Earnings Call Transcript - HUMA Q3 2022

Operator, Operator

Good morning, ladies and gentlemen, and welcome to the Humacyte Third Quarter 2022 Results Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I will now turn the call over to Lauren Marek with LifeSci Advisors. Please go ahead.

Lauren Marek, Investor Relations

Thank you, Operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof and the company undertakes no obligation to update or revise the forward-looking statements except as required by law. Information presented on this call is contained in the press release we issued this morning and in our Form 10-Q, which will be filed today and may be accessed from the Investors page of the Humacyte website. Joining me on today’s call from Humacyte are Dr. Laura Niklason, President and Chief Executive Officer; Dale Sander, Chief Financial Officer and Chief Corporate Development Officer; and Dr. Heather Prichard, Chief Operating Officer. Dr. Niklason will provide a summary of the company’s progress during the quarter and recent weeks, and Dale will review the company’s financial results. Following their prepared remarks, the management team will be available for your questions. I will now turn the call over to Dr. Niklason.

Laura Niklason, CEO

Thank you, Lauren. Good morning, everyone, and thank you for joining us on our third quarter 2022 financial results and business update call. During this call, I'll review our recent highlights and our progress in our key program before turning the call over to Dale for a review of our financial results. Then, we'll be happy to open the call up to your questions. We had an exciting third quarter in advancing our bioengineered human tissue platform, which produces the Human Acellular Vessel or HAV. We completed a productive meeting with the FDA in October for our arterial trauma indication. Also in our pipeline, we initiated an important partnership to facilitate the development of our type 1 diabetes HAV product candidate. We've also strengthened our Board of Directors and our leadership team with the respective appointments of Lieutenant General Bruce Green and Dr. Cindy Cao, who brings significant experience in public health, drug, and biotechnology development that will be invaluable as we move closer to our goal of bringing the HAV to market. I'll begin with an important update on our late-stage program for the HAV and arterial trauma. The FDA has previously indicated that the HAV for the indication of vascular trauma qualifies for the accelerated approval pathway. We're pleased to report that we completed a meeting with the FDA in late October. Discussions in the meeting were productive and they focused on a statistical plan that incorporates data from our current ongoing V005 clinical trial and from patients whom we have treated in Ukraine. The discussions during this meeting informed our plan to file the BLA for the common indication in mid-2023. Our V005 Phase 2/3 trial, which is a single-arm study evaluating the use of the HAV in a trauma injury setting currently has 56 patients enrolled, and the results of these patients were shared with the agency at our recent meeting. In addition to the V005 patients, we've treated nine patients to date in Ukraine with the HAV, and results of these implants were also shared with the agency. We're continuing to work with the FDA on the complete data package that will be necessary for filing the BLA. Previously, we've guided the market to an expectation of approximately 75 total patients as being needed in order to support the BLA filing in vascular trauma. Including patients from Ukraine and from V005, that guidance of around 75 total patients remains our current estimate. Importantly, we're also submitting a clinical trial application to Ukraine in preparation for the planned addition of Ukrainian sites into the V005 trial. We continue to be encouraged with our results to date in vascular trauma, which show high rates of patency, a low rate of amputation, and only one case of HAV infection within the V005 trial. We look forward to continued collaboration and dialogue with the FDA as we advance towards the BLA filing next year. The HAV in the vascular trauma context was also the subject of multiple presentations at scientific conferences and publications throughout the third quarter. In October, the U.S. Army published an update describing the use of the HAV in treating war wounds in Ukraine. In the article, it was also noted that officials with the Defense Department encouraged Humacyte to collaborate with the Medical Technology Enterprise Consortium. MTEC has provided more than $6.8 million in funding to Humacyte to develop the HAV for vascular trauma, and we're grateful for their support. At the European Society for Vascular Surgery Annual Meeting in September, Ukrainian surgeons presented patient outcomes from the use of the HAV to treat wartime vascular injuries, including blast trauma, shrapnel injuries, and gunshot wounds. The surgeons observed that access to the HAV greatly assisted in limb salvage by improving their ability to perform vascular reconstruction and by eliminating the need to harvest the saphenous vein or venous conduit. In addition, Dr. Todd Rasmussen presented an update on the HAV for the treatment of vascular trauma at the 44th International Committee of Military Medicine World Congress in September. Dr. Rasmussen spoke to an audience of NATO and other international surgeons and concluded that injured service members as well as civilians with complex injuries could benefit from the use of a readily available and infection-resistant vascular conduit such as the HAV that would facilitate quick implantation, especially in the setting of contaminated wounds. I'll now provide a quick update on our program of HAVs for arteriovenous or AV access in hemodialysis patients. Enrollment in our current ongoing Phase 3 trial in dialysis access, which is designed to assess the usability of the HAV for hemodialysis, in comparison to autogenous fistulas is nearing completion. With 227 patients out of the target of 240 total patients as of October 26, we are on track for enrollment to be completed soon. Top-line results are anticipated one year after enrollment completion, based upon the one-year follow-up period that's built into the study. If successful, results from the trial will support a BLA filing for the dialysis access indication for the HAV. As we progress towards commercialization in this indication, we're continuing to strengthen our relationship with our global partner and shareholder, Fresenius Medical Care, which is the global market leader in kidney care services, products, and value-based care. We're partnering with Frenova, the clinical research arm owned by Fresenius to evaluate complications and costs of dialysis access care for vulnerable patients in both the U.S. and Europe. Granular data from more than 600,000 anonymized patients, concerning demographics, access complications and failures, access infections, hospitalizations, and mortality is being analyzed to provide targeted information on those dialysis patients who may most benefit from the HAV. We're also happy to provide updates in our earlier stage programs as we make progress in preclinical studies of the HAV, particularly in type 1 diabetes and in coronary artery bypass grafting. In October, we initiated a research partnership with the Diabetes Research Institute, which is a global leader in preclinical studies of novel diabetic therapies. In order to facilitate the development of our Biovascular Pancreas or BVP. The BVP is our HAV product candidate that is coated with islet cells and designed to deliver insulin to type one diabetics. We're excited for the opportunity to work with the experts at the Diabetes Research Institute in Miami and to accelerate the development of the BVP. Preclinical results from our small diameter HAV program in CABG were also presented at both the American Heart Association Basic Cardiovascular Sciences Sessions in July, as well as at the American Heart Association Scientific Sessions meeting earlier this month. In a non-human primate model, the HAV maintained structural integrity and patency for up to six months post-implantation as a coronary artery bypass graft. In addition, the HAV showed evidence of robust host cell repopulation and remodeling. We're excited about our small diameter HAVs that continue to show promise in an important preclinical CABG model, and we remain hopeful that these HAVs have the potential to address the long-term patency availability and consistency issues that are associated with the current standard of care, which is harvesting the saphenous vein. Finally, Humacyte strengthened our Board of Directors and leadership team this quarter with appointments of accomplished medical and industry experts. In September, we welcomed Lieutenant General Bruce Green to our Board of Directors. General Green is a former surgeon general of the United States Air Force and is an expert in disaster relief and military medical response operations around the globe. In addition, we also welcomed Dr. Cindy Cao as our Chief Regulatory Officer. Dr. Cao brings over 20 years of industry experience, with expertise in global and U.S. regulatory strategy and policy on biologics, small molecules, and devices. We're very pleased to have General Green and Dr. Cao join us and we look forward to adding their insights and expertise to the Humacyte team. With that, I'll now turn it over to Dale for a review of our financial results and other business development.

