiple indications. As a recognition of the groundbreaking nature of the HAV, the FDA issued a Regenerative Medicine Advanced Therapy, or RMAD, designation for the trauma indication in May. In July, we announced completion of enrollment of our Phase 3 trial in vascular trauma. Based on the 30-day endpoint of this pivotal trial, we will present topline results for the trial during Q3 of this year. We remain on target for filing our Biologics Licensing Application, or BLA, with the FDA during Q4 of this year. Reinforcing the importance of the HAV in wartime scenarios, we're proud of the highly successful outcomes to date with our humanitarian program in Ukraine. And lastly, we recently announced our collaboration with the Juvenile Diabetes Research Foundation, or JDRF, to advance our biovascular pancreas product candidate. During this call, I'll review these recent highlights in more detail before turning the call over to Dale for a review of our financial results. Then we'll be happy to open up the call to take your questions. I'll begin with our HAV program in vascular trauma. We're excited to have recently completed the target enrollment of our Phase 2/3 V005 trial of the HAV in vascular trauma repair. As a reminder, the V005 trial is a single-arm open-label pivotal study of patients suffering from vascular trauma injuries. The primary efficacy assessment is based on the 30-day patency of the Human Acellular Vessel in patients…

Thank you, Laura. As of June 30, 2023, we had cash and cash equivalents of $114.6 million. In May 2023, we reported the completion of a funding arrangement with Oberland Capital of up to $160 million, of which we have received $40 million. We believe our cash and cash equivalents and planned funding from the Oberland funding agreement are adequate to fund operations past the anticipated timelines for approval and commercialization of the HAV in vascular trauma. There was no revenue for the second quarter of 2023 and the six months ended June 30, 2023. Revenue was $1.3 million for the second quarter of 2022, and $1.5 million for the six months ended June 30, 2022. Revenue for 2022 was related to a grant supporting the development of the HAV. Research and development expenses were $20.5 million for the second quarter of 2023 compared to $14.7 million for the second quarter of 2022, and were $37.8 million for the six months ended June 30, 2023, compared to $31 million for the six months ended June 30, 2022. The current period increases resulted primarily from increased personnel and external services expenses, supporting the expanded research and development initiatives and our clinical trials, including preparation for the HAV vascular trauma trial completion and planned BLA filing, as well as expansion of clinical development of the HAV NAV access. General and administrative expenses were $6.2 million for the second quarter of 2023 compared to $5.2 million for the second quarter of 2022, and were $11.4 million for the six months ended June 30, 2023, compared to $10.9 million for the six months ended June 30, 2022. The current period increases resulted primarily from increased personnel and external services costs, primarily driven by preparation for the planned commercial launch of the HAV and vascular…

Thank you, Dale. We're very pleased with our progress so far in 2023. As we move closer to BLA regulatory filing in vascular trauma, I'd like to take a moment to thank the Humacyte team, as well as our partners for their continued commitment to our programs. Our colleagues in Ukraine who've used the HAV to save limbs and lives in war-wounded patients, also deserve our appreciation and thanks. We're approaching a transformational time, not only for our company, but also for patients suffering from a range of vascular diseases. Across our clinical programs, the HAV has already accumulated more than 1,000 patient years of experience, including in vascular trauma, AV access, and peripheral artery disease. Our large animal studies that are ongoing in heart bypass surgery and Type 1 diabetes, continue to support the flexibility and the potential impact of our transformational manufacturing platform. And we are continuing to study the HAV in order to maximize the full potential of the HAV's value for patients and for our investors. We look forward to keeping you updated with our progress, starting with our upcoming anticipated V005 trial topline results reporting later this quarter. Thank you all for joining us today. Operator, we're ready to take questions.

[Operator Instructions]. Our first question comes from the line of Ryan Zimmerman with BTIG. Please proceed with your question.

Good morning and congrats on all the progress, Laura, and Dale. It's nice to see the enrollments complete. I was struck by the patency rates in Ukraine that you've seen thus far, Laura, and I'm wondering if you can talk about those in the context of the prior studies that we have seen. They appear to be far better than maybe what we've seen in some of these prior studies. And so, maybe how does that inform your view around kind of what to expect when we see topline results next quarter?

