Windtree Therapeutics, Inc. (WINT) Earnings Call Transcript & Summary

Good day, and welcome to the Windtree Therapeutics Business Update Conference Call. [Operator Instructions] I would now like to turn the conference over to John Tattory, Chief Financial Officer. Please proceed, sir.

Thank you, Eric, and thank you, everyone, for participating in today's call to provide an overview of the recently announced completion of a $23 million public offering and up listing to the NASDAQ capital market, as well as to provide updates on our acute cardiovascular and pulmonary clinical programs. Leading the call today will be Craig Fraser, our CEO and President. Also participating on the call today are Dr. Steve Simonson, our Chief Medical Officer; and Eric Curtis, our Chief Operating Officer. After the prepared remarks, we will open up the call for a question-and-answer session. Before we begin, I would like to remind everyone that remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Windtree cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including those related to COVID-19 and its impact on our business operations, clinical trials and results of operations. For a discussion of the risks and factors that could affect the company's future results, please see the risk factors and other cautionary statements contained in the company's filings with the Securities and Exchange Commission. Any statements made on this conference call speak only as of today's date, Thursday, June 4, 2020, and the company does not undertake any obligation to update any of these forward-looking statements to reflect events or circumstances that occur on or after today's date. As a reminder, this conference call is being recorded and will be available for replay on our website at www.windtreetx.com. With that, I will now call over to Craig Fraser. Craig?

