Pierre Laurin - President & CEO Bruce Pritchard - CFO

Alan Ridgeway - Scotia Bank Neil Maruoka - Canaccord Genuity Joel Hurren - RBC Capital Markets Endri Leno - National Bank

Good morning, ladies and gentlemen. My name is Julie and I will be your conference operator today. At this time, I would like to welcome everyone to ProMetic Life Sciences Second Quarter Results Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Pierre Laurin, President and Chief Executive Officer; you may begin your conference.

Well, thank you operator and good morning everyone. Welcome to ProMetic's webcast. I remind everyone of the statement on the Safe Harbor Slide 2 that this presentation contain forward-looking statements about ProMetic's objectives and strategies and businesses that involve risks and uncertainties. Moving onto Slide 3, during this call we intend to provide more information on ProMetic ChinaCo joint venture. We'll discuss PBI-4050 IPF data and the next steps. We'll then go over Ryplazim 48-weeks clinical data and updates on the BLA process. I will review the key catalyst expected in the coming months before Bruce Pritchard discuss the financial and operations, highlights; we'll then open the lines for Q&A period. And this call is scheduled to last about an hour. So moving to Slide 4, yesterday morning we announced that we signed definitive agreements with our joint venture SRAM or Shenzhen Royal Asset Management, I'll call it SRAM throughout the call today, it's faster. The signing ceremony took place Friday afternoon and is the result of 18 months of work between the two groups. We've known the principle and founder of SRAM for many years, and while China represents a very large market opportunity, pricing is quite lower related to the U.S. It is in fact the second largest market after U.S. by share, volume of patients out there, but it is not yet populated with a critical mass of innovative pharmaceutical companies and for this and other reasons, an optimal way to leverage the value of our drug candidate and start monetizing this market is via this hybrid joint venture licensing business model. The deal provides ProMetic with an initial $33 million of which $23 million is receivable in the second half of this year, $13 million due upfront upon signing and $10 million for a milestone already achieved. SRAM equity position and ProMetic ChinaCo. increases upto 25% only once the $33 million is collected. The JV controls all manufacturing of bulk API which it will sell to licenses in China. This is very important as we want to ensure constant control of supply and quality and we make a profit on each shipment of goods to licenses. So this business unit actually generates cash flow before sales of product occur in China, so we generate cash flow as we supply API during clinical trials for example. So ProMetic ChinaCo. will also receive further license in milestone fees and royalties from other parties in China. Controlling the supply of API become a very good insurance policy to ensure that all payments otherwise due to us from licenses are indeed collected. So now since we announced the signing of the binding MOU in April, SRAM acquired a Chinese pharmaceutical company in China. This is again a massive investment in the part of SRAM to put in place a development and commercial platform for some indications such as diabetic kidney disease. So our license was granted to SRAM affiliated company such that the clinical program for DKD can be initiated in China ASAP. So SRAM provides funding to ProMetic for activities outside China, funds the commercial infrastructure and development cost for DKD in China, provides local regulatory commercial expertise, ProMetic on its side provides technical support, R&D and clinical leadership. However, SRAM and ProMetic believe that IPF is likely the first indication to be approved in China and the JV, ProMetic ChinaCo. will initially focus on advancing PBI-4050 in the clinic for IPF. So in the coming months you can expect more update on how the IPF clinical program in China is to unfold. On Slide 5, it serves as a reminder that our drug candidate have demonstrated anti-fibrotic activity over 24 animal models. PBI-4050 is the lead drug candidate with confirmed activity in human observed in three phase 2 clinical trials. PBI-4547 and 4425 are amongst equally promising drug candidates scheduled to enter clinical trials, and this will enable us to focus PBI-4050 towards a selected number of indications and advance the follow-on candidates towards other indications. So I'm using Slide 6 as a visual aid while I explain our IPF phase 2 clinical data and what it means. Our phase 2 study was designed to confirm PBI-4050 would be safely used in IPF patients either alone or in combination with standard of care and to detect any early evidence of efficacy. Clearly, these objectives were both met. This study allowed us to discover a drug-drug interaction between PBI-4050 and pirfenidone. The patients in this cohort ended up with very low levels of PBI-4050 in their plasma because pirfenidone reduced the absorption of PBI-4050 and whatever small amount of PBI-4050 was absorbed, it may actually have accelerated the metabolism of pirfenidone thus reducing the plasma concentration of pirfenidone. The net result of this drug-drug interaction is as if those patients and that cohort were on placebo and you can see that indeed when PBI-4050 is not absorbed, the patient lung function declined in the same fashion as patient on placebo in other trials. In contrast, patients that were on PBI-4050 alone or in combination with PBI-4050 and nintedanib did very well. In fact, we already have statistical significance at 12-weeks when we compared the groups with pirfenidone. So Slide 7 and for sake of comparison only shows that all five [ph] latent disclosure on their clinical data at 48-weeks falls nicely in the blue zone that pirfenidone and nintedanib activity and their placebo group in the red zone of the large phase 3 trials [indiscernible]. So we are very encouraged by our phase 2 results and motivated to pursue the phase 2 treatment with trials for IPF. We already had our pre-IND meeting with the FDA which recommended we pursue a phase 2 treatment with trial by adding PBI-4050 or placebo to patients already receiving pirfenidone or nintedanib. The add-on trial will only be enrolling now patients on nintedanib as the FDA concurred with our conclusions resulting from our phase 2 study. The monotherapy trial would enroll patients that have failed to tolerate nintedanib or