Ondine Biomedical Inc. (OBI) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Ondine Biomedical Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself, however, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to say the following poll. And I'd now like to hand you over to Dr. Nicolas Loebel, President and Chief Technology Officer. Good afternoon, sir.

Thank you so much, Alessandro. Good afternoon. Welcome to our financial year 2022 update. My name is Nicolas Loebel. I'm the Chief Technology Officer and President of Ondine Biomedical. This presentation will take about 20 minutes, and we'll be happy to take questions afterwards. Thank you. Please note all financial figures we'll be discussing are denominated in Canadian dollars. Our company is focused on reducing health care-associated infections. These are the infections which can occur while receiving healthcare for another unrelated condition. These hospital-acquired infections can happen in any healthcare facility, including hospitals, ambulatory surgical centers and other facilities anywhere where patients are presenting for care. Over half of the infections involved are caused by drug-resistant microbes. And research published in 2020 by the European Center for Disease Prevention and Control have found that, on average, these HAIs effect 1 in 81 Britons. That's not just Britons presenting to hospitals, that's 1 of 81 members of the public. This adverse cost represents upto 6% of hospital public budgets, as you see. In fact, HAIs cost the NHS just about GBP 2.7 billion every year. We have spent the last 20 years developing the system called photodisinfection. We have spent over $200 million developing this company, and we have a large patent portfolio covering every aspect of the technology with a deep pipeline of products. We'll return to that point at the end of the presentation. This technology is already proven in hospitals and clinics across Canada with more than 300 papers from academia having been published across the world. We've received regulatory approvals in a number of countries already. And we've initiated sales in select markets. In the U.S., we're focused on entering our Phase III clinical study with the partner, Healthcare Corporation of America. This is the largest hospital group in the U.S. with nearly 200 hospitals and 2,000 sites of care. We have been granted both qualified infectious disease product and fast track accelerators by the FDA. So how does the extraordinary technology work? You can see here on the left side, a photosensitive compound is swabbed on to the area to be disinfected. This stain strongly attaches to microbes such as MRSA, pseudomonas klebsiella, that are present at the wound site or the site to be treated, but does not attach to human tissue. There is an electrostatic or charge-based differentiation mechanism. The stained microbes are then illuminated with a cold red laser light. You see that in the middle. And this is a painless 5-minute process. Desensitizer activation produces a localized flux of oxygen-derived free radicals, which almost instantly inactivate the microbes. And this occurs whether or not the bugs are antibiotic-resistant. Here, you can see on the bottom, actual plates of patient samples showing high levels of MRSA between -- before treatment, followed by elimination, almost complete elimination of the microbe immediately after treatment. I want to stress that, that speed of action and the broad spectrum kill, all bacteria, all fungi, all viruses, it's what makes the approach so valuable. Imagine not having to apply an antibiotic twice a day for 5 days without knowing whether the antibiotic works during which the patient is losing valuable time. Consider how useful this is to hospital workflows where nursing staff can be confident in disinfection outcomes in just a few minutes of therapy versus the days and weeks that antibiotics can take. And all this without fear of resistance generation and without concern for matching the drug to the particular species of [indiscernible] because of the broad spectrum. So this technology has hundreds of different applications in medicine, in food production, in public health. The potential market size across these applications is billions of dollars annually. Here, you can see on the left, we adapt the photosensitizer to be applied using particular methods that are optimized for any particular application. The first one is how we are presenting the drug or staying to the nose. And then we match that applicator to a specific way to introduce the light. That's a specific disposable light applicator. In the case of the nasal decolonization product that we're going to be talking about, you will see the swab on the left is used to place the gel into the nose. And then on the right side is the nasal illuminator, which is the first one in that sequence, is used to diffuse light from the laser comfortably into the nose and then discarded after onetime use. So these approaches have also been tested in large clinically unmet need. You see that on the right. Disinfection of the sinus cavities, for example, for treatment of chronic sinusitis, treatment of burns and wounds. Note that HCA