Liminal BioSciences Inc.

Liminal BioSciences Inc.

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Liminal BioSciences Inc. (LMNL) Q2 2015 Earnings Call Transcript

Published at 2015-08-14 18:16:02
Executives
Pierre Laurin - President and CEO Bruce Pritchard - COO and CFO John Maron - Chief Medical Officer
Analysts
Alan Ridgeway - Scotiabank Neil Maruoka - Canaccord Genuity Doug Cooper - Beacon Securities Sanjay Jha - Panmure Gordan Douglas Miehm - RBC Capital Markets Jim Belin - Aldebaran Asset Management
Operator
Good day and welcome to the ProMetic 2015 Second Quarter Financial Results Conference Call and Webcast. I would like to introduce Mr. Pierre Laurin, ProMetic’s President and Chief Executive Officer; and Mr. Bruce Pritchard, Chief Financial Officer and Chief Operating Officer; and Dr. John Maron, Chief Medical Officer. For your information, the presentation will be followed by a question-and-answer period. You can ask a question in the language of your choice. The conference may now begin. Mr. Laurin, you may now begin.
Pierre Laurin
Thank you very much, Simon. And good morning, everyone. We have a lot of materials to cover today in the conference and therefore I'll precede it swiftly. Reminding everyone that this presentation contains forward-looking statements about ProMetic's objectives and strategies and the business we're involved with that involves risks and uncertainties. On slide 3, I summarized the agenda we intend to cover today and following a brief introduction, Bruce will describe the financial of the quarter and then we'll provide an update on the plasma operation, give you an update on the clinical program between plasminogen and PBI-4050, and after recapping on the milestones for the second half of 2015, we'll open the conference for question and answer. But on the following slide, guys, we are very excited about the progress made today. The first of this year, the second quarter has been rich in events that contributes the consolidated basis of ProMetic’s future. I mean, financing leads the company in a very, very good financial position, along with secured orders which combines and with anticipated milestones will result in recognition of $20 million of revenue in the second half of 2015. And this exclude obviously cash inflow from business development activities currently under discussion. And we secured two agreements with Emergent, one for the production capacity, contributing to long-term production capacity, but also contributing also immediately to the development capacity of ProMetic. And I will have four, five slides describing how transformational that relationship has become, added to our existing Laval facility. And as we announced yesterday morning, we completed the transaction to acquiring the first collection center also in Winnipeg. So very exciting times, our dropped candidates plasminogen -- patient came up clean with no drug related side effect. I mean this is fantastic and first PK indication, quite along the line we expected moving along to increase the dose now in PBI-4050 of course first 12 patients enrolled. I'll let John expand on that later in the presentation. But why don’t we pass that on to Bruce now to cover the financials for the quarter. Bruce?
Bruce Pritchard
Thanks, Pierre. Good morning, ladies and gentlemen. If we can move on now to slide number 6 in the slide deck and reminding everyone that this part of this morning’s webcast is based on the financial information for the second quarter of 2015 and 2014, as well as on the audited financial statements for year ended 31 December 2014. All of these statements were prepared under IFRS. Annual information for the group information for the group and the quarterly reports can be found online at sedar.com. And all sums in today’s presentation are in thousands of Canadian dollars except for per share amounts or if otherwise indicated. So if we move to slide 7, I'd like to start my part of this morning's presentation with the review of the revenues for the quarter which were $2.9 million compared to $4.4 million in the same quarter of 2014. The analysis of the revenue reviews in the second quarter of 2015, $2.7 million of the revenue was generated from product sales, only slightly behind the $3.1 million from product sales in the same quarter of 2014. The forecast number for half two, which I'll refer to shortly confirm our usual price that revenue do not accrue evenly from quarter-to-quarter and that annual comparison are more reliable indicator of our performance. Service revenues were only $200,000 in the second quarter of 2015 compared to $1.3 million in the second quarter of '14, underlying the fact that this is no longer a core part of the business strategy as we focus on developing products to commercialize ourselves. There were no milestones or licensing revenues in the second quarter of either year. If I turn now to the forecast, we're providing guidance as Pierre mentioned of revenues in the second half of 2015 are expected to exceed the $20 million, when combined with revenues for the first half, this confirms that we maintain guidance for the full year product sales of $20 million and revenue from service licensing and milestones to be around $5 million. It’s important to note, however, that this time we've excluded the impact of any revenues from business development transactions from this guidance and although these are currently under discussions the timing of revenue recognition for many of these dues remain uncertain at this time, so we've excluded it from the guidance. As I now transition on to Slide Number 8 and some of the key figures from the profit and loss account for the second quarter, as discussed on the last slide, revenues were $2.9 million for the quarter compared to $4.4 million for the second quarter of 2014. As I mentioned earlier, product sales were down $400,000 or 12.9% quarter-over-quarter and service revenues were $1.1 million lower than in the same quarter of 2014. The reduction in product sales impacts on cost of goods sold which amounted to $1.3 million for the quarter compared to $2 million in the previous year. Total research and development costs have increased over the same period in 2014, mainly due to the increase in clinical trial activity