pirfenidone; so we plan to file our IND for IPF in the coming weeks. Let's move on now to Slide 8 and talk about our exciting drug, Ryplazim. So on Slide 8, reminder that ryplazim has been tentatively approved as a brand name and we expect this product to maintain with that trademark until the final confirmation with the BLA approval. Let's move to Slide 9 and I want to reiterate our process with the clinical trial during the phase 2/3 protocol. First, the phase 2/3 protocol was to enroll and has enrolled 15 patients that are treated during a total period of 48-weeks. When we had our pre-BLA meeting with the FDA for the accelerated ryplazim approval it was with a view that the 10 patients that have completed 12-weeks have already met the primary endpoint that is, 100% of the patients under plasminogen level above base line and met also 100% of the secondary endpoint, that is that 100% of patients and resolution of their lesions. So the pre-BLA meeting led to the conclusions that we would file the clinical data for the 10 patients that have completed 12-weeks, there was no need to conduct additional clinical studies for the congenital deficiency indication and that's not insignificant, very often when you have approval under an accelerated regulatory approval process, that's on the basis of a surrogate endpoint, the Company is still obligated to demonstrate efficacy running additional clinical trial; in our case, efficacy was confirmed in the same trial. However, we would continue to monitor the 15 patients enrolled for a total of 48-weeks and file clinical data as part of a supplemental BLA once ryplazim is approved for full licensure. Now what's the difference between full licensure and regulatory -- accelerated regulatory approval is really that there is no additional evidence of clinical efficacy in the full licensure. So you recall that few weeks ago we announced that our 10 patients, very same 10 patients for which we have filed the 12-weeks data and the BLA have also now completed the 48-weeks and we still had 100% response rate with no recurrence of lesions, no side-effects related to long-term use of this product for the entire treatment period of 48-weeks. Now this is not insignificant because obviously this is going to help tremendously payers to make a decision as to whether reimbursing ryplazim is actually worth the investment given that throughout that period of time those patients who are used to have recurring need for surgeries and medical attention are free of lesions and therefore free of incurring those additional costs so that economics and the reverence of the 10-weeks patients completing 48-weeks data is very, very significant. In fact, there is back and forth communication with the FDA, we keep filing data at their request and there was discussion right now surrounding whether we would consider filing the additional 48-weeks data for 10 patients and there is going to be further discussion over this as we want to make sure that we understand the trade-off for receiving full licensure with the 48-week data versus the accelerated pathway as currently pursued. So there will be further update as we get clarity over what our options are, but so far I mean the BLA as you can see on Slide 10 is being processed, we are like any other BLA process entering any questions, we are providing any requested additional data reports that need to be appended, and we are very, very proud to look at our performance over this development program which would mean that we would have successfully developed a product first in human to commercial launch which we expect to be in Q1 2018 now to be done in about 3.5 years. So that Slide 10 give you a pretty good idea of the process involved in getting to the BLA filing, the review process which is underway and the commercial launch that we are now expecting in Q1, the company is launch ready by end of this year but there are all kinds of things that could happen in the review, there could be changes on the label, there could be changes on the packaging insert that require that we reprint, we've been building an inventory of products which are naked vials, they are labeled and not applied to those vials just in case there would be changes to the printed material. And therefore, it's only normal to expect that an effective launch in Q1 is reasonable timeline to target, the company is ready with already hiring MSLs, medical lightly [ph], that will cover some of the Tier-1 hospitals in the U.S. as well as the specialist that we've identified and are already taking care of those patients with congenital plasminogen deficiency, and we very much work toward this process with the agency to make sure that the review proceed swiftly. So when we have more information as to the timing of approval, we will gladly communicate this with our shareholders. In the bottom of that slide you have pediatric designation requests, there has been several filing because there has also been a change in the regulation about the pediatric designation and we have now -- company has now to demonstrate that the life-threatening clinical manifestation of the medical condition predominantly occurs in pediatric patients; it's not just to show that there is more pediatric patients than adult, but to show that it is more life-threatening and of course we have filed what we believe completely meet that criteria and if the pediatric designation is granted, then of course it increases the likelihood of having a pediatric voucher granted at the same time as the regulatory approval. We will know sometime in September whether this pediatric designation is being granted. So as we disclosed before on Slide 11, we are looking to advance other clinical indications in critical care where acute plasminogen deficiency is at the core of complications and some patients such as senior burns, acute long injury, we disclose if and we look in that clinical trial initiation later this year, early in the coming year and these studies will really be focusing on dose ranging, establishing a dose regiment and primary endpoint being PK data again, and monitoring a secondary endpoint clinical outcome. So a lot of back and forth with KOLs as we design those trials and excited to update you further during the year on this program that expands the use of plasminogen intravenous for acquired deficiency. Now tympanic repair, diabetic foot ulcer, again expecting to start enrolling patients September/October this year with proof-of-concept on the clinical outcomes mid-year next year, these two trials would