Humacyte, Inc. (HUMA) Earnings Call Transcript & Summary

Good morning. We're getting towards the end of the morning, but -- or actually middle of the morning, sorry. I'm Josh Jennings from the TD Cowen Medical Research Medical Devices Research team, and we are excited to have executives from Humacyte in our midst, in our presence, multiyear participant. Thank you guys for supporting the conference and especially this year, it's the -- we have CEO, President and Founder, Dr. Laura Niklason; and CFO, Dale Sanders, is here as well. But I'm going to hand it over to Laura to run through the Humacyte story and get us up to speed on an exciting regenerative medicine technology. Laura, thanks so much for coming again this year.

Thank you, Josh. Really appreciate the opportunity. I know this is a 30-minute slot. I'm going to try to keep this to 20 or 25 minutes in case there are questions. But there's a lot of really exciting stuff that has happened in the last year and that's upcoming in the next year. I'm really excited to talk about that. So for those who are not familiar with the Humacyte story, this is an engineered tissue platform where we use normal human cells to create functional implantable human tissues at commercial scale. The way that we grow these tissues allows us to produce them so that when they're implanted into a patient, even though they come from a cell bank, they do not require any immunosuppression. In fact, we've treated more than 700 patients during clinical and commercial phases over more than a decade, and we've never seen a bout of immune rejection. So we believe these tissues are really universally implantable. But in addition, after the tissues are implanted and they're functioning as blood vessels, what also happens is cells from the patient repopulate those tissues and turn it into a living artery over time. And that's an aspect of the technology that really provides durability and some other important features that provide value for the product. So we got our first FDA approval for our first engineered blood vessel, which is 40 centimeters long and 6 millimeters in diameter. We got that approval late in 2024, had a market launch in the first quarter of 2025. So we've been on the market now for roughly a year. Our manufacturing platform is in-house. We do all of our own manufacturing. I'd like to say that we're a vertically integrated biotechnology company that gives us a tremendous amount of control and quality control and stability on the process and the product. And we have multiple partnerships, which have been very important, including a major partnership with Fresenius Medical Care, the largest provider of dialysis services as well as the Department of Defense. So fundamentally, this is what the technology looks like. And again, the diagram that I show here is really applicable to growing tissues of multiple shapes and sizes. And as you'll see, we're making blood vessels of multiple dimensions for clinical study. But essentially, as I mentioned, we start with a working cell stock. These are human cells that we've extensively screened, and we seed them onto a degradable polymer scaffold. And it's really the size and the shape of that scaffold that dictates the ultimate size and the shape of the tissue that we grow. After the cells are put on to the scaffold, then there's a growth process where the cells proliferate over 2 months and they secrete extracellular matrix proteins. And then while that happens, the scaffold dissolves. So after 2 months, we have an engineered human artery that's the size and the shape that the dimensions that we set, and it consists of cells and the matrix proteins that they made like collagen, but there's really no polymer left. And then in a final step, we drain -- in each culture bag has an artery. We drain the culture medium out of the bag, and we replace it with decellularization solutions. Over a period of 5 days, we wash the cells out of the tissue, wash all the DNA away. And that means that we've got a mechanically robust human tissue that doesn't have cells and doesn't have DNA and so doesn't get rejected. But it can function as an artery from the time it's implanted. So I'm going to focus today on just a couple of indications. We have clinical and preclinical stage work in multiple large markets, as you can see here. What I'm going to focus on primarily is some of our data in trauma, which -- or vascular injury, which is our first FDA-approved indication and also what we hope will be our second FDA indication, which is using the same vessel for hemodialysis access in patients with kidney failure. Lastly, I'm going to focus on a smaller caliber version of the vessel that we hope to study in an early phase trial late next year in coronary artery bypass grafting or CABG. So here's the approval for our vessel in trauma. As you can see, this is an off-the-shelf non-immunogenic product that's just removed from the refrigerator and can be available for use by the surgeon within minutes. It's truly an off-the-shelf product. And it's indicated for patients with vascular injury when urgent revascularization is needed and when vein is not obtainable. So sorry for the GORE photos. I actually cut down the number of GORI photos in this presentation. But the value proposition for our vessel, which the approved name is Symvess, the value proposition for Symvess in trauma is really as follows. If a patient, either a civilian or a war fighter presents with an acute injury to an artery such that blood flow is cut off to the limb, typically, that patient will get worked up for a few hours in the emergency room. And by the time the patient gets to the operating room, the surgeon has to restore blood flow in this contaminated wound bed. He can either spend an hour taking a vein out of the leg. That causes additional injury, but it's a preferred method because vein has a very low infection rate. If you take a vein and if you put it into this contaminated wound, the chances are good, it's not going to get infected. In contrast, though, if the surgeon feels like he doesn't