on both the small molecule and plasma pipelines. Total research and development costs were therefore $10.7 million in the quarter compared to $9.7 million in the same quarter of the previous year. Administration costs rose in the second quarter, primarily as a result of increased headcount and business support functions, together with increased stock-based compensation cost resulting from the higher stock price. These effects combined to make admin cost in the second quarter of 2015 $3.8 million compared to $2.7 million in the same quarter of 2014. Finance costs were slightly lower year-on-year consistent with the level of financing activity undertaken. The fair value adjustment on warrants was $2 million in the quarter and we've described this is many quarters in the past, but this is the last time that these figures will impact the P&L account on a quarterly basis as the warrants themselves became an equity instrument during the quarter following our annual meeting. The loss on extinguishment of liabilities occurred as a result of the restructuring of the Thomvest loan and warrants, details of which are fully explained in the notice to the financial statements, which you can find online at SEDAR. And finally in 2014 as a result of our step-up acquisition of NantPro, we recorded a gain on that transaction and that gain was recorded in two lanes in the 2014 P&L account and these will not recur in 2015 and that gain skews the comparison of the net loss period-to-period and they turned Q2 2014 loss of $8.9 million into a profit of $23.4 million. In this year the Q2 loss was $13.5 million reflecting the lower revenues, higher R&D cost and one-off debt reorganization charges. That loss competes to a net loss per share of $0.02 for the quarter on both a basic and diluted basis. Year-to-date adjusted EBITDA shows a loss of $11.5 million in Q2 2015 versus a loss of $8.5 million for Q2 of 2014. If I move on now to Slide Number 9 and the key feature of the balance sheet at the end of the quarter, cash stood strong at $56.7 million compared to $27.1 million at the end of the previous year. Accounts receivable stood at $6.7 million compared to $11.8 million in December 2014 and the main reason for the fall in accounts receivable was the receipt of the GENERIUM upfront payment, which was invoiced at the end of 2014 but collected in Q1 of 2015. Capital assets have risen by around $3 million since December representing mainly the ongoing investment in our manufacturing capability in Laval and on the Isle of Man. Intangible assets have remained unchanged $146 million and reminding everyone that these include $141 million recognized in relation to the acquisition of NantPro during 2014. Trade and other payables are down by $2 million to $7.1 million due to payments in the first half of the year. The warrant liability which was $24.7 million at the yearend has now been commuted to equity as a result of the change in the Thomvest warrant, resulting excuse me, in a significant improvement in the level of current liabilities on our balance sheet. Furthermore, the long-term debt provided by Thomvest is shown here at $20.9 million has reduced slightly as a result of both the debt modification and the repayment of debt and exchange for equity subscribed in the quarter. And lastly we've got the deferred tax liability on the balance sheet of $34.5 million relating to the recognition of the NantPro intangible and the timing differences between the book value of that asset and the value for tax purposes. So altogether, these results significantly improved the balance sheet bringing total equity to $166.6 million, up from $104.4 million at December and the total asset figure to $235.9 million from $203.4 million at December 2014, so overall solid base from which to continue building. And on that note, I'll hand back to Pierre who will provide some details of the business update.
Pierre Laurin
All right. Bruce, thank you very much for that and again as we say strengthening the balance sheet and combined with your -- with our guidance for the base business to see $20 million in an excellent position to execute on our plan and on that note I'll take you to Slide 11. As we made announcements back in May and just as recent, yesterday, on our relationship with Emergent by solution and this transaction is transformational and I don’t think that we've given it enough time for our shareholders to appreciate what it means. So on Slide 11, I summarize the two transactions, the first one that was announced in May is providing us access to Emergent's FDA license plasma facility, plasma production facility in Winnipeg. It provides immediate additional development capacity. It enables us to scale up and prepare GMP batches for additional IND filings without disrupting our current Prometic Laval facility operating under GMP condition or for plasminogen and IVIG and it enables also to do a further five times scale up of that size compared to our Laval facility. So as we progress, we're not only adding more INDs in the pipeline but also further scaling up our process under GMP condition and obviously as we explained before, over time and for the next 15 years it provides an additional 250,000 liter plasma processing capacity annually. So this combined with our Laval to bring us to about 400,000 liter of plasma processing capacity as a base, part of which is already in North America built, operational and FDA licensed; so extremely strong contribution to our business plan. The second acquisition, the second transaction ladder is the acquisition of Emergent plasma collection center in Winnipeg. That is now owned by ProMetic and it has FDA and Health Canada licensed to operate and collect plasma. It contributes to our management of plasma supply chain and further vertical integration. The plasma collection center can be used as blueprint for future centers and the plasma collection center provide access to specialty Pharma. So all in all, two important transactions, but more importantly I'll say on Slide 12, I would like to exemplify how significant this is. On Slide 12 you can see that if we were to build a new Greenfield facility it would be at a cost of $150 million. It will take three years to build and be validated and throughout