be around in Sweden in top tier centers, reminder again that clinical experience have been generated with some clinicians in Sweden, hence the reasons for going back there and actually demonstrating now with our GMP product the effectiveness of plasminogen injected around the wounds to close those hard to treat wounds. So overall, on Slide 12, a reminder that the IV plasminogen will be first intended for congenital plasminogen deficiency and we intend to run the clinical trial to expand the use to severe burns and acquired acute deficiency, acute lung injury being one of them that would disclose before with evidence of efficacy of plasminogen in an animal model and as you can see the number of patients grow considerably from 2,000 patients, estimated number of patients for congenital plasminogen deficiency to 15,000 and over a 100,000 in the acquired acute deficiency, albeit though that the severe burn, acquired acute deficiency is for an acute treatment of two to three weeks in the hospital and -- but definitely compatible with regard to usage and pricing for the congenital plasminogen deficiency. And I explained before that the diabetic foot ulcer, tympanic repair are requiring the use of plasminogen sub-Q or intra-dermal or intra-lesion and these are going to be relying on the completely different formulation of plasminogen, we work hard to develop totally distinguished formulation for the use on these hard to treat wounds compared to the ID formulation and I'm very, very proud to see how the team has come up with a different number of SKUs that really facilitate product distinction with regard to the clinical use. So Slide 13 and 14 really highlights inflexion point as we see them over the next six to nine months really as we deliver on milestones that will build value for the company. On Slide 13, a lot of them related to plasminogen as we expect commercial launch in the U.S., plasminogen update on regulatory process would help Canada and EMEA; I know that they helped Canada launch or Canadian launch rather following yield Canada is also expected by mid-year next year and more and more on this as we progress. Plasminogen update on the pediatric designation, as I said, hopefully get some news confirming our claims in September. Filing additional orphan drug designation we have several in mind, all related to the acute care indications and we look forward to update you on those designation as soon as they are being granted by the FDA and EMEA. We plan to initiate those clinical program and enroll patients for tympanic repair and diabetic foot ulcer; we look forward to share with you exciting new data for again future use in critical care conditions. And of course plasminogen is the subject of partnering discussion right now for selected indications and geographies, we are focused on the North America market, boots on the ground with account sales manager and MSLs, logistics and so on for Canada, the USA, and we are in discussions for other geography; we're in discussions as well for selected indications that would probably be best handled by specialty pharma that focuses on those type of uses and specialists. IVIG filing of BLA for Canada in the cards, it will proceed the filing of the same BLA-4 at the U.S., so expect commercial launch in not a too distant future following plasminogen. And enter alpha-1 [ph], another exciting orphan product, not available in the market, it would be again the first one to bring this ones to market, we expect to share with you our first orphan drug designation during that time period and exciting to get that one on board as this product has very, very promising clinical application, and of course alpha-1 and trypsin following its course and initiation of the clinical program during that period. On the following Slide on 14, PBI-4050, well there is going to be more data in the coming months over the ongoing clinical trials and especially Alström Syndrome; as we said all along, Alström Syndrome is either going to provide us with definitive information on fibrosis and the activity of PBI-4050 could become also a very rare indication for which we could seek approval on the basis of the data analysis in the coming weeks, we will be able to set meetings with the FDA and EMEA and get a better understanding of what could be the next step for that terrible condition that affects multiple organs in young patients. We expect also IND clearance by the FDA for the IPF pivotal phase 2/3 clinical trial and we also expect IND clearance by the EMEA for the diabetic kidney disease phase 2/3 clinical trial. We are looking forward for series of peer reviewed publications to be published, covering both the mechanism of action and efficacy in multiple systems and clinical trials, and that's again, forthcoming months. And PBI-45457 to enter into clinical phase or phase 1 starting this coming quarter. So partnering for selected indication and geography is very active activity right now for the company, there is several companies in discussions with us and obviously the data that we'd generate in both phase 2 trial including Alström Syndrome is moving the needle, the efficacy is not in question, safety is a big feature, convenience of [indiscernible] or early active; all those factors are really helping in the current discussions and we're very excited at the prospect of such event for our shareholders. On that note and before handling over the call to Bruce to discuss the Q2 financials, I would like to take a few moment to discuss the departure of Greg Weaver as CFO. I mean Greg communicated personal reasons for wishing to step aside from the role. Following discussions between Greg and the Company, it was mutually agreed that this was in the interest of both parties. I mean Greg leaves us, not only what our blessing but also with our thanks for his commitment to the Company during his tenure and our best wishes for his future endeavors. There are no circumstances around the departure of the CFO which need to be brought to the attention of the shareholders, specifically there were no disagreements with the Company or any circumstances around the proprietary of our financial statement. A search for a replacement CFO is already underway; I'm pleased that Bruce Pritchard has agreed to cover the role in the interim. For those who don't know, Bruce was the CFO of the Company for nine years prior to Greg joining and managed the finances of the business through much tougher times and what we are currently faced. So I will now hand over to Bruce to go over the financials.

