Beyond Air, Inc. (XAIR) Earnings Call Transcript & Summary

Okay. Okay. I think we're going to get started. I really want to welcome what's an absolutely full room here in New York, and I'd like to -- basically event sponsored by Beyond Air, and my pleasure to turn the call over to the Chairman and CEO, Steve Lisi.

Thanks, Bob. Thanks, everybody, for coming and those tuning in on the webcast. We're very happy to be here to show you what we've become. It's been a couple of years since we went public and then made it to the NASDAQ. So in case you haven't noticed -- you didn't notice, we closed -- rang the bell on Monday. It's the only good day in the last 2 weeks. The market -- actually, the biggest point gain ever in the market. It says it right there on the screen on CNBC when I hit the button. But don't look at me, look at my daughter who is there. It's a much better picture with her. But in all seriousness, we've had a good week. The entire company was here, except for a few people from Israel. So it was exciting for us to ring that bell, and then we spent the last 2 days having operational sessions. So we do have a lot of the team here. We have Duncan Fatkin, our Chief Commercial Officer, who will be doing most -- half the presentation. We're going to split it. So you can learn about Duncan and his abilities on the commercial side. We have Fred Montgomery. Fred is half the dynamic duo, who has been building nitric oxide delivery systems since the early '90s, actually the first one ever approved. The INOvent came from Fred and his partner, Duncan, and their team. Sitting next to him is Mark Rimkus, who is Fred's bitter competitor in the '90s with the Aeronox Delivery System, which came a few months after that. Mark is an RT engineer, so he's our expert from the RT side of things. And then you have Amir Avniel, who's the Chief Operating Officer and Founder of the company; and Doug Beck is our CFO. He makes sure we don't spend too much money. As you can see, he's good at it. So I'm pleased to have 3 KOLs with us today. From Maimonides, we have Dr. Filipov. He's our neonatologist. And I'm sure everyone here knows Maimonides, but this is a very high-volume hospital. He's in the weeds, so he's going to really understand persistent pulmonary hypertension [ and he can answer ] your questions. Oop, mic's back. Answer your questions on that. Stacey Martiniano from Children's in Denver. She is a pediatric pulmonologist, and she is one of the esteemed people running NTM studies with the CF Foundation. It's a consortium of hospitals around the country, and there's very few people running it. So it's an honor to have her here to help explain NTM and what it can do. Since she is a pediatric pulmonologist, she will also be talking about bronchiolitis and potentially COVID-19 as well; along with Andrew Colin from University of Miami. His accomplishments are too long to list. We can be here for 3 hours. Andrew is one of the top pediatric pulmonologists in the world, and he can talk about pretty much everything that we're doing here as well. So we're lucky to have them. And when I don't know the answer, they do, which is probably most of the time, okay? So we're going to jump right in. I didn't introduce myself, but if you don't know me, you shouldn't be here. So we're going to jump right into it. Here we go. We are nitric oxide. We've always had a little tag, The Magic of Breathing. Now we're more than that, okay? It's very important to breathe, but we've added an oncology program to our pipeline. So we're technically not targeting the lung anymore, so with that program, but we'll go into that a little bit more. Again, nitric oxide. It's an N and O and some dots, and most of us don't know what that means, but it's nitric oxide, I've been told. We have 2 machines. One system is compatible with ventilators, the other one is not compatible with ventilators, and we're going to talk about between the 2 as we go forward. First, I want to talk a little bit about nitric oxide. Nitric oxide is naturally occurring in the human body. There are 3 types of nitric oxide synthase, and they have all of these functions. And we're going to be focusing today on cardiovascular homeostasis, antibacterial, immune response, and I've been told, apoptosis, too, but I'm not qualified to talk about that. Functions of NO in the immune system. Okay, this is a busy slide. I'm not going to go through it. We're just going to talk about the category here. It's an antimicrobial; anti-tumor activity; tissue-damaging; anti-inflammatory, which is later in this talk; okay, modulation of the production of the function of cytokines, chemokines and growth factors; T-helper cell deviation as well. I can't even talk about half these things. But what nitric oxide -- the key point is it's naturally occurring in the body. It's not toxic. It has multiple functions in the body. I don't think we fully understand what it does yet as a scientific community. We're still learning. But with that, how do we make it? Well, Fred and his partner, Duncan, realized lightning strike makes nitric oxide naturally in nature. I guess what we can do. We'd simulate lightning strike inside of our system, okay? The chamber is a little smaller than a baseball called the plasma chamber, okay, and we simulate lightning strikes inside. As you can see on the slide here, when this happens, nitrogen dioxide is created, okay? What do we do when that happens? We use this little thing called the nitrogen dioxide filter. I want to talk a little bit more about this later, a very important piece of equipment for us. So this is our system compatible with ventilators. We can put it on a cart or off a cart, which is important, and Duncan is going to talk about why a little bit later, okay? And we blow up our little screen here. We'll talk about that a little bit more later. It's very important. The user interface is very similar to the user interface used today by the current systems that deliver nitric oxide. Now we're going to go to the tale of the tape. This is not a fair fight. The cylinder weighs 45 pounds. Our filter weighs 2.5 ounces. On average, you need about [ 7 ] cylinder, okay? It's not fair. It's not toxic. It's not considered a biohazard, very easy to ship, very easy to store. Inventory is simple. This is not a fair fight, which we're happy about. Now when you put the cylinder system on a cart, the whole thing, it's 175 pounds. Our system on a cart is 65 pounds and off the cart is 32 pounds. Again, it's not a fair fight, which again I'm happy about that. Okay. We generate our nitric oxide from ambient air, as I mentioned, okay, in the hospital for non-ventilations or at home with the compatible system, okay? So it's very easy to use for both home and hospital. Lightweight. Portable. Any standard electrical outlet could be used in the home. It's safe for patients, hospital staff or other members of the household, okay? For the hospital, our first indication is bronchiolitis, okay? And our first indication in the home market is NTM, okay? So we have more potential indications in those settings as well, okay? So again, we want to emphasize safety, not just for patients, but for family members, health care professionals, the environment, okay, all-natural ingredients. This is our active pipeline. I think most of you know about the LungFit PH, pulmonary hypertension, our first indication. We will be filing our PMA in the next couple of months, and we hope to get approval 180 days later. That is the review time for the FDA, okay? We have LungFit BRO for bronchiolitis. We just completed our third pilot study. We'll have the data in about, I don't know, 6 to 8 weeks, and we will be starting our pivotal study in the United States in November of this year. LungFit NTM, or that's nontuberculous mycobacteria, our pilot study at home where patients treat themselves for 12 weeks. That should be starting in June. And then we have LungFit COPD, which is our next indication in the home setting. We'll talk about that a little later. And then we have oncology. We will have data released towards the end of April. So how do we get here? We're going to go through this quickly. The last 9 years -- the first 3 years, Amir, our founder, founded the company, acquired some assets from University of British Columbia, put together pilot studies and started executing those studies. In 2014 through '16, we completed the studies, improved the patent portfolio. Data were presented at the American Thoracic Society in 2015. Compassionate use for 2 NTM patients occurred late '15, early '16. And then there was the preparation for the money raise. '17 through '19, we've had $43 million raised. The new management came in. That's including me. I actually started in this -- towards the end of the previous period. We licensed in the generator. We got together with Fred and his partner, Duncan, and came up with a great deal. LungFit system has been built. Pilot bronchiolitis and NTM trials have been completed. We're almost ready to file our PMA. We got uplisted to NASDAQ. And one thing that people kind of overlook sometimes, we've completed all of our animal tox studies, critical, and we'll talk about that later as well. What are we going to do this year, next year and the year after? We're looking for PH -- LungFit PH approval. We're going to initiate our home study, as I just mentioned. We're going to initiate a pivotal study in bronchiolitis. We're going to have our preclinical data in oncology. And we just opened our Irish subsidiary. The LungFit Ireland is now a reality. I know everybody is waiting for that. So in '21, our at-home LungFit system, we will have our data, and we're going to try to start that pivotal by the end of '21. My team is like, "Steve, that's a lofty goal." I said, "Exactly, I want to go for it." But that is all going to depend a lot on FDA as well, how quickly we can move. So PMA submission in '21 for LungFit BRO, very excited about that. Again, that's 180-day turnaround, so we can launch that in 2022, as you see. We'll continue to roll out LungFit pulmonary hypertension, or PH, in '20 -- '21 and '22. We think by the end of '21, we could have our first-in-man study initiation for oncology. We also think we'll start our COPD pilot study as well, and we have to obviously expand our team to make that happen, okay? In 2022, BRO -- LungFit BRO approval. LungFit BRO ex U.S. study starts. We continue global rollout of PH. NTM pivotal study will definitely be ongoing in '22. Hopefully, we can start a pivotal COPD study. These sound like lofty goals, but we think we can do it. We're pretty sure we can do it. Again, we need resources. We'll talk about that later. Oncology, Phase I/II studies, hope to initiate those in '22. And we should be a fully integrated U.S. hospital commercial organization in 2022. Whether we launch pulmonary hypertension on our own in the U.S. or not, we're going to launch bronchiolitis on our own in the U.S. for sure, okay? And our aspirations for what we look like in 2023, we will talk about this towards the end. I just want to let you know we start with nitric oxide. Our intellectual property is strong. We have great expertise. We're going to fill out [ licensure ] operations that everybody knows companies need. We're well aware of these things. Our manufacturing is going to be outsourced completely. We're going to have Madison, Wisconsin. It will be our center of excellence for engineering and design. We will be fully integrated commercially, okay? We're not going to have commercial offsets outside the U.S. And for R&D, again, we think we're going to have new indications by 2023 in development that we haven't even spoken about yet. And Amir and I have decided the teams not even allowed to speak about new indications until we get to like '21 to '22 because there's too much to do. But we're very excited about this, okay? And I am going to -- we're not doing Q&A right now. We're going to turn this over to Duncan. He's going to talk about the pulmonary hypertension or the persistent pulmonary hypertension of the newborn market.