that time, it doesn’t provide any capacity to our development of the pipeline. It doesn’t contribute anything to being able to advance more INDs and more products in the clinics and then the capacity only becomes available in 2018. Now this deal had a cost of approximately about $5 million per year for the first two, three years. The capacity is readily available for scale up. It provides additional GMP manufacturing for our clinical trial in addition to Laval and its enabling us to ramp up multiple commercial launches and have them 2018 plant if we were to just start Greenfield. Now remember that and we'll talk about that later, but should come online as well by 2018 in effect and part of GENERIUM's capacity to add to our 400,000 liter but this a major, major transaction for both companies. For us certainly in the sense that this facility license is underutilized by Emergent and we can retrofit our platform technology at that facility and actually work with people who are extremely experienced as track record at the approved product and can understand and be trained very well to handle our platform technology. So that being said, when you look at on Slide 13 what it means is that what processes, products are being developed in Rockville, Maryland. They're now being tech transferred also to Laval and in addition depending on the portion, the size and weighed in the Q4 sequential development to Winnipeg and therefore those two facilities will actually be working in sync and progressing more INDs. This is again further exemplified on Slide 14, our three product Fibrinogen, Alpha-1 Antitrypsin and C1 Esterase Inhibitor will be accelerated, scaled up and prepared for filing of INDs early next year and that deal with Emergent will contribute that additional development capacity. Overall, if I want to summarize what this whole means, our business strategy on Page 15 is focused on a sequential development and commercialization of high value biopharmaceutical. So as we add products to our pipeline and products become subsequently approved for sale, our net sales output per liter plasma increased significantly and now you can see the revenue line curve is quite easy to understand at that point. As each product contributing a value or sales per liter plasma time the 400,000 liter capacity that already exists between Winnipeg and Laval and you have that kind of straight line that indicates the growth of that business as those products come online. And this excludes, as I mentioned before the capacity from Winnipeg and GENERIUM is expected to kick in as well by 2018.
Bruce Pritchard
Yes, and Pierre its probably worth just reiterating that of course that capacity is obviously driven by the volume and requirements for our high value proteins and should we -- as we go forward require additional capacity, we can bring that online if we have the flexibility of using that capacity from Winnipeg and GENERIUM to help us with that.
Pierre Laurin
Absolutely. I think Bruce we have also on Slide 17 for our shareholders a series of pictures that were taken actually on the site in Russia where the construction and demands as far as the partner in Russia, they are planning to complete the construction of the building by the end of the year, so that they can continue during the harsh winter that they have just like us with the completion of that facility during the winter in house inside. So you can see the size of the plant. That plant will be able to accommodate capacity of 600,000 liter of plasma and well underway to be ready and operational and contribute by late '17, '18. So quite exciting time on many fronts with the plasma business. But I'd like to invite John perhaps to comment on our flagship product Plasminogen. John? On Slide 18.
John Maron
Yes. And it’s a pleasure to take you to Slide 18 to talk about Plasminogen. You heard Pierre's enthusiasm already. We're making really good progress there. As you probably know, we received orphan drug designation from the European Community and we've finished the first series of patients with the lowest dose, single dose without any significant adverse events. In fact no drug related adverse events at all and we're starting up the second cohort and we expect to complete that fairly quickly because we've patients who have been hanging back to make sure that the drug is safe before they end up the trial. So in second half of 2015 to talk about Slide 18 further, we expect to complete the higher dose. We expect to find nothing unusual in the pharmacokinetics and we expect to be starting Phase II/III and we also expect during this half of the year to get permission to extend our studies in Europe. And the very important last bullet point we're looking to develop another indication for Plasminogen separate from that congenital Plasminogen deficiency. Slide 19, to talk about our current sequence of clinical trials with lead compound PBI-4050, as you know, we've completed successfully the Phase I in normal volunteers up to 2,400 milligrams with no significant adverse events. We completed a similar trial in patients with advanced kidney disease, which showed no change in the pharmacokinetics, a very helpful finding and no significant adverse events again. We are now in the middle of a trial with Type II diabetes and metabolic syndrome, a rather important indication given that one third of Americans have the metabolic syndrome as of today. We have 12 patients enrolled. We're going to have a meeting shortly to decide whether it's safe to add more patients. We expect that meeting to occur before the end of this month and I think we will be moving forward. We will be getting some preliminary data on the biomarkers showing us whether actually affecting the metabolic syndrome and the diabetes before the end of this year. And Slide 20, the rest of the things that are keeping us very busy initiating a clinical trial Phase II open label in the United Kingdom and orphan indication of patients with significant metabolic syndrome. We'll be providing preliminary results in the first half of 2016. That study may be extended based on what results we see. It's very much an orphan indication and we expect that we'll have an accelerated pathway for approval. Starting in the United States, sorry