Thank you, Pierre, good morning, ladies and gentlemen. If I could ask you now to move to Slide 15 in the slide deck and just a quick reminder that today's part of the webcast on financials is based on the financial information for the second quarters of 2017 and 2016, as well as on the audited statements for the year ended December 31, 2016. All the figures were prepared under IFRS and the true annual information and the important information can be found on SEDAR.com. Everything that I'm talking about today are in thousands of Canadian dollars except where indicated. So if I move to Slide 16 and begin my part of the presentation with a review of revenues for the quarter which were $3.6 million compared to $3.3 million in the same quarter of 2016. Further analysis of that revenue reveals in the second quarter of 2017 $2.7 million is generated from product sales compared to $2.5 million in the same quarter of 2016. And as discussed on previous conference call was the company's revenues do fluctuate from quarter-to-quarter in comparison of annual revenues gets some more reliable indicator performance. Those revenues have remained flat at $0.7 million quarter-over-quarter and year-over-year and in addition, this quarter we will rental revenues over $300,000 arising from the [indiscernible] facility. So year-to-date revenue for the first half of 2017 was $8.5 million which is consistent with that of the first half of 2016. If I transition to Slide 17, I'd like to focus the next couple of slides on our largest expense which is R&D costs. In the year-to-date we've incurred $48.8 million of R&D cost but as the schematic shows, $35 million of that is on our plasma pipeline and of that figure, almost $60 million relates to our manufacturing infrastructure; overtime as the product is commercialized, that element of cost will migrate from R&D to cost of goods. The underlying spend on preclinical and the clinical pipeline was $28 million in the first half of 2017, split roughly two-thirds to the plasma business and one-third to small molecules. If I move to Slide 18, at the annual meeting shareholders will remember that we confirmed the recent increases in R&D cost would begin to [indiscernible] and would be subject to modest increases going forward. Looking at the R&D figure quarter-over-quarter for this year, we can see that this has been born out with overall expenditure flat between Q1 and Q2, a little over $24 million. And obviously, we have some fluctuations between the headings within R&D but the overall group has remained broadly consistent quarter-over-quarter. If we move to Slide 19 and then look at the comparison of R&D year-over-year, it can be seen that the business segments driving the increase in R&D are plasma derived and small molecules. Not surprisingly, in both of these segments, assets are advancing through clinical trials resulting in these increased costs and more significant of course is our investment and our manufacturing infrastructure ahead of the plasminogen launch, we expected at the turn of the year. So this is the case for the majority of the difference in the plasma proteins R&D figure. On Slide 20, so I thought it was worth closing to reflect on the [indiscernible] plasma derived and small molecule pipelines and development and funded by this ongoing R&D spend, we make much focus recently on both, plasminogen for congenital deficiency are replied [ph] when they are calling it until lesser degree on IVIG. However, the plasma pipeline is also supplemented by several other proteins under development including plasminogen through wound healing and alpha-1 anti-trypsin and fibrinogen. And in the small molecule segment the same is also true with not only PBI-4050 being advanced but also PBI-4547 and PBI-4425. Pierre has given some flavor of those additional assets during his presentation this morning and in further calls will give more detail on these assets as we continue to develop. If we move to Slide 21, I'll just provide some further color on the key figures from the profit mostly gained for the second quarter. As we just mentioned on the previous slide, our revenues for the quarter was $3.6 million compared to $3.3 million for the second quarter of 2016. The cost of goods sold was $1.6 million for the quarter consistent with that of the previous year reflecting the relatively stable year-over-year revenues. Total research and development cost of $24.4 million in the quarter have been discussed in the last couple of slides. Administration cost increased over the second quarter of 2016 primarily as a result of the increased headcount in business support functions. Financing costs are slightly higher year-over-year consistent with the increased level of financing activity undertaking in 2017 so far. And the net loss for the quarter it was $31.5 million, up from a loss of $24.6 million in the same quarter of 2016 resulting in a net loss per share of $0.04 for the quarter, both the basic and diluted basis. Year-to-date, adjusted EBITDA, the loss of $27.2 million in the second quarter of '17 versus $20.5 million in the second quarter of 2016. On Slide 22, a few words about pro forma cash position. The pro forma position at the end of the quarter remained at $96 million. $14.3 million was on-hand at the end of the quarter and as reflected in the financial statements. However, $50 million which we see as net in July from the financing and as announced yesterday, $23 million was to be received in the remainder of the year from SRAM. And in addition, revenues of between $8.5 million and $10 million are anticipated from product and service revenues prior to year end. As part of my interim CFO role, I'll be focusing on further strengthening the cash position of the business with non-diluted means. So including further licensing activity, as well as possible royalty based financing deals. I move to Slide 23, our balance sheet at the quarter end; obviously full balance sheet is disclosed on SEDAR.com so I'm just talking here by one or two of the bigger numbers. I mentioned earlier the cash stood at $14.3 million in compare to $38.9 million which combines both cash and multiple securities at the end of 2016. But as described on the last slide since the end of the quarter we've increased our pro forma cash position of the Company. Cash receivables stood at $5.9 million compared to $8.8 million, inventories increased in the second quarter to $24.4 million, and over that figure around 60% relates to a combination of both plasma inventory and the inventory of make [ph] plasminogen as Pierre discussed earlier ahead of the anticipated launch in the first quarter. Capital assets have risen by $2.9 million since the beginning of the year representing the timely investment in our manufacturing plants and intangible assets remain stable at $155.4 million and that includes $141 million related to the intangible recognized in 2014, as well as some that's associated with the rights for plasminogen which we acquired in 2016. Finally, total long-term debt has increased from $48.1 million at the year-end to $67.5 million, primarily as a result of the new instrument [indiscernible] also arising from other debt modifications totaled which are fully disclosed in most of the financial statements. So Pierre, that concludes my comments on the major numbers and the financials. So if I can hand back to you now for the rest of the presentation.