maintains the largest burn unit in the U.S. And then disinfection of ventilated tubes, foley catheters, direct integration into medical plastics and drapes, even environmental surfaces, et cetera. Here you see what a presurgical patient looks like being photodisinfection, how simple the process is. On the left, you see the swab being applied into the anterior nose, just the lower 1/3 of the node, it's a painless process. And then on the right, the light activating unit being provided to the patient. And the result is that pathogens are eliminated. Money saved. Infection rates reduced. Ultimately, the hospital readmission rate for that patient who's avoided an infection are reduced, which saves money borne by the healthcare system insurers and, of course, ultimately the patient. In the NHS today, over 6 million patients are waiting for surgery. That's the longest waiting list in history. It's imperative that patients do not require readmission to precious beds, increasing the waiting times further. Ondine IPO-ed on AIM in December of 2021, and we promised to complete our Phase II study, substantially prepare for Phase III as well. And we've done both of those goals and quite a bit more. We've conducted yet another study designed to support an upcoming regulatory filing. We'll talk about that in some detail. And we've produced significant publications on our R&D efforts. We've hired a total of 17 new staff, primarily in manufacturing, quality control and production as we gear up commercial sales. And as we head into the Phase III process, we've designed and built a high-volume, low-cost, disposable light illuminator. You see that on the left side, which does exactly the same thing as before, with over 100,000 patients treated but it's more ergonomic, allows for much higher margins and much less plastic waste into the waste stream. We've also concluded a spectacular COVID study at the University of Navarra including the finding that photodisinfection can induce a vaccine-like response when used to kill viruses such as SARS-CoV-2 in the nose. So our foundation for growth is summarized on this slide. We're advancing the clinical programs. They are on track with a successful Phase II reported last year, extensive work carrying out Phase III preparations. Our commercial team has expanded with the addition of key distribution partners. And you're starting to see more extensive rollout now across Canada as well as discussions with trusts in the U.K. And we're readying for scale now given that our Phase III program is kicking off and we can start to expand production for that large U.S. study, about 6,600 patients as well as, of course, across the rest of the world with that high-margin product. Just a moment of detail on the Phase II. The study was conducted at HCA Healthcare's Memorial Health University Medical Center in Savannah, Georgia. The study met its primary endpoint with Staph aureus eliminated or significantly decreased in 88% of nasal carriers. So these are direct measurements in patients, confirming that a single 5-minute treatment of nasal photodisinfection significantly reduces the major cause of surgical site infections in presurgical patients, and that's Staphylococcus aureus. And the study also met its secondary endpoint, an analysis of the follow-up data demonstrated that treated patients showed a substantially lower surgical site infection rate than the U.S. national average. That was 0.6% versus the normally expected 3%. And there were no significant adverse events. And of course, that parallels years of experience with the product in Canada. In terms of the Phase III program readiness, we've made significant progress. I'm not expecting folks to read through all of those little points. But just to give you a sense of what's being done here and what's still remaining. The clinical trial sites, the CROs, other clinical and regulatory support partners, if you will, have been identified and are working with us closely. As discussed, substantial work has been undertaken to enhance the manufacturing process, reduce cost of goods, establish automation so that we're in a position to launch commercially equivalent product into the Phase III. And then finally, the extensive documentations required for the type B and C meetings with the FDA have been established. And these focus primarily on the protocol, the selection of the surgical procedures we will be treating, biostatistics design, chemistry manufacturing controls, that sort of thing. And then assuming FDA authorization to proceed, we believe the company is operationally on track to initiate this Phase III study this year. Outcomes. We expect to look something similar to this. These are a couple of leading Canadian hospitals, which deploy this product daily. On the left side, you see just a few key metrics from Vancouver General. 