Perfect, Steve. I mean you've probably heard the name Duncan a couple of times. I want to just make sure that even though we're really small, there's actually 2 Duncans in the organization. I missed the opportunity to have the start-up e-mail, [email protected]. Duncan Bathe worked with Fred Montgomery over many years, and he's the other Duncan in this picture, so I don't want to take all the credit for that. But just over at the back here, for those of you who are in New York, we have the 2 systems here. On the right-hand side, you should have seen images of this. Here it is in the flesh, LungFit PH for persistent pulmonary hypertension of newborn, and then we have LungFit BRO for bronchiolitis, and we're going to transport both of these systems into the corner room after the -- after we've done all our presentations so you can really get into some more detail, and we've got the team here to talk about it. So it's definitely a very exciting phase for us, and it's a very attractive market. It's been growing at a very good rate for some period now and well over $500 million in the U.S. The first competitor didn't come into this market until right at the end of last year, which is very unusual in the medical device world. Having been in that space for 30 years, to have one player for 20 years is very unusual. So we think the market is very primed for the entry of systems that don't have a cylinder like LungFit PH. And there's many hospitals using nitric oxide already because of its established usage, and approximately 5 hospital -- 5 systems in each hospital. And we think there's plenty of potential for expansion of this market. Firstly, through expansion of the label. And secondly, for rural and potentially small hospitals. Without the logistics associated with cylinders, we think there's an opportunity for them to start to use a system that's much easier to start up with and use without the cost. So I just want to talk a little bit about the competition, which we do think is going to be a really good thing for us as people assess their contracts and they're ready for change. We'll be coming in at a time where they're open to that possibility, and we do think we'll make a very significant difference. So just to orientate you on the slide, and for those of you on the webcast, if you look to the top right, you can see on the left-hand side, the Mallinckrodt INOmax DSIR system, which is the one that Fred is very closely associated with, and you can see also that there are 2 cylinders. Steve talked about the size. There's also a significant amount of logistical activity, not just to move them around the hospital and store them, but also to monitor the usage and make sure that, that is fed back to the manufacturer. The one on the right is the very recently approved Praxair NOxBOX system, which has only just started going out to the market. A very similar type of system in that has those 2 large cylinders and slightly different user interface but basically does very much the same thing. And now you look at the 2 at the bottom, you can see on the left-hand side is the EVOLVE system, which is the next system that Mallinckrodt will be releasing. Latest guidance is by the end of 2020, and it does still have 2 cylinders. They're significantly smaller, but the fact is that, that smaller system means it's got a much higher concentration, about 6x the concentration of these larger cylinders. And for any of you who watch the MythBusters video, if there's any kind of accident, then this has turned into a much more potent missile. You still have to purge the system. I'll talk about that in a moment. And there are obvious potential cost benefits associated with not having to use those cylinders. And then you can see on the bottom right-hand side, that's the Genosyl system from VERO Biotech, very, very recently approved. We haven't seen any significant activity out in the field, and that's a system that uses dinitrogen tetroxide converted to nitrogen dioxide, which in turn is converted to nitric oxide. There are some potential questions around safety associated with this device. We haven't seen enough of it to really comment, but there is -- within the label, there are some temperature criteria within 20 to 25 degrees with excursions from 15 to 30, which suggests that we have to be a little bit careful with this device. And the second system that you can see here is a backup unit. I'll talk about the backup unit that we have in a second, but it's within the system itself. So NO cylinders is a really good thing. Not having a backup system within the unit itself is a big advantage. There's 4 hours of battery life associated with those 2 units, and we talked about the logistics. I'll talk a bit more about that in a second. I think of this as a simple, safe and a practical system. And it definitely has the potential to be moved around the hospital much more easily because of its portable profile. So here it is in a little bit more detail. Again, please stay and touch and feel it later on. I'll just point out a couple of things here. Firstly, the user interface, which I'll cover in a little bit more detail in a second, it's been designed, as Steve said, to be very much familiar to people who are used to using the current standard. And we've also kept the screen very simple, and the idea is this should be really intuitive and make the transition to our system really easy. There is a backup system available. If you look at the label on this system, the blue areas where you make the connections to the ventilator, sample line and the delivery module. And then the rest of the system is to allow you to switch to the backup unit, which is held within the system, and also, if you want to use the bagging system. The system is detachable. We've got a cart, which is available where we can store a lot of the accessories that you normally use for this type of treatment and also secure storage for the filter, which is what I'm holding the hand. And for those of you on the webcast, it's on the left-hand side of this slide. So if you think about the model as a razor-razor blade model, this is our razor blade, the filter I'm holding. The razor blade that currently exists is the 45-pound cylinder on the right-hand side. And it takes about 300 of our filters to be equivalent, and it's also a very simple process. You'll see this later. But simply replace the existing filter by pressing a button, moving that out and putting the new filter in. This filter lasts 12 hours, but it has an RFID chip on it. So if you've only used 3 of those 12 hours, there's 9 hours remaining, then you can simply use that for either continued treatment of that patient or for another patient because it's the circuit that's changed between patients. And the current systems on the market, you have to change -- if the cylinder is running out, you obviously have to change it. That means you have to locate a cylinder. You have to first locate a respiratory therapist to locate the cylinder. You bring that up, and it's a significant effort while you're treating a fragile baby to make that change. For us, it's simply press the button, pop it out, pop it back in, very little interruption for supply of nitric oxide. So you can see the system in a little bit more detail here. I talked a little bit about the label. We've been through some human factors work to make that as good as it can possibly be. Once they've been trained, we don't see them having any difficulty with it. And on the screen, you have the normal measurements. Again, this is very similar to the current system for obvious reasons, seeing as Fred was the person who designed that and no need to break something that's working well. And we're measuring oxygen, nitrogen oxide and nitric oxide. The filter filters out the nitrogen dioxide, which is a toxic byproduct of nitric oxide and oxygen. The good news for us is that because we're sparking to create the nitric oxide, it's an instantaneous creation of nitric oxide and an instantaneous cessation. So there's no residual nitrogen dioxide to deal with when you're moving between patients or, for some other reason, you have to swap the system over or make a change of any other nature. There are alarms that are at the top of the screen. You can see how longer is left in the filter. It alarms at 30 minutes and then 10 minutes. And then as you get closer, it alarms more frequently. And you can see how much battery is left for the unit if you have to go to battery. And you can set your settings and the alarms for each of these gas monitoring setups. It's dependent on what you set. For example, typically, the nitrogen dioxide is set at 3 parts per million. We definitely don't want to go above that. Very simple and easy to use, and we think we'll definitely reduce the transition time for hospitals. So there are many benefits that we think we can bring to the current users, and they really fall into 3 basic categories. The first is the logistical benefits, and that's associated with not having bulky cylinders to move around the hospital, to store in the hospital with the associated protocols. It's also associated with the respiratory therapists and the team in the NICU, not having to think about that plan when something occurs and they have to make a change. They don't have to ready alternate cylinders. They don't have to really do anything other than find a new filter. And if it's there right in the compartment on the tray, on the actual cart, it's a very simple swap-over. And in terms of the cost associated with that second significant areas, we don't have the costs associated with having to transport these cylinders backwards and forwards, having to store them and having to maintain them. That's a very significant benefit. The hospitals at the moment have contracts which can be lengthy and also based on the time used. And there is a timer at the top of the cylinder in the valve. And if you don't completely switch that off, you may continue to be delivering according to the time that they're measured to charge the hospital. So a cylinder might show that's been used for several hours following the actual clinical use. And there are many examples of hospitals being charged tens of thousands of dollars associated with that problem. In terms of the safety profile, that's another significant benefit. I talked about the removal or purging. The lack of -- the removal of nitrogen dioxide as a byproduct and as a residual gas means that pregnant ladies and anybody who is also susceptible, we're reducing that in the atmosphere as well. So I'll talk a little bit about our strategy to launch the product. The first phase is like most medical devices that I've been involved in. We're going to take it slowly. We're going to make sure that the system performs as we expect clinically, logistically and it's reliable. And we gather as much feedback as we can from that first phase of hospitals. Then we're going to start to build the commercial team. And as Steve said, our intention, our plan, is to build our own commercial team. If an opportunity to partner comes up, we'll obviously consider that, but we want to be ready to take advantage from the first day that we're approved. We'll expand both -- within the U.S., and we are talking to partners about expanding internationally. And then finally, the full transformation takes place when all-comers have access to the system. And we start with our design iterations, next-generation designs, next-generation software and everything that we can throw Fred to improve the technology. So it's not a hugely surprising phase, and we feel very confident we can deliver that very successfully. From a positioning perspective, clearly given that the vast majority, well, 100% of the market today, is the cylinder market. The differentiation there is very obvious and very clear. We will focus on that. But the system itself is very simple, safe and practical. And the way people use it, if you talk to respiratory therapists and clinicians, you will find definitely some feedback. I welcome questions for Dr. Filipov about how he sees the system being accepted in the marketplace and what he thinks it will do to help those babies. We don't see any issue whatsoever with the current reimbursement framework, and our business model is going to be fairly simple, and it's deliberately so. It's going to be a pay-as-you-go model. We will remain flexible for other approaches. If somebody wants to buy the systems for whatever reason, from an accounting perspective, we can deal with that, but it's really going to be coming down to how many filters are they using and how many systems they have within the hospital, very straightforward. We've been working on accessories that are associated with it. Many of them are already widely available in the market, and they -- there shouldn't be any issues with that transition. And we recently announced a partnership with MESA in California to supply the calibration gas, which is needed to make sure the system is fully calibrated prior to use so we don't anticipate any issue. Service is very important in this very fragile and vulnerable population of patients, and we expect to be able to emulate anything that's out there. Mark Rimkus, who runs our clinical group, also has experience running this very same service model for the Aeronox device in his former life. And then post-approval, we'll be applying for a label expansion for cardiac use. Outside of the U.S., we see really 3 distinct groups. They're the well-established and significant markets that you might expect in Europe, Australia and in Japan. And then there are high-potential markets such as China where there is significant use of nitric oxide but not of a medical grade. And given the size of the populations and the relative ease-of-use of our device and the simplicity, portability and the potential cost effectiveness, we see those as significant opportunities. And we will be exploring those as partnerships. We don't intend to do this directly ourselves given the size of the company and where we are. So there's plenty of opportunity for us to talk further, but I'd like to open it up for questions now. I'll do my very best to repeat them. If you can state your name, and please ask the question quickly -- clearly, and I'll pass it on to whoever can answer that question. Hopefully, take as much [ manage ] as the clinicians as you can.

I guess, initially, just talk about the strategy with the staged rollout. I understand the initial rollout year 1, but maybe fully explain kind of the second and third stages.

Sure. So the question was about the phase strategy and how we're going to roll out, particularly in the second and third phases. So -- and I'll answer that question. So in terms of the first phase, there's around 800 hospitals that use the nitric oxide at the moment, so we see that first phase as being no more than 30, maybe less, hospitals. So we're going to go out there for a 6- to 12-month period, get feedback and really make sure that everything is watertight. Following that, we'll be scaling up. We don't see any challenges scaling up with our contract manufacturers for both the filter and for the device, so we'll be building that inventory. And then in that second phase, we'll have the sales organization in place, along with clinical scientific liaisons and the service team, to make sure we're prepared for that larger-scale launch. And then after about 4 to 5 years, we anticipate having something like 75-plus team to cover the U.S., and that's pretty consistent with what's there at the moment. And the reason why we think that's very achievable is that, typically, a hospital, firstly, they'll understand the logistics in nitric oxide. And once we have the systems in place, we don't anticipate the daily maintenance and handholding that might exist, for example, with an operating room device, et cetera. Does that answer your question?

Yes, Duncan.

Thank you.

Yale Jen from Laidlaw & Company. Just 2 quick questions. First, you mentioned that the first and second phase of a launch, are you -- are those launch also going to match up with their different hospitals' capital budget cycles for potentially sort of getting revenue, buying quicker and getting revenue from that?

So I'll answer that question first. So the question was about the timing of our phases, are they going to match the capital purchasing cycle of the hospitals? And I guess the end question is, are you going to be able to make conversions based on that? And so from the conversations I've had and our team have had, there are some that might not make the change for whatever reason, but most are already anticipating the entry, that they were already expecting the entry of Praxair. And so for some time, they've been expecting to have to try and find flexibility within their contracts, so there's plenty that we believe can fairly easily change their contracts. And then there are those that are insistent that their contract allows them to change anyway even if they haven't made that shift. And given the pace that we're going to be moving, we think that they'll -- we'll be able to stay -- keep pace with that transition. So we don't anticipate that we're going to be in a situation where we can't move as quickly as we want because contracts are running out. We -- there's plenty that are ready.

And maybe a follow-up question here, which is for the cardiovascular side. Is there any clinical study or even an investigator-sponsored study needed? Or somebody just can ask for the extension? What are you going to see?

Okay. So the question is whether there's any data needed for the cardiovascular label expansion. I'm not going to answer that question. I'm going to pass that to Steve.

So I don't know if my mic's on, so I'll use this. So thanks, Yale. The question was about the cardiovascular indication, do we need any data. I don't think so. We think that this will simply be existing information. There's plenty of literature published in reputable journals about cardiovascular surgeries and the use of nitric oxide and its benefit. So I don't think it's going to be a problem. And if you read about our competitor, Mallinckrodt, I think their last 3 conference calls, on their transcripts, they've said that they will be -- they've met with FDA and there's a pathway, and they'll be applying, I don't know if they have already or they will be this year, applying for approval in pediatric cardiac surgeries. So if they can find a way, I think we can, too.

It's Gregg Gilbert from SunTrust Robinson Humphrey. I have a couple. Let me start with just a follow-up on that last comment. How aware is the customer base of you guys coming as they think about contracting with the current players? And what's your understanding of the discount level that Praxair has been offering to get business?

So the question is, how aware are the customer base of Beyond Air? And the second question was, what kind of discount might we expect? Correct?

Current discounting levels by Praxair, what are you hearing there? Because that $500 million market is now something you have...

Yes. Yes. So the -- and I'll answer. Steve, feel free to add. So the first question is, in terms of awareness, I think that the community in general is aware because it's not such a broad community. Certainly, the respiratory therapists. There's not so many of them, and all the means that we attend, there's definitely some buzz. But we haven't -- we deliberately haven't gone out there and we can't promote the product, of course, and we haven't been as present as we will be getting closer. In terms of the current discount levels, do you want to comment on that, Steve? I mean I can...

Sure. No, current discount levels, they vary. I mean if you talk to different hospitals that have been approached by Praxair, you might hear as much as 40% discount, but we've heard 15%, 20% as well. I think the best indicator is Mallinckrodt's guidance for this year. They guided to about a 10% decline, give or take, maybe a little more, and that would include price and volume being taken away from them. So if they're correct, then the price isn't down so much. I don't know how right they are, we'll see. But our best guess now is the price is probably in the 20%, 25% discount range over the -- on average, but we'll see. We'll see how much share Praxair can take. But I just want to go back to the first question. Maybe, Dr. Filipov, you can explain how tightknit the neonatology community is. I think it's -- you'd be hard-pressed to say there's not too many neonatologists and groups in your Level 3 NICU that don't know each other, certainly in New York or even across the country.

Well, since the introduction of nitric oxide for treatment of severely sick newborns with pulmonary hypertension, this is the only approval produced so far, and we know that [ this ] use of level. This was a -- there was a dramatic change in outcomes, and the benefit of nitric oxide in treatment of these specific severely sick newborns is tremendous. We have all the 20 years of experience that changed dramatically the outcome. The need for ECMO, it's extracorporeal membrane oxygenation, very highly invasive procedure to which the babies were cannulated, and the blood of the babies was basically oxygenated outside of the baby for days. Nitric oxide decreased -- the use of nitric oxide decreased the need for that procedure two to threefolds with the tremendous impact on the outcomes of these babies. Since then, most NICUs who treat severely sick babies, Level 3s, Level 4 NICUs -- I'm part of a regional perinatal center NICU, and we use for 20 years nitric oxide. We obliged and we do have nitric oxide delivery systems for babies. Level 2 NICUs and Level 1 NICUs who -- NICUs with -- supposed to treat less sick babies and babies who eventually get sicker there, they're supposed to transfer them, do not have that system, and there's a potential if a system like that exist and with the simplicity, they can also use it for stabilization of these babies initially before being transferred. So the need, in my personal opinion, is it's there. And the usage of nitric oxide in the neonatal will remain because the problem persists and it's the same over the years, and it has been there for a long time, and we're very familiar with the benefits of that.

Dr. Filipov, would you say news travels real fast in the neonatal community?

I would say so, yes. Absolutely.

I think that's what Gregg, I think, is getting to your question. It's kind of hard to keep the lid on the fact that this generated technology out there like ours. I would say that we've met with a lot of hospitals who have requested us to come in and talk to them and show them what we have. And how they find out is just through Dr. Filipov and others who've seen it and touched it. And they hear from their friends and talking, and it's a very small knit community. This isn't a GP physician population here.

Sure. Just one more follow-up, Steve. Partnership strategy. Sorry, if I missed this. I know your prior partnership is changed or no longer. What's the plan and the first launch?

Yes. So as Duncan mentioned, we're preparing to do it ourselves. We're not relying on someone coming in to give us the deal that we're looking for. If it happens, that's great. So we have a threshold that we're looking for. And if we get there, we will partner. I think there's benefit to us partnering this in the U.S., but there's a level that has to be at. So if the numbers aren't right, we're going to do it ourselves. So we are preparing fully to launch this on our own. And there comes to a point where it's not even worth trying to partner anymore. If we're a couple of months away from approval, I mean there's no need to take somebody out at that point. They won't be able to get ready and launch it in time. We're not looking to get approval and launch 6 to 9 months later. That's not in our best interest or anybody's best interest, not in the medical community's best interest at all or the patients. So we'll be ready to go day 1. Again, like Duncan said, it's a limited launch in the first -- in the beginning of the first year. But again, if someone comes along, understands the opportunity and can do a better job than us and has the infrastructure and puts the right numbers in front of us, we'll partner. Scott?

