Pierre Laurin – President and Chief Executive Officer Bruce Pritchard – Chief Financial Officer

Dewey Steadman – Canaccord Derren Nathan – Hybridan Ammar Shah – National Bank

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the ProMetic Life Sciences Inc. Second Quarter Results. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Pierre Laurin, President and Chief Executive Officer, you may begin your conference.

Thank you. Thank you, operator, and good morning, everyone. Thank you for joining today’s call as we review our second quarter highlights and financial results. First on Slide 2, I’ll remind you that this presentation contains forward-looking statements about our objectives, strategies and business that involves risks and uncertainties. Moving on Slide 3, I’ll begin with an update on our partnering and development activities related to PBI-4050 and our Ryplazim, brand name for plasminogen, before turning the call over to Bruce Pritchard for a review of the Ryplazim BLA application and the second quarter financial. Moving on to Slide 4. We have two promising late-stage clinical assets with proven clinical activity and excellent safety profile. And we’re actively progressing partnering discussion for both PBI-4050 and Ryplazim. Seeking partnerships and licensing agreements with well-recognized biopharmaceutical companies remain a top priority for ProMetic. Moving to Slide 5. For PBI-4050, this process taking a little longer than anticipated, mainly due to the strong interest from potential partners in reviewing additional information around Alstrom syndrome. And gaining a better understanding of the FDA’s view for the clinical development of PBI-4050 for that indication. In this regard, we recently reported good news that the FDA granted rare pediatric designation for PBI-4050 for the treatment of Alstrom syndrome. So if approved for Alstrom syndrome, PBI-4050 would be eligible to receive a priority review voucher. This would be highly valuable asset for ProMetic and that we could potentially sell to a pharma or biotech company. The potential revenue opportunity for PBI-4050 in Alstrom syndrome is smaller than IPS, but quicker to market indication for which ProMetic could well afford to fund the clinical trial itself. We met with the FDA yesterday to discuss our plans for a pivotal Phase III trial and the regulatory pathway for PBI-4050 in Alstrom syndrome. Following the positive dialogue with the FDA, we have been encouraged to pursue this further and we will provide an update based on the minutes of the FDA meeting as soon as we receive them. We’re also meeting in a few weeks with the European regulatory authorities and we believe that we can define a clinical protocol for pivotal Phase III for both U.S. and the EU market and we will update our shareholders once finalized. Keep in mind that Alstrom could be a stand-alone indication for which we could fund the pivotal trial on our own. This is an ultra-rare disease with approximately 1,200 to 1,500 patients worldwide and a few hundred in the U.S., such that a Phase III pivotal trial would be of a reasonable size. We will evaluate the rationale for both running this program internally or partnering with others. Looking at Slide 6 now, this objective is still to do a deal for us, for PBI-4050 regardless of the indications. But we have to strike the correct balance of economics territory and field of view that is the therapeutic indication. And as illustrated on Slide 6, PBI-4050 has demonstrated clinical activity on five different organs and system. So we refer to what we seek to achieve here as smart partnering that is creating a win-win for all parties involved with value creation and upside remaining available for all parties. There are multiple parties at the table and we want to provide all of them the opportunity to reach the same level of understanding and knowledge while being mindful that what is in their best interest for our own shareholders from an economic and timeline point of view. IPF was and still an indicating generating a lot of interest, but it is not the only one. New data on biomarkers for IPF Phase II trial that was presented at the American Thoracic Society meeting, provided again for evidence of the clinical activity in IPF patients. So it’s quite exciting time for PBI-4050, but it is a complex landscape. So Slide 7, just to prove the point the interest for other fibrotic conditions is increasing as we publish more data and peer reviewed scientific articles on this new antifibrotic pathway based on groundbreaking data and the scientific discovery of ProMetic. We had very successful peer reviewed publications in three well recognized and scientific publications so far, The American Journal of Pathology, The Journal of Clinical Investigation and just few weeks ago, a recent article demonstrating reversal of liver fibrosis published in the prominent Journal of Pharmacology and Experimental Therapeutics. So moving to Slide 10, reminder to everyone that Ryplazim is actually our most advanced late stage clinical asset and is also generating significant partnering interest as a differentiated plasma-derived therapy that would be applied to congenital deficiency conditions. And once applied in this condition, we believe that Ryplazim can be also applied for acute care indications such as thrombosis. Here again, publications on the clinical performance of Ryplazim in the clinical trial, our Phase II/III clinical trial and the prospect of additional indication is driving an aggressive business development process. As you can see on Slide 12, Dr. Wong wrote in Blood Journal – is it Slide 12 or 11 – that undoubtedly many hematologists, cardiologists are already thinking broadly about all the indication that a widely available licensed plasminogen project may serve for a myriad of acquired conditions. So we’ve already been approached by several KOLs, looking on Slide 12, to develop optimal protocol for potential use of Ryplazim to supplement patients with an insufficient level of plasminogen following a medical complication. We, initially, intend to focus on acute acquired deficiencies where management of plasminogen level is already part of a medical – a procedure or protocol or in conditions where plasminogen supplementation has already been proven to be safe and effective in human. The following slide, Slide 13, has been shown at the AGM to illustrate potential future indications. But it’s now amended to provide additional color on such first medical conditions meeting the criteria that I just described. We’re looking here at a significant patient population and such a potential expanded clinical indication has contributed to the partnering discussion momentum. And Slide 14, for example, is just to show one case in particular, where the administration of PPA, or Streptokinase to dissolve a blood clot dramatically affect the plasminogen blood level. So replenishment of plasminogen may be, very, very important for patients that do not have a full resolution of their clot, because there’s simply no more plasminogen to convert into plasmin. And if they’re still presence of clot, one cannot wait for the liver to reproduce enough plasminogen, which would take days. So this is a very simple supplemental therapeutic approach that are of interest by KOLs and that we have been approached. So again, Ryplazim, a very promising drug and it is also subject to active business development and discussion. And on that note, I’ll turn that call over to Bruce for an update on our Ryplazim BLA application and following by the review on our financials. Bruce?