Thanks, John. Welcome, everybody, to the Windtree Business Update Call. I want to begin by saying, I hope everyone is safe and weathering the situation with COVID-19 as well as possible. We have had a lot going on and have made really good progress with the company, and I look forward to telling you about the recent transaction, our assets and programs and our short to mid-term outlook. I'm Craig Fraser, the CEO, and I joined Windtree 4.5 years ago after spending about 30 years in this industry, primarily in biotech, in areas like acute cardiovasculars and oncology in some small start-ups such as Centocor that brought me to this area and happened to work out well as well as running some large businesses in big companies like J&J, Wyeth and Pfizer. Today, you'll also be hearing from our CMO, Dr. Steve Simonson, who's a critical care pulmonologist out of Duke and who's spent many years at AZ and had a small start-up prior to Windtree. As well as hearing from our COO, Eric Curtis, who has broad experience as a biotech executive in leading both small companies, including recently as a CEO of an early stage oncology endeavor, and in large businesses. Our CFO, John Tattory, that you just heard from came out of E&Y and spent many years at BMS leading various financial functions prior to joining Windtree nearly 9 years ago. He -- we have a very experienced team here at Windtree, which in my experience is important when you have a small company. Turning to our portfolio. Windtree is a biopharm device company with what we believe to be an attractive portfolio of multiple late-stage assets and programs that are focused on significant unmet needs in acute CV and pulmonary care. Over the past 2 years, both through a merger and acquisition of a specialty cardiovascular company as well as work on additional indications, Windtree has successfully diversified our portfolio, creating more opportunity for potential growth. Our portfolio includes our lead drug asset, istaroxime, or ista for short, and ista is a unique dual acting IV drug candidate for acute heart failure that has produced positive Phase IIa and Phase IIb results that we read out mid last year, and we received a Fast Track designation also last year. Based on the unique profile of ista, we were encouraged to explore cardiogenic shock as a potential for a breakthrough designation. We see a significant opportunity in this area of high unmet need and thus have started a second program that we're in the midst of starting a cardiogenic shock study that our CMO, Steve Simonson will tell you about in a few moments. Dropping down to the bottom of the page here, you will see that we have oral follow-on SERCA2a Activators, which is the unique mechanism of ista as well for chronic as well as acute heart failure. SERCA2a has been a much sought after but elusive target for chronic heart failure, particularly for heart failure with preserved ejection fraction, which is a big part of chronic heart failure, lacking good therapies. As such, this platform has the attention of a number of large pharmaceutical companies. Now with the acquisition, we also brought in a novel agent to treat genetically associated hypertension called rostafuroxin. I will not be talking about rosta today because as a product for hypertension, even if specialty hypertension, like it is, it best belongs in a large company, and as such, we plan to fully out-license it and intend to use the proceeds for non-dilutive funding of our core programs. Now we also have our legacy acute pulmonary programs. Our registration program of AEROSURF is an innovative drug-device combination that is redefining the treatment of Respiratory Distress Syndrome in little preterm babies. AEROSURF is an actively enrolling study, bridging us from Phase II to Phase III. It also has a Fast Track designation as well as orphan designation in the U.S. and in the EU. Given our deep and broad experience in acute respiratory disorders, and around avoiding ventilators and lung injury, when the COVID-19 pandemic hit and with requests for drug, we knew we needed to try to help these patients. As such, our latest clinical endeavor is an effort to study prevention of lung injury with KL4 surfactant in COVID-19 respiratory failure patients. Now we're working with some of the best advisers and world-class institutions and have engaged with the U.S. government and agencies to plan a study that Steve will discuss with you. Moving on, our multiple program portfolio creates opportunity that after a set of successful raises, including a $26 million private placement in December and the recent $23 million public offering as part of our -- us achieving our NASDAQ listing, we currently have the funds sufficient to execute what is our current good clinical development plans, along with active robust BD. That set up what we believe is a series of short- to mid-term milestones that we believe can be catalysts for the company and our shareholders. And we're on track to start ista early cardiogenic shock study this summer and expecting it to run for 3 or 4 quarters. We are conducting some pre-study work and preparing for the next larger acute heart failure study that we plan to start early next year. We recently announced First Patient En on a small AEROSURF study focused on bridging us to Phase III. We plan to have some interim data and then read this out on the back end of the first half of 2021. You will also hear about our plans to study KL4 surfactant in COVID-19 patients, which will initially be a small quick study. Additionally, we have a robust set of activities in the business development arena that Eric will address here later in the call. So now with all this activity, we knew it would be important to deliver these milestones and news from NASDAQ, where we believe value can best be realized. Just over 2 weeks ago, we executed an underwritten public offering that due to demand, I'm happy to report was upsized and priced on May 20, achieving our NASDAQ listing and then closed on the 22nd. John will be providing the details on this transaction. So turning to our lead program of ista. We gathered top heart failure experts together last year, and we were encouraged by their excitement with the positive Phase IIb data and specifically, the profile we're all seeing with ista. Heart failure is a big, important market, where the need is only growing with growing prevalence and unfortunately, increased mortality the past few years. Heart failure affects millions of people. It is the #1 reason for hospitalizations of people over 65 years old, accounting for close to 1.5 million admissions annually in both the U.S. as well as in India. It is the most expensive medicare diagnosis. Now due to a lack of advances, particularly advances in the acute hospital setting, there is one thing that has changed recently, and that is the regulatory requirements to gain approval. In July of last year, the FDA issued new guidance for heart failure development that provide greater flexibility and acceptable endpoints. Gone are the days that an acute care agent needs to achieve mortality or MACE measures, this makes for a better regulatory landscape to conduct heart failure development. Heart failure patients will sometimes experience a severe crisis called acute decompensated heart failure, whereby they end up in the hospital in distress due to their poor heart pump function and being in fluid overload. The immediate focus is to administer powerful IV diuretics to try to offload fluid through the kidneys to get the patient breathing better. Then attention turns to improving the heart function itself. The goal over the next few days will be to get them out of this decompensated acute state and get them healthy enough, which means, getting them dried out, blood pressure up, perfusion to the body up, to be started on their oral outpatient medicines and healthy enough to be discharged out of the hospital as soon as possible, but also in a manner that they can stay out of the hospital. Now the problem is, clinicians have had really nothing new. And they're left with these old therapies that have many rate-limiting toxicities, which often can create barriers to treatment and improvement, particularly in certain clinical situations. These toxicities include heart rhythm disturbances, they can increase the heart rate, which increases myocardial oxygen demand. That's something that's really not wanted in this situation, because it can be also associated with potential damage to the heart muscle itself. They can decrease blood pressure, which is counter to the objective of perfusing the body better. They can worsen renal function and even some of the studies have shown increased mortality in some cases. Now I want to draw your attention in particular to a certain group of patients, and that's the patients with low blood pressure and peripheral hypoperfusion. And these are high-risk and arguably the most challenging patients. These patients also tend to be diuretic resistant due to the lack of flow to the kidneys. And there's a lot of these patients, they represent 35% to 40% or so. And they have about twice the mortality, they have more events, longer length of stays, and these are the patients that are often discharged in a suboptimal state. Now fortunately, the company and our advisers see ista's unique profile, specifically matching this area of greatest need and where there's a lack of therapies, and thus, this presents a great setting for our clinical development. With that, I'll turn it over to Steve, who will tell you more about ista, its data and where we're taking development. Steve?