7,000 patients or more treated annually, enjoying a 50% reduction in the incidence of infection because of a product that is in the $50 to $100 range when it comes to market in the U.S. 550 extra bed days is a significant increase in the total capacity of that hospital given the fact that no new investments were made directly into the hospital infrastructure. On the right side, you see the Ottawa Hospital. Recent publications by the hospital are showing that average patient length of stay is reduced by almost half. That's because patients who get infections do not have to -- and we don't have to have that extensive readmission into the bed, which can take weeks in some cases. And the number of readmissions is down by half. Obviously, these key performance indicators are highly attractive to any hospital administrator, much less the largest hospital operator in the U.S., which is HCA Healthcare with a $60 billion top line. We are proud to have been associated with several other clinical studies, our own as well as conducted by others. And these were published in the last year. Escape pathogens are some of the most virulent and dangerous pathogens responsible for some of the deadliest hospital-acquired infections, primarily because the bugs are so antibiotic resistant. It's very difficult to kill them. Results of our study showed that photodisinfection technology can easily eliminate all escape pathogens independent of their resistance and resistance nature. This was key proof of the breadth of spectrum and the fact that clinicians do not need to select particular antibiotics or particular classes of drugs to combat different classes of bacteria. It's a one-stop shop. And this is going to be important to demonstrate in the product package insert once we're through the Phase III. With research from others, for example, the University Hospital Zurich. They published their findings on pathogens colonizing artificial joints. These are hip and knee implants, for example, made of titanium, other materials. And these researchers demonstrated that photodisinfection can almost instantly eradicate these pathogens in biofilms, that tough-to-kill, film-like presentation of these microbes, and these are directly on orthopedic implants with no regrowth after treatment. These results were presented at the recent Swiss Society for Microbiology Annual Congress in Lausanne this year and published in the Journal Antibiotic. Results from our 2021 COVID study conducted by the Sunnybrook Research Institute in Toronto, Canada showed that SARS-CoV-2, the etiologic vector for COVID-19, could be effectively inactivated directly in the noses of patients with COVID-19. These patients, by the way, were treated in their homes, in vehicles, in emergency rooms and so forth. And that just demonstrates the utility of the technique, how simple it is, how rapid it is. And this work was published in Nature Scientific Reports, which is obviously a prestigious high-impact factor journal. 90% of patient's samples show decreased viral infectivity and 70% showed no detectable virus whatsoever after the single 5-minute process. And this work was then expanded on and demonstrated in a randomized controlled study at Clínica Universidad de Navarra in Spain with a groundbreaking study in vaccinated patients. So these are patients you would not expect initially to become reinfected with SARS-CoV-2, but did. And this study showed rapid and substantial suppression of SARS-CoV-2, both replication of the virus and then subsequent infectivity from one patient to another, that tighter outcome of secretion in the nose of these patients. Over 6x fewer PCR-positive patients were found in the treatment arm compared to controls, highly significant. And the treatment in just the external nose resulted in reduction of virus in the upper airway, which is a really important finding. And in another important world's first finding. Steroid treatment was shown to induce CD4 and CD8 T-cell responses. These are the essential antibody cells of the immune system, which provide long-term immunity against pathogens like SARS-CoV-2. So this finding implies that destroying virus in the nose in the upper airway can reduce infectivity expected, obviously important for public health in the future, but also that the destroyed viral fragments can stimulate the immune system to create antibodies, acting like a kind of topical vaccine. And obviously, that could be of major importance going forward as SARS-CoV-2 mutates or other pathogens come to the floor. I'm happy to report on a new business sector for Ondine. This was the subject of a webinar we gave a few weeks ago. Shareholders may recall that we treated essential workers in the meat processing industry in Canada during COVID-19, helping to keep these plants online, and supporting -- doing our part to support Canada's $10 billion meat industry. But because of our work in this field, an opportunity to directly disinfect meat products rather than the essential workers themselves occurred with the goal of improving food safety. And Ondine was awarded funding of nearly $735,000 from the Government of Canada and Agriculture and Agri-Food Canada as an organization towards development of a food safe method to photodisinfect Canada's meat packing industry product. These are very different photosensitizers than we use in humans in the preclinical domain -- Presurgical domain, excuse me. And they're optimized for the specific pathogens that occur on meat products. And they're selected from food groups themselves, which