Well, the patency results in Ukraine have been outstanding. They're actually not that different from some of the early patency results that we've talked about for V005 in some calls that we've done earlier. I would say that this is a 30-day patency rate, and it's also in relatively young healthy patients. The warriors in Ukraine don't have a lot of peripheral vascular disease. So, this really allows the HAV to shine in the sense that it's being implanted into relatively healthy people with severe injuries, but relatively healthy people. And so, the 100% patency at 30 days really reflects the inherent properties of the HAV.

No, that's very helpful and certainly encouraging. And then as we think about BLA submission kind of coming later this quarter, or excuse me, later this year, I should say in fourth quarter, what are you guys doing to kind of de-risk that and how should investors think about that process and just kind of getting that across the goal line in time as stated?

Well, I think there's a number of things that we've done to de-risk the BLA filing. First and perhaps most importantly, our manufacturing process, which is currently at commercial scale has been in use for the last two years. And in fact, the FDA reviewed a comprehensive comparability data package for our current manufacturing system two years ago, back in 2021. Much of that part of the BLA, frankly, has already been written, along with our preclinical results. So, the final piece of the BLA which needs to be pulled together is our clinical outcomes from V005, but also the Ukraine data are going to supplement the BLA filing. Importantly, the primary endpoint on these - both of these groups of patients is 30-day patency. So, having the data come together in this finite number of patients is something that we see as very doable for fourth quarter.

Yes, no question. All right, well, that's it for me. Congrats on the progress.

Thank you. Our next question comes from line of Josh Jennings with TD Cowen. Please proceed with your question.

Hi, good morning and thanks Laura, and Dale, and echo Ryan's congratulations on all the progress. Wanted to just ask about the potential cost effectiveness angles that Humacyte can take for HAV in trauma. I think you got reduced infection re-operation rate potential versus synthetic graft and reduce the work time for HAV versus saphenous grafts. Maybe just talk about those angles and just how cost effectiveness data could accrue and support ultimately the launch.

Yes, Josh, thanks for that question. We believe that the HAV will offer an outstanding alternative for injured patients, both civilian and wartime compared to both synthetic grafts in saphenous vein. With respect to synthetic grafts, as we mentioned earlier in the call, there's a comprehensive literature review that we've done of synthetic graft outcomes in vascular trauma. The results of that we're going to share at the time we share our topline results, but suffice to say the rate of amputation and the rate of conduit infection from that systematic literature review, shows us that the HAV provides a great effectiveness benefit, both in terms of limb salvage and in terms of infection. We can look directly at the published literature and the claims data to understand what the actual costs of this improved - what the actual cost savings of this improved clinical outcome will be. And that is really allowing us to put together comprehensive and really compelling cost models that we believe show the HAV will offer not only improved outcomes, but also decreased clinical costs compared to synthetic grafts. As compared to vein, what we see is that the HAV is available off the shelf, as we've always mentioned, and in fact can be removed from its container in the operating room in about two minutes. This is a vast improvement compared to just the time it takes to harvest saphenous vein from a patient, which by the time you prep the leg and take the vein out and prepare the vein and then close the leg wound, that's easily an hour. So, having that extra hour for the patient in terms of speed of revascularization, that also leads to a demonstrable decrease in the rate of amputation for patients with vascular injury. So, we believe there will be clear and compelling health economic basis for utilizing the HAV in vascular trauma as compared to both synthetic grafts, but also vein.

Thanks for that, Laura. And I wanted to just review the modular BLA submission that's in play for the vascular trauma indication, and just was hoping you could review just the ability to leverage that filing and those modules on subsequent filings for new indications like they gave the access and PAD down the line. Thanks for taking the questions.

Yes, Josh. So, the HAV, as you know, even though it's been studied in three different clinical indications, is all the same vessel. It's all grown in the same way. The dimensions are the same. All of the characteristics are identical across our different clinical indications. What this means is that most of the modules, BLAs are five modules, having to do with manufacturing and quality data and preclinical data and summaries and then clinical efficacy and safety. Much of the BLA that we're going to submit for trauma will be identical to a follow-on BLA that we would file, for example, in AV access or even in PAD. So, that really allows us to utilize the work that we've done so far so that when follow-on clinical indications become available, we can leverage our prior work and just add in additional clinical data on the same HAV product candidate.

Excellent. Thank you.