in Canada, we have a trial ongoing, open label Phase II study of Idiopathic Pulmonary Fibrosis. Again we have been granted orphan designation in the United States for this drug, for this indication and we are planning to extend that study as time goes on. We're moving to the United States. We have set up pre-IND Meeting with the FDA to discuss the Idiopathic Pulmonary Fibrosis indication and what would be required for pivotal trails in the United States. And the last trial we're developing right now is patients with diabetic nephropathy as we showed you with Type II diabetes. That will be a multicenter study in both Canada and the United Sates. We've talked to many investigators already and it will be our first randomized placebo control channel to get started. We need to have a meeting with the Food and Drug Administration to make sure they're happy with our trial protocol and then we will get going. So Pierre, you could summarize please Slide…
Pierre Laurin
Well yes, John thank you for that. I would say that the last three slides really summarize what to expect for the second half of this year. As John just said, on the Plasminogen front on Slide 21, total confirmation of safety profile at higher dose, which then enable us to provide an optimal dosage regimen and crossover to our Phase II/III program and that should all happen during the second half and as John mentioned initiating a clinical trial in Europe that will contribute to accelerating the program overall. Very excited, look forward to share with you where we're going with Plasminogen next. This is an additional medical indication and we're only few weeks away from unveiling the master plan on this one, exciting prospect for our flagship product Plasminogen. IVIG, we're back and forth with the FDA stepping enrollment of the primary immune deficient patient on IVIG in U.S. and in Russia very shortly and this should have started earlier in the year, but again we have put buffers in our own critical path assessment and it doesn’t change anything in terms of our expected BLA filing and commercial launch for 2018. Something to watch very closely, obviously the successful big transfer to Emergent, Winnipeg facility, a lot riding on this as three key drugs are being scaled up and being prepared for IND filing in 2016 and that will then bring the total of late stage clinical trial program to five from the plasma derived products and then to top it by our PBI-4050 program, which is again summarized on Slide 22. And the Metabolic syndrome what to expect therefore as we expect the Drug Safety Medical Board to confirm that they're okay with the safety profile and enabling the expansion of the trial and look forward to be in a position to preliminary review the clinical data by the end of the year as John indicated. The Pre-IND Meeting with the FDA for IPF in the coming weeks is very, very important. We've some great ideas that I want to share with the FDA and see if they're on par with us and if so then our Canadian program will expand in U.S. and we will get ready for the pivotal IPF study. Same for chronic kidney disease, we've already had a meeting with the FDA for chronic kidney disease. There is some fine-tuning on the protocol that John wants to reassured again with the FDA, but we would be in positions to file our IND for both IPF and chronic kidney disease this coming quarter and excited about the prospect of this orphan indication in Europe. Again orphan indication, smaller number of patients may be required to show evidence of efficacy because the risk benefit is very, very different when you have a ultra rare disease. Excited to potentially contribute to the quality and life of those patients, and look forward to more on that. And we've submitted seven abstracts to the American Society of Nephrology, and they've all been accepted. So we will quite busy with several presentations of new data at the American Society of Nephrology Meeting in November, as well as presentation at the American Heart Association a week after. So a busy Q4 in terms of product development with luxury milestone and to sum it up on the operation side, just again reminding everyone combination of product sales, service revenue and reorganization of some milestone bringing it to 20 million by end of second half and that excludes business development. And our shareholders should expect us to continue and close them, some of the current discussions on business development that contribute a combination of financial, current contribution to our development to help us access complimentary knowhow and intellectual property and improve the value of our pipeline asset and to provide us access to markets. So that's it from us for now and perhaps we can switch over to the question-and-answer period. Operator?
Operator
[Operator Instructions] Your first question comes from the line of Alan Ridgeway from Scotiabank. Your line is open.
Alan Ridgeway
Hi. Good morning, guys. Thanks a lot for taking the question. Could you guys just confirm as a bookkeeping kind of thing, just confirm the guidance for me. So the second half of the year you're expecting total revenue of greater than $20 million, which includes the $5 million of milestones and service or is it, you're expecting $20 million of resin sales in the back half, plus the $5 million?
Bruce Pritchard
So Alan, just -- its $20 million in total. So for the second half, total revenues for the year to be at least $25 million. Of this two year revenues, $20 million of the $25 million will be the product sales and that matches the guidance that we’ve given earlier and then the residual $5 million will be milestones and service revenue.
Alan Ridgeway
Right. Right. Okay. Great, thanks. I just wanted to make sure I had that right. Okay. And then, maybe just on the R&D spending front, so if I look at the numbers for the quarter and annualize, it looks like the 4050 program is at about $10 million run rate. The Plasma program is at about $30 million run rate. You’ve got a lot of additional trials coming online, particularly I think if you end up having a positive meeting on IPF with the U.S. and may be filing IND's around an expanded program there. Can you just talk to where those levels could go as the programs continue to mature?