is a really interesting technical development. We carried out this development with our research partner, Chinook contract research in Alberta. We demonstrated that photodisinfection was highly effective against these foodborne pathogens, and that's both on the food processing surfaces as well as directly located on chicken, beef and pork meat, contaminated in petri dishes and then killed to demonstrate just how effective the technique was. And this obviously paves the way for a new sector of operation for us, outside medically-related core markets, but nevertheless, with evidently high impact to consumers and producers alike. And we will progress this effort once further non-dilutive funding and second phase awards as such are made. In 2022, we started to significantly scale our commercial efforts in 3 key new markets, U.K., Spain and Mexico. Together with Canada, these represent markets of over 275 million people. We focused on clinical installations at 10 to 12 key reference sites. These are generally early innovator hospitals. And of course, in the U.S. we will be introducing steroid wave into 10 to 15 HCA hospitals to initiate the Phase III study. Just a reminder that the U.S. represents the largest and most concentrated market in the world with 330 million people and up to 50 million major surgeries each year. Early in the presentation, I touched on the design of our high-margin, high-volume disposable illuminator module. And here, you see it on the screen. The device separates at the point shown, and this component is then discarded. This unit is produced onshore, reducing our reliance on supply chains which were previously impacted during COVID outside the country. And I have to say this unit is a marvel of engineering. We can make one of these every 20 to 30 seconds with performance that completely matches our earlier units, which were much higher cost of goods. So this is a key component of our go-to-market strategy worldwide. As we turn to the financial results, there are a few highlights to mention here. As expected, our revenues were down from last year's opportunistic COVID-19-related sales to the meat processing plants in Canada. Despite the reduction of production volume, we were able to hold on to the margin gains that we made prior because of the supply chain expansion and the production efficiencies we did create. We spent almost $1.5 million on the development and tooling of the low-cost scalable illumination modules that we discussed earlier. Looking into the details. Total operating expenses were up modestly year-over-year. That's $19.2 million versus $18.8 million, an increase of just 2%. Gross margins, as I said, roughly maintained flat at 45%. Majority of the increase in OpEx came as a result of funding the clinical studies for Phase II FDA and relating to COVID-19. Operations, including G&A, was lower in 2022 as the prior year had included our onetime IPO-related costs. Sales and marketing expenses were up $1 million to $1.4 million, reflecting our growing commercial effort, both inside and outside Canada. And much of this increase was in support of building up the sales processes, the marketing collateral, infrastructure, et cetera, needed for direct and indirect commercialization. In terms of cash, we ended the year at $13.1 million. And then finally, as of December, the company had no debt as was the case at the end of the prior year. I'd like to just summarize our goals for 2023 as my last slide. We're firmly focused on establishing the key Phase III clinical study at up to 15 HCA hospitals, working very closely with our partner, HCA Healthcare. Of course, there's a great deal of operational and regulatory work that is happening in support of the FDA submission. While this is a large study, it is relatively simple because the treatment takes just a few minutes, and we expect follow-up to be limited to only 30 days, determination of whether or not a surgical site infection occurred. So we do expect to be able to conclude the study relatively quickly. And we're planning the U.S. market launch well ahead and what that will mean for us operationally as we face the large demand from both HCA hospitals and other hospitals, other healthcare systems. We do expect to expand our sales and marketing footprint in the approved jurisdictions as we discussed earlier. And then looking even further forward, I'd like to remind you of our deep product pipeline, which we touched on earlier. This has extensive data already developed in key indications such as sinus disease treatment. These are billion-dollar markets onto themselves, and we will look to partner and develop these indications as rapidly as possible, obviously consistent with focusing on our U.S. rollout and scaling plan for nasal decolonization. I'd like to thank our investors, our Board members and stakeholders for their continued support and obviously, our incredible team of employees for their hard work and commitment, helping us realize our goal, which is functionally seeing photodisinfection deployed in every hospital worldwide as a standard of antimicrobial care. Thank you very much for your attention. I'll open up for questions. Over to you, Mark.