Thanks, Pierre. Good morning, ladies and gentlemen. So first of all, I’d like to provide a brief update on the Ryplazim BLA application. The graphic on Slide 16 of the presentation shows an outline of our project at the updates against the current status of each of project items. Working with our regulatory consultants, we’ve made very good progress with the list of requests raised by the FDA. And we’re just in the process of completing the design and implementation of the required additional assays and process controls requested by the FDA and we have submitted our plans to them for review. And we mentioned before, that we plan to hold an upcoming type C meeting with the FDA and that meeting has now been scheduled for mid-September and the purpose of that upcoming meeting is to ensure that the correct measures that we’ve in place are satisfactory to the FDA before we commit to running the required conformance batches. We want to be absolutely certain that we have understood and adjusted the production process to their entire satisfaction before moving forward. It’s our intention to update on the time lines once we’ve been able to consider the formal minutes of the FDA type C meeting, which means that we’ll be in a position to provide an update no later than our Q3 earnings call. We should then be in a position to provide guidance on the timing or on the remaining parts of this plan. If I can move now to Slide 17 in the slide deck and begin the discussion on the financial update. So today’s part of the webcast is based on the financial information for the second quarter of 2018 as well as on the audited statements for the year ended the December 31, 2017. All the figures have been prepared under IFRS and full information can be found online at sedar.com. Everything that I am talking about today is in thousands Canadian dollars except where indicated. Moving to Slide 18 then, I’d like to review the revenues for the quarter. Total revenues for Q2 were $20.2 million compared to only $3.6 million in the same quarter of 2017. Further analysis reveals that $19.7 million was generated from the sale of goods in the quarter, of which $14 million came from the sale of plasma previously held in inventory. This plasma was originally destined for the commercial manufacture of Ryplazim, however, the delayed launch of that product has allowed us to remonetize that asset. Notwithstanding the sale of plasma, sale of goods was $5.7 million in the second quarter of 2018, an increase of $3 million over the same quarter of – as of 2017. Sales from the rendering of services on rental income were modestly down on the prior year. On Slide 19, I’d like to highlight a few key expense trends quarter-by-quarter over the past three quarters. As you will see, there is a progressive downward spend in R&D on non-manufacturing activities as well as in our administrative and sales and marketing expenditure. In the second quarter of 2018, expenditure on manufacturing activities increased over the previous quarter. And this increase is solely attributable to activity on the submission of a BLA amendment for Ryplazim. That increase covers costs such as additional engineering runs, consultancy fees associated with the filing as well as recognizing additional costs, which would have historically been capitalized as inventory in the quarter. And Slide 20 provides further color comparing research and development expenditure of Q2 2018 to that of Q2 – I’m sorry, Q1 2018 in a bit more detail. Again, it’s clear to see that in all areas of research and development expenditure, we’ve reduced costs over the previous quarter other than the area of manufacturing, as I’ve just described. At our AGM in May I made the commitment that we would be shutting our overall operating spend in the range of 10% to 15% over 2017. And I believe that these Slides 19 and 20 demonstrate this cost containment program are well underway. On Slide 21 then, I’d like to review selected information from our Q2 financial statement. I’ve already provided the breakdown of revenues on an earlier slide, but recapping, Total revenues for the quarter ended June 30 were $24.4 million compared to $8.5 million during the comparative period of 2017, an increase of $16 million. Total revenues for the quarter ended June 30 were $20.2 million compared to $3.6 million during the comparative quarter of 2017, an increase of $16.5 million. As we continue to experience revenues from each source varies significantly from period-to-period, with this year being particularly impacted by our $14 million plasma sale. Cost of sales and other production expenses were $21.2 million during the six months ended June 30 compared to $3.9 million for the corresponded period in 2017, representing an increase of $17.2 million. Cost of sales and other production expenses were $16.4 million during the quarter ended June 30 compared to $1.6 million for the corresponding period of 2017, an increase of $14.9 million. Of these increases, $15.5 million is due to the sale of the normal source plasma in the quarter. R&D expenses were $46.4 million in the six months ended June 30 compared to $48.9 million in the previous year, representing a decrease of $2.5 million. And in the quarter, the expenses were $24 million compared to $24.5 million in the corresponding quarter of 2017, a decrease of $0.5 million. As I mentioned on the previous slide, this is a compound effect of an increase in the manufacturing costs and a decrease in non-manufacturing research and development expenditure. Admin, selling and marketing expenses declined slightly to $14.6 million for the six months compared to $15 million for the corresponding period of 2017, representing a $0.4 million difference. And in the quarter, the admin expenses were $6.9 million compared to $8.1 million for the same quarter of 2017, a decrease of $1.1 million, mainly due to reduction in consulting fees and employee compensation expense. Finance costs were $9.5 million for the six months ended