have time, then he'll -- prior to our approval, he had to reach up on the shelf and take down a plastic graft made out of Teflon. And those grafts are really prone to infection and they often fail. And alternatively, the surgeon could just amputate the limb. So the value proposition for our vessel in acute injury, vascular injury is really the fact that we have a low infection rate. We're very durable, but we're also immediately available for the surgeon. So given that we're in war time, I thought I would show one war time photo. So the conflict with Iran in the Middle East has certainly changed some thinking of some of the players that we work with as far as where the product should be going. But I will say that part of our -- part of the data package that supported approval by the FDA was a civilian data package of treatment of trauma patients in the U.S. and Israel, but we also had a wart time data package where we collected data on patients who we treated under a humanitarian program in wart time Ukraine in 2022 and 2023. And this is just some of the data from those war time experiences where you can see, by and large, patients had incredibly contaminated and really devastating wounds, typically blast injuries, not so much bullets, more blast injuries. And this is one -- an example of one patient who had a terrible blast injury that was nearly fatal. He got his leg revascularized with our vessel, which did not become infected despite the terribly contaminated nature of the wound. And then this patient walked out of the hospital a couple of months later. So this is a finding that we -- this type of finding we've seen over and over in both clinical and military settings. So just at a very high level because I don't want to spend too much time in detail here, but essentially, this is the data package that supported approval of our BLA in vascular injury about a year ago. The way the approval worked is that we looked at outcomes for our vessel in trauma patients to include patency, which is blood flow, infection rate, amputation rate, et cetera. And then we compared those outcomes to published outcomes for use of plastic grafts like made out of Teflon, the published outcomes from those grafts. And as you can see, for patency or how many vessels had blood flow in them, outcomes with Symvess were generally better than outcomes with synthetic grafts. The infection rate for our vessel was only 0.9%. It was about 1/9 of the infection rate of plastic grafts, which again does not surprise us, really all of our clinical data supports a very low infection rate. And because the blood flow rate was better and because the infection rate was lower, the amputation rate was a lot lower. So there was only about a 4% overall amputation rate in patients who were treated with our vessel as compared to almost a 1 in 4 amputation rate in patients who have been treated with synthetics historically. So this was really the value proposition, the efficacy data that supported approval in treating vascular injury in the U.S. And again, this frequent focus on low infection rate that we've seen in trauma, but we've also seen in dialysis, which is the next thing I'm going to talk about. And in other indications is really the fact that our vessel, even though it's decellularized when it goes in and has no cells when it's implanted, it becomes cellular over time. It becomes a living vessel over time. And an illustration of this is shown here. This is a sample from a patient, a dialysis patient who had our vessel in place for about 9 months. And then we wound up getting a small biopsy of that vessel and looking at it under the microscope. And what we can see here is that the wall -- here, it's ATEV, acellular tissue engineered vessel. The wall of the ATEV is shown here, the lumen of the vessel is down here and the outside of the vessel is up here. As you can see, there's a lot of spindle-shaped cells, red cells that are taking up most of the wall of the vessel. I can tell you that if we had done this stain on this vessel before it went into the patient 9 months ago, you would see no red staining here. So all of these cells have come from the patient. And in fact, what we've seen is that this happens over and over. We've looked at about 30 or 40 specimens, happens every time. And even small capillaries form in the wall of this vessel and really turn it into a living artery. And because it becomes living, it has a resistance to infection and a durability that's very similar to our own tissues. So this is some long-term data that we just recently published. The short-term data that gained us approval were published about 1.5 years ago. And the long-term data going out to 3 years were just published a few months ago. And as you can see, the outcomes in terms of potency, but also in terms of limb salvage and infection-free rate were outstanding. So actually, the infection-free rate isn't shown here, but it remained at like 98% limb salvage remained very stable. And this is patency values going out to 3 years. As you can see, there was some loss of patency over time. But that patency loss in these patients was not associated with any limb loss. And this was probably gradual decrease of blood flow in the conduit, but without any clinical manifestations. And then lastly, again, we are approved in patients -- in trauma, we're approved in patients who do not have vein as an alternative for treating their wounds. But as soon as we got on the market, surgeons began to ask us, well, how would those patients have done if they had vein? How would that have turned out? And so we were able to answer that question sort of by doing a retrospective comparison. We looked at the outcomes of patients treated with our vessel, Symvess, and then we compared those outcomes to very similar patients who were already in a vascular trauma database called the PROOVIT database. And this database contains data from more than 5,000 patients. And so we did this propensity matching and we matched up patient characteristics and artery and gender and age and all those things. And