[Operator Instructions] What I'll do now is I'll start off the Q&A session with the first question here, which read as follows. Do you have sufficient funding to see -- to see through the strategy, which ties into another question here, which says there is a question about your plans for raising more capital. Can you give a bit more on that?

Thank you for that question. At the IPO, we were clear about the fact that we would come back to market after a successful completion of a Phase II and after completing substantial Phase III preparations. And today, we're happy to report that both of those goals have been achieved and a great deal more, as you heard during this presentation. It's still our plan to come back to market when we're ready to functionally embark on a Phase III study.

Perfect. We've got 2 other questions here, which tie nicely together and those being, what do you expect your Phase III trial will cost? And how is the Phase III going to be paid for?

Thank you. Some of these figures are obviously dependent on expectations relating to the protocol that we'll be deploying, the control groups that we'll be deploying, operationalizing the study at these HCA Hospitals. But in general, I think I can say that this study will be in the $8 million to $10 million range. And those are actually quoted in U.S. dollars. We will be working closely with HCA Healthcare in the U.S. facilities. And this does, of course, depend on specifics associated with the protocol, et cetera. But we are anticipating that this program will be funded from use of proceeds, both in terms of treasury and future raises. And then, of course, I just want to reiterate that we're not developing a new chemical entity. We're not taking years to determine whether, for example, a cancer therapeutic is creating a difference in lifespan. No, this is a very simple outcome. It's a 30-day follow-up that we expect, and that follow-up is whether or not the patient developed a surgical site infection. And that's really a quantitative assessment done on 2 different scales. One is called the NHSN scale. The other is the scrip scale. And those are well understood, validated endpoints. There's not much difficulty in establishing them. So we don't expect long follow-ups. We do expect a relatively short study. In terms of the detail, we are still expecting to start the study this year, and we expect the study to be 6 to 9 months in duration.

Perfect. The next question here. When will you start to recruit into Phase III?

We expect that to occur just before the end of the year. The specific date is difficult to project right now, but somewhere in Q4, we should be able to kick off.

Perfect. Just moving on, why is no credit being given for a positive Phase II? I can't remember the last time a listed company was successful in a clinical trial.

I think Ondine has -- I'm assuming credit implies a market cap or a share price component. I think we're in a very difficult biotechnology market, but we see strong signs of recovery. There are a lot of folks who are interested in our story and have saved a great deal of interest. We are also a company that has embarked on commercialization because we are approved in a number of regulatory jurisdictions. And so all of that requires that start-up phase, implementation phase, use of capital phase. And so I think you'll see that situation reverse itself in the near future.

Perfect. Could you please provide further details on the second clinical study you mentioned earlier and in this morning's press release and when the results will be released?

That study was conducted in support of our Phase III regulatory filing. And we have not disclosed a great deal of information yet about it as it's going into a regulatory summary. So I'll paraphrase and circumscribe my comments to the following. It was done to determine what the components of the formulation, this photosensitizer formulation, do unto themselves when applied to a patient. So the excipient matrix, the 2 active pharmaceutical ingredients, the light. And I can tell you here that those individual components don't do much if anything at all. It is the combination of ingredients, as we expect, because of the decade in Canada and 100,000 patients plus that have been treated. It is that potent combination of photosensitizer and light which achieves the outcome. And that is being written up into a clinical study report for regulatory access, and then thereafter, we will publish results.

Just turning to the next question. Can you talk a bit more about on how you're thinking about running your control group in the trial? I know there's been some debate around whether the control will be the current standard of care and the time of trialing these groups versus the trial group. So I was wondering if you could update us on how you're thinking about that.

Thank you. A complicated question, but an important one. It's too early to provide precise answers because that is the purview of the FDA to decide. But we are asking for either the selection of a control group that really maintains standard of care. We're so confident about the effect of this therapy on patients and all surgical site infections that we are willing to accept all comers into the study even when they have been treated with other standard of care compounds. So we believe, produce an outcome well in excess or whatever else has been used on the patient. And that includes chlorhexidine body wipes, washes, hair washes, even other products placed in the nose. And so we are willing to accept the idea that standard of care can be used in these hospitals. And our product, added to that entire spectrum of interventions, will demonstrate a highly statistically significant effect. So the types of control groups needed to show that could include historical controls where patients come into the study the prior 3 months and their surgical site infection rate is clearly determined by the same clinicians in the same hospitals with the same surgeries and covariants, making sure the patient mix is identical, and then following on with treated patients and comparing the 2 groups in time. And there are other strategies for that control group, which could include, for example, randomization between the groups coming in of patients who will be treated and patients who will not be treated. Have to realize though that our extremely significant partner, HCA Healthcare, is a $60 billion organization with 200 hospitals. And operationalizing rapid changes between treatment and patient control groups is very difficult in such a large healthcare system. So we need to work within the construct of the group that we're working with. And we have discussed and we'll continue to discuss these issues with the FDA.

Perfect. Given clinical success in Canadian hospitals, why is the NHS not adopting this technology?