June 30 compared to $3.2 million for the same period of 2017, an increase of $6.3 million. This represents the – reflects, rather, the higher level of debt during the six months ended June 30 compared to the same period of 2017. So overall, the Corporation incurred a net loss of $67.7 million for six months compared to $60.6 million for the same period in 2017. For the second quarter, the net loss was $73.1 million compared to $31.5 million in the same quarter of 2017. The net loss for the six months is higher mainly due to the increase in financing costs of $6.7 million, offset by the decrease in R&D of $2.5 million. The total adjusted earnings for the Corporation was consistent at $53.3 million loss for the six months ended June 30. And for the quarter, it was $25.1 million at June 30, 2018 compared to $27.4 million for the comparative period of 2017. If you turn now to Slide 22 and the balance sheet, the cash position decreased by $11.3 million over year-end. The cash balances are directly influenced by the timing and size of financing events and operating revenues and expenditures. Cash flows and liquidities are discussed in detail in the MD&A. Our cash receivable increased by $0.2 million over year-end, mainly due to higher sales tax receivable, offset by a reduction in tax credits receivable. Our income tax receivable decreased by $1 million at June 2018 compared to December due to a receipt of a portion of the refundable R&D tax credits from the UK. Inventories decreased by $12.8 million over the year and, principally due to the sale of the plasma inventory I mentioned earlier. Capital assets remained at similar levels. Intangible assets increased by $5.9 million due to the acquisition of two licenses for intellectual property relating to the new indications for plasma therapeutics. Our long-term debt increased by $39.2 million at June 30 compared to December 31, and that increase was also primarily from the drawdowns on the non-revolving credit facility in January, February and April. On Slide 23, recreating a slide used at the AGM so that we present consistent tracking of our progress against guidance. In the first half of 2017, we had used $62.3 million in operations, rising to $122.6 million by the end of the year. In the first half of 2018, we’ve used $44.9 million in operations. It’s worth noting that this benefits from the $14 million plasma sale in the second quarter. When normalized for the item, our spend was around $59 million in operations in the first half. Forecasting our cash used to be slightly less than that in the second half, which would bring our spending on operations for 2018 to around $99 million to $105 million, which is slightly improved on the cadence given at the AGM. We remain focused on delivering our cost controls and the balance way, allowing us to keep activities – key activities associated with delivering a business development deal and securing the Ryplazim approval underway. Finally, on Slide 24, I’m again using an updated format of a slide I used at the AGM to assist in tracking progress against guidance. Pro forma cash at June 30 was $35.7 million. This was made up of the $11.8 million of cash on hand at the balance sheet date. In addition to that, there were three tranches remaining of the Thomvest line of credit available to us at that date for around $41 million, augmented by a further $12.9 million of receivables due from a variety of sources including another $5.5 million of plasma sales concluded in the past few days. Since the 30 of June, we’ve drawn one additional tranche of the line of credit leaving two more available to be drawn as of today’s date. Although our current cash positions projects sufficient cash to see the company through to the end of 2018, it’s clear that our primary objective is to raise additional funding. As we’ve outlined, our plan revolves around monetizing key assets and securing licensing revenues in the form of upfront and milestone payments. However, as you would expect, we’ve several backup plans at our disposal, which are fully worked up and ready to be executed. Firstly, you will note that the June financial statements have been prepared on a going concern basis. This means that we’ve been able to satisfy ourselves and lead our financial auditors that we have a plan, which would allow us to run the business using existing cash resources for a period of 12 months from the balance sheet date. This plan inevitably involves significant scaling back of the business, curtailing plans for projects. We believe that this would reduce current and future shareholder value, and for that reason, it’s not our primary objective. However, we’re ready to act if and when necessary. We’ve also been proactively approached by key U.S. institutional funds, who have expressed an interest in making equity investments in ProMetic and traditionally take long positions in companies such as ours. And entering those discussions were cognizant of the impact of dilution of our existing shareholders and our feel that the introduction of additional large institutional funds with the shareholder base would ultimately be beneficial to the company. Moreover, an investment by well-known institutional funds may stimulate other institutional funds to do their work and make an investment in ProMetic. But to be clear, whilst we have no timeline for closing a financing of this nature, it does remain a possibility. So these plans, combined with the primary objective of causing a meaningful development transaction, give us the confidence that we can bridge the current financial position and ultimately remove overhang from the balance sheet. We will also have the opportunity to potentially refinance the line of credit into a longer dated instrument. We feel that the execution of these other initiatives first will put us in the position to do so. So that summarizes the review of the financials and financial positon. And now I’ll now turn the call back to Pierre for his closing remarks?