Thank you, Bruce. I think that this covers what we had to present and may as well operator open the floor to questions.

[Operator Instructions] Your first question comes from Alan Ridgeway with Scotia Bank. Please go ahead, your line is open

Hi, good morning. Pierre maybe -- you made it quite clear in your comments that you guys are actively working with the FDA in going back and forth along the regulatory process. I'm a little bit more interested at -- I guess at this point given that you've covered that part in the presentation but as far as the launch plans go and being in sort of launch ready by year end, could you just give us a little bit more color on sort of what you guys have accomplished to-date as far as hiring people and some of the planning and internal timing of those things? And maybe talk about what you can do sort of a head of the approval?

Yes, I mean, thank you Alan for the question. Of course we -- for a couple of years now we've been preparing on the marketing side, we've been putting in place already all of the logistical side of the operations which means all the relationship with the appropriate distributors securing license in all the states in the U.S., getting all the appropriate coding for your products when you launch, and so that you can be reimbursed and people can hold your product. So there is a lot of work that was being done for the past two years on the logistics aspect of getting our sales and marketing organization online. We've been hiring all the leadership for the past six months; sales, marketing and MSLs that report to the medical affair, so the Head of Medical Affair has already hired several MSLs and these MSLs, medical science liaison, are on the ground to talk to specialist and make sure that people connect the dot with regard to how to treat and diagnose this condition. Sales; account sales manager are also being hired systematically, and when we say, I made a statement, say launch ready by end of Q4; that means that we have a core of around 8 to 10 MSLs on place by December and we would have roughly 5 to 6 account sales manager already in place by December, and plan to go upto about 10 MSLs by mid-Q1 and a total of also around 10 sales account manager across the country. Now we already have identified with the work that we've done with market research from various angle including IMS, we've already identified patients that are requiring treatment, physicians that have those type of patients under maintenance right now, and -- so we know exactly the hot-beds [ph] within the country to have them focus our sales effort.

Okay, great. So if I was to think about the 8 to 10 MSLs and the 5 to 6 that you have in place; so are those people already at ProMetic and those costs are in the system today?

I would say about -- in Q2 we have about 25% to 30% of that cost and you're not talking about adding a massive amount of cost here per quarter, the workforce will increase by number of about between now and year end of 8 FTE and another additional 5 FTE in Q1. So it's not a significant increase I would say on an annual basis, about $1.5 million to $2 million, on an annual basis.

Okay. And just on the payer front, can you sort of give us an update on where you stand with payers and have you got any feedback from payers as to their thinking regarding plasminogen?

Well, yes, thank you for the question, I omitted to mention the huge amount of work that we've done over again the past year and a half with payers, understanding what payers need to see such that reimbursement of the product doesn't become an issue and clearly, it comes with the data. So as I mentioned, securing clinical data where you clearly have patients who have multiple surgeries before they were put on infusion and plasminogen and then no need for surgeries, no need for -- no recurrence so many lesions and therefore, no need for medical attention is the time of health economics that the payers want to see. So that last bit of data that we've disclosed is, you know, for me extremely significant; and that -- you know, it confirms that removing the lesions is one thing, the lesions don't recur for a year, give the ultimate argument that payers want to see that the cost I've been incurring for all those medical procedures in the past will not come back and therefore I'm willing to pay for the treatment that is offering a health economics benefit.