Scott Henry, ROTH Capital. Just a couple of quick questions. Could you compare and contrast your device with the Third Pole device, which I believe is in development for at-home uses as well and perhaps reference timing?

Sure. That's a really good question because I actually failed to point out Third Pole on the slide because we didn't have an image. And actually, the information is a little bit limited. I -- what I'll do -- so the question was about Third Pole, their device, how it compares with ours and the timing. And I'm sure Fred's probably thinking a little bit about this because I might ask you to talk about the technology. In terms of timing, there really is limited information, and so I can't honestly give you an update of when they're going to be coming out to market. I'll ask Steve if he has any additional information.

We can even go by what they say. I think the last time I heard them -- and I didn't speak to them directly myself, by the way, just hearing from other people who say they spoken to them. They're like a '21 or '22 or something. I don't know. I mean you'd have to ask them. But the fact that we don't see them at medical conferences or RT conferences or we don't see any pictures of their system or machine on the website or anywhere else, I don't think they're going to be at the level of development that we are. They have put out some published information in the past about some of the issues that they're running into, and I think that they're quite a bit of ways behind us. Last year, they opened up a PAH program, which is something that they would compete with a company called Bellerophon who uses cylinders, and it's low -- very low concentration nitric oxide being delivered. So perhaps they feel that it's better to focus on very low-concentration nitric oxide. Remember, for PPHN, you have to be able to deliver up to 80 parts per million. The drug label says 20. But for the delivery system, you have to do 80, okay? And there are other parameters around that. Just 80 PPM is flow rates and so forth. Maybe they can't do it, and that's why they went to the other indication, I don't know, or maybe they're doing 2. But it's very, very sparse information about what they're doing. So us, we're showing our systems here. We're going to demo them here. We've demoed them at AARC for 2 years. We've demoed them at PAS and other conferences. We're going to be at a conference in June in Greece showing it. We're out there showing our system on exhibit floors and conferences as many opportunities as we can. So we want to show what we have. We're very proud of it, and we're looking forward to getting approval by the end of this year. So I hope -- sorry I can't answer that question directly, but just putting all the pieces together, I think there's a big gap between us and them at this moment in time.

That's helpful. And then topically, obviously, coronavirus is a big potential use. I don't know if -- did you want to talk about what you're doing now? Or was that going to come up later in the presentation?

It will come up later. I mean it's a lung infection. So all of our other programs, other than now oncology, is lung infection. So this is PPHN, or hypoxic respiratory failure is the appropriate term for the condition. That's not a lung infection per se. So we're not discussing at this moment in time, but we'll get there. I promise you. No one's going to go home without a COVID-19 question.

Excellent. And then just final question for clarification. I believe you said Phase III would utilize about 75 reps to market the product, I assume. Or...

Yes. We don't -- yes, go ahead, please.

And then the question was for Phase 1, did you say you wanted to be in 30 hospitals? Or did you need 30...

30 hospitals.

Okay. For clarification.

Right. So your question was how many hospitals in Phase I, the answer is 30. That's the target number.

And how many reps do you think you would need for Phase I?

We think we're going to start with about 10 to 12 reps.

Time for one more question on PPHN topic so we can keep with time. Anyone? All right. 1 minute ahead of schedule. That's going to change, I have a feeling.

Okay. Am I on? Hello. Can you hear me now? Okay. So we're going to go -- jumping away from the ventilated patients and going to high-concentration nitric oxide delivery. We're going to talk about bronchiolitis, okay? I'm going to start out. Duncan is going to finish it off. So overview of bronchiolitis. This is inflammation and swelling of the bronchioles, okay, a little different than bronchitis. So bronchiolitis is caused by viral infections. It's technically ages 2 and under. It's really 1 and under, and it's really mostly 6 months under, okay? So hopefully, none of you have ever had to take your infant to the hospital with bronchiolitis. It's not fun. RSV is about 70%, give or take, depending on what publication you're looking at. And the other 30% or so are other viruses, including coronavirus, Scott. Not necessarily COVID-19, but coronavirus. Coronavirus comes in many different flavors. So moving on. The most important thing in high-concentration nitric oxide is safety. We got to talk about safety because at 20 parts per million, it's very safe. At 150 parts per million, questions arise. Well, so far, we've done a rat study, 30 days intermittent treatment with the LungFit system. At 400 parts per million, no macroscopic or microscopic findings. 12-week rat study, 12-week dog study. [Technical Difficulty] [ John ]? All right. That's better. Okay. At 250 parts per million, rats and dogs, and no macroscopic or microscopic findings, okay? So again, we're talking about 150 parts per million to treat for bronchiolitis, not even close to these levels. We're going to treat for up to 5 days. 400 parts per million, again for 30 days. We're only treating for 5 days at 150. We're not worried about safety, okay? We've done 2 -- over 2,500 treatments of nitric oxide at 150 parts per million and higher, up to 250, much more at 150, 160 and 250, but we have it 250. 140-plus patients with over 100 of them being infants under the age of 1 in 9 different clinical settings, 0 serious adverse events related to nitric oxide, 0. All these studies, 0, okay? How do we do it? Intermittent delivery. We'll throw a little bit more data on intermittent delivery and why it's safe later, but we do not have continuous delivery at these concentrations or we would have severe side effects, potentially death.

[ It's not a good idea ].

[ To ]...

Try again. Maybe the connection to the...

Yes, I don't know. That's better? That's worse? That's better? I'll hold it in my hand. Okay. Sorry on the webcast. This is really bad. I'm going to use this thing. Let's turn that mic off. This one's better. Thank you. Sorry, webcast. We're back. Okay. So we've completed 2 bronchiolitis pilot studies. In fact, we've completed a third, which we don't have data for yet. We just closed it last week, and we'll have the data in April probably. It just depends when they clean it up and break the blind. So with data from the -- both pilot studies were consistent, so I'm going to show the second study, which was bigger and at more centers, okay? So baseline characteristics are pretty much the same. Again, this data is presented in 2018 at ERS, European Respiratory Society. We had 67 subjects, 6 sites. We randomize them 1:1. It was standard of care versus standard of care plus nitric oxide. In this particular study, we did 160 parts per million for 30 minutes, 5 times a day for up to 5 days, okay? Our current regimen is 150 parts per million, 4 times a day for 40 minutes. Again, the simple reason for that is you want the babies to sleep at night. Five treatments meant we were going into their sleep time, okay? What we're looking at is length of stay in the hospital, and we're looking at time to clinical improvement as well as oxygen saturation, okay? And here we go. Again, this is per protocol. So we learned from the first study and the second study, we're getting better. We'll be ready for intent-to-treat when we do our pivotal study, I promise you that. But there were some pretty good reasons for doing a per protocol since there were some learning curves on some of the data that we had. For example, one baby stayed in the hospital for 6 extra days because its twin was in the hospital for another reason. The hospital said, "We're not going to send the twin home and make the parents go back and forth between their houses." Unfortunately, they could have released it from our study. It would have been easier, but they didn't. So simple things like that is why we did a per-protocol analysis. I know some of you out there are going, "Yes, per-protocol means nothing." Trust me. We're pretty close to what the reality is here, okay? So saving a day in the hospital, very important, saves the hospital money, okay, opens up a bed a day early, very important. Duncan's going to talk a little bit more about that on the commercial side. Oxygen saturation, probably the most important parameter, not the only important paramater. Probably the most important paramater to make sure they get them breathing on their own. And then we have a clinical score here, which is a composite of 4 different end points, okay? Data looks pretty good. We've done another study. That was -- like I said, in April, we should have the data, and then our pivotal study will start in November, and I'm going to walk through this pivotal design real quick. It is a double-blind, randomized, placebo-controlled pivotal study. About 265 patients, less than a year of age, hospitalized with acute bronchiolitis. Again, we can reduce this number maybe by, I don't know, 10%, 20%, give or take, based on our results from the study we just completed, okay? 4 inhalations for a maximum of 5 days in addition to standard of care versus standard of care, of course. Each treatment is about 4 to 5 hours apart, okay? The reason for that is we are looking to have methemoglobin levels reduced. I'll talk about methemoglobin a little later. But when you treat, they go up. When you stop, they go down. We just need to go back to baseline before we treat again. Primary end point is time to fit for discharge, okay? So in the last study I showed you, the primary end point was length of stay. Here, what we're doing is getting them fit to make a decision whether we should release them from the hospital or not, taking out the actual variable of the physician's actual decision. This has been worked on with FDA, so we are set with this primary end point, and we're excited about it. A fit for discharge end point is both the composite end point or the Modified Tal Score and sustained oxygen saturation at 92% or above. You need to hit both of those to hit the primary end point. So it is a very simple composite end point, a composite of a composite. Took me like a day to figure that out. Okay. Key secondary end points, time to achieve the Modified Tal Score, time to achieve sustained SpO2, and hospital length of stay is the most important secondary end point. That is how we can price our product, okay? So I am going to turn it back over to Duncan.

I'll try this. Is this mic working okay? Excellent. I think we're good. Okay. So bronchiolitis is a lot simpler from a treatment perspective, but I just want to point out a couple of things from a market perspective. Obviously, this is an established market. There is no approved drug for bronchiolitis today. Treatment regime is oxygen therapy and hydration, so we're very excited about this. About 130,000 hospitalizations in the U.S. each year. And eventually, we're going to get on to demonstrating the effects in the elderly bronchitis. And there's significantly more of those potential patients, but that's not the initial indication that we're going after. And so from our perspective, we're going to take actually something that's much simpler, and we're going to go into hospitals that don't have any alternative right now. We think that the adoption could be really quick, but we're going to still take a phased approach. We're going to focus on that message that Steve described, which is we expect to be able to reduce the length of stay by about a day, which could be anything up to 1/3 of the time that they're treated, sometimes a little bit less, sometimes a little bit more. And our goal is to make sure that our positioning, our pricing, is appropriate to achieve accelerated adoption. So the device is the left-hand one. For those of you in New York, if you're going to be able to stay, feel free to talk to the team and also play with the device. The difference here is very straightforward. Instead of having to be compatible with a ventilator and set up like that, we simply deliver nitric oxide to the patient through a mask, and we monitor the gas. And the interface is very similar, except even simpler because we don't have to have the ventilator capability. And you can see the system here, and for those of you on the webcast, at the top, you can see there's an alarm, which basically deals with delivery failure or gas monitoring changes. You're measuring, once again, nitrogen dioxide, which is, of course, toxic. The filter does exactly the same thing as for the pulmonary hypertension, except that it's programmed to be only 40 minutes because that treatment regime is 4 x 40 minutes, as Steve described, and this filters out the nitrogen dioxide just the same way. The idea is that it's very intuitive, and this -- you'll hear more about this device because it's the foundation for some of our other indications. But for the hospital staff, it's very straightforward. And you'll see in the other room, once you've linked the breathing circuit, it's simply a question of switching on, putting whatever setting you want for the various gas monitoring, and off you go. And it's very portable. It's lighter than the PPHN system. It's only about 20 pounds. Obviously, over time, we'll continue to work to try and improve that profile and make it even smaller. And I think Steve mentioned the 150 parts per million in the safety and clinical data. So we feel very good about this. Obviously, we await the results so that we can get on with our pivotal trial at the end of this year. So the phase approach is very similar in terms of the principle as PPHN. The difference here is a lot more hospitals treat for bronchiolitis, and we also don't have an existing system and existing contracts to deal with, so we'll simply go to those hospitals and start to get that evaluation guide. From an organization point of view, assuming we go ahead, we're building a direct force. These same people will be in the hospital and able to be leveraged to promote the bronchiolitis product on approval. The second phase, the expansion phase, we're going to go to a much broader spectrum of hospitals. And again, once we have these devices in the hospitals, we think that the actual maintenance and follow-up is going to be fairly straightforward, and therefore, we won't need a very broad-based sales organization. We will partner this product outside the U.S. We certainly don't have any intention to try and do this ourselves outside the U.S. Too early, really, to be talking to partners because of where we are in the clinical side. And then eventually, when we get into our transformational phase, we'll be going to design innovation, but also, we are taking the same product and looking at other indications, which Steve will talk about in a second. And one of those obvious transitions will be into the home. Obviously, bronchiolitis is very much in the hospital environment. So we're going to definitely focus on the length of stay. And personally, as a father who had a daughter with bronchiolitis, I know that this can be a very scary experience, and we want to get those babies very much back home as quick as we possibly can. The reduction in length of stay isn't just about the -- that return to normal life. Obviously, if they're not in the hospital, there's no chance that they'll get hospital-acquired infections and all the bugs that are surrounding that, and we will simply be reducing the stress associated with that patient episode. And we'll also allow the hospital to use the bed that's freed up for that third or fourth day for another purpose, which is obviously very beneficial. And then, of course, they will return to normal life. Now there are codes already existing for the treatment of bronchitis asthma and bronchiolitis. There may be an opportunity to get a specific reimbursement code for bronchiolitis, which will accelerate adoption, and we're already exploring that opportunity as we speak. So as I mentioned in the U.S., we'll leverage the team we build for pulmonary hypertension. If we do partner, we may have a co-marketing approach. Or if we don't, we will build our own organization for bronchiolitis. We'll be in a better position to do that. The team will be around that 75 level. If we need to go higher, of course, we will. We'll monitor that as we go. And there is significant number of hospitals that present an opportunity, and we'll price commensurate with the reimbursement environment. And then outside of the U.S., definitely, our strategy is to out-license. So once again, a very simple, safe and practical system. We've gone after the more complicated system first with PPHN. But obviously, that's an existing market. For the other indications that we're going to be talking about later and for bronchiolitis, it's a much simpler system for us to get out there. So once again, I'm going to stop and invite to ask questions. Please direct any clinical questions while we have our clinicians here. And Dr. Colin, I'll certainly ask him to make any comments. He has about the likely adoption of this system for bronchiolitis and the kind of challenges that they currently face. So maybe if you want to start?