Pierre Laurin
Well, on the Plasma front, I think that one has to take into account that we have at least two or three cost contributing to what is it look -- seem to be R&D, right? We have our existing manufacturing and it allows us now the Winnipeg capacity that is labeled as R&D and obviously driving the cost for developing the clinical trial. But when we are adding additional clinical trials, they're not necessarily linear, some of those trial as you know Alan, involve a small number of patients. The IVIG trial is spread over -- the cost of it is spread over two years and most programs actually are spread over two years and they're about $4 million, $5 million piece spread over two years. So they're not -- it's not like you’re adding or tripling the cost of R&D as we add a new protein. The bulk of the cost at this point in time actually, could be pointed to all the manufacturing, the GMP, the preparation of the IND, the stability, all that cost is in part our infrastructure that enables it, right? So as we add more product don’t expect like double and triple of that cost line. It is going to increase, but it's manageable with our increase in revenue and we're looking very closely to synchronize some of our business development activities to assist on that front, right? There's some partnership that we’re looking to close that will be quite helpful to contribute to upset or contribute to such cost. On the PBI-4050, again, we are very, very much focused on demonstrating proof of concept one step at a time. We'll reassesses, we're in extensive discussion with several parties interested in partnering PBI-4050. So this is again a dynamic space that -- we're proceeding aggressively and cautiously at the same time, right? The objective number one is to prove that we move the needle with biomarkers and demonstrate translation of activity from animal to humans. Now the clinical trial expansion that will require significant funding are the two that we'll be filing IND for late this year, IPF and CKD, and we would probably really engage full course in 2016, 2017, having already on hand proof of concept data. So probably a very different picture all over corporately and partner wise. So Bruce, do you want to add anything to this?
Bruce Pritchard
No. I think you’ve covered -- I think we gave guidance sometime ago about total R&D spend for the year. I don’t expect us to exceed that this year. I think your indication of the proof on the expenditure is bang on.
Alan Ridgeway
And so just, Pierre, maybe on the last comment you made about the two files, the IPF and the CKD, just to close off the loop, if you were to drive ahead with the randomized trial and CKD and potentially a larger program for IPF, I’m assuming with the 150 or so patients you're forecasting for the CKD it would be at least that big on the IPF, how -- are we talking $30 million to $50 million to run both studies? At which point then would you actively or aggressively look to partner that at this point or how are you thinking about that as you’re looking into next year? And I’ll leave it there, thanks.
Pierre Laurin
Well, Alan, it's going to be interesting to see how things develop. Obviously a lot of interest around our compound. It's a safe compound. It's orally active. It's a once a day. Everybody is on the edge. They are watching is this going to translate into movement on biomarkers. We can’t take it all on our own. That's the obvious statement and we’re looking at an optimal way of partnering this. We’re talking to a lot of interested companies and each one having their own preference on how something could be structured. But be under no illusion, this is a program that one we're not alone, be partnered. There is some indication that would probably make sense that we could hang on to and do a very good job at developing and commercializing. There's other indication that are clearly [achieved] [ph] by the tail, because as we show efficacy in the cardio renal metabolic type of patients, as John indicated, it's a huge indication and probably more akin to a multinational infrastructure to continue developing and commercializing. So, it’s a complex set of circumstances that will drive forward the decision. But those decision to be made about incurring cost on clinical trials, they're not to be made now. What we have to do is just set the scene, design the protocol according to the best input from the world experts and take advice from the FDA and EMA, and set the stage such that we could execute on our own and/or in partnership right? So stay tuned, it's exciting time actually.
Alan Ridgeway
Okay. That makes sense. Thanks a lot guys.
Pierre Laurin
Thank you.
Operator
Your next question comes from the line of Neil Maruoka with Canaccord Genuity. Your line is open.
Neil Maruoka
Good morning, guys. Thanks for taking the question. Just first on plasminogen, how many patients are interested in starting in the Phase II, III, and if you’re up at the 18 patient level they need to have the cross over to Europe? And then the second part of that is can you outline your filing strategy for plasminogen and are you consider a rolling BLA?
Pierre Laurin
I can answer part of those questions generally, Neil thank you for the questions. As John indicated, when we invite patients motivated to be on the trial, we had probably a ratio of 80% of them preferring to be in the Phase II, III trial and the Phase I trial. So the fact that we've been recruiting a lot of motivated patients to be part of the program, but a majority of them that elected to wait for the first results. Now those first results are very, very convincing in terms of safety and therefore will help bring the other one online in the program. So this program of Phase I, II, III like that for an ultra rare condition, rare disease is almost seamless right. You go from one to another step and so it's not as formal as having to regroup all the data. The FDA has already agreed to the protocol of Phase II, III and the question here is more to do with reconnecting with the FDA and making sure that the dose that we chose is agreeable to them before we formally seek with the dose regimen optimization part of the trial. So we're looking again, the BLA to be filed. It's going to be very expensive in terms of CMC Section, which has been reviewed already for the IND, and it’s a pharmacokinetic study, right, monitoring adverse events but a pharmacokinetic study and at certain point, very well established, incremental of 10% above baseline as it's very good endpoint to fix the objective for licensure. So, fairly straight forward program.