Thank you. Our next question comes from the line of Matthew O'Brien with Piper Sandler. Please proceed with your question.

Great. Thanks for taking my questions. Laura, so for starters, just on the topline results, what should we be looking for specifically with that data? And then, are there any confounding factors that we need to be considering that may pop up that probably aren't overly clinically important, but just that we should be aware of?

Well, we're going to share topline results later in this quarter. And so, I hate to highlight those in advance of database lock. But what I will say is that we have more than 50 patients who've had extremity trauma injuries, which are going to comprise our efficacy set. In addition, the total V005 enrollment is roughly 70 patients now, and we're going to provide safety data on all of the patients who receive the HAV in vascular trauma in addition to the 15 or so patients that we have consented to use their data from Ukraine. As far as caveats or unexpected observations, I can't really say that we've had any. The HAV, as I tend to say to analysts and investors, the HAV just keeps being the same product candidate. It keeps functioning roughly the same year after year, regardless of the indication. So, I don't think there's going to be too many surprises here based on some of the information that we've shared in prior calls.

Got it. Well, that's great to hear. As far as Ukraine goes, and I don't have a lot of the data points that you guys do, but if there's so many patients that are being affected by this conflict, unfortunately, and you've had 19 deployed at this point, I'm just wondering about logistics in terms of getting it to them. It would just seem like it's working so well. Why are more patients not getting it? I don't know if it's just because 19 is all that's been available or something like that, but why are more and more patients not getting it? And I do have one more follow-up for Dale.

Yes, so that's a good question, Matt. So, our original agreement with the Ukrainian Ministry of Health, which we entered into, I think in May of last year, was that the humanitarian effort would last for one year. And so, we delivered 30 vessels to Ukraine, and they went to five different frontline hospitals. Again, neither we nor the Ukrainian Ministry of Health understood how this would go at the time. We were just doing our best to help patients in need. The outcomes over the last year, as you heard, have clearly been excellent. However, our initial agreement with the Ukrainian government lasted only a year. We’re currently working with the Ukrainian government to actually add hospital sites to our V005 trial. The V005 trial, even though we've reached enrollment for filing, is actually continuing to accrue a few patients because we're interested in gathering as much safety data as we can. And so, we may add Ukrainian sites, but that's really an issue that we're dealing with the Ukrainian Ministry of Health right now in the second phase of this interaction.

Okay, got it. Makes total sense. And then Dale, did I hear you right that you used about $35 million of capital in the quarter or cash in the quarter? Because if I'm doing the math right, I think you have 114 plus about 120 left from the recent deal that you announced. So, that's about 240-ish. So, you’re burning through about 35. And how does that burn rate look as we get close to commercialization, which I think is probably about a year away? Thanks.

Yes, Matt, the numbers you quoted are accurate. For the first half of 2023, we burned a net of $35.2 million. Yes, I would not expect more than a $40 million burn for the remainder of the year. And we've given a sense that the Oberland transaction, combined with how we expect to operate, and also the cash on hand we expect takes us well past the approval and commercialization in vascular trauma. But from a calendar point of view, that means going to the end of 2025 at a minimum in terms of how we expect to operate.

Got it. Thank you so much.

Thank you. Our next question comes from line of Suraj Kalia with Oppenheimer & Company. Please proceed with your question.

Good morning, Laura, Dale. Can you hear me all right?

We can hear you.

Perfect. Hey, so Laura, you mentioned benchmarking for V005 with PTFE grafts, and I'm curious if you could expand on that in terms of how should we think about the benchmarking itself, because most of these synthetic graft studies are somewhat single-arms on same lines. So, just kind of - and there are pretty diverse array of synthetic grafts. So, maybe if you could just give us some additional clarity on how we should think about the control or the comparison.

So, the control arm, the historical control benchmark for the V005 trial is based on a comprehensive literature review. And the structure of the literature review and the meta-analysis was actually something that we agreed upon with the FDA before undertaking this. So, this is really a comprehensive review of the world's literature over the last 20 years using any type of synthetic graft. So, this means anything made out of a plastic. So, this is excluding things like CryoVein or xenografts, for example, but any synthetic graft of any type used in vascular trauma over the last 20 years. But this is also high-quality studies. So, to your point, Suraj, the surgical literature is sometimes messy, and there's a lot of single-arm studies that are of low quality. Those studies were excluded with agreement from the FDA. So, we're focusing on high-quality studies. And because of that, the benchmark that we've obtained, we feel is robust and we feel will provide excellent support for eventual approval of the HAV and trauma.