Okay, great. And then just one last thing for me and I'll jump back in the queue. You mentioned filing for IVIG in Canada, I think in the list of upcoming catalysts. It does seem Canada is likely the fastest path to market for IVIG given the data requirements but could you just -- what's the current pricing in Canada versus the U.S.? And I'll leave it at that, thanks.

This is a very interesting question that perhaps highlights how complex the U.S. market is. In U.S. everybody refers to an average selling price per gram of about $75 per gram, but then you have all kinds of discounts, reimbursement, and reduction of pricing and so on that basically lands a net contribution of about $64 per gram, well guess what, convert in Canadian dollar and that's about the same price for Canada. But in Canada then the distribution goes through two major players, CDS and Mokibek [ph] and you have far less administrative and discount -- I think you don't have the same type of pricing dynamic. So in average, CAD84 or CAD85 has been the program, has been the pricing for IVIG, and however, much closer to that full amount being net contribution to the Company.

Great, that's very helpful. Thanks a lot, Pierre.

Thank you, Alan.

Your next question comes from Neil Maruoka with Canaccord Genuity. Please go ahead, your line is open.

Good afternoon. Maybe just a more procedural question on your FDA filing, has the FDA accepted the filing for plasminogen and if not, when can we expect that? And is there a requirement that the FDA responds within a certain period of time?

Well, I mean the FDA has undergone all kinds of changes and some decisions have emerged which introduced some changes and procedures. So I mean the FDA in our case have been requesting filing of reports that were otherwise available for reference and now are needed to be appended as part of the BLA filing. So we see this as procedural, back and forth, as much as there will be questions during that process Neil. As you know, everybody is having hands over PDUFA date and so; you know, PDUFA date is a target date, it's not a definitive date, and there is all kind of back and forth throughout a BLA processing or prosecution as you call it. So I mean we are very pleased with where we are with the filing and there is no pending questions on the clinical side or the manufacturing, so we just keep harping on this process and also now turning to file in Canada very soon and to also address the EMEA, so we're pushing on all fronts.

But can you expect or are you expecting to receive a date soon and -- I mean given the challenges that you've had so far, what gives you the confidence in a Q1 launch?

Well, obviously there has been absolutely no substantive comments from the FDA, so it's been procedures. And we also have some decisions to make and some communication to have with the FDA with regard to; do we leave it at 10 patients 12-weeks, is there a window to introduce the 10 patients for 8-weeks? If so, how does that affect the timing of approval if this timing is not unduly affected then should we better off putting 48-weeks data in our package insert and increase even better the reimbursement rate of the insurance or if it's going to delay then not even go there; these are some back and forth that could affect the timing Neil, and rest assured that again there is nothing substantive or untoward in the filing that we have so far that gives us any inks as to risk of approval, this product has shown safety, 100% efficacy and we've been manufacturing the GMP [ph] this product for the past two years now, or more than that actually. So I mean we're very, very confident with our file.

So even with some of those requests that might take a little bit longer, you still see a Q1 launch?

Yes, absolutely.

Okay. And then maybe just moving on and following on, on a question from Alan, but could you give an update on the status of the IVIG study?

Well, the IVIG reported that the all and elsewhere were enrolled. And what happens here is that the Canadian health authorities require 6 months of monitoring as opposed to 12 months of monitoring for the U.S. FDA and therefore, we're in a position to file a clinical module faster for the Canadian authorities. So the question here is going to be filing first in Canada followed by the U.S. simply by a virtue of the fact that the data becomes available faster with adults completing 6 months versus the 12 months. So the pediatric cohort is following, there will be a separate BLA as we mentioned before.

Okay. And maybe last question, just on the balance sheet you've put yourself on more financial footing with recent financings; and you have a lot of projects that are ongoing, is there any way to scale back the burn, maybe focusing on mission critical elements to extend your cash runway or do you see everything you're spending on is being at the core to the business?

Well, we absolutely look at this very carefully. We want to make sure that we focus on advancing the value driver projects. We mentioned before just for that very reason Neil, and hopefully people remember before blaming us on being late on certain program that we purposely slowed down for that very reason and expand the applications of plasminogen in other indication, this is lowering fruit for us and the shareholders compared to advancing a significant number of products at once. So we're pacing ourselves on that basis, the one thing that they can do much about that's the burden of the barrier to entry to get into that business is to maintain the cGMP facility and we want to make sure that people. And after Bruce's presentation realize that if that R&D cost is actually the same engine that will generate significant revenue, there is no two way about it; you cannot go there with a goofy plant, put teen-shack [ph] as I mentioned just to show you get approval and then you ramp up your GMP facility; you're going to have everything staffed, trained, validated ahead of time. So welcome to the private club of the few that make big in that market and we are one of them, and we're very proud of this but we are indeed, as you suggest controlling our cost to make sure that we focused on the value drivers.

Okay, great. Thank you very much.

Your next question comes from Joel Hurren with RBC. Please go ahead, your line is open.