Neil Maruoka
And just on the rolling BLA, have you had discussions with the FDA since your CMC Section is probably largely complete?
Pierre Laurin
Well, what happened here is that the FDA invites companies like us in condition such as plasminogen deficiency to have constant contact. So it will be updating the FDA with the core one, the first dose and already engage in discussing what else could we be doing. The FDA is really eager to see company advancing safely, therapies that, especially in conditions that there is no solution .So the precise profit -- regulatory profit here will be refined as we meet the FDA again this summer on that.
Neil Maruoka
Okay. All right. And your PPPS processes is optimized for I think it's about 12 products, but you only disclosed a handful including plasminogen IVIG. What considerations you've taken into account as you move the next products forward from here? And is that partnerships or whether it's an orphan drug or not? And do you have any concerns as you look to optimizing more products within that processes? How difficult is it to move product number 13, 14, 15 into your optimized process?
Bruce Pritchard
Well, yes, there is a limit to how many products you want to make out of a single leader at plasma, but we were very, very keen to make sure that before we locked in the backbone we would make sure that we were okay on, as you mentioned between 12 to 14 products. And how do you chose, which one to move forward is the combination of a lot of factors and I will name some. They're not necessarily more important than the other. They're all important, but obviously manufacturing technology readiness -- some products sometime more are already quicker for scale up and entering the clinical trial. There is also the logic of some products being launched commercially as much as possible simultaneously. So they become good companion products and generate a decent cash flow that contributes to the overall growth of the company. And two products that meet that criteria was the IVIG and Alpha1-Antitrypsin for now. They won’t be necessarily our flagship core products for us, but they will contribute significantly to the cash flow and will support plasminogen overall combined P&L. We always look at freedom to operate the patent minefield and make sure that we can create some of our own and sometime we're going to be working a little bit more on creating a unique aspect to the product before we actually formally launch. So a combination of all of those, but in reality we have a core group that has a certain capacity and now that core group has launched its first wave of product and it's been developing the second wave of product when Winnipeg is receiving the tech transfer. They will then get on to the third wave of product and this is where we can announce other often drug candidates. So it’s a sequential process that is driven by all those factors put together.
Neil Maruoka
And are you still on track to announce a couple of more products in the near term?
Bruce Pritchard
Yes, absolutely. That's what we want ProMetic to be positioned in. Even though we drive protein from plasma, we're not per se a plasma fractionator. We're not out there to compete with Baxter CSL in the business that they're doing very well at. We will sell some products, some core hospital commodity products, but not in a matter that is a head-to-head competition where we are seeking to take huge market share. These are more decent revenue contributing to our overall platform and growth. But ProMetic will be much more known for its orphan products and its positioning taking boots on the ground, marketing, handling those products at least domestic markets for us only in North American, right.
Neil Maruoka
Okay. Great, and last question on fibrinogen, you can manufacture that product and have plans to launch that for non-pharmaceutical purposes. Can you give us an update on where you are there and with any partner -- sorry, any customer discussions that you had?
Bruce Pritchard
Yes fibrinogen and you explained it well, there is two kind of life to it, there is an existing status fibrinogen [at ProMetic] [ph] is commercially available for use as an ingredient to be part of another company's product and that will be a device, biologic group, images and therefore we can supply those products to those companies readily. We're in discussions with two groups of companies, two group of clients or licensees. One typically have products already on the market and they're looking at us supplying them a new generation of fibrinogen or becoming a second supply when they want to de-risk their own current supply. So that’s a group of companies, and the other group of companies are developing new products needing fibrinogen as part as their offering and those two are being pushed forward. So we expect impact of this gradually and it doesn’t require regulatory approval for us. But we also intent to have fibrinogen approved per se as an IV drug for the treatment of bleeding and there is a cleaner regulatory pathway that has been established for this. This will become disclosed fairy shortly as well in late Q3, Q4.
Neil Maruoka
So do you think you'll see some sales in the non-pharmaceutical use in the second half of the year?
Bruce Pritchard
A little bit marginal, but more and more significant in '16. So in '16, as our overall business grows, we expect to see fibrinogen contribute more meaningfully. We may get there as well with plasminogen if we're lucky and the review is fast enough and to hit part of '16 pretty much consensus with analyst's sales starting more meaningfully at plasminogen in '17, but all of those are lumping ahead as we advance our deals and/or invent the product in development.
Neil Maruoka
Okay. Great, thank you.
Operator
Your next question comes from the line of Doug Cooper with Beacon Securities. Your line is open.
Doug Cooper
Hi, guys. All my thoughts have been answered. Thanks very much.
Bruce Pritchard
Doug, I missed the question.
Operator
Your next question comes from the line of Sanjay Jha with Panmure Gordan. Your line is open.
Sanjay Jha
Good afternoon gents. Most of my questions have been answered, but can I just ask a couple of things on the plasma side. Now it's been a few months now since you've had the Laval facility up and running. What's been your experience? You have been giving out some yield projections on what you might achieve. Are you still happy with those? Have you seen anything that have been positive surprises, anything that's been negative that you might have seen from your experience in Laval?