the patients in the PROOVIT database, though, all got vein as a treatment, which is the gold standard. And as you can see, if we compare patency, the patency was a little bit lower than our -- for our vessel than for vein. But if you look at rates of amputation, if you look at infection and if you look at death from all causes and interventions, they were pretty similar. And there was no significant p-values for any of these outcomes, meaning that if you have a patient who does not have vein available as a gold standard of care, these data suggest that if you use our Symvess instead, that actually the outcomes are going to be pretty similar to what you would have gotten if you had -- if the gold standard had been available. As far as the commercial launch in this product, not the clinical -- the outstanding clinical data is fantastic, it's necessary, but it's not sufficient. And so we've also published budget impact models in the Journal of Medical Economics, and we have some follow-on papers as well, showing that because patients who are treated with our vessel as compared to patients -- trauma patients who are treated with plastic grafts or xenografts or other types of grafts, because patients treated with our vessel have a much lower rate of expensive complications, particularly infection and amputation. Even though our vessel is expensive to acquire, our cost right now is between $17,000 and $20,000. So even though it's more expensive to acquire than some other conduits, the low cost of complications such as infection and amputation mean that the total cost to the hospital are actually lower for our vessel than for most other options that surgeons have in the operating room. So these data have been very important for us in terms of going through value analysis committees and getting the product on the shelf in Level 1 and Level 2 trauma centers. So I'm just going to go on to the next indication for the same vessel that's already approved. This is an indication that we're currently studying at Phase III using our vessel for hemodialysis access. So as you can see, for those of you who don't think about dialysis all day long, when patients have kidney failure and they have to go to the dialysis center 3 times a week to get their blood cleaned, what has to happen is nurses have to be able to stick 2 needles into the patient and 1 patient -- 1 needle draws blood out at 0.5 liter per minute and runs it through a machine and then returns it to the patient through the other needle. In order to do that, surgeons typically need to sell sort of an artificial blood vessel in the arm right underneath the skin, which is large and which nurses can hit with needles so that they can dialyze the patient. The gold standard for creating this sort of artificial blood vessel is what's called a fistula, which is where the surgeon goes into the arm and sows an artery and a vein directly together. That's the gold standard because it has a very low infection rate and because it's durable if it works. The problem is 40% or 50% of the time when a surgeon does this operation, it fails. And the fistula never becomes a usable functional thing that patients can use for dialysis. If a fistula operation is done, but if it never works, then patients are stuck on temporary catheters, which should be temporary, but sometimes they are practically permanent because surgeons are never able to get a fistula to work. And so patients are stuck with a catheter in their neck that leads to many complications, including sepsis and hospitalization. So Humacyte has -- because of our low infection rate and because of the durability of our conduit and the biologic nature of our conduit, we believe for some time that we would present a real benefit, a real value proposition for surgeons and for patients who are on hemodialysis. So the first part of supporting that value proposition is a Phase III study that we've completed, and we've announced results on and it's actually in the process of being published right now. This was a prospective randomized head-to-head trial of our vessel, the ATEV versus the gold standard of care, which is fistula in 240 patients in the U.S. Patients were randomized in the operating room. So there was really very little chance for bias on the part of the surgeon. And what we found is when we looked at function at 6 months and 12 months, when we looked at these co-primary endpoints across all patients in this study, what we found was that our vessel had substantially better function at 6 months compared to fistula and also at 12 months compared to fistula with an impressive p-value. So this was a very exciting outcome for us because it showed for the first time that our conduit was better than the gold standard in dialysis access, which has actually kind of never been shown before. But when we dug out in the data, what we saw something that was really interesting, and that was that there were certain subsets of dialysis patients where fistulas tend to fail even more frequently and where our vessel tended to do even a little better. And the most important subset was women, which is almost half of the dialysis population. So if we look at female patients and if we follow them out over 2 years, this is 24 months. This is a Kaplan-Meier curve showing patency or blood flow through the conduit for our vessel, which is shown in red and then for fistula or AVF, which is shown in blue. And as you can see, and as I mentioned earlier, when the fistula operation is done in women, nearly half the time, the thing never works. And what that means is that the whole time this thing is not working, typically, these women are sitting around with catheters in their neck, getting infections and getting hospitalized and creating a lot of morbidity and also a lot of expense. So the ability to get women, in particular, off of catheters, that ability is really shown by the difference in these 2 plots, which is pretty significant. So when we saw this in the first trial, we decided that we really wanted to confirm this in a second study, and that's what