Few quick questions for me. First one, could you just discuss the IPF IND for 4050, when you intend to initiate that trial and then kind of time to recruitment until it's fully enrolled?

Joel, I wish I could look very sad [ph] on this morning on this one. And you know, we were just few weeks away from having a full report on feasibility, there is going to be several sites these IPF studies will enroll in Canada, in the U.S., in Europe, even in Australia. You want to put a lot of site such that the enrollment goes as fast as possible. You want also quality, you want to make sure that your screening process is uniform, I mean, this is going to be a fairly significant trial involving CRO that have had experience with this, I'm very pleased also that we have a team within ProMetic that have lived IPF trials, multi-center trials with all the international [ph]; so we're very well equipped with experienced physicians, PhDs within the Company. But I'd like to provide more color on this in the coming weeks.

Okay, perfect, thank you. And then maybe just to dig into Neil's question a little bit more on the plasminogen filing; you didn't receive the refusal to file from the FDA on the plasminogen BLA, correct?

We've been filing additional information and we've been responding to requests from the FDA. That's -- and the BLA is being processed, that's the status as we said in our press release ongoing processing of the BLA.

Okay, great. And then last question, it does sound as though discussions with payers took a significantly positive turn when you reported the 48-week data, so I'm just wondering if you could elaborate a little bit on how discussions with the FDA change is done around the similar timeframe? Did they become more positive with the FDA more interested in the 48-week data and how did things go there?

Well, I mean the FDA is an impartial body but obviously you have humans and you have physicians and you have scientists on the other side of the table, this is a non-mathematical need, they clearly see the suffering of those patients that require unnecessary surgery knowing that a product that you infuse prevent those surgeries, that's a long life-threatening situation. So I mean the FDA is committed to process that file as expeditiously as possible, it will never compromise on quality and nor will be and there is a lot of back and forth on that front. Of course, the accelerated regulatory approval provides for a nearly entry in the market and a supplemental BLA is currently Plan A. However, with the invite and discussions right now opening on the fact that the 48-week data could be considered and so we need to understand whether that option, opportunity call it, change in anyway the delay of the review; and then we'll update the market consequently. But I think that if we don't have it in the packaging insert and the accelerated regulatory approval, we will make sure that it's published in peer review articles and that can actually still be used by the MSLs and our sales force to validate the merit of the therapy. So there is two ways to go about it.

Great, thank you. And just on that front, this is the last question. Do you still intend to publish the mechanism of action for 4050 in the peer reviewed journal?

Yes. I mean this is another process where you have reviewer and editor comments and then the reviewer comments and back and forth, so we're very confident that in the time period that I indicated we'll have both the mechanism of action, peer reviewed publish and we also have many other data that will be sequentially published and this all mean obviously we have been quite busy patenting and disclosing the mechanism of action in very well regarded peer reviewed publication is going to be a boost for the credibility of the science.

Fantastic. Thanks very much.

Thank you, Joel.

Your next question comes from Endri Leno with National Bank. Please go ahead, your line is open.

Hi, thanks for taking my questions, a couple of quick ones for me. First one, it's on the Q2, Slide 22 actually saw the Q2 equity raise; at $50 million does that include the $8 million from Tom Best [ph] as well?

Bruce, would you like to handle that.

Yes, sure Pierre. That's just been the net range from the Canaccord financing. We -- the Tom Best [ph] as you know is not fresh cash, it actually is used to offset some of the value of their loan balance.

Okay, great, thank you. And the other question is, for PBI-4050 you mentioned the look in the different geographies to partner, particularly as they become more interested on Alström data; I mean what other geographies would be interested in Alström data outside of North America and Europe?

Good question. Alström, as I mentioned before is one of the ultimate metabolic syndrome and multi-organ fibrosis. So when you surely move the needle in any fashion, and meaningful way in those patients, it speaks for credibility with regard to any other indications. There are some Alström patients in other jurisdiction but it remains an ultra-rare condition and for that we would look at Alström as a possible indication for early access to market so long as we have an agreement with EMEA and the FDA as to what's required to secure such early access otherwise it becomes a clinical trial that demonstrate evidence of efficacy that serves the purpose for other medical conditions. When we say partnering for other indications or geographies, obviously IPF drives the show right now. Our performance against almost the facto placebo group is very commanding, the patients were stabilized over a 12-week period and I mean, those reviewing, the file under due diligence and discussions also can see that the patients in other clinical trials, whatever we activity we saw 12-weeks is maintained at 24-weeks, is maintained at 36-weeks. So again, you need to always repeat the data and the patient population targeted but what we see at 12-weeks, because of the data we have as well, longer exposure in other trial; it indicates strongly that we should see a maintenance of that performance overtime. So IPF drives in most of the discussion, and so does diabetic kidney disease; as you can see, SRAM, our partner in China; you know, very, very keen to support financially, all those indications and besides to take add-on DKD for China, while the JV will focus on IPF and look to see how we can leverage other clinical trial activity for IPF around the world. But as I said, there are certain countries that we will absolutely need partnership, and there are others that we could consider overtime holding our own sole partnership, smart partnership is very much what we are in discussions right now for it.