Got it. Laura, again, for V005, how should we think about the site enrollment bell curve? Remind us how many sites were in the - have actually enrolled the 50 or so patients so that we can just get an assessment of concentration, if any.

So, I'm going to have to estimate here, Suraj, because I don't have these numbers right at my fingertips, but my estimate is that about 15 or 17 sites total have enrolled a total of 70 patients in the trial. So, on average, that would correspond to three or four patients per site, per enrolling site. There is clearly some concentrations. So, there are some sites that are very active trauma centers that have enrolled more than that. So, for example, Baltimore Shock Trauma, Denver Health, and Miami have all enrolled, I think, more than that patient number.

Got it. Laura, finally, did I hear you correctly in terms of BVP, some components obviously have been derived from HAV. So, BVP does two-way communication with the surrounding environment, but HAV theoretically would not, right?

I'm sorry, Suraj, I didn't understand your question.

So, BVP, it has to sense glucose, right, and release insulin. HAV, theoretically it should not be communicating with the outside environment, right? So, I was just curious, you’ve reconfigured some components of the HAV for BVP?

Yes, this is correct. So, our BVP product candidate consists of the HAV, which we're making and implanting into patients every day. But the outside of the HAV is coated with a monolayer of islets. These islets can be derived from a donor pancreas. They can also be derived from stem cells, potentially even genetically engineered stem cells that are minimally immunogenic. So, this is an islet agnostic platform for delivering a curative number of islets into patients with Type 1 diabetes. What's exciting about the primate studies that I've mentioned is that we've been trialing essentially a human-sized version of the HAV in primate animals. The islets that we've loaded onto the HAV were primate islets, not human islets of course, because they would reject immediately, but these are primate islets from the pancreas of another animal. And what's exciting for us is that we've shown that these islets can survive for several weeks after implantation in the BVP model, and they're secreting insulin. So, this is an excellent proof of concept data point that says that the overall platform of using the HAV to deliver islets is likely sound, and we have to continue this work, but we view this as very important and exciting.

Got it. Congrats again and look forward to the data on V005 soon.

Thank you. [Operator instructions]. Our next question comes in line of Bruce Jackson with The Benchmark Company. Please proceed with your question.

Hi, good morning and congratulations on all of the progress. I'd like to just ask a follow-up question on the coronary artery bypass graft program. So, I believe the idea was to try to get into first-in-man transplants in 2024. I was just curious about where you currently stand in terms of the regulatory discussions with the FDA and if that's still the case, if you're still planning to do the first-in-man in 2024.

I'm going to ask Heather to take that question.

Sure, Laura. Hi, Bruce. So, where we stand right now with the coronary bypass program is that we continue to do our primate IND-enabling studies with primates, and we're continuing to do those through the remainder of this year and gather data for the IND, the preclinical part of the IND for - that we still expect to file in 2024. Laura, do you want to add anything else?

Well, I think we're going to have to see how these results turn out. We have begun discussions with the FDA about what a suitable preclinical package would comprise. And so, I would say just stay tuned. We'll see.

Okay, great. And then with the large animal work in BVP, are you going to be doing anything to take a look at the durability? The first results were great for the survival for a few months in the insulin generation, but do any of the future studies involve looking at the durability of therapy?

We're absolutely going to be looking at longer time points in our large animal model. There’s really a couple of questions that really need to be proved out before we can prepare for first-in-human studies. The first question in our minds is whether the BVP construct can support islet survival and insulin production. That's really a question that you can answer in just a few weeks. You can't implant islets into an environment where they don't have enough oxygen and nutrients and expect them to survive for weeks at a time. So, we believe this initial data point is a really important proof of concept that the foundational science around the BVP construct is valid. As a second line of investigation, we're then going to look at the durability of the islet survival and insulin production. This will require studies in diabetic animals and looking over longer periods of time. And so, we are gearing up for those studies right now.

Okay, great. Thank you for taking my questions and congratulations again.

Thank you. I'm showing no other questions in queue at this time. This concludes the Humacyte second quarter 2023 results conference call. Thank you all for participating. You may now disconnect your lines.