Yes, I would like to just take a second to give you a perspective of what this disease is about. It's a very non-famous disease, and RSV is a very non-famous virus. When you consider it in comparison to the current coronavirus, RSV kills thousands, possibly tens of thousand children in the world around every year. Nobody talks about it because it is an environment where they don't have access to care, but these are lethal diseases potentially. So the admissions in the United States are the peak of the iceberg, of course, but this is a much more common disease than we are appreciating, and the impact worldwide is huge. In the United States, we are largely preventing the severity of disease by spending millions of dollars by immunizing newborn babies and prematures who should not get RSV by giving the monoclonal antibodies for 5 months a year. It's called palivizumab. It's extremely expensive, and the purpose of that is prevention of the disease. That basically has no treatment. So if you look at the literature on RSV, the first remarkable publication review paper was published in the mid-'70s by [ Czernik and Wohl ], who are the giants at the time. And they say, "Basically, all we can do is support these children and give them oxygen." And if you look at the follow-up guidelines that came up, basically, they say the same thing with 20 pages instead of 2. So we really have no medication. Vaccination have tried to be developed in the '60s and failed. And we -- any attempts of new therapies have really not introduced in the last 50 years that we've been dealing this disease. So any change that we can introduce at this point in time would be a welcome to a market that really has 0 answer. And just the last note about that is that if you think that the story of RSV and bronchiolitis ends with the disease in the hospital, it is not. We, as pediatric pulmonologists, see large cohort of wheezing patients that we call asthmatics in childhood that have no real asthma because it would go away during childhood but may have very severe wheezing, and we know that this is a sequel of RSV infection. And so this is a whole class of disease. We have no idea how modification of this disease in the hospital time is going to affect this many year sequelae.

Thank you. Questions?

Matt Kaplan from Ladenburg. I guess the question is for the panel in terms of your thoughts on -- in the treatment of bronchiolitis. And I guess have any of you had any experience using the XAIR -- Beyond Air systems in some of their pilot studies or higher-dose nitric oxide in their pilot studies or the device that we see here today?

So Matt, let me just say real quick to that about our KOLs here. All of our studies in bronchiolitis, the data have been done in Israel. So since they're not in Israel, pretty sure the answer is no.

No first-hand experience. I come originally from Israel. I have connections there, and people who have been using that have been impressed with the result. And one of the leaders in Israel who does the study is Dr. Asher Tal who is very famous in these studies because he actually developed the parameters that we're using, which is called the Tal score. So I don't think we can talk about significant clinical responses at this point in time, but the data of these studies are definitely being published.

And I guess in terms of -- I'll let you answer. But in terms of clinically meaningful change in that Tal score, could you elaborate on that and your answers as well?

So we don't really have any physiological parameters to tell whether somebody is improving because we cannot do pulmonary function testing as we would for an asthmatic who goes to the hospital. The babies are not amenable to this kind of approach. So the only physiological measurements that we're using is actually oxygen saturation, which by the way is a magic tool that have not been -- has not been here 30 years ago. And if you needed to know oxygen saturation in a baby, you needed to take blood gas by a needle in an artery. So the fact that we can monitor it continually is quite remarkable. The Tal score is a set of physical observations and parameter, clinical observations put together, and they have been shown in all studies in bronchiolitis. Various variations of the Tal score have been used and have other names, but basically, those are the parameters. They have been shown in all the studies, and there are many studies on bronchiolitis and attempts to intervention. For instance, the question of whether inhaled corticosteroids or systemic corticosteroids make a difference, and we know now that the answer is no, but these clinical parameters are the conventional outcomes. As far as the final outcome, all the studies that evaluated outcomes for bronchiolitis focus on length of stay. And length of stay, typically, if you reduce 1 day in a 4- or 5-day hospitalization, that becomes quite significant.

Yale Jen from Laidlaw. In terms of the pivotal study, which is a composite end point or 2 separate end points, first of all, are those 2 end points weighted? Or they are equally weighted?

Questions about the end points in the pivotal study about their weighting, they're equally weighted. It doesn't matter which order they happen. And either oxygen saturation comes first or the composite comes first, it doesn't matter. It's just when the second of the 2 curves is when you've hit your primary end point.

And I know that's probably -- you need to look at a second Phase II study to finalize that. But what's the initial assumptions there in terms of powering assumption?

You're asking a non-statistician about powering, and our statistician is not in house. Suffice it to say though that we do have an excellent statistician who works with us, and I'm not really concerned about the powering of the study in any way. This is someone we've known a long time. If you look at our Board, you'll see some exceptional people on our Board, and we have an excellent statistician. I just -- I'm not going to do justice to the conversation about stats, but we're comfortable.

Maybe a last question, just throwing -- it's a business development questions, that I understand for the PPHN, you look -- certainly consider partnering. If there is a partner coming up also on the BRO, B-R-O, would you consider that too or sort of bundle things? Or you definitely want to move that only on for the bronchitis (sic) [ bronchiolitis ]?

So the question is, would we partner bronchiolitis, the short answer is no. To expand just a tiny bit, these are 2 distinct different indications in the hospital. One unit works with a ventilator. The other one doesn't. So the one that does work with a vent theoretically could work without a vent. But it's a much bigger machine, much more complicated machine. And the filters for bronchiolitis are programmed differently than the filters for PPHN, so they're not going to be interchangeable. Call point is different. Physicians are different. It's not going to be hard to separate them within the hospital. We've been through the exercise for a couple of years now.

If I can make one comment on the composite score and kind of gets at your clinical interpretation, too. It's just using the clinical score plus the saturation is basically a [ circ ] for length of stay, so that we're not in that region where they meet discharge criteria but just have stuck around a few more days. And so typically, clinically meaningful changes would be to get below that Tal score of 5 and have a normal saturation before any clinician would discharge that patient anyway. So I think it's a circuit of length of stay, and it's actually probably more accurate looking for clinical meaning -- clinically meaningful difference.

We had one question from the web. And if there are questions from folks who are on the webcast, you can just send them to [email protected]. We have a question which is, how is bronchiolitis -- basically bronchiolitis treatment reimbursed in hospitals today? Is it -- there a DRG setting? And how do you think your treatment might affect reimbursement levels?

So the first answer is, yes, there is a DRG for bronchitis and asthma. And within that, there are 4 codes for bronchiolitis. The DRG payment is an average of all of those treatments. So the idea is that if we can reduce the average cost of bronchiolitis, there will be a direct impact for the hospital because they'll reduce their spend, and the average will still remain. Over time, that will continue to grow. But I think there is an opportunity for us to get a specific code. But it's going to take some time. And that's why we're starting at this point on the journey to try and get something specific because obviously, that will help with adoption.

So I guess a question for the clinicians. In your current setup with cylinder-based iNOs, how do you all mitigate any adverse events? And specifically, I'm more interested in NO2. And how do you all see it in this framework? I guess that would be one on the safety side that I'd be very curious. Let's leave ergonomics and logistics and finances aside, right? This would be much better. We get it. When your list clinicians see the platform, on the efficacy side, what do you see? Across the board, what do you see are the key things we should focus on irrespective of indication? And on the safety side, what are the red flags you guys as clinicians for a new disruptive platform say, you know what, for example, one of the things that I -- I'm always curious when the -- and maybe this is a question more for the company also. When the system was developed and they did the FMEA, right, how do you make sure NO2 is always within a certain type band? Something goes wrong, like you said, there is no physiologic measure to catch some of these. So I'd like -- if you could put it within a framework, here is where the current setup with the cylinder base and there is -- here is where the needle moves with a disruptive technology like this.

Thank you, Suraj. There's a couple of questions in there, and we want to take them in turn. So I think the first question about nitrogen dioxide and the danger in the hospital with cylinders currently and how they deal with it and what -- how that might change without cylinders, the only one here on the panel is Dr. Filipov who could speak about that because he uses the nitric oxide, whereas our other KOLs, they're not using bronchiolitis or NTM, nitric oxide treatments, at this time. But -- so I'll let Dr. Filipov talk about that.

I see that there is a question regarding the nitric oxide problems and risks for safety during [ QC ] from a patient and during storage. I've been -- in my mind, for 22 years, I'm not aware of any issues so far with the storage of the cylinders. In terms of using it on the very patient, the controls of the system that is currently existing is pretty much the same as the controls on this system. I'm not aware -- we have had to measure methemoglobin, which is much more commonly and where it is a standard for measurement every day on a patient who is using nitric oxide. And we go by the -- what the monitor says in terms of the concentration of the nitric dioxide. But if the FDA approves this device, obviously, all these tests will prove these devices equal, if not better, than the device that we are just using. We're not going to -- otherwise, we won't see it on the market. So right now, I'm not aware of single case report regarding [ QC ] nitric oxide and toxicity related to nitric dioxide. There are reports of methemoglobinemia rising for certain patients with high levels that are a little bit above the average that is used. But that's very easily treatable by disconnecting or stopping it. But I'm not aware of any case reports on nitric dioxide as a toxic agent and event on a case.

So I'm going to pass it over to Fred Montgomery to talk about nitric oxide concentrations and how you're going to be comfortable with the fact that what's being delivered is what is being intended to be delivered. And before I do that, I just want to mention that, remember, in the PPHN setting, the concentration is pretty low. The NO2 is not a problem while delivering. The issue is more, is there a leak? Did you close the valve properly? That's the real problem. Or did you purge properly? And Dr. Filipov is not the RT. He's not going to be purging. He's not going to have to worry about nitrogen dioxide being stuck in the lines. When you turn off the valve on the cylinder, there's no flow. There's no pressure. So it just sits there. The NO converts to NO2, and you have toxic gas in the lines. This is where the danger resides with NO2 when you're talking about low concentration. We go to the higher concentrations, obviously, that's why we have the filter. And we have a sensor in case the filter fails and we have alarms. But I'm going to pass it over to Fred Montgomery to talk about your question with respect to nitric oxide and the confidence in what's being delivered. And when that's done, I'll let the panel talk about your question of what are we looking for, for efficacy from nitric oxide in these other indications. Fred?

Thank you. Before I get on to the NO concentration, I just want to make the point that nitrogen dioxide in the circuit that goes to the patient is nearly all formed actually in the breathing circuit after the NO mixes with the oxygen-enriched gas that the ventilator is giving. So the amount of time that the NO is reacting with the oxygen and forming NO2, if you're using larger humidifying chambers or breathing circuits that aren't optimal or the lower ventilator flow rate, so the time for that reaction to take, that is where all the NO2 is being formed. And it's not really about whether it's one delivery system or the other. It's more about how the RT sets up the system and making sure it's appropriately set up. As far as the nitric oxide concentration is concerned, all the deliveries in this system -- since -- I worked on the very first INOvent delivery system that got approval back in 2000, and we established with the FDA the guidance documents that specify how accurately the nitric oxide has to be and how stable it has to be throughout the breath because in a ventilator, the gas flow is changing all the time. During the inspiratory flow, it may be going up to 10 liters a minute and then down to a very low bias flow of about 0.5 liter a minute. So you've got this very dynamic situation. And there are very strict guidance that you have to pass for the FDA to approve as far as having a constant concentration throughout the breath that is going to the patient. Because all the clinical studies that led to the approval of nitric oxide in PPHN were done at a constant concentration. And that's why the special controls are set up to ensure that any delivery device continues to maintain not only the set concentration but a very stable concentration throughout the breathing pattern.

So I think the last part of the question, and this will be the last question for this section. Suraj, you've filled that time. Thank you. I think it was -- you were asking our experts here what to look for from nitric oxide and to reserve [ effkins ] -- efficacy and safety in, I assume, bronchiolitis and NTM, right? And we're going to talk about NTM in the next section but feel free to answer the question for both indications.

I'll start. So I mean the -- so the efficacy end points are kind of different depending on the age of the patient and also what we're looking to study. So -- and then also the length of use. So we talked about already in bronchiolitis, really, we do focus on that length of stay. But clinically and also in the trials, you want to be making sure we're monitoring oxygen saturation as an outcome measure and a side effect that we're monitoring. We're measuring, in older patients, lung function tests and making sure they're monitoring that and seeing if we can see efficacy from lung function. Measuring -- measurements of like activities, so ability to be more active, be able to walk and have exercise not limited. Quality of life is a big measure that we do in pediatric and adult studies of all sorts of inhaled-type medications. And then I guess more side effects, we're mostly monitoring acutely and long-term oxygen saturations, vital signs, monitoring blood pressure, that's something you want to be making sure they're monitoring and then just clinical changes. Anytime you're doing an inhaled medication, you can always have acute responses of lung tightness. You can react to that medication, have bronchospasm. So that's something we're always looking at to be monitored both clinically and in studies. And then thinking also about other inhaled medications, hemoptysis is coughing up blood, so making sure you're not getting irritation in the airway, too. And so I think those are really important and things that need to be incorporated in all the studies and then things we will directly be looking at, at the bedside, too.

Just specifically for this gas, methemoglobin would be something that would be monitored at all times, which is a predictable side effect of giving high concentration of this gas. And the other one would be toxicity from NO2. And you just don't allow the NO2 to go to concentrations that are prohibitively high. So I think the limit has been set to, what, 3, 5 at this point in time?

Yes, 3, 3.

So it's -- there are OSHA guidelines about the -- and what -- how long you can be in an environment of a certain concentration, and I think 3 would be considered to be...

OSHA is 5 parts per million nitrogen dioxide exposure for an 8-hour workday, and we're being restricted to 3 by the FDA. So it's ultrasafe from that perspective when you're monitoring it. But if there is -- for example, with the cylinder, you can't monitor if there's a leak from the cylinder. But you can monitor what's coming out of our system, much safer.