Okay, great, thanks. And one quick follow-up to that; do you have any comments -- I mean especially on IPF and the recent Galapagos data that shows that they actually stopped the disease. I mean has that come up in any of the discussions that you've had for partnerships on IPF?

Well, I mean the landscape is not small. I mean, and any indication when you start looking at a competitive landscape at preclinical or clinical, we're monitoring this as much as big pharma is, and you know, with regard to Galapagos data, I mean it's early stage 2; we don't quite understand why the data actually falls by 55 ML at 15-weeks, they don't comment much on that. So I mean -- you know, I'm sure that they will have their own explanation on this. For what we can see, our data is solid and we have a very, very good drug to safety profile, convenience, costs of goods low [ph], and extremely well tolerated whether used alone and combined with standards-of-care. So we have pretty much ticked all the box that one would want to see before considering 4050 for IPF.

Great, thank you. That's all the question I had. Thanks, Pierre.

Thank you.

So our next question comes from [indiscernible]. Please go ahead, your line is open.

Thank you, gentlemen for the detailed review. Just a dig on little bit further into the BLA; so as part of the BLA for plasminogen, has the FDA already undertaken there inspection of the manufacturing facilities, and if so, when did that happen?

Yes, I mean there is back and forth, there was scheduling in summer that needs to be always scheduled very tightly with the FDA and the timing of GMP batches and the manufacturing and the campaign and so on; so -- I mean this is an constant adjustment with the FDA availability and timing of those production batches.

So if I've heard that correctly, those reviews have not been completed in terms of the manufacturing?

No, it has not been complete yet. No.

And so -- then I would project based on -- that was lead projected Q3 for the BLA stuff, maybe November/December would be a more accurate option?

That is still possible. Unfortunately, we cannot provide exact guidance on the basis that those discussions and opportunities to add more data on the clinical if it makes sense may become available to us. And on field, that's cleared, we do not want to commit yet to a firm date, plus minus few months. We know that we're ready launch and we also know that it would make sense to actually launch in Q1 to have all the logistics in place as I mentioned during the call.

Fair enough, thank you. And then just moving onto IVIG quickly, so just the back of the envelope calculation based on what you said in the 6 month data, would it be able to project filings with CTA in Q2 of 2018. And then I would then assume the BLA application, go to the FDA in Q4 of '18, are those timelines what you're thinking?

I think we can do better than this, and we'll have definitive dates on the timing sooner the -- that type of filing is done; we have to disclose but clearly, Canada could be as much as two quarters ahead of the U.S.

Thank you, that's all for me today.

Thank you.

Your next question comes from Alan Ridgeway with Scotia Bank. Please go ahead, your line is open.

Hi guys, thanks for taking the follow-up. Pierre just quickly because we haven't talked about in a while and a conference call that much, and you did elude to it in your slides; can you just give us an update on what you guys think your potential timeline for an A80 approval, could be and then just sort of what the status within alpha-1 and what needs to be done before you can provide more information?

Well, the alpha-1 and [indiscernible], production schedule has been a bit of a challenge in the sense that we did not want to do anything in the facilities, that would otherwise cause a challenge or prejudice to the inspection of plasminogen or the inspection and the GMP production for IVIG. So back to the point Neil made earlier, what you guys are doing to mitigate risk and mitigate cost; well, adjusting timelines, adjusting sequence of production to make sure we stay focused on delivering on the value drivers has been important. Alpha-1 its trypsin, process has been successfully scalped. We have a good stability on this, so it's a question now agreeing with what are pursue, I -- Phase 1/3 program or straight to a Phase 3 growth, These are some small new answers right now that we still need to finalize, but in a sense we're looking at 2019 late night 2010, entry for alpha-1 and trypsin the trials are much shorter than IVIG, this is typically a 12-week crossover study comparing a brand to our product. So we look forward to further updates on that. And through alpha-1, this is being scaled up from scratch, this very interesting protein has not on the markets for many reasons, including the fact that it's a complex molecule to extract and purify but we're on it, and a very, very promising iValue indication as by far, very potentially and eligible for pediatric designation as well. So exciting program within alpha-1 [ph], so we look forward to update the street on that as well. So on that note, Alan, I noted that the time we had allocated for this call is over. And anyone who have questions, please do forward them to Frederick or myself or Bruce; we'll be happy to address them. And we are looking forward to continue progressing, building a strong company, fully integrated, as we say boost on the ground, launching plasminogen, following with IVIG and -- you know, again partnering is going to be part of the equation, we can't do it all and we want to do partnering that will be enabling and further enhancing our growth potential. So on that note, we look forward for further updates on the catalyst and milestones we have ahead of us and thank you for listening to our call.

This concludes today's conference call. You may now disconnect.