Well, I mean, thank you Bruce. Very detailed plan. And on Slide 26, if I may simply, in summary, conclude that ProMetic is advantageously positioned with two late stage assets that can address multiple indications in significant and unmet medical need. And we’re actively pursuing partnering discussions on both of those assets. Moving forward the PBI-4050 to Phase III trial and Ryplazim to a revised BLA submission and potential FDA approval. So seeking the smart partnership as we explained at the beginning of the call that leverage the attractive clinical data on these assets in significant markets. And the cash level, as you just explained Bruce, that are sufficient today. And we’re working with the appropriate sense of urgency to increase our cash resources through multiple sources of cash, including business development deals. And on that basis, operator, I think we’ll open the line for Q&A period.

Certainly. [Operator Instructions] And your first question comes from the line of Dewey Steadman from Canaccord. Your line is open.

Hi, guys. Thanks for taking the question. I guess, on the priority review voucher that could potentially hit with plasminogen, how urgent is that to flip that around into a potential non-dilutive source of cash? I mean, what is the process to do that from the terms of FDA in terms of finding out if you get a PRV? And is there already inbound interest on that voucher?

Maybe I can take that one, Pierre? The voucher comes with the BLA. I think, clearly, we’ve said before that it will be a key party for us to move to monetize that particular voucher. As Pierre has highlighted on this call, it will be in the first of the number of vouchers that we hope to receive. So this one, we feel, it would be appropriate to monetize and take that non-dilutive cash to the balance sheet. In terms of the process, there are one or two banks who have been involved in brokering sale of these vouchers in the past. And come as no surprise to you that we’ve already made some additional inquiries there. I think, funds were a little clear on timelines. Once we’ve had the type C meeting with the FDA we’ll be able to engage, again, with a view to hopefully moving this voucher obviously as weekly as we can. Obviously, we want to do it in a way that maximizes the value that we can get from that. So yes, a balance of timing and value as always.

Thanks. And then on PBI-4050, given that you’re looking at two similar yet very different patient populations with IPF and Alstrom, and Alstrom being small and relatively manageable from a commercial perspective, do you think it is possible to bifurcate that program into two different products, different MDAs, to be able to maximize the commercial value there?

Well. Obviously, PBI-4050 is technically now positioned for two pivotal Phase III programs. One that is quite onerous and definitely being sought to perform under a partnership, that is for IPF. And Alstrom, as I explained, is actually a much more reasonable size trial, in the range of 30 patients or so. So we look favorably at the concept of advancing Alstrom as the first indication. And that could mean that this approval precedes any other indications by 18 to 24 months. We do have analogues that are following up and would be in a position to initiate Phase II trials next year, that is namely PBI-4547. And then this is all going to be a part of strategic decisions in line with partnering discussions as well with regard to liver fibrosis. I mean, the results we’ve obtained in Alstrom patients, which I remind everyone, is a type of patient that do have quite significant and accelerated fibrosis process. And the majority of the patients that were enrolled in our study had severe fibrosis and we had a near 100% response rate, which is extremely high percentage. Now, albeit that’s a small study, but it’s a small study in a small percentage of patients. But what does that mean in the larger NASH patient community is something that we’ll need to explore in concert with partnering discussions as to which best asset would be positioned to address a different subset of the NASH promising and in-need indication.