Okay. So we're going to jump on to NTM or what we would call the home market, NTM being first indication. And in this section, I will cover COVID-19 at the end of this talk. I think it [indiscernible] nicely into it. So let's bring it home. Take the thing home, very simple, safe, small, clearly superior to any other nitric oxide system out there. So all we have to do is plug it in and turn it on, place the mask on the face, put this filter in right here. It's preprogrammed. As you've mentioned, there's a chip that Duncan talked about earlier with respect to bronchiolitis, same chip here. Program the system, and you just press this button here and press go, very simple, okay? That machine does everything for you. Now you don't just bring it home. You bring it anywhere. You can use it on a boat, go out the boat later; trains; camping trips, if you have a source of power, okay; hotels; RVs. It doesn't matter. Any place you have a standard electrical outlet, 110 or 240, doesn't matter, okay, you can use our system, all right? And please don't ask me questions, can you use it in subzero temperatures? You need to be inside your house or inside something. This can't be a sandstorm. Let's be realistic a little bit, but we can go up a couple of thousand feet. So first indication for the home market, nontuberculous mycobacteria, okay, NTM, right up here in the top. NTM is an FDA disease area of focus, and there are limited options. NTM is not the only infection that is an FDA disease area of focus. We have a lot happening, okay? Pseudomonas is a problem, MRSA and others. They're becoming worse. We're running out of options, and there are many of us in here have heard that there's overuse of antibiotics. These bacteria and viruses, for that matter, will morph and continue to change, and we have to keep up with them. Nitric oxide seems to be able to take it. So with respect to NTM, we're going to be looking at NTM abscessus as well as NTM MAC. So MAC, or Mycobacterium avium complex, is the most common form of NTM, but abscessus is the most aggressive and difficult-to-treat form. Pretty much all abscessus is refractory to antibiotic therapy. A small percentage of MAC is. So we'll be targeting the refractory -- both refractory setting for both of them, in other words, patients who failed antibiotics, okay? If you look over here, one little quick thing. Median survival for a MAC patient is 13 years. Non-MAC is 4.6 years, so that's from diagnosis. We're getting these patients when they're refractory. They're going to die a lot quicker than that. Estimates from a 2014 paper, about 180,000 NTM cases in the United States. Europe doesn't really have a big problem. However, Asia does have a big problem. Why? Well, NTM is acquired by inhalation from the environment, and water is the main source. Warmer climates have higher infection rates, okay? So don't live on a tropical island if you are susceptible to this. And who is susceptible? Essentially patients with underlying lung conditions or immunosuppressive situations essentially, okay? There are exceptions, but those are basically the people at risk. Okay. So I'm going to start out a little bit of in vitro data. Over here, we're showing Mycobacterium abscessus in vitro. You can see there's a clear dose response, 160 parts per million down to 400. 400 [ wipes ] to that, 4 hours. 160, we're still waiting, probably take about 2 days, but [ we just kill ]. Down here, we're showing different clinical isolates of abscessus. You can see depending on the isolate, we can kill or can't kill, okay? So we're learning. And this is the 250 parts per million. The 400 might kill everything, but we're never getting 400 to the lungs of a human being, at least not with what we know today. I put over here pseudomonas. Pseudomonas at 200 parts per million is killed as fast as abscessus is with 400, showing it's easier to kill other bacteria. And don't be fooled, pseudomonas is a huge problem, especially in CF patients. But in non-CF patients as well, pseudomonas is a major problem. Here, sticking with the NTM theme. We're showing synergy with clofazimine, synergy with amikacin. Amikacin is the only antibiotic or product right now approved to treat NTM, and it's refractory MAC. But clofasimine is used as a background antibiotic therapy. So we do have synergies. We're continuing to do our in vitro work to try to optimize the background therapy for the best treatment for patients, okay? Over here, just want to show people that we are using intermittent therapy, 250 parts per million intermittent against abscessus, 4 x 40 minutes per day for 2 days. We had basically a 50% reduction in the bacteria load. So you have to understand, this is how we treat in people intermittently. So we're showing -- continuous is not going to help us in vitro if we can kill it with continuous exposure to NO. Here, intermittent exposure NO, we know it kills. So we know we're killing the bacteria in patients. The problem is this is 250. We've only used 160 so far to date. So we know there's a dose response. Our first study was done with 160 parts per million, okay, in 9 cystic fibrosis patients with Mycobacterium abscessus, okay? For those of you who were Vertex fans from back in the day, they excluded NTM abscessus patients from their pivotal study. All other NTM patients were in there but not the abscessus. These are the worst of the worst, okay? In 2 weeks, we treated 5 times today for 30 minutes at 160 parts per million. In 2 weeks, we had a 45-meter increase above baseline in 6-minute walk tests. We cut our treatment down to 3 times a day for the next week, and then we stop therapy. We still maintained our benefit at 3 weeks. 60 days after we stopped therapy, we still had about a 30-meter increase over baseline. We can speculate why there's continued benefit after we stop therapy with nitric oxide. We have our theories on that, and we can talk about that between 5:00 and 6:00 all day long. But it's a fact on these 9 patients, and we've treated 4 patients with compassionate use, and they all saw benefits well beyond the stoppage of treatment. We're just showing FEV1 here. This is not a clinically meaningful event. But again, these are the patients that Vertex chose to exclude. So the fact that FEV1 didn't decline is a good thing. So we're very excited about these data. It's pointing us in a direction where we say 160 parts per million for 30 minutes 5 times a day for 3 weeks is not enough. We know there's a dose response. We need to go higher. We need to treat longer. It takes a long time to kill this in vitro. So what are we doing? We're going to run our home NTM pilot study, open label, 12 weeks of treatment, 12 weeks of observation, about 20 subjects, 18 years of age and older. We'll do both MAC and abscessus patients, including CF and non-CF patients. They will be refractory to antibiotic therapy. Simply, that means they have to be on antibiotic therapy for at least 6 months and have no response, okay? Sometimes patients are treated for 18 months on antibiotic therapy, and it's quite toxic, all right? Not only is it toxic, quality of life goes down, physical function go down in these antibiotic therapies. So we anticipate starting in June, results early '21, interim results. That will be the 12 weeks of treatment, and then observation will come a quarter later. 4 doses of NO per day for 14 days, followed by 2 doses of NO per day for 70 days. So think about that. For 2 weeks, the patients are pretty much confined to the hospital for the first few days, where they are being titrated from 150 to 250, and they're being trained on the system so they use it at home alone. And then when they're home, they're staying at home, 4 times a day. But after that, the next 10 weeks, they're going back to their normal lives. This is important. I know these patients are sick and they have a debilitating disease, but they don't want to sit at home all day. They want to go out. They want to go to school. They want to go to work. They want to go out with people. They want to have as normal of a life as they can, okay? And we have 2 physicians here who can tell you about CF patients who were very ill. Their FEV1 is probably 40% or 50%, and they're going out. They're not sitting around doing nothing, okay? So these people want to have lives. So it's important that it's twice a day for 40 minutes. We all have 40 minutes at night. And in the morning, if you have a deadly lung infection, you'll find 40 minutes in the morning, I'm sure of it. So not onerous on the patient, it's very important, okay? Now 4- to 5-hour difference between the first -- when you're doing 4 times a day, at least 9 hours apart when you're doing it twice a day, okay? Again, I said they'd be titrated in the hospital for a couple of days, and they will be trained on how to use the system. If you stay from 5:00 to 6:00, I'll train you in 5 minutes. It's not hard, okay? Primary end point is safety, okay? Remember the safety slide I showed earlier. Over 2,500 treatments, over 140 patients, no SAEs related to NO. We're pretty good here. Key secondary end points. What do we care about? Culture conversion of bacterial load, we want to see it eradicated. Quality of life, very important; respiratory function, important; and physical function, we'll be going for the 6-minute walk, but we're going to add in activity tracker or maybe some other things. But activity trackers are probably a better indicator than 6-minute walk test. So in this little corner here, Dr. Colin mentioned methemoglobin. So this biomarker right here, methemoglobin, is the danger signal for us with nitric oxide. High concentration of nitric oxide raises methemoglobin levels. It's very simple. Your oxygen levels in your red blood cells are at 99%. We're all sitting here about 99%, maybe 98%, okay? As methemoglobin rises, your oxygen level in your red blood cells goes down. Not good. Okay? So the higher the metheme, the less oxygen in red blood cells, simple. I'm sure our experts here can explain it in detail from a scientific and medical standpoint, if you'd like that explanation later. But very simply, what you can see here is every time we treat, metheme spikes back down, spikes back down, up, down, up, down, every time, every single time. We haven't had a patient not have the metheme come back down. We split the treatments out about 4 hours apart. Usually, it's back to baseline in about 2 to 3 hours. So we're not concerned. As long as we have a cushion there, patients will come back to baseline at methemoglobin. We know where it peaks, depending on the dose and the time we give it. It's very predictable, okay? Remember, we've treated over 140 patients. This is the 9 patients, CF patients, we treated. All 9 patients are in here over many days. So treatments 1, 2, 3, 4 and 5, okay? Overlapping each other, over 3 weeks, overlapping. You can see they don't really change, okay? The variability is very small. We're very comfortable that methemoglobin won't be a problem, okay? So now I think I've convinced you that NO kills in vitro, but it's not just NTM and pseudomonas. It kills many bugs. So we did studies at 200 parts per million many years ago. This is before -- this is some of the data that we licensed back 7, 8, 9 years ago. And actually Mark Rimkus here, our respiratory therapist and engineer, he was part of the company that generated these data, okay? So here you have strep, 200 parts per million, killed it in 2 hours. No problem. Mycobacterium smegmatis takes 10 hours. Everything you see in this blue box killed longer than 2 hours but less than 10 hours. Staph, pseudomonas, Klebsiella, MRSA, E. coli, et cetera. That's 12 bacteria, plus abscessus I've shown you, plus -- we have pseudomonas here too, so only 11 -- I mean 13. But we have killed all of these in vitro with 200 parts per million, no problem. That's important, okay, because we're going to talk about other infections in patients that we can treat at home. It's not just NTM. We could treat all of these infection in patients and others. Then we jump to the bottom of this slide, okay? We're looking at dose response for influenza A, 40 parts per million, 80 parts per million, no effect. 160 parts per million, death. 800 parts per million does the same. So we really don't need to go that high for the viruses, okay? Now in the bottom corner here, we're talking about herpes, coxsackievirus, Japanese encephalitis virus. This is all in the 90s done by others. Everybody knows the killing power of nitric oxide in viruses as well as bacteria. This is nothing new. What's new is we have a generator we can use anywhere you want. You're not stuck in the -- in the ICU with giant cylinders that are dangerous. Our products can go anywhere. We can treat all of this. This has been known, okay? So how big is the home market, okay? It's huge. We're just going to talk about COPD, okay? COPD is the largest average population for opportunistic lung infections we know of. 30 million people estimated in the United States, 10% considered severe, okay? This data from 2010, in this study, over 1 million COPD exacerbations that cause hospitalization, over 1 million, okay? The average length of stay was 10 days -- or 6 days, excuse me, 6 days. The cost back in 2010 was almost $40,000 per hospitalization. We're probably up around $50,000 now. It's been 10 years, okay? It's a real problem. Mortality rate. I learned this when we did the research, I had no idea. I'm shocked. Mortality rate, after hospitalization from a COPD exacerbation, mortality rate is 16% to 19% in the 3 months following. How about we jump it out to 5 years, 55% to 65% mortality, 5 years after a hospitalization due to an exacerbation for a COPD patient, okay? We have the ECLIPSE study here. They didn't just look at severe, they looked at GOLD II, III and IV. III and IV will be severe. GOLD II is moderate. They looked at moderate patients. A lot of the -- I'll let you guys look at this later, but when you look at -- you add up these numbers, there's way more exacerbations than just over 1 million that was shown here. There's just no way there's enough patients to justify. You're not going to have more than 1/3 of the severe patients going to the hospital every year. There are some GOLD II patients that are hospitalized as well, okay? Now there's a lot of exacerbations that you'll see in the ECLIPSE study that weren't -- didn't result in hospitalizations. So we could have 1 million in the hospital, another 2 or 3 million that didn't go into the hospital, okay? It's a huge market. We can treat all of these patients. Why? We don't treat COPD. We don't treat COPD. We treat infections. Let's see what causes exacerbations to COPD patients. And let me tell you, this is going to cause exacerbations in other patients as well, not just COPD, could be bronchiectasis, IPF, asthma, et cetera. So the ones in italics, for all of you non-scientists, those are the bacteria and the other ones are viruses. We have 6 bacteria, 6 viruses. One of them happens to be coronavirus, which we'll talk about in a second. Pseudomonas, which we know we kill; staph, we know we kill; influenza, we know we kill; strep, we know we kill; RSV, we know we kill. We know we kill more than half of these already with data that we've generated ourselves, okay? And now this adds up to a lot more than 100 because there's a lot of coinfection as you probably all realized. So the home market is gigantic. Our study that we're about to do, we believe it's safe. We've shown it's safe. It's so simple to use yourself. All we do is take this filter, plug it in, press go. That's it. We even have a little slot so you can't do it incorrectly. You can't make a mistake, okay? Very simple to treat on your own. The market is enormous. We have safety. We're not concerned. We're very excited about this. What does it mean for COVID-19? What can LungFit do for COVID-19? We need safety, efficacy, and it's got to be practical for the situation that we're in. The numbers people are throwing out there for what COVID-19 is going to do is -- I mean, it's hard to conceive. I heard someone say 60 million in the United States next year. And someone said 1/3 of the population. And I mean the numbers are ridiculous, who knows what the truth is? I really don't know, but they're big. So let's see. Safety is important. I want to come back to my safety slide. Again, rats, 30 days, up to 400 parts per million. We're not going to need 400 parts per million to kill this, okay? We're probably not even going to treat it for 30 days. We're certainly not treating for 12 weeks, and we did that at 250. We're probably not going to need 250 to kill this either. Usually, we kill viruses with a lower concentration than it takes to kill bacteria, but we'll see. We couldn't get the COVID-19 on Amazon. We're still waiting. Hopefully, we get it soon. Look, again, 2,500-plus treatments, over 140 patients, over 100 of them are infants. I know I sound like a broken record, safety first. 0 serious adverse events, okay? So we're not going to harm patients infected with COVID-19 if we try to give them nitric oxide. Not going to do -- we're not going to make them any worse. What's the mechanism of action? Why? Why should we use nitric oxide against COVID-19? Well, I just showed you we killed a lot of viruses and bacteria already. But why? Why should we go after COVID-19? Let's just talk about the mechanism of action. There are 3 mechanisms of actions that matter for COVID-19 patients. Bronchodilator. We're not going to talk about that because it's been approved for hypoxic respiratory failure with bronchodilation for 20 years. We already know about that. Anti-inflammatory. It's critical for these patients, okay? Inflammation is probably what's killing them. Viral elimination, we got to get rid of it fast, okay? So anti-inflammatory, okay? Everybody knows the anti-inflammatory properties and how it works with nitric oxide. It's been documented for decades, okay? Immunoregulatory functions, inhibition of T- and B-cell proliferation, et cetera, et cetera. Anybody wants a real explanation? Hang out between 5 and 6. We have one of our scientists from Beyond Air who can talk your ear off about this, okay? Elimination, inhibition of viral enzymes, blocking of RNA synthesis, blocking of viral replication cycle by modifying target molecules essential for replication. This is not something new. I was told this almost 4 years ago when I sat down with Amir to learn about this. He told me right away. We stopped the replication of RNA for viruses and DNA for bacteria. That's it. This is not anything new. Now don't take it from me. Take it from the Swedish government, okay? So SARS is coronavirus. I bet you, not everybody in this room knew that SARS was coronavirus. Come on. Got to be people who didn't know that. Okay? So SARS is coronavirus. Nitric oxide inhibits the replication cycle of Severe Acute Respiratory Syndrome coronavirus. I can't pronounce these Swedish names, but these guys are from the Swedish Institute for Infectious Disease Control, okay? They wanted to go out and show, and this is 2004 Journal of Virology, okay? They wanted to show nitric oxide has an impact, and it eliminates SARS who's a nasty coronavirus. COVID-19 is not the only nasty coronavirus. It just seems it might be a little more contagious than others, might be in a longer incubation period than others. We don't know who has it. But I'm not -- I haven't heard from anybody it's more deadly than SARS and more deadly than -- we're going to talk about the camel coronavirus from the Middle East. I haven't heard it's more deadly, but it's certainly more difficult to control. So what do we have on coronavirus? This is not COVID-19 data. Please don't jump to that conclusion. In our first bronchiolitis study, we looked at what type of virus the patients had. The last 2 we did, we didn't care because we're not looking at viral load. We were looking at symptom resolution. So we didn't really care and weren't going to waste our time. But this one, we went back and looked at our study from 2013, '14. We found 4 patients with coronavirus. Again, this was the coronavirus most likely coming from camels in the Middle East, which is not good. This isn't like a ranavirus. This is pretty bad. All we had is length of stay data. And yes, okay. So we cut the length of stay in half. It's 4 patients. We're not jumping up and down about it. But it's important. Nobody else has any data like this, okay? Nitric oxide works. It works. And all the other viruses that cause bronchiolitis, it worked in all those viruses, too. Works. We know it's safe. We know the mechanism of action is important. We know it works. So what are we going to do about it? Well, here's our LungFit. It is a practical solution for COVID-19. Why is it a practical solution? Well, first of all, I want to point you right here to the bottom. There's a port in the back of this, and you can see it later. I'm not going to turn it around because Fred and Mark will yell at me. I'm not allowed to touch it without -- they have to help me. I'm not an engineer. But in the back, there's a port for oxygen supplementation. That's important, okay? And you'll hear from our experts that oxygen's critical. These patients, not all of them, but those severe ones are going to need oxygen supplementation. Just stick it in the back, no problem, comes right through. Okay? Convenient. Simple. Let's keep going. It's easy to use. Remember, we program it by the filter. It's already preprogrammed, just plug it in, you're good. No one has to think. No one has to try hard to say, "Oh, how do we use this machine?" Okay? It's convenient for everyone, not just the technician or the RT or the physician or the nurse but for the patient. What does the patient have to do? Sit around for 40 minutes breathing normally? No problem. I mean we're on our phones 4 minutes -- 4 times 40 minutes. Come on, we're on our phones longer than that every day. All of us. Computer, read a book, do something. It's easy. Okay? This is not hard for the patient. They sit there and do nothing. Okay? The only thing they can't do is talk, which is probably a good thing. All right. It's portable. The thing weighs 20 pounds. You can come over later and touch it. Pick it up and carry it around. Well, you can't leave with it. But you could pick it up. This is easy, okay? And if you look at it, there's only 2 things to hook up. This is the breathing circuit, simple. You'll see it later. And that's just the sample line. So we know what -- how to measure the nitric oxide, nitrogen dioxide and oxygen, if we put supplemental oxygen in. If we don't, it's going to measure 21 most likely. If we want 30 or 40, you'll see it there. That's it. Too little hookups, no time, okay? Take it anywhere. Anywhere. Now why else is it practical? Great. It's easy to use. We could take it places, okay? Let's keep going. One system could treat multiple patients, okay? Now it's 40 minutes. We think it's 40 minutes, 4 times a day, okay? You could probably do a treatment every hour, 40 minutes, use the other 20 minutes to get the new patient and say, okay, patient's got to get treated 4 times a day. You could treat 6 patients in a day with one machine. In theory, you can, okay? One system can treat 6 patients. And if you treat for 5 days or whatever it is you're treating 6 patients. I'm not sure that anybody is going to be able to do it so perfectly, but maybe it's 5 or 4 patients, I don't know. But one system can treat multiple patients, okay? Now it's easy to change the breathing circuit. So if you have a patient -- let's take, for example, a cruise ship right now. You give a patient a breathing circuit, they come in, they get -- they do their dose, they take the breathing circuit with them, go back to your room. That's your breathing circuit. Next person comes out with their breathing circuit, they can sit down and do it. There's no cross-contamination. It's positive flow. Always one direction. When you exhale, there's a valve that closes, you exhale out of the mask, not back, okay? There's no cross-contamination here. There's no concern about that, okay? The filter is disposable but easily disposable. There's no little sharps box or anything like that, any special disposal. Just take the thing and throw it out. It's nylon, soda lime, plastic. It's nothing. Very, very simple. Now great, one system could treat multiple patients. Well, how many operators, respiratory therapists, operators do you need per system? Well, one RT can operate multiple systems, not 3 or 4, but probably 10 or more. Okay? If we want to really max it out, you can sit here and say, "Okay. How long does it take to sit the patient down, make sure they put their face mask on right, pop the filter in, press go? And just stay there for, like, 10 seconds, make sure the numbers are good." Is that 2 minutes, max? It's a 40-minute treatment. One RT can probably do 15, 20 machines by himself. And guess what? If something goes wrong, we have alarms. Okay? So if you have maybe a couple of monitors in the room, they could do it. You could treat an entire cruise ship of thousands of people with our systems, no problem. Not -- you don't even need that many technicians. It's very simple, very simple. So that's why we think it's a practical solution. I don't see anything else that can handle that. Now what are we doing? What are we doing? First of all, in the lab, in Israel, we have a BSL Level 2+ lab, which means we can test the camel coronavirus that's in the Middle East. We cannot test COVID-19 in vitro in our lab. We need to be a BSL Level 3, and we're trying to get there, okay? We will be testing several types of coronavirus, including the camel 1 and a couple of others in our BSL Level 2+ in Israel. So we'll get some data in other difficult-to-treat in human coronaviruses, and hopefully, if we get to BSL Level 3 and COVID-19 is available on Amazon by then, we're good. So in humans, we've applied for multiple grants that are made available around the world, just like us and probably 5,000 other companies, universities and forth that have applied for these things, okay? I can't tell you what's going to happen, but we will initiate human studies if we get grant approval. Again, they don't have to bring the patients to us. We can go anywhere. We can administer this anywhere. We can go to Italy. We can go to South Korea. We can go to China. We can go to Washington State. We can go anywhere we want. It doesn't matter, okay? We can treat these patients. So manufacturing, very important. I'm sitting here telling you how we can do all this stuff. We've got to be able to make these things. Well, we submitted an IDE for our LungFit BRO system, which is the system that if this were to come to fruition, we would be using, okay? We don't know what the exact concentration will be. Is it 150? Is it 200? Maybe 250? I don't know. I mean that's what we need for anti-M. abscessus so probably lower. So the IDE submits. We've done a lot of testing, a lot of work. FDA has all that information. This is our IDE for our bronchiolitis pivotal study. So we've done a lot of work on manufacturing. We're ready to go. We're not at commercial scale. We cannot crank out 10,000 of these next month, not right now, anyway. But our contract manufacturers are strong, they have a lot of capacity, and they can ramp quickly. How do you ramp quickly? You need space, which they have, and you need money. You have to build these lines out. Some of you in here probably know this better than I do. You need to build the equipment so you can manufacture very quickly and build lines. That's not going to be a problem. If there's a need, it can be done. With that, I think we have questions on NTM as well as the entire home market for lung infections and COVID-19. Nobody? Go ahead, Scott.