Thanks, Craig. I'll start by explaining how istaroxime works. I'll review our data to date and then tell you about our next steps. Istaroxime is a very interesting molecule. It has 2 mechanisms of action. First, it inhibits the sodium-potassium ATPase. This increases the intracellular calcium concentration, creating a stronger contraction. The second mechanism and the very unique aspect of istaroxime is that it activates SERCA2a. SERCA2a acts to decrease intracellular calcium after contraction takes place. It transports calcium from the cytoplasm into the sarcoplasmic reticulum where it's stored until the next contraction. This results in a more effective relaxation of the heart muscle. So the first mechanism results in a better squeeze, a more forceful contraction, and the second mechanism relaxes the heart muscle to allow the ventricle to fill more effectively for the next contraction. Istaroxime has been studied in 2 Phase II trials. The IIa trial infused istaroxime for 6 hours and statistically significantly improved cardiac function across all 3 doses studied. This set the stage for a IIb study that I'll review with you now. This trial enrolled 120 hospitalized patients with decompensated heart failure requiring intravenous diuretics. They had ejection fractions less than 40%. There were 2 istaroxime doses and placebo and study drug was infused for 24 hours. As I describe the results, you can see them graphically on the next 2 slides. The primary endpoint, e to e-prime is an echocardiographic assessment of pulmonary capillary wedge pressure or filling pressures of the heart, a major determinant of cardiac function. This endpoint was significantly improved by both doses of istaroxime. Stroke volume, the amount of blood ejected with each contraction was substantially increased. Heart rate, which is a major determinant of myocardial oxygen demand was decreased, indicating a more efficient generation of cardiac output. Blood pressure was increased in a dose-related manner. When pump function is improved and blood pressure increases, organ perfusion increases and in the kidney, this results in improved renal function, or GFR, which is shown in the bottom panel. It's also important to note that these benefits were achieved without signs of increased risk of rhythm disturbances or arrhythmias, and there was no increase in troponin, a sign of myocardial injury. The treatment was generally well tolerated with the most common adverse events being nausea, particularly at the highest dose, an infusion site discomfort, particularly with peripheral small intravenous catheters. This data has created a very special profile for istaroxime that dovetails very nicely with an area of substantial unmet medical need in acute heart failure. Patients with low blood pressure and pump failure and those heart failure patients who are diuretic-resistant, these patients are very difficult to treat and are at increased risk for morbidity, mortality and long hospital stays. By improving cardiac function, increasing blood pressure in renal function, we also hope to increase the effectiveness of diuretics, which help to mobilize and remove the extra fluid that accumulates in decompensated heart failure. In our next trial, we want to build on these results and extend the physiological improvements to effects on clinical parameters, such as duration of hospitalization, worsening heart failure, readmissions to the hospital in 30 days and potentially mortality. These are endpoints that could potentially be used in a pivotal trial. We are planning a global study of approximately 300 patients in multiple sites, and we plan to increase the duration of istaroxime dosing beyond 24 hours. We believe this study will provide the information we need to place the program in a good position for Phase III and potential partnering. We plan to begin study start-up later this year with enrollment beginning in early 2021. After completing the IIb trial, we took this data and our plan to the FDA and had a very positive interaction. Subsequently, we submitted a Fast Track application, which was granted in August. We also explored what it would take to get breakthrough designation. We were told that an improvement in blood pressure in patients with shock or preshock could potentially be something upon which a breakthrough designation could be based. Furthermore, there is precedent at the agency for approving a drug for shock using change in blood pressure as the primary endpoint. There is precedent for this with Giapreza for distributive shock. So after getting this feedback, we evaluated our data to assess the feasibility of istaroxime to improve blood pressure in patients with early cardiogenic shock. This slide shows the key data suggesting a meaningful blood pressure change can be achieved. This is the data from both the IIa and IIb studies, and you can see a dose-related increase in systolic blood pressure has been demonstrated in both trials. At the 1.5 microgram per kilogram per minute dose, there was a mean increase in systolic blood pressure of 15 mm Hg. For a patient in early cardiogenic shock, who may have a blood pressure of 75, an increase to 90 could be a meaningful change that improves that patient's condition. We intend to initiate a study in early cardiogenic shock while we're getting things in place for the heart failure study that I described earlier. This study in early cardiogenic shock will include 60 patients at sites in the U.S. and Europe. We expect to start midyear and expect data in the second quarter next year. Our hope is to demonstrate a meaningful increase in blood pressure in these more severe patients. Craig?