we're doing right now. So we have what we call the V012 trial, which is the first only dialysis trial ever to be done just in women. And it's a prospective head-to-head randomized trial comparing, again, our vessel to the gold standard, which is fistula. And the way this trial is designed is that there's a prespecified interim analysis after the first 80 patients have reached 1 year. We're actually coming up on that analysis right now. Our 80th patient will have their 12-month follow-up in April. So we are hoping by late May, maybe early June, but hopefully, late May, we will have results on this interim analysis. If this is positive, then that will be 2 independent indications that for nearly half of the dialysis population, our vessel substantially beats the gold standard, which to us is very exciting. And we would then -- if we hit that endpoint, we would plan to file for a secondary indication in dialysis with the FDA later in '26. I'll just spend a couple of minutes on the pipeline because, again, this is a platform. We can make tissues of different shapes and sizes. And I'm very excited about the ability to make smaller diameter tissues that can be used as a heart bypass. So this is just a diagram of what happens when a surgeon does a bypass of blocked arteries in the heart. Essentially, he'll use the internal memory artery or the thoracic -- left internal thoracic artery graph, which is shown here. But more commonly, surgeons will take vein out of the leg, saphenous vein, and then they'll show it pass to bypass blockages. So they'll show it to the aorta and then they'll show it downstream to the coronary artery past the blockage. And the way, by doing this, they're able to provide blood flow to the downstream parts of the heart and really remove the effects of the main artery blockage. So this is a very commonly performed surgical procedure. There's about 200,000 cases done in the U.S. every year. Even beyond that, there are many cases wherein patients who need a bypass actually can't have one because their vein is either diseased, has varicosities, has been stripped already for other surgery indications or they're just too high risk for vein harvest. For these patients, they're effectively not able to undergo bypass. And even for patients who do get vein harvested for bypass, the success rate with vein is actually not that great. 20% or 30% of them fail in the first year. And so we became very interested in whether or not our smaller caliber version of our technology, could be useful in heart bypass. So this is just an enormous photo showing the difference between our approved product here and then the product that's going to be under study, we hope, in patients later on this year. We've studied the smaller caliber version in large animals to include baboons, nonhuman primates. And this is just some of the publications on that work. This was recently published -- well, it was presented at the American Heart and then was recently published in the Journal of American College of Cardiology. But essentially, this looked at 6-month results of coronary artery bypasses done with our vessel in large nonhuman primates. And what you can see here, this is kind of one of the coolest parts of the study, which when cardiac surgeons and when cardiologists see this, it makes them sort of very interested. This is -- these are 3 CAT scans, 3-dimensional CT scans that are taken of animal that got our vessel at 1 month, 3 months and 6 months. And in these images, the heart is inside here. You can't see the heart. What you see in these images is the aorta, which is the large artery coming up here and then the 3 main coronary arteries in the animal, the right coronary artery in the left and the left circumflex. The yellow arrow in each case points to our vessel. So our vessel is a human sized vessel made for an adult human that's 3.5 millimeters. Unfortunately, these male baboons are only about 60, 65 pounds. So they're about as big as a first grader. So our vessel is oversized for them. So in order to [indiscernible] in, we have to actually show in a pretty short segment from the aorta right to the right coronary artery. But as you can see, it's oversized. Our vessel is oversized at 1 month. But then by 6 months, it's been remodeled down to the same diameter as the native artery. And this happened every single time. And we've also seen a similar phenomenon happen in patients who've gotten our arteries to treat blockages in the legs or in the upper extremities, where over time, cells from the patient, as I showed earlier, they remodel and they repopulate the vessel, but they remodel it so beautifully that I've had multiple radiologists say to us, I can't find the vessel, where is it? And that never happens with a plastic graft. So our vessel really becomes very biologically incorporated, and this is very exciting. This has never been shown in coronary artery bypass before. So we've embarked on commercial-grade manufacturing of these vessels, and we're still trading data with the FDA, but we hope to be in our first trial in patients with coronary artery bypass graft sometime in the third quarter of this year. So as far as milestones, we hit all of the major milestones that we said that we were going to do in 2025. And we've got ongoing milestones in 2026 that I think are going to be very exciting. We're going to continue our commercial launch and look for quarter-over-quarter sales growth. We're going to read out our Phase III in dialysis, which is very exciting. And if that's positive, we'll file a BLA in dialysis. We'll also have, I hope, starting our early phase trial in coronary artery bypass. And this will be the first prospective trial done in the U.S. of a new coronary conduit ever. So for the clinical community and for the surgical community, I believe this is going to be a thunder clap. This is going to be very important. And then we've got other stuff going on in the pipeline as well that I haven't even talked about. But I appreciate your time. I've got a couple of minutes for questions, if there are any. Thank you.