Steve, just a couple of questions. First, and I have no familiarity with this, what does it take the BSL Level 3 versus Level 2? And how long does that take?

I don't know. I don't know. All I know is the young lady who runs our lab is actually here in the back of the room, and you can chat with her a little bit later. But it's just maybe another -- what do you think, Amir, 3, 4, 5 weeks or something like that? Call it another month or so, give or take. It just depends. We have to get approvals and so forth and get some -- upgrading some things, but it can be done. Let's say in April, some time, we would probably be able to be at that level.

Okay. And then as far as treating a COVID-19 patient, does that become a lot easier once the device is approved? Because then it -- then can you just bring it...

You're talking about the wrong device, my friend. We're looking to get approval of the ventilator-compatible system, not the bronchiolitis system. Oh, I mean look, Fred could tell you. The ventilator compatible system is a lot more difficult to manufacture. That's harder, much harder. That gets -- I mean the bronchiolitis or NTM system, that's not as hard. I mean, I'm not saying it's not hard. It was difficult, don't get me wrong, but the ventilator-compatible system is much more difficult. That gets approved -- look, if you're talking about being commercial, I mean I'm not so sure COVID-19 is necessarily a commercial market. I think it's a need market. We need something now. I think that's what governments around the world are looking for. So we have a system that is, in our opinion, ready for a pivotal study, which your device should be commercially ready, and I'm going to use that phrase loosely because we're not at, let's say, commercial scale where we can crank out large numbers of these on a weekly or monthly basis. We can get there quickly if people are motivated and have money. If you're asking me, when we get approval of bronchiolitis? Sure. We'll get approval for bronchiolitis in about 2.5 years. But are people going to wait that long for COVID-19? I don't think so. I think that if you want to run an open-label study in COVID-19 patients and say, this works and it's safe, and they give us approval, we're ready to go. We're not going to get approved for bronchiolitis first, my friend. If they want it, they're going to do it now. We can run a COVID-19 pivotal study right away. No problem.

Okay. And just as a follow-up, obviously, influenza, the flu, is not an easy virus to treat as is. Is that something you would pursue down the road?

No. No. Tamiflu can't even treat it in a day. Flu is a different animal. It's a different animal. And I would pass it over to Dr. Martiniano and Dr. Colin, if they want to talk about the difference in terms of trying to treat COVID-19 versus the flu. I don't think that flu is something we'd attack, unless it was, let's say, severe flu in elderly patients that have caused hospitalization. We don't want to treat them in the hospital. That would be my guess. But I'll pass it on to one of you 2 to attack that.

I have actually never thought about this before. I think that the common flu that we see known epidemics such as H1N1 that we have experienced maybe 7, 8 -- no, actually, it's even more than that, I think this was in some 9 years ago, would have been an opportunity that is similar to that of the current coronavirus. But I think that the common flu would probably not need this kind of aggressive intervention. So I don't think it will be on my list of the "normal treatments". I think that COVID is an interesting discussion. I -- if you would ask me, before SARS, would I thought that coronavirus would be something that one should worry about too much? The answer probably would have been no. But I think that if you -- if this opportunity would have been available to the people in Hong Kong and China during the SARS epidemic, they probably would have tried it out because I think the devastation that they have seen with the population was quite remarkable. And we may be going through a similar situation with the COVID. We just don't know at this point in time, but I think we need to be open-minded about the possibility that this is actually a very large-scale pandemic. And I don't -- we are talking about 2% to 3% mortality at this point in time. If this becomes a pandemic, we are talking about -- even it's 2% to 3%, we are talking about potentially millions of people's lives.

So not the common flu, Scott, just the pandemic. Hopefully, we don't have to treat any of that stuff. But -- anyone else? Matt?

Interesting question would be, however -- sorry -- interesting question would be, where -- what would be the circumstance at which humanity, or for that matter, the authorities who make this decision would say, "We're at a point that we have no good intervention." Let's try to throw at them whatever we have, and then we'll just use this as an emergency treatment. Is that going to be when the numbers escalate to the hundreds of thousands of millions? When is that going to happen? I think this, currently, we are dealing with so much unknown about the transmission, the rate of transmission, the magnitude of the problem, will all be -- hopefully, we'll not be wiser in the wrong direction in a month from now. But I think we are gaining information on a daily basis. And it's not encouraging.

Go ahead, Matt.

So Steve, beyond the getting to the BSL Level 3 that you need, what would it take for you to get into a clinical trial in the COVID-19 right now?