Bruce Pritchard
Yes. It’s an interesting question. Obviously there has been problems that didn’t come to my attention. I'm sure we have very experienced and vaccinated Senior Management there. They've seen it before, launched products before, dealt with the FDA and regulators before and that probably speaks to two things that ProMetic do have a very robust platform. Let's not forget that we have been involved in the CMC section and the manufacturing process of some of the most sophisticated biopharmaceutical products where companies came to us to help them manufacture those products. Albeit in those years in the past we were mostly involved in the bio-separation of it, but that’s key for biologics is the bio-separation is key and that’s all we're doing here with plasma products. Plasma and the proteins in the plasma are made by humans. So what you have there is a bio-separation blade, and that’s our strength right. So on that front we're very, very well positioned and then people that are working at ProMetic have long-term experience of developing those type of products, several products currently in the market developed by our existing players. And there has been no surprise, it's been working well because it's been a long, long planning. We've been added for so many years Sanjay. Not to say we won’t come across some challenges and so on but again, it’s a good question, and it's actually worth reminding ourselves that no, things have been running rather smoothly considering right. Let people look at this as a new process, fair enough. But for us this is a 25-year old new process. We've been working with this process for various proteins for 25 years. Right so, it's not such a challenge as some may think from the outside.
Sanjay Jha
Can I -- my second question actually relates to Emergent, the plasma production facility in Winnipeg. This is probably one of our booth, how do I model this because obviously at Laval and you've got production and you have cost, but how do we deal with something like Emergent where you have a strategic relationship with them. Were you going to be using their facility? So how do we look at think of kind of cost in terms of modeling it?
Bruce Pritchard
Good question, Sanjay. We’re grappling with the final accounting for that ourselves right now, but we’re looking right now the IFRS Gods permitting is that we’re going to be looking at the costs in two component parts. If you recall the announcement regarding the deal, we have a kind of minimum annual commitment that we’re paying to Emergent for access to the facility that’s made up of two, essentially two components. There’s an element of it that provides us with a minimum number of employees and there’s an element of it that provides the access to the facility and the overhead. Essentially the easy thing to do I think is to take that minimum annual commitment and straight line it over 12 through the P&L account because it will be that, it will be a P&L charge. As we begin to ramp up production at the facility, we will exceed that minimum payment on the costs for how we go forward from there. We'll not be incurred through the P&L account on a straight line basis. They’ll be kind of booked as incurred. So as we’re running large scale production runs and we have costs, they will be booked there and again if you recall that we have access to the facility but it’s not access to the facility 100% at the time we have a certain amount of time in the facility. So you will see chunks of additional revenue. As far as other stage we’re not in a position to give more details on that on how those costs are going to accrue because we haven’t yet ourselves booked all the production slots and worked out the production program, but baseline fixed cost straight line them over 12 months could be far wrong.
Sanjay Jha
Okay. All right. Thanks Bruce.
Bruce Pritchard
Okay.
Operator
Your next question comes from the line of Doug Miehm with RBC Capital Markets. Your line is open.
Douglas Miehm
Good morning. Yeah a lot has been asked and answered, but I do have a few questions. Number one, with respect to the potential deals that you’re looking at 40, 50 side peer what type -- what’s the hurdle like what have been or what type of data are potential partners looking to get in hand before a final deal could be consummated?
Bruce Pritchard
What Bruce -- you know what Bruce, its Doug, I’m sorry, we could have done deals before and it was a question of as we have been in the weak position and needing badly a deal to fund the company we could have done that. But as we progress overall corporately, we want to bring the company to the soft spot and the soft spot is really as you know between Phase II, Phase II where some evidence of the translation is present due as the partner increase the value everybody is happy and still ability for the partner to have some valuable input in the development program. So it’s interesting that we've seen that the soft spot for an optimal deal for both partners is in somewhere during the Phase II not necessary post pivotal Phase II, but during the Phase II right. So we’ve been entertaining a lot of discussions that everyone due diligence and so on. And you get to know the other partners as well what their weakness. Not everybody wants the same indication. Some are interested in lungs. Some are interested in kidney. Some are interested in the diabetes aspect. So, we’re blessed and cursed by a product like PBI-4050, because it deals with fibrosis. And fibrosis is involved in virtually every bloody disease. It’s the end game of how a tissue or an organ doesn’t itself does not regenerate and start to kind of slowly down performing an dying. So it is a metrics and we’re looking very favorably for geographical type of deal we have a territory such as Japan for example with the more easily carved out a certain amount of territories are like that. And so looking by indication by territory and using that period for what I would call the mutual due diligence. So make sure that signing the deal is only the beginning of a long journey. You want to make sure that that asset is not only partnered by is well partnered and that the partnership that just bring money but brings wherewithal to increase the other success. So it’s a process we’re well engaged in and inevitable with that asset for sure and we want to make sure we do it right.