We have one from the audience. Thank you.

Discuss the secondary patency in [indiscernible]

What's going on there?

And is that just -- is it good for the first months than the time [indiscernible].

Yes, it depends on the patient population.

Can you just repeating the question for any...

I'm sorry. I'm sorry. Yes. So the question is regarding the secondary patency in dialysis and what that data means for total efficacy for patients. So you're right, the difference in usability or efficacy at 6 months was greater than it was at 12 months. So the benefit of our vessel in all comers shrank down going from 6 to 12 months. What I can tell you is that looking at subsets of the data, what we saw is that women and men with risk factors for fistula and nonmaturation, like if they have obesity and diabetes, those high-risk patients, women and high-risk men, the profile that we had over time looked like this. In relatively healthy men, the loss of patency was more significant. And actually, what I'm saying to people is if you're a relatively healthy man on dialysis, you should get a fistula, go with God. But if you're in part of that 55% of patients who have a lot of trouble with fistula maturation, our data state pretty clearly that you're going to do better with us. And the infection rates are similar, the intervention rates are similar. I mean it's in these high-risk groups, there's real durable benefit.

In the [indiscernible] you saw that the vessel remodel [indiscernible]

It does not. It does not. So vascular diameter is maintained in dialysis. It's also maintained in PAD. We see -- and we've published long-term data going out to 6 years in dialysis, 5 years in dialysis, 6 years in PAD that shows that the diameter is relatively well maintained. I believe that what's happening in the coronary system is because of the big size mismatch. The cells that repopulate the vessel are sort of programmed to see a smaller diameter in a different blood flow rate and they grow in until they sort of hit their equilibrium.

Do you ever see any vessel remodel through the bigger size?

We have not seen remodeling to a bigger size unless you talk about patients who've been using the vessel for dialysis. So we have patients who've had the vessel in for 5 or 10 years and getting punctured with large bore needles 3 times a week. In some of those patients, there will be a gradual dilatation, not an aneurysm formation, but our long-term data shows that our vessels go from like 6 millimeters up to about 7 or 8 millimeters.

Why is that [indiscernible] better than anything...

I don't know that it is. I don't know that it's not.

[indiscernible] Not much difference in all [indiscernible]

Oh, you mean for -- no, that's in trauma. So the question is, why isn't our vessel better than vein?

Usually a vein, I mean usually a vein in place in artery which has much higher pressures [indiscernible] you have [indiscernible] engineers [indiscernible] more resilience and...

We do engineer to be tougher and more resilient.

[indiscernible]

It is -- so it is better in the fact that it's...

[indiscernible]

So our mechanics, our mechanical durability is superior and the tendency to develop inflammation and intimal hyperplasia is superior. What is inferior is the fact that veins have an interlining on the inner surface of endothelial cells, which inherently blocks blood clotting. Our published data show that our vessels develop an endothelium, but it takes time. It takes -- they have a head start on the early patency data, they have a head start. But in terms of durability and resistance to infection, we're the same. And the small differences in patency in trauma between our vessel and vein actually don't translate into loss of limb or other complications.

You can improve the technology to [indiscernible]

We spent about 15 years working on that.

How does the price compare to [indiscernible] procedure versus your product?

Right. So it's -- so that's a loaded question because price in terms of what the hospital total charges for the hospital will vary with indication. So in trauma, the way hospitals are reimbursed is with a DRG or just a fixed number based on how injured the patient is. And then the hospital has to care for all the complications of that patient with that one fixed dollar amount. So in answer to your question, though, our vessel, it takes about an extra hour of operating room time to harvest vein, which is actually thousands of dollars for an acute trauma OR. So -- and our vessel costs about $17,000, so it's more expensive than that. It's also more expensive than plastic as far as the acquisition cost because plastic is about $1,000 or $2,000. But the fiscal benefit to the hospital comes from the fact that they're saving not only OR time, but compared to plastic, they're also saving infections and amputations, which they also have to -- those all occur in the first hospitalization and the hospital has to foot the bill for those. So that's -- it's really the economic -- I mean, the clinical data are strong, but it's really the economic argument that means that our VAC success rate is pretty high.

Excellent. Well, I think we've hit the buzzer here for this time. Thank you, Laura, for the presentation for taking the questions. And again, thank you for participating in our conference this year.