Thank you for the question. I think the question begs a response the NHS is not adopting the technology. We are only now embarking on the NHS approach, working with trusts, working with individuals. One of our Board members, for example, Mike Farrar, used to be the Chairman of the -- the CEO of the NHS Confederation. We are working with pharmacoeconomic modeling companies to develop pharmacoeconomic benefit publications that can be used by hospital administrators in the NHS. There is a prescriptive process involving NICE as well as hospital trusts themselves to develop a product like this. We are aiming for nothing less than changing standard of care. We want every single presurgical patients to be treated with nasal photodisinfection before that surgery. And we want to be able to demonstrate just how powerful that is. And so there's a discussion that has to occur and how you implement these products, how the patient is spoken to, how the nursing staff -- we've never seen bright red photonic decolonization in patients before, how they are to deploy it, the training requirements, et cetera. So I would say that we have launched now and are expanding significantly, the effort into the NHS, and we look forward to significant success in the U.K. This is our home market. We are an AIM-listed company. The product was originally developed at University College, London and licensed from them in the oral cavity. So we consider the U.K. our home. And the NHS is squarely in our sights as a deployment target for this technology.

Perfect. That's great. There's another question here, which asks, can you expand on your plans to commercialize the business opportunity? And what extra resources will be required for you to scale?

Thank you. We are putting judicious amounts of money into the sales and marketing effort. This means selecting target markets that are large, often are characterized by high levels of medical tourism, so that folks who are interested, for example, in crossing the border and heading into Mexico can, in fact, access this technology. Remember, this is not yet approved in the U.S. So when we select these countries, we're looking for companies -- countries who have clearly indicated sensitivity to antimicrobial resistance. Very often, these countries have significant problems with healthcare-acquired infections. Antibiotics stewardship may be poor in these countries. And the number of bugs that are circulating around sharing genes of antibiotic resistance is very significant. So we're selecting those countries for our first concentration. And we indicated earlier some of the names of those countries in this presentation, including Spain and the U.K. Now when you look at the cost of developing a new market, you will very often find that the company is offering to provide equipment, training, ongoing assessment of results, and we're doing that. However, because our first focus is on our FDA Phase III clinical study, there's a very clear prioritization there. We need to address the most concentrated market in the world as fast as possible. And I can assure you that our friends at HCA Healthcare are highly focused on helping us get there. They have a $60 billion operation in the U.S. You can imagine the impact of surgical site infections as well as hospital-acquired infections in their operation, albeit the fact that they are among the finest hospital operators worldwide with extremely good practices and principles and processes. But you can imagine just how important the product is for them. So it is effectively a marketing access tactic to move into the U.S. as fast as possible. But as I said, we are supporting development worldwide in those markets, which have already received regulatory approval. And that includes expanding in our home country, Canada, where we're now up to 9 large hospitals who are using the product with clinical pilots happening at institutions like that. So that's a significant increase year-over-year.

Perfect. That's great. The next question here read as follows. Can you give an update on how you're progressing on the manufacturing scale up for the trial? And then what would be left to do -- and then what would be left to do to expand again for commercialization following approval?

Great question. The manufacturing of a product that goes into a Phase III pivotal study is required to closely mimic the commercial undertaking that will occur after the study. These are closely, highly regulated products, nothing can change of significance between the going-in condition and the coming-out condition in the marketing condition of the product. We are a highly quality managed company. We're an ISO 1345, an MDSAP compliant company. We get audited once a year, just having gone through our CE Mark audit. I can tell you that we are very efficient and effective at this. And in terms of the way we've designed this product, because the high-margin, low-cost, high-volume capability of this device is in place, it doesn't mean there is any significant change in the way it distributes light, in the amount of light that's distributed, the way it's used by patients and healthcare workers. Those things are required to stay the same because it allows us to match the influence of the system on the patient from the new technology to the old. So devices have been designed under the signed control. Manufacturing has commenced of pilot production quantities to ensure that we have those quality factors in place. We are not yet initiated into the Phase III production loop, but that is shortly to occur within the next few months. And we will be producing something on the order of 10,000 units again, in a way that is consistent with the manufacturing methods that will be used after the study. In terms of the balance of the question, which is what will still be left, I think you're really talking about automation, so-called bigger hammer. As we produce hundreds of thousands of units and ultimately, in a short period of time, just a few years, millions of units expected, you will see that the automation requirements will grow exponentially and of course, the investment required into that automation. But again, with cash flows that we expect to enjoy, those should be self-funded at that time. And so that automation and scale up is what's left to complete those clinical products. On the photosensitizer side, those are extremely well designed and qualified and characterized processes in the U.S. We will be using manufacturers other than us to create these products. They require to adhere to a very specific U.S. CFR Code federal regulation compliance standards. And those -- that's well underway for us. We have a very stable product. We have a product that we have developed and used for 10 years. So we're just basically duplicating all of that in the U.S. except for much higher volumes.