Douglas Miehm
Okay on IPF like already you are going to have your FDA meeting in September you’ll get the results of that. What are the next steps depending on what the outcome is in moving towards that pivotal program? And what I mean by that is what do you need to see from them and when is the likeliest date to commence that pivotal trial?
Bruce Pritchard
Well we have minimum two objectives there with the FDA, first is to make sure that if we elect to we could file an IND in U.S. and add U.S. sites to our existing Canadian trial. And are some interested sites, our radar would like to do just that. But the question that we have with FDA pertains the fact that there’s now two drug that have been approved for the treatment of pulmonary fibrosis nintedanib and pirfenidone. And everybody have seen the results of how in an animal model we outperformed those two drugs, with regard to reduction of fibrosis. And in particular, how the combination with pirfenidone showed extreme reduction of fibrosis like synergy between those two drugs. So you can see where I’m going with this is that we’re going to have some very interesting questions asked FDA whether do it allow the combination trial to start earlier for the benefit of the patients. And that maybe the signaling that we could be heading a path that requires less patients to get an answer that is meaningful to patients and to ProMetic shareholders. So what you can expect from the FDA meeting is for us to have any heads up any green -- any issues that they may have is before we file the IND to expand the trial -- trial and we could actually [indiscernible] on this in Q4 ready to kick in coming back from the FDA meeting. Because again this is not going to be the first time that the agency have seen the CNC section of the product and when we met with the FDA with [indiscernible] this time we’re meeting the FDA with the pulmonary lung division. Under an orphan drug designation profile. So -- we’ll update everyone mid September and could be rolling into those programs as early as October and November.
Douglas Miehm
So -- I’m clear do you think you could start a pivotal program by November?
Bruce Pritchard
No. The rolling the Canadian study -- and when you open the…
Douglas Miehm
Into the U.S. and then getting data and then not starting a pivotal to probably early 2017?
Bruce Pritchard
No, the pivotal could start much earlier than that, the pivotal could start in the first half of '16.
Douglas Miehm
Okay, perfect. Now my final question just has to deal with -- you're generating a significant amount of what looks like important data, but I don't think it’s been published yet in significant journal, what can you tell me about how you’re thinking about publishing some of these data that you’re generating?
Pierre Laurin
It’s been a planned wall in my office. We’re planning to call it open the communal and start publishing along with some reputable institution that has cross validated our own data repeating our model and/or doing reinstructing their own model such as vendor build, the Montreal Heart Institute both of which has generated astounding data supporting our claims. So there is manuscript that have been prepared to be submitted. So it’s difficult to say when those will be published Doug as each publications have their own review time period, review time that the first, but we expect just as of November when we’ll be reveling new data and making new presentation, seven presentation at the American Society of Nephrology, two presentations at American Heart Association in November and probably around that time, maybe just a bit after some initial publications where more is reveled about mechanism of action and peer review the article and peer review the journals yes.
Douglas Miehm
Okay. Thanks very much. That was great.
Pierre Laurin
Thank you, Doug.
Operator
Your next question comes from the line of Jim Belin with Aldebaran Asset Management. Your line is open.
Jim Belin
Thank you for taking my question. I’d like to know how is Plasminogen administered and how long does the dose of Plasminogen last in a human before another dose is needed.
Pierre Laurin
Thank you for the question. It’s an IV infusion at this point in time and where we’ll be disclosing the PK profile later this fall, we want to make sure that we answer very critical question, which is does the PK change -- is it dose dependent. And you need critical mass of say 12 individuals to create a fair sophisticated representative profile. So we have pretty good of where this is going. We can model it, but now we're going to be populating it with additional data in the coming weeks, coming months. And we’ll be revealing the data this fall.
Jim Belin
Okay. And also I had a question, last fall there was a resins contract which was due to expire and I had asked the question on one of the calls about what's the status of this and I was told that discussions are continuing. I’m curious was that contract in fact extended or was a new contract entered into.
Pierre Laurin
Bruce.
Bruce Pritchard
Yes actually, the answer is that discussions are ongoing, nearing conclusion. We expect that to be extended and we expect to announce that fairly soon. And what I would say is that we just want to make sure as we’re negotiating extension to these contracts, that the terms are favorable for us and we as a company are in a very different position from where we used to be and we want to make sure that we get the best commercial terms. So I think it's taking a bit of a long time, but we’re getting close to it.
Jim Belin
Thank you very much.
Bruce Pritchard
Thank you.
Operator
There are no further questions at this time. Presenters back to you.
Pierre Laurin
Well thank you Simon operator, we thank you for all those questions and participation this morning. As you saw in the recap, several milestones and we’ll be into their conference call when we update with significant news. We'll take the time to set with cash afterwards make sure that all those questions that you may have surrounding news and updates are addressed. And we will look also forward to squeezing an Analyst Day, wrestling a bit on the best time to do this later this fall, but again a lot of exciting development forthcoming and look forward to other exchanges at that time. Thank you again everyone.
Operator
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.