Great. Thanks for taking the question.

And your next question comes from the line of Derren Nathan from Hybridan. Your line is open.

Good afternoon, guys. I was just wondering, now talking about some PBI-4547, what’s actually needs to be done to get this ready to have a Phase I in humans. How – maybe, it’s not number one spend in priority, but if somebody wanted to run with that, how quickly could they get it CTA ready?

Good morning, Derren. The CTA is, quite frankly, near ready. I think we’re in a position in the coming weeks to initiate this Phase I clinical program. We’re looking at being in the position to wrap up the Phase I data in Q1 and old pre-IND meetings for the Phase II programs with the EMA and FDA. And so the timing is pretty good because the combination of having results and positioning and regulatory view on whether Alstrom is a suitable indication for us to pursue. And then what from this program can we roll out looking at liver as being a target organ of interest, both medically, but also from a market perspective. So PBI-4547, as illustrated, comes in a state of readiness in a very nice fashion. So we would have, technically, next year, two, clinical asset looking to address and generate clinical data in liver fibrosis patients, one being as part of the evolution of Alstrom syndrome, because Alstrom syndrome have more than liver fibrosis. They also have cardiac fibrosis and kidney injury. I mean, this is a multiple-organ indication. But PBI-4547 could, right on the tail of PBI-4050 and look at subsets of patients in the NASH landscape.

Okay. So we could – regulatory hurdles notwithstanding, we could possibly expect to see that in the clinic this year still?

Absolutely.

Yes. Okay, thank you, Pierre.

And your next question comes from the line of Ammar Shah from National Bank. Your line is open.

Yes. Hey guys, thanks for taking my questions. First of all, regarding plasminogen, maybe I just was hoping if you could update us on, number one, when the decision to pursue a partnership was reached? And then a follow-up to that in terms of potential partner, are you guys thinking, like big pharma companies or more niche organizations? Just maybe a few comments on structure, what you guys are looking at? Thanks.

Okay. Thank you for your question. The prospect of partnering for Ryplazim, plasminogen, has actually always been on the table. We’ve always looked at ProMetic focusing on the domestic market being defined as Canada, USA. And seeking partnership ex USA for plasminogen has been in the cards since the beginning, and therefore, quite active discussions and lots of interest for ex USA. However, as we expand the size of the commercial opportunities for plasminogen beyond congenital and start looking at acute care and then acute care involving thrombosis and eventually – and if you look at life cycle management, this plasminogen will end up being used, assuming that we prove in the clinical trials, that it is the case could be used in multiple acute care indications. And that opens up all of the sudden potential strategic fit for collaboration with larger organizations including, therefore, the U.S. So it is not off the table that a smart partnering, again, involving the U.S. for Ryplazim could be consumed. So, I mean, this is – perhaps that’s what’s new in the sense that the realization by parties out there to the extent that Ryplazim is not just congenital, which in itself is an interesting proposal. But the addition of expanded indication has been attracting different types of discussions now. Not just niche, as you described, but also large global players.

Okay, great, thanks. That’s very helpful. And then just one final question. In terms of the sale of plasma, how much more do you guys have left? Is that just the amount in inventory on the balance sheet? And in terms of timeline of selling that. I am just selling that. I’m just trying to get a right idea from a modeling standpoint? Thanks.

Okay, I’ll take that one, Pierre. So the plasma that we have – that we will be selling or we just recently sold was as a result of some inbound plasma that we had taken under a supply contract. So as you can probably imagine, in preparation for an earlier anticipated launch of plasminogen, we have supply contracts in place for the supply of raw plasma for us to manufacture products. In the event of the delay to the launch of the product, we’re bringing in more plasma under these contracts than we are using in the short-term. So it makes sense for us to monetize that and not have plasma sitting too long on inventory. It’s possible that there might be another modest sale of plasma in the next 6 months to 12 months. But obviously, we’re now preparing for the resubmission of BLA and we’ll be gearing up again for the launch of the product. So I wouldn’t anticipate too many more sales of plasma as we go forward.

Okay, great. Thank you, very helpful. I’ll turn it back.

[Operator Instructions] And there are no further questions at this time. I will turn the call over to Mr. Pierre Laurin for some closing remarks.

Well, again, thank you very much for your time today, and we look forward to provide you with further updates as we continue to progress on our key programs. And we wish you a very good day. Thank you again.

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