Yes. Thanks, Steve. As you heard, we believe cardiogenic shock is a good opportunity to add real value in a clinical setting that's associated with high mortality and need. This fairly straightforward pivotal endpoint of blood pressure increase, combined with our profile in not only cardiac function and the ability to significantly increase blood pressure, as you saw, but the safety profile that we've experienced to date related to arrhythmias, avoiding arrhythmias has had us excited to execute this study. Now strategically, any time a therapy can have a potential breakthrough indication and because that may move faster and at a lower cost out in front of a bigger indication, it's a great situation for development and commercialization and can increase the asset's attractiveness for partnership, which is in our plans for ista. So I also want to remind you of the follow-on oral SERCA2a activators in development that are behind ista. These include both mixed mechanisms like ista for chronic outpatient or inpatient use as well as a selective SERCA2a mechanism only. As I mentioned earlier, this mechanism has been sought after by large companies. In particular, for that heart failure with preserved ejection fraction or HFpEF, a condition that's associated with stiff cardiac muscle that doesn't relax well enough or blood fill well enough and has a lot of need for therapies. This happens to represent over 40% of chronic heart failure as well. So together with ista, we really see these as representing a novel multi-asset heart failure platform. Eric is going to tell you a bit more about this when discussing BD. Additionally, we've done some work with KL4 surfactant. We've actually done a fair amount of work with KL4 surfactant beyond our core lead indication of RDS. One of the most recent of these involves our plan to study lung injury in COVID-19 patients. With that, I'll turn it back over to Steve.

So how does surfactant play into the treatment of COVID-19 acute lung injury? SARS-CoV-2 is the virus that causes COVID-19. It infects cells via the ACE2 receptor, which is on the surface of many tissues in the body, but specifically on the surface of cells in the lung that produced surfactant called alveolar Type 2 cells. This results in damage or death of the Type 2 cells and decreased production of surfactant as well as inflammation in the alveoles. This can lead to a pulmonary condition called acute respiratory distress syndrome or ARDS. This is a condition with high mortality and no approved drug therapies. Surfactant abnormalities are an important part of ARDS pathophysiology. Lung changes in COVID-19 associated lung injury resemble those changes seen in premature neonates in the era before surfactant therapy for these babies. We don't see these kinds of changes very often anymore because these babies are treated with surfactant. But this pattern and its prevention by surfactant are part of the rationale for surfactant in COVID-19 lung injury. There is preclinical support for this approach in acute lung injury also. Windtree has done a significant amount of work in preclinical models of lung injury, demonstrating the ability of KL4 surfactant to protect the lung from many types of insults such as radiation damage, chemical attack and most relevant to COVID-19, severe viral pneumonia. We have shown protective effects in both H1N1 influenza and highly pathogenic H5N1 influenza. The data from this work is summarized here, showing protection of lung structure and histology that translates into improved function and gas exchange, and as you can see on the left panel, survival improvement in this model of very severe lung injury. We believe our synthetic surfactant has the potential to mitigate the surfactant deficiency and the degradation of surfactant that occurs in acute lung injury like that in COVID-19. Our surfactant is unique in the class because it is synthetic. There are no immunological concerns. And importantly, we can scale up production to provide the quantities of drug required to treat adult patients. We've administered our KL4 surfactant to adult patients with acute lung injury and can build upon that experience as we approach COVID-19 patients. The goals of administering our surfactant in acute lung injury due to COVID-19 are to improve lung function as gas exchange and oxygenation, improve the compliance and quiet down the inflammation in the lung that will hopefully decrease lung damage, facilitate recovery and decrease the need for mechanical ventilation. We're taking a 2-staged approach to COVID-19. In stage 1, we're planning a small study at centers in the U.S., enrolling patients who are intubated and ventilated for respiratory failure due to COVID-19. These patients will be dosed down the endotracheal tube. We have a solid rationale for our dose and for the dosing regimen. We want to demonstrate the safety of the surfactant administration and show the expected physiological improvements that occur when you administer surfactant. The primary outcome measure will be an assessment of oxygenation. We'll also look at compliance on the ventilator as well as clinical parameters such as time on mechanical ventilation, days in the ICU and mortality. Pending completion of regulatory approvals and drug manufacture, this trial should take approximately 1 quarter depending upon COVID-19 attack rates at the hospitals participating in the trial. Stage 2 of this program would include a trial similar in design to the one I just described, but it would be larger, randomized and controlled with clinical endpoints as the primary assessments. Stage 2 would also include a study that would take advantage of Windtree Technology to aerosolize and noninvasively deliver surfactant to patients with COVID-19, who are at risk for respiratory failure and the need for intubation. We would want to demonstrate the same physiological improvements as with endotracheal administration but also attempt to show a decreased need for intubation and mechanical ventilation. Craig?