Perfect. That's great. And regarding the V2 light diode, you mentioned that you invested quite a bit into developing this last year, and you're expecting to use this in the trial. I was wondering how much more development is needed to get this to the level where it can be used in the trial?

It's there now. We believe that we have taken care of all of the extensive regulatory requirements designed to show safety. We have utilized the product in extensive in vitro and in vivo assays. We have established concordance and the fact that the device is functionally identical in terms of its light activation to the previous devices. And would be ready to turn on manufacturing here just in the next few months, and that's probably mostly related to paperwork at this point and not to any hardware or production systems. I am currently situated in 10,000 square feet of research development, like manufacturing space. We've just acquired another 6,000 square feet of manufacturing space in a campus facility next door, which will allow us to expand manufacturing into the clean environments in a very controlled manufacturing practice environments that are required both for the clinical study and for commercialization.

Perfect. And maybe time for just one final question here. Can you comment on IP position, please? Remaining length of the patent/protection in approved markets? And what, if any, benefits do you get for U.S. post-FDA approval, i.e., what does Fast Track/QIDP status mean?

Thank you. I'll answer that as a 3-part question. The intellectual property portfolio is large. We've spent a great deal of time and money developing it. It constitutes 70-plus patents in 3 patent families, covers aspects of the photosensitizer formulation, how it works, how it's applied, methods of development of activation by light, different light sources, different types of sources of the chemicals involved. But all of those are issued across multiple different countries, some of which have issued these patents only in the last few years. So patent lifetime really depends on jurisdiction. And I would say between 5 and 15 years of patent life is available on all of the core pieces of intellectual property. However, the third part of that question is very important to address with respect to an IP question because IP implies protection, protection against competition, protection against follow-on development companies. In this product, we're submitting a new drug application, an NDA, which is the requirement by the FDA for what is called a combination product. That is a product that involves both the photosensitizer and the light, a piece of hardware and the liquid. That approach cannot be followed on by a third party like a me-too product, which is covered by a regulation called 510(k). That is an approach which is confidential to the company and the regulator. And the work that we have done cannot just be duplicated by others without going through much of the effort and expending much of the $200 million that we've expended to get there. The reason for having taken this time and spent this money is to get a product which is groundbreaking in nature and therefore, new, through the FDA. The FDA provides for incentives to do that because this product truly can do its part in stemming the kind of antimicrobial resistance that we're seeing. It is really dangerous to go to a hospital with an infection or having developed one and not be able to be treated with an antibiotic. It is a frightening and dangerous situation. And this product can start to reverse that trend because it does not produce resistance on its own, and it does not rely on sensitive microbes or microbes are susceptible to it. As a result, the FDA has provided us with the QIDP and fast track accelerators, and those allow us to access the FDA more frequently and they allow us also to provide for, once approved, a monopolistic approach to competitors. We will be provided with an exclusivity period ranging up to 8.5 years for the product, during which this kind of product cannot be produced by others. So it's that regulatory exclusivity that is equally or more important than the patents. But working together, we're in a very good position in terms of competitive protection.

Nicolas, thank you very much for that. I think you've addressed those questions you can from investors. And of course, the company will review all the questions submitted today, and we'll publish those responses on the Investor Meet Company platform. But just before redirecting investors to provide you with their feedback, which we know is particularly important to yourself and the company, Nicolas, could I just ask you for a few closing comments.

Certainly. Well, I'd love to thank all of the folks on this call for joining the presentation, past present and future investors, for their interest in our company. I think nothing less than joining a world-class effort with a very, very important product for healthcare, which we believe will change the state of healthcare as we know it today, reducing these really difficult and dangerous infections that occur in a healthcare environment where you went to be treated, to be healed. So fundamentally, paradoxical and expensive to healthcare systems. So I'd love to thank everybody involved, our Board members, our stakeholders for joining us on this call. And I'm looking forward to keeping you updated quarter-by-quarter as we go forward into this Phase III program. Thank you.

Nicolas, thanks, once again, for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Ondine Biomedical, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Thank you.