I mean, look, we probably would want to do some lab work first just to see what -- how fast it's killed with constant and intermittent delivery and what dose? We don't want to go up to 250 if we don't have to. Maybe 150 is enough. So we do a couple of weeks worth of work in the lab. Probably do that pretty quickly. Again, if everybody is motivated to go fast to do a study, I mean, Matt, you've just got to do the right protocol design. I mean that doesn't take very long. We have experts on our team that can do it quickly. It's just access to patients. This isn't like a normal study where you go out there and go to the hospitals and get your IRBs, and you got patients laying around. They're quarantined. I mean you need governments to say, "I want to do a study with you." How will we get the patients? And hopefully, in 3 months, there's not 5 million people infected and then it's easy to get patients. We don't want that either. But you really need access to the patients, okay? You need that and money. I mean it's not cheap to do these things, plus we don't -- we don't have the resource. We have a lot of programs going on here. You want me to kill 3 programs to go after COVID-19? Let me know, Matt, okay? I don't think that's going to happen. We're going to run our company the way we run it. And if there's an opportunity to help out, I think we need to be funded. And I think we need some more resources to do it. But it can be done very quickly, very quickly.

So in other words, this is a contract from the government, maybe a BARDA, DoD, something like that, that you could...

They're all saying they're going to give money. So just like everybody else, we put our hat in the ring and we're all waiting. I don't see the money flowing much, unless you're Gilead or Sanofi, right? Other than that, I haven't seen tons of grants going out to help. We'll see. I don't -- your guess is as good as mine when the money starts going to be, but I just don't have the answer. I don't know.

Sure. I guess maybe a question for Dr. Martiniano. NTM, help us think about the pilot study that's planned? And what we should be looking for in that -- from your point of view in terms of the secondary end points, thinking about that aspect of -- beyond safety?

Sure. The -- so just a little perspective for NTM current treatments. So this is on top of background treatment. Specifically for abscessus, is a minimum of a year of antibiotic treatment, with a minimum of typically 4 antibiotics. Typically, initially IV antibiotics for the first, at least, 3 months, followed by inhaled and oral antibiotics. So huge burden, huge amount of side effects. It's a terrible disease. And even with that, at best, you can potentially maintain lung function, but typically, people get sicker. And then as was mentioned, the majority of people don't even clear their infection. So it's really terrible. We're borrowing from all antimicrobials that are out there that are not meant to be used for NTM. We're just trying anything we can. So it's really -- we just don't have a lot of options right now. So anything that we can do to add on is going to be great. The main thing we look for as these patients are typically a little older is that lung function. How, at least, stable the lung function can be? Obviously, we would love improvements in lung function. And then, obviously, we would love culture conversion, meaning clearing the bacteria. In these types of studies, we're looking at the refractory patients. That means these are patients who have been on medicine already and have failed to clear. So they had failed primary treatment. It's much, much, much harder to clear that infection. So it's not necessarily something we expect. We would love it if we saw that, but I think it's why it's a reasonable secondary end point to keep an eye on how much we're reducing bacterial load. And that's another thing, even if we don't clear it, if we can just reduce the amount of bacteria in the lung, kind of make it a little bit more latent, meaning less active, that's going to be successful, at least in the community eyes. And the patients adding it on to therapy at home, I think it's very critical for NTM, just keeping in mind how long this treatment lasts. These patients can't come to the hospital every day for a treatment for years and years. So having it in-home is really critical. And at least in CF, and I think in non-CF patients too, they're very routinely doing airway clearance treatment, inhaled medications twice a day. So it's very routine to add on something twice a day. I think that sounds really reasonable for home.

I would like to add here a slightly prophetic perspective here, taking the example of cystic fibrosis that many of you may have heard that we have new therapies that are quite magic. And the question is whether if we start them very early on, are we going to prevent the evolution of the severe disease, if you would start it with a baby. The one thing that seems not to be working for these patients is making the bacteria go away. So despite the fact that we put them on these therapeutic measures now that seem to improve the pulmonary functions, the nutritional state, et cetera, the infections that they have seemed to remain. Maybe not to the same severity, but if they lived with pseudomonas, it appears that the pseudomonas doesn't go away. And so the real question -- so one of my question would be, if you would add nitric oxide to the regimen of these people on a regular basis, would you then be able to make the pseudomonas go away, or for that matter, the NTM over time go away? But more importantly, if we would give these machines to children who are very, very young and instead of doing chest physical therapy for 20 minutes a day, they would inhale nitric oxide for 10 or 20 minutes a day, would you be able to prevent future infections by curbing the early infections that they acquire typically after a viral infection when the bacterium settles there, and you just don't allow it to proliferate because you are killing it with the nitric oxide? In my mind, this is going to be, if in fact, this gas is as good as we think it is, then that may actually become the preventative disease for early cystic fibrosis potentially for a lifetime and potentially also for the person who has COPD. The person who has COPD typically used to be either a smoker or an asthmatic and at certain point in time, has acquired a set of infections. When they become very sick with exacerbation, it's driven not by the asthma but the bacteria that they live with. And the question is, if you have an asthmatic who, at age 40, becomes a COPDers in the sense that they acquire infection, if you will then start them on nitric oxide, could you then prevent the progression to the severe COPD on time? This is totally speculative what I'm saying here. But in the big picture of evolution of diseases, if this really becomes the panacea against the variety of microbes that we are talking about here with reasonable pricing and reasonable concentrations that turned out to be safe, we are talking about a change in the concept of antibiotics.

So it's more about decreasing the frequency of exacerbations and progression would impact the progression of the disease.

If you talk about what has been approached here with COPD, we are talking about the established patient with COPD who lives. What you need to understand about these conditions is like cystic fibrosis, living with COPD means that you live with bacteria in your lung all the time. All of us do, but most of these bacteria are benign bacteria that don't cause disease. They live with pathogens. And so the patient with cystic fibrosis who spits now, despite the fact that he is well, you'll culture bacteria like pseudomonas that you and I would respond to with horrible acute disease immediately, and they live with it on a daily basis. And then they have exacerbations. Similarly, the patient with COPD who lives with this bacteria, from time to time, for reasons that are not always obvious, needs to go to the hospital. They become suddenly much sicker and require aggressive antibiotics, again, similar to CF. If you could actually treat them with nitric oxide at a baseline level on a daily basis and either eradicate the bacteria completely or at least decrease the load and prevent the exacerbations, that would be a huge impact on their lives. Stepping back even earlier is what I said, if you would be able to say, "I know when they get the first infection, and I'm going to treat them from the first infection," and we actually are getting a glimpse of that in cystic fibrosis. Because we know that the patient with CF who is a baby who is not sick but your bronchoscope them may actually already be colonized with bacteria. And if you say, "I know the patient is colonized. I'm not going to have them develop the infection and inflammation and the deterioration of the lung disease by reducing the load and making the bacteria go away," you may change completely the pattern of the development of these diseases.

So just to follow up on what Dr. Colin is saying, nitric oxide has been around since the beginning of time for humans, I guess, since we manufactured ourselves and used it to spray every pathogen -- invading pathogen that comes into our body at 200 parts per million, naturally. There has been test to try to induce resistance to nitric oxide. We can't do it. Not saying it's never going to happen, but thousands of thousands of years, there's no resistance to nitric oxide, okay? So what Dr. Colin is alluding to is, obviously, way down the line in the future. But it would be interesting if what he's saying could be true. It's easier to stop something from infecting the lung rather than treating it after it's embedded itself. But we're not really concerned about resistance. We just haven't seen it. So I -- at least in my head, you would think if there's resistance being built up, you're just going to shoot yourself in the foot. But we've never seen resistance. And Mark Rimkus over here, if you ask him later, there were some studies done at his former company called Pulmonox, where they tried to induce it and it didn't happen.

In that context, let me also add for -- so that the current treatment for the patient with cystic -- the young patient with cystic fibrosis who gets their early infection and one of the things that we do for these patients is have them come every quarter and take a throat culture in order to try to identify the early inflammation -- the early infection. As soon as we get pseudomonas, we try -- we start to try to eradicate it. And if we are unable, we keep them on ongoing nebulized antibiotics forever. So -- and the question -- and then they develop resistances because all these antibiotics will develop eventual resistance. And the question is, would the nitric oxide might be the alternative? And whether you need to do it every month or every -- or periodically every day? And then with a prospect that it's not going to develop resistances, then you have your ultimate "antibiotic".

Yale, you have a question?

Maybe 2 questions here. The first one is, I understand that granting -- grant is important for the COVID-19 study, but given that in the United States there is already a virus, I guess, available for testing, would you guys consider actually have the study done in here instead of go to -- go back to Israel, so maybe you may save some time to get some initial outcomes?

You mean in the lab?

In the lab, yes.

Yes. I mean there's COVID-19s available, but we don't have a lot to test it.

Collaborate someone in the United States to do that.

Sure. Snap your fingers, Yale, and it happens right away. It's so simple. We'll see. I mean we're not a giant company. I mean we have a lot of priorities, and this just jumped on us in the last few weeks like it did to everybody else. To react that quickly is not easy. I don't have 3 or 4 extra guys lying around doing nothing, okay? So we'll get there. We'll get there.

Sure. And one question for the KOLs for the NTM. In terms of the next clinical study is that you're treating the patient, the refractory, to the antibiotics. Are you -- in the study itself, you also will have the additional or different antibiotics concurrently with the nitric oxide? Or is it purely a monotherapy of nitric oxide? And how do you think about either one in terms of the outcome or other stuff?

Well, this study is concurrent treatment. So they have to be on a baseline treatment regimen without change for, I think, 3 months moving into the trial. But I think that makes sense. I don't think, especially in the setting of being very refractory to treatment that just switching over to monotherapy, anything would be really accepted by the community probably, and then probably wouldn't work very well. So I think it's reasonable to be an add-on at this point. But I think in the -- I mean this is not necessarily the plan, but a lot of -- in general, that's how we're studying things at the moment is add on to current baseline clinical-guideline-directed care. But we are thinking in the future to potentially be moving earlier and earlier. So if we can do a monotherapy eradication, that would be amazing. We're all hesitant in the clinical research community to just add a classic antibiotic as a monotherapy because of concern for resistance in this already resistant bugs, but potentially, nitric oxide would be a great opportunity there.

Would you consider rotating to different antibiotic set in this study or you will stick with the one which you presumably is not working?

Well, I think for the purpose of study, you should keep it fixed just so you know what you're comparing. In real world, in the study that I'm leading at the other sites, it's more of a multi-center just observational trial. We are kind of changing as clinically needed. So kind of 2 different questions there, though. For this study, I think it's important to keep the background without change.