Yes. Steve referred to our history and data. The point I want to highlight is the extensive body of work that we have related to various acute respiratory syndromes that was happening long before COVID-19 emerged. There's been a lot of development providing learnings from varied results and experiences that we continue to apply as we progress our program in taking KL4 to each new potential clinical indication through 17 clinical studies, involving a couple of thousand patients to build our expertise in acute pulmonary care. These studies have included respiratory distress, failure, ARDS, BPD and involving -- avoiding ventilators and protecting the lungs when respiratory support or other assaults like radiation or viruses occur. During the SARS epidemic, our CEO testified before Congress about KL4 surfactant's potential to treat these patients. Now while the epidemic dissipated before that trial happened, this report supported the company receiving over $10 million in NIH grant, supporting much of the work that Steve described around acute lung injury. And in 2018, at the [ top ] pulmonary congress, the discussion was around the potential of our KL4 surfactant in highly pathogenic viral pneumonia, including pandemic strains. Given this, we're working to do our part to help patients and have engaged in planning and process to be able to conduct the study. We believe if the data is positive, we could gain broader and longer-term government support, which may be significant post COVID-19 and preparing for other pandemics and supporting us continuing to build our program outside of RDS in infants. Now speaking of RDS, let me turn to the late-stage clinical program that leads our KL4 surfactant endeavors over the last few years, and that is AEROSURF. Now when babies are born premature, the lungs are the last to develop and they lack the endogenous surfactant. As such, their lungs can collapse between breaths and these little fragile infants really don't have the energy to reinflate them for adequate gas exchange and thus are experiencing respiratory distress syndrome. There was a breakthrough many years ago with animal-derived surfactants that Steve mentioned a moment ago, and their use as replacement therapy. Now the problem is, the traditional approach is to administer these invasively by taking the little infant and without anesthetizing them like we do in adult, intubate them and fill their lungs full of animal-derived surfactant and place the baby on a ventilator. Now while the surfactant provides a near immediate critical benefit, the procedure is associated with a high level of known complications, and some of these complications can be serious. Because of this, physicians have made trying nasal CPAP or continuous positive airway pressure, along with supplemental oxygen, first-line standard of care in an attempt to avoid these complications of an invasive approach. Unfortunately, without addressing the underlying cause of the RDS, specifically the lack of surfactant, CPAP alone fails nearly half the time. And the clinicians then are bailing out to invasive surfactant replacement therapy second line, which is now delayed in that case. Most infants with RDS are therefore intubated and put on a ventilator, either frontline or from a CPAP failure. This is what we're working to change with our approach with AEROSURF. Now AEROSURF is a drug-device combination that utilizes an innovative aerosol delivery system that produces a very consistent aerosolization of our KL4 surfactant to right particle size for little infants. And it attaches to the top of the CPAP circuit and delivers our KL4 surfactant in a timely, noninvasive manner into the babies as they breathe. This approach is designed to increase the clinical success of the standard of care and offers the best of both competing pathways with what we believe to be without the downside of those pathways, namely, having the efficacy associated with timely administration of surfactant delivered noninvasively to avoid the complications associated with invasive administration and the need for mechanical ventilation. Market research conducted with 278 neonatologists in the U.S. and in the EU, reported that the #1 need, by far in RDS was for noninvasive surfactant delivery. And we have seen some remarkable results, when we delivered drug to infants with RDS in this novel manner. Steve, if you can tell us about that and where we're taking the program?