And Yale, we're not going to dictate what the background therapy is. It's up to the physician whatever background therapy they're on when they start the study. We're not going to dictate it at this point in time. Okay. So we're going to have another Q&A session after this next presentation. It will be a little longer, so you can ask about anything. But we're going to jump into -- see we're early, but we knew we'd be late, COVID-19 minutes late. Okay. So gastric nitric oxide for cancer therapy, okay? Here's our cancer project research team, okay? Yes, we need these protective suits because we are using nitric oxide concentrations in excess of 5,000 parts per million. So very high concentrations of nitric oxide, okay? So how powerful is nitric oxide? It has been reported to show anticancer properties in high concentrations. And at these high concentrations, NO induces DNA damage, as you mentioned before, okay? And as a result, p53 is upregulated, leading to cell growth, arrest any apoptosis. So here's a little picture. The NO attacks the tumor locally. Again, local ablation of the tumor leads to tumor regression, oxidative/nitrosative stress, mitochondrial and DNA damage. And then your tumor is dead, okay? So local ablation for tumor resulting in the release of tumor antigens has been the goal and the fight against solid tumors for a long time. And our country says 5,000 parts per million, as I mentioned, okay, may provide the tool necessary for local ablation, resulting in tumor antigen release, okay? What have we done? In vitro studies, we've looked at these cancers here: colon, breast, melanoma, prostate, lung, pancreatic. I think 1 or 2 more maybe. And we've done over 70 mice studied and in vivo studies. We're not going to discuss any of our data, okay? Come to the AACR towards the end of April, and we'll show our data, okay? This is [ Sarah ], okay? [ Sarah's ] our pet. She's been with us for quite some time, okay? [ Sarah's ] one of our mice. Now how do we do it? How do we do it safely with that high concentration? I mean that's -- it's pretty high. We're talking about 150, 200, 250 parts per million. We're worried about nitrogen dioxide. We're worried about methemoglobin. 5,000, 10,000 is going to kill people, right? Well, we're doing it locally so it's not impacting the patient, okay? And this little cylinder here, which I -- we brought one. So for the user on the webcast, you can see it on your screen. For everyone else here, I'm holding it in my hand. Nothing. 5 inches long, 2-inch diameter, single dose. So it's not a lot of nitric oxide. It's high concentration but a very small amount. So if there's any kind of a problem, it's not going to cause much damage. And hopefully, our delivery system is going to be extremely safe, which we have proprietary delivery systems being developed, and we've already patented these. And we will optimize it as we go forward before we get into humans in probably, hopefully, 18 months, give or take, okay? It's very easy to transport, easy to handle, as you can see, okay? This is important because you can't have big cylinders with that kind of nitric oxide in there. It'd be a real problem. So we've thought this through. Again, treating locally, not through the lungs, not systemically, not danger to the patient and for the caregivers or the people in the hospital, so to speak, or anyone else on the planet. We're good. It's very small. Something goes wrong, it's not going to cause much damage. Okay. Sorry, there's not a lot in cancer, but you have to wait 6 weeks. Patent portfolio. We have issued patents that go through 2033. We have pending patents through 2037. We have other patents that are provisionals, which will be the cancer. So we're going beyond that. We have to generate the breathing circuit, NO concentration, NO action in the body, NO dosing, NO2 filters, method of use, this is bronchiolitis and coronavirus. Going after coronavirus claim directly, but we do have coronavirus in some of these other patents that have already been issued and are pending, okay? I just want to point out that above 80 parts per million nitric oxide, we pretty much corner the market, okay? And this action in the body is going to block anybody from coming with bacteria. Nitric oxide penetrates biofilm. And this patent covers that, and that's something that probably I previously should have mentioned. But the penetration of biofilm is important because biofilm covers bacteria and makes it essentially invisible to the immune system. So maybe when we're penetrating this biofilm, it's some -- the bacteria and stimulating immune response, which may be why we see longer duration of effect after we stop nitric oxide therapy. So we have an excellent patent portfolio, and we continue to expand upon it. Okay. So we got our shares outstanding, prices closed yesterday. Cash marketable securities, as of February 29 is $15 million. No debt, not yet, until off the line. So today, we announced $25 million line of credit. There's $10 million available any time over the next 2 years. $15 million is available after the LungFit PH receives FDA approval. The details are in the press release today. I don't have them all here, but it's a 5-year debt, 10% annual interest. There are some warrants that -- more warrants for the first 2 tranches, less warrants available for the last 3. Each tranche is $5 million. We have to take $5 million at a time. If you look at what we've already had before we did this, we had a $20 million stock purchase agreement in place. There's more than $15 million remains on that. It expires in August of 2021. We had about 6 million warrants. I'm showing you how many we had at each strike price, okay? This was last week. So our burn is accelerated from what I tell you before. So we're going to be doing $3 million plus per quarter. It's going to be chunky. Don't get mad if I spend 4 one time and 2.5 the next time. It's going to be chunky. That's just how it is for small companies, as you all know. But having $50 million on hand, which is more than a year of cash with availability to all of this, makes us feel really good to be able to execute on what we need to get done. So where are we going? Again, this is a repeat of what we said earlier. I won't go through it again. I think we'd like to get to more Q&A for you guys. But again, I think maybe 2022, very important. We're going to have COPD going, oncology going in humans, fully integrated hospital sales force, commercial organization, very important. We're excited. And again, I'll talk a little bit more about this now, what we're going to look like in 2023, our aspirations, again. Hospital operations, certainly for bronchiolitis, perhaps for pulmonary hypertension. Again, it's important to understand, and most of you know this, but I want to just mention it so you know that we know it, too. If we do bronchiolitis by itself, we don't have pulmonary hypertension, we're certainly going to go out, try to get another 2 products in the bag. It's not helpful to anybody to have one product in his salesperson's back. You usually want to get 3, maybe 4. I don't know. Maybe if they're really big, you only have 2. I don't know. But you don't want to have just one, especially bronchiolitis, which is seasonal. Work it for 6 months and then you take off for 6 months. But then, they come back and we retrain everybody. So we got to be careful. I want everybody to understand than Duncan and I are all over this. We'll be looking for additional products in the bag. Even if we do both, we'll probably get one more, okay? NTM, home market, we're going to probably partner that. That's going to be real tough for a company of our size if you consider home -- the homework. I mean there's a lot to it. We can talk about it later for any interesting questions later. And from 5 to 6, but that's [ fair ]. So we're going to be looking for partners, obviously, post our home study completion. Ex U.S., we have no desire to do anything commercially. Oncology. I know we're just getting started here and it's a long ways away. But when we get to 2023, we're probably going to have to make a decision on whether we're going to out-license or do some oncology operations commercially on our own. Many companies launch oncology products on their own. We're very far away from thinking about that. But in oncology, things can move fast. They can move very fast. We have something good, as everyone knows. We'll find out. Again, manufacturing. I just want to point out, we're going to be manufacturing -- by this time, we should have our calibration gas potentially in-house. We have a 5-year deal, where we have the right to ask our partner, MESA, to build a facility for us. We can control our own cal gas. We're also going to be managing our global supply chain from Beyond Air Ireland. We need a global expertise. This is not just the U.S. We need global expertise, and Ireland is the place to get it. Again, so we will be in New York, Wisconsin, Ireland, Israel. That's going to be the company. That's our 4 locations. We don't expect to expand beyond that. It's enough. It's enough. And again, we talked about the R&D earlier, but again, to have bronchiolitis studies completing outside the U.S., NTM pivotal study completing. COPD pivotal study ongoing, oncology pivotal studies ongoing. Hopefully, we have oncology pivotal studies ongoing. That's -- there's a lot that has to happen and go right for that to happen, but look, we'll do our best. So I'm going to leave this slide up there while we take the last Q&A session. I think we have about 25 minutes for Q&A. We have to exit this room at 5:00 and move over to the demo room where my team will be available. RT, engineer, commercial, our key opinion leaders will be available to speak to you and answer direct questions, and we will be doing demos of both systems. So our ventilator system will be hooked up to a ventilator in the other room. And you can see it working on event. So if there are any questions, we'll take them now. And there will be drinks and food served, so you have to stay for that, at least. No coronas.

Just one question on the BD side. You mentioned that you will be interested in licensing product going forward. What will be the sweet spot? What will be the type of indication orders you will be contemplating?

What will be in-licensed on products? Again, Yale, that's based on commercial. I mean hospital-based product, something that we can be synergistic in the hospital. It's not easy. It's not simple to find a product that goes right in your bag and works well with the stuff you already sell. I mean we put it up there. It's something we have to explore and work out. It takes time. It's not easy. But clearly, we'd be a hospital-based product. We're not probably something that's on the market or near to market. Again, something to maximize our sales force, not something that's going to be a first detail in front of our LungFit system, but something that can pick up the slack for our sales force, where we're not just having them stand around doing nothing and wasting everyone's time. So you -- when you go in a hospital, it's nice to have multiple products to talk about. And even when you go into a physician's office, this is classic commercialization strategies. It's not easy to do. I don't even know what kind of products are out there or available, and we're not talking about doing this for another 3 or 4 years, okay? So when we get there, we'll figure out what's around and what might be synergistic for us, for our sales force that are hospital-based sales force. We're going to stay in the hospital. That's crystal clear, we're staying in the hospital. We're not going to in-license something that go takes us out of the hospital, hospital-based, something that is complementary to what we're doing already. Might take a couple of years. We're not going to -- it doesn't take 6 months. These things take time. But we just want you to know that we're aware of this, and we want to make sure that we fill out the team properly and we fill out the bag, so to speak, properly.

Is that most likely in the pulmonary space? Or that's not a limitation there?

I don't think it's limitation. But Duncan, you might want to comment on that? Does it have to be respiratory in the hospital?

Yes. I mean I think it's all about the call points. Ideally, if it's respiratory, obviously, that's the kind of perfect -- so ideally, it would be in the respiratory environment because, obviously, that's the best way of maximizing the call point and making sure we got the most synergy. But often, the skill sets that are used for the same kind of sales process can be applied to a number of different disease states. So not necessarily but ideally.

Steve, with the oncology application, what should we expect to see at the upcoming AACR conference in April? And talk a little bit more about the mechanism of action you proposed with respect to upregulating p53. Most -- large percentage of cancers have no normal p53, and that's part of the issue. No -- to upregulate. So talk about how you're inducing that apoptosis, perhaps beyond p53.

Okay, Matt. I'll take the first question. Matt -- for the webcast, Matt's trying to get me to tell him the data that's coming in 6 weeks, and that won't happen. So you'll just have to come and see it. We're not going to talk about it at all. And as for the true mechanism, I am not going to attempt to answer that question. Hila, if you would want to come up here and answer the question of the true mechanism with respect to p53 upregulation and how nitric oxide works. Again, pure mechanism answers. Don't let him trick you into telling the data. He's a very sneaky guy. Everyone, this is Hila Confino. She is our immuno-oncologist doing -- she's done all the studies, so she will talk to you purely about mechanism.

So nitric oxide at high concentration induces DNA damage, and this is why p53 elevates and eventually apoptosis occurs. At low doses, it does not occur. But at high doses, it does.

And then, I guess, Steve, on that line, in terms of oncology, kind of path to the clinic?

So how do we get to humans? Lots of rodents is how we get to humans. There's a pathway. I mean there are clear levels that we have to clear in terms of sheer numbers of rodents. We've done over 70 mice. That's not nearly enough. It's enough to tell us that we have something worth pursuing and that it's very exciting. That much we know, but we have more work to do. It's going to be 12 to 18 months before we get close to a first-in-man. We have to do a lot more animal work to satisfy the FDA and others. If we may not do our first-in-man the U.S., but we have to satisfy the regulatory authorities in whatever country we do it in that this is safe and has the possibility of being efficacious. We need to get over those hurdles. And it's probably a year to 1.5 years away. And just also, it depends on which tumor we end up targeting first in humans. And we really haven't settled in on which one.

And I guess, last question, in terms of how do you deliver the NO to the tumor?

So you take this. So I'm showing -- for everyone on the webcast, I'm showing the little mini cylinder where we have the nitric oxide. You hook it up to a flow controller, okay? And then you apply the nitric oxide to the tumor, whether -- there's a couple of different techniques we've used. So I'm not going to describe them. I really don't want -- we're going to have to wait until we -- until later, until April. But again, I said it was local. We got to get it to the tumor site. It needs to get inside and attach to the tumor cells to have that killing effect. So imagine, you've got 5,000, 10,000 or higher parts per million nitric oxide. You can't just spray it. You're going to kill all the cells around it. So it must be contained to the tumor cells in some way, whether it be a direct injection or it be contained with the tumor, kind of isolated where we just flood it, but it's isolated, so you're protecting the rest of the cells in the body or organs. There's a couple of different ways to do it, and we're working on them. I think Hila has got it down to 2 that she thinks she's going to keep trying, but we haven't settled in on the last one that we're going to do. I think maybe in April, we'll be able to talk more directly about it. But think about it this way, Matt, this will be minimally invasive in humans. This is not like slice people open and look for it. Minimally invasive, okay?

Steve, there's a lot going on here, and you're still a small company. How comfortable are you that you'll be able to have the resources to make this all happen? And along those lines, when would we expect to perhaps see the first ex U.S. partnership?

Okay. So Scott's question is, when to the first ex U.S. partnership and how do we get everything done because a lot happening. We didn't anticipate the COVID-19. So that's an extra program that we didn't anticipate. So yes, that's something that we are treading slowly with. But if resources become available, then we'll move. But before that, it's very hard for us to sacrifice what we're doing elsewhere for that. On the oncology side, it's not very expensive right now. We have our own animal house in Israel, so makes it easier. We don't have to rely on anybody else. We have our own lab there. Going to BSL-3, important. So it's not a lot of people. It's not a lot of money at this point. When we go to humans for cancer, it's going to be much, much bigger. So again, if we have the resources in 12 to 18 months, we think we can do it. If we don't have the resources, we're not going to go. We're not going to go into humans until we don't have the resource. So oncology can be slower if we don't have the resources. COPD is not going to happen unless we have the resources. That's just not going to go anywhere. I wouldn't expect us to even talk about COPD data this year, minimum. Forget it. We just don't have the resources. We're not able to execute. So right now, we're still focused on our top 3 programs, and it would be real nice we get our LungFit PH approval at the end of this year. It becomes commercial. There's still work to do for the engineering team to stay on top of things with the supply chain and our commercial manufacturer. But maybe it frees up a little bit more time for them to work on other projects. Again, the engineering team in Madison is not really focusing on oncology. We're not using the LungFit system for oncology. So they'll help with the delivery system, but it's not a LungFit system. So it's not a burden on them at this point. So yes, it will be great to free up some resources on the team if we can get -- once we get LungFit PH approved. So we're kind of waiting for that so we can really accelerate some of the other things, to be honest. And again, when you think about it, bronchiolitis, when we're done with that pivotal study in about 15 months from now, that frees up the clinical team to do something else. So we've thought this through. We can't really jump on something else clinical until that bronchiolitis pivotal is done, and that's about 15 months from now. So then if you think about it, hopefully, we got our first-in-man oncology in 12 to 18 months, which would be second half of next year, I'll call it. Same thing with COPD. The clinical team frees up after bronchiolitis, maybe they can swoop right into some first-in-man oncology or pilot COPD. So we've thought it through that we're kind of staging these things. And yes, it sounds great. The time line sounds great. It's not easy. And sometimes, not everything works out exactly as you like. And COVID-19 could be something that takes some attention away and maybe some things get pushed out a little bit, not the pulmonary hypertension approval, not the bronchiolitis pivotal. Don't get me wrong, but COPD and oncology can certainly slip if we have to focus on COVID-19. So look, we are a small company, but we're a very talented company. And it's not just me. I'm not -- I'm one of the lesser talented guys in this team, believe me. These are some serious experts here. Our team in Israel is highly qualified. They're amazing. And you've got not just Fred and Mark. I mean there's 7 other guys who've been doing nitric oxide since the '90s. They know what they're doing. It's a very high level that we work at. But at a certain point, we can only do so much. So I appreciate the question. We've kind of staged things, so we can handle them. But it would be real nice if we have more resources. There's no doubt about that. We'll see what happens. We will not sacrifice the first 3 programs, though, for later ones. They have to wait until we free up resources, unless more resources become available. 10 minutes left, and then we get kicked out. Anybody else have any questions? Sure. [ Jordan ]?

With the PPHN partnership decision or going alone, could you discuss a little bit more the factors that you think about when you are making that decision? And actually, maybe you start with the deal that you made about 1.5 years ago, how those parameters have changed and what you'd like to see now that we're much closer to launch -- I mean filing an approval.

Okay. Thanks, [ Jordan ]. So the question is what's the hurdle for PPHN partner to show us for us to jump on it. We're not going to tell you that. We're not going to say. I will say, though, that if you look at the terms of our previous partnership that was terminated, yes, they have to be better than that, for sure. I would say we can all have our own definition of better, a little bit better, a lot better, significantly better, far superior, whatever term you want to use, everybody's got their own definition. But it's got to be better, for sure. Definitely has to be better. So that's kind of the baseline of what do you think is better. And remember, I mean you go back and look up those terms. I won't recite them, but you can go back and look them up. So we expect to see improvements on that or else, it's not even worth having a discussion. Anybody else? Okay. Well, look, we are going to end up here. We're going to go next door, would do demos. Our team will be available to speak. I thank everybody for coming here and on the webcast. And it's a very exciting time for us. And hopefully, we execute on all we've said, and we'll be back here next year. Thank you.