Sure. While RDS babies are given AEROSURF into their CPAP circuit and begin breathing surfactant through their noses, bedside care providers noticed that the babies began to pink up, their work of breathing decreases and they begin to decrease the amount of oxygen that the baby requires. We hope to show these improvements translate into a reduced rate of CPAP failure and fewer invasive intubations. At our sites in the U.S., we have seen CPAP failure rates nearly cut in half in 2 of our Phase II studies. All of this results in babies with healthier lungs that have a decreased risk for problems down the road. One of those problems we may be able to impact is risk for bronchopulmonary dysplasia, or BPD. This is chronic lung disease of the newborn and impacts these kids in the NICU, through childhood and into teenage years. It can also be associated with other problems. There are no drugs approved to treat BPDs, so we're very excited about the early data showing decreased rates and severity of BPD that we're seeing in our Phase II studies. And in our Phase IIb study, we saw signs that the risk of hospitalization during the first year of life may be able to be favorably impacted by AEROSURF. Our program has included 3 Phase II trials. We have a clear regulatory path. We have transitioned from our Phase II prototype device to our Phase III device that we will take forward. And importantly, the safety database we have generated so far has been generally comparable to our control group of CPAP alone, and it's allowing us to explore a dosing regimen to deliver more surfactant in a shorter period of time. We have begun enrollment in a bridging study to demonstrate that our new device delivers surfactant comparably to our prototype. And we are taking advantage of this study to evaluate that dosing regimen that delivers more drug faster. We believe this should be a good supplement to our Phase II data, and will hopefully put us in a position for Phase III readiness upon completion. We are fortunate to have a strong supportive licensing partner in China, Lee's Pharma. We've recently signed a development agreement with them that provides non-dilutive funding for our global AEROSURF development program. As our program moves forward, they may also be able to be a source of additional patients for enrollment in our clinical trials. Now I'll turn things over to Eric to discuss our business development activities.

Thank you, Steve. I'll describe for you our approach to business development in 3 phases: short, mid and long-term. Starting with the short-term, we plan to find a cardiovascular partner for China, a partner for our pure SERCA2a activator compounds, and to leverage a partner model for AEROSURF development. Just in the first half of 2020, we have made considerable progress on the short-term objectives I just mentioned. First, on the SERCA2a activators and the heart failure front. We are in active discussions with several potential partners, including working with one of them in a plan to leverage their expertise to conduct preclinical heart failure tests with a pure SERCA2a compounds. Next, I'll talk about the AEROSURF KL4 partner model. Windtree announced that we signed a project financing binding term sheet in March 2020 with Lee's Pharmaceuticals. The term sheet provides for Lee's to fund up to $2.8 million in non-dilutive project financing for the continued development of AEROSURF for the treatment of preterm infants with respiratory distress syndrome, including the Phase IIb bridge study and related support costs, beginning April 1 through September 30, 2020. The term sheet also provides that we intend to negotiate in good faith, terms of a definitive agreement by September 2020, which would set forth additional semiannual, nonrefundable payments to fund the continued development of AEROSURF after September 30, 2020. Last, on the short-term objectives is the cardiovascular partner for China. We are in discussions with a pharma company now and hope to bring this to agreement soon. Looking ahead to the mid-term objectives. We plan to globally partner on our heart failure portfolio, out-license rostafuroxin in hypertension and gain a regional or global partnership with AEROSURF KL4. Finally, in the long term, we plan to optimize our Windtree portfolio and expand our portfolio with products well suited for a small biotech company. Several of us have a very strong background in commercialization. So we plan to retain U.S. co-promotion rights in our licensing agreements whenever possible to assist in driving value. I think you can see that we have a lot of very encouraging things happening in Windtree's business development activities, and we plan to continue to execute to provide returns to our company and to our shareholders. Now I'll turn the presentation over to our CFO, John Tattory.

Thanks, Eric. Let me take a moment to walk through our recent public offering and financials. On May 22, we announced the closing of a $23 million public offering of 3.2 million units at a price of $7.25 per unit, including the full exercise of the underwriter over-allotment option. Each unit consisted of one share of common stock and one 5-year warrant to purchase 1 share of common stock at an exercise price of $7.98 per share or a 10% premium to the purchase price. Net proceeds after deducting underwriting discounts and commissions and other estimated offering expenses were approximately $20.2 million. As previously mentioned, in connection with this offering, our common stock began trading on the NASDAQ capital market on May 20. We believe the listing on NASDAQ will improve the liquidity of our stock, increase our market visibility, and allow for greater access to capital, as we move forward in developing our acute cardiovascular and pulmonary franchises. Investors in the offering include existing shareholders, directors and officers, and new institutional and retail investors. I'll now provide a brief overview of our financial position. As of the closing of the public offering, we had cash, net of estimated transaction fees, of approximately $35 million. In addition, we have $4.6 million outstanding on a bank credit facility, which we assumed through the December 2018 merger with CVie Therapeutics, and the balance is currently due in March of 2022. We have 16.9 million common shares currently outstanding and 26.6 million shares out on a fully diluted basis. We maintain a strong and supportive roster of shareholders as evidenced by the participation of existing shareholders in this latest offering, and very importantly, have added a significant number of new holders, resulting in a broader base holding of our shares. We are very pleased with the results of the team's effort to secure additional funding, complete the NASDAQ listing and meaningfully improve our financial position. Prior to the closing of the public offering, we had provided guidance that our existing cash resources would fund the operations of the company through the third quarter of 2021. While the proceeds of the public offering are expected to extend our cash runway, we are in the process of finalizing an updated operating plan for 2020 and 2021 and look forward to updating you with the revised guidance in the near future. With that, I'll turn the call back to Craig to summarize our updates and outlook before opening the call to Q&A.

Thank you, John. So I'd like to end where, where I started, with a view of our multiple programs. This activity presents a robust potential news flow of deliverables in 2020 and through 2021. We have great assets. We believe, we have the cash forecast to execute our plans and an excellent team also with rigor to build value. With the NASDAQ listing and planned BD transactions, we believe then that we can realize the value that we've created and realize that for our shareholders and for the company. I look forward to keeping you up-to-date on our progress as we execute throughout this year and into next. So with that, John, we want to open up for some questions?

Sure. Eric, if you want to open it up for Q&A.?

[Operator Instructions] Our first question today will come from Michael Brcic of National Securities.

A couple of real quick questions. On the COVID thing. And you sort of talked about the lack of patients and as we're sort of getting into summer, it seems like viral things tend to die down. Are you going to have enough patients for that study? Or do you need to take it to the southern hemisphere, like Brazil or something?

Mike, that's a good question. Fortunately, many areas are past their peak surge of COVID-19 patients. And although numbers may be decreasing, there are still many cases coming into the hospital. In fact, at 1 of our potential sites, cases have been increasing in the past few weeks, and there are more patients on ventilators with COVID-19 than there were 2 months ago. We expect to be able to recruit into our first study, even as COVID-19 numbers decline, going into the summer. If the cases do not decline, as we hope, or if there is an uptick in cases for whatever reason, we will be even better positioned to recruit number of patients. Additionally, there's the real possibility of the fall season for this virus and I think we will be in position to be finishing our first study or hopefully, ready for Stage 2 of our program. We believe that this program of study will serve us well as we continue discussions with interested parties, regarding other forms of injury, such as chemical or radiation injury and being ready for the next pandemic. So we see a path forward, even as numbers begin to decrease.

Just following up on that. The lung damage that's done, I mean, the people that make it, obviously, off the respirators as opposed to the people who don't make it. Does that damage stay there? And is there something that you're drug can fix? Or there's go away? How does that mechanism work?

Yes. That's a very good point that you're making. With COVID-19, it seems like every day, more and more information is coming in on characteristics of this disease. And in those patients who are intubated and have acute respiratory injury, there is a very high-risk for a fibrotic response and for damage to the pulmonary system that can persist even if they survive, get off the ventilator and are able to go home. Patients who have COVID-19 lung injury have been spending longer periods of time on ventilators and in the ICU than what you might say for traditional ARDS. and there is a substantial post-ICU syndrome that patients can have. So if we're successful in improving the pulmonary condition, and then, if we can decrease the time that a patient is on the ventilator, which largely drives the time they're in the ICU, we think we can impact post-ICU survivor quality of life and medical condition.

Great. Finally, on the istaroxime, on those slides you showed with the infusion. Are the effects -- do the effects of your drug stop after the infusion? Is that going to have to be something that they're chronically going to have to have infusions every month or whatever? Or are you showing that it's cured for want of a better term?

Yes. istaroxime, itself has a relatively short half-life. And the way we want to administer istaroxime in these patients with acute decompensated heart failure is, when they come in decompensated, we want to add to the standard of care to get these patients in as good a physiologic condition as possible, to improve their blood pressure, decrease their congestion, mobilize that fluid. And istaroxime can contribute to doing that. As these patients -- and we're talking about the patients with normal to low blood pressure, with heart failure here. And as these patients improve their blood pressure and improve their pump function, they'll be in better condition to be ready for discharge, but importantly, they will have an adequate blood pressure to institute their chronic therapies to -- so they can start those and be able to tolerate those better than if they did not get istaroxime. So the istaroxime is for an acute decompensated heart failure program. We don't foresee that it would be -- that patients would need periodic dosing periods with this. But when they do come in decompensated, it can be an important adjunct to improve their cardiac function and get them ready for discharge.

Yes, Steve. Steve, I would -- and I would add exactly that role for istaroxime in-house. It's those outpatient oral outpatient meds that should manage the disease effectively enough, there's -- Novartis brought out Entresto, for instance, beta-blocker and ACE inhibitors. But by the way, all those agents, if you look at them, they need to have blood pressure up and the patient healthy enough to really start those. If they do their job well and the patient does their part and not eating too much salt and so forth, hopefully, they'll stay out of the hospital. But when they do, we have an agent in acute situation that can really get him out of that critical situation. Also as a reminder, in the program moving forward, the plan is, once we do some additional tox work that we're doing this year is to be doing dosing 48 to 96 hours. So we're going to take this out a few days, because they are in the hospital. These patients tend to be, and even in the U.S., which has the shortest length of stays, even for these sicker patients, you're probably dealing with them about 8 days in the hospital. So that's really where this is going to fit. Our oral follow-ons, maybe those outpatient things that will be part of the drug regimens, as part of the mix with the chronic therapies. So John?

Our next question comes from Anita Dushyanth of Zacks.

I just have a couple of questions that maybe you can help clarify. As far as the COVID-19 indications, could you talk a little bit about the patient profile that will benefit best from this therapy?

Sure. Patient profile, there are a couple of ways that patients with COVID-19 lung injury are affected. There is a vascular component through the pulmonary arteries that comes into play. And then there is also damage from the gas exchange side, the alveolar side. And the profile of patients that we will -- that we think is going to most benefit from a surfactant replacement will be those patients who have alveolar damage and are patients with stiff lungs, that have noncompliant lungs and the profile of surfactant deficiency. So we would be looking for that profile of patients -- non-compliant type respiratory failure with hypoxemia.

Okay. And is that the, the number of patients who have the alveolar damage, is that sort of significant? Or are there are more vascular damages that are being found?

No, I think that's 1 of the pieces of -- or characteristics of COVID-19 lung injury that seems to be evolving day-by-day or week by week. And we feel that, any patient who has an inflammatory or infectious insult to the alveolar component or alveolar compartment, likely has an element of surfactant deficiency or is having surfactant degradation. So one of the things we want to sort out as our program moves through the COVID-19 investigations is identifying which phenotype of patients with lung injury are the most appropriate for surfactant replacement.

This concludes our question-and-answer session. I would now like to turn the conference back over to Craig Fraser for any closing remarks.

Okay. Thank you. We appreciate everybody's attendance and hearing about Windtree and learning a little bit more. We're excited about the most recent transaction. It's obviously very, very great to be on the NASDAQ board and what we've done to be able to expand the program with our registration work with ista in acute heart failure. We're excited to get going on the next big study. And then, of course, immediately here in the next couple of months start the cardiogenic shock study, and see how we can apply the profile that we've seen with ista into those patients. And of course, we have the ongoing execution of AEROSURF in RDS. So we'll stay busy, and we'll stay in a position that we can look forward to updating you on our progress. Meanwhile, I hope everybody stays healthy, and able to be safe and healthy through everything that is going on with the COVID-19, and look forward to talking with you further.

The conference has now concluded. Thank you very much, everybody, for attending today's presentation. You may now disconnect.