Dale Sander, CFO

Thank you, Laura. As of September 30, 2022, we had cash, cash equivalents, and short-term investments of $171.7 million compared to $225.5 million as of December 31, 2021. The $53.8 million net use of cash, cash equivalents, and short-term investments for the first nine months of 2022 resulted from spending related to net operating activities for the period, including clinical and earlier-stage research and development programs, and preparation for the company's anticipated commercial launch. We believe that our cash, cash equivalents, and short-term investments are adequate to fund operations through 2024, as the current expected timeline for potential approval of the HAV and vascular trauma. Revenue was $31,000 for the third quarter of 2022, compared to $0.2 million for the third quarter of 2021 and was $1.6 million for the nine months ended September 30, 2022 compared to $1.1 million for the nine months ended September 30, 2021. Revenue in all periods related to grants supporting the development of the HAV. Research and development expenses were $17.3 million for the third quarter of 2022 compared to $15.4 million for the third quarter of 2021 and were $48.3 million for the nine months ended September 30, 2022 compared to $45.1 million for the nine months ended September 30, 2021. The current period increases resulted primarily from increased personnel expenses to support expanded research and development initiatives and the support of clinical trials. General and administrative expenses were $6.2 million for the third quarter of 2022 compared to $5.4 million for the third quarter of 2021 and were $17.1 million for the nine months ended September 30, 2022 compared to $15.6 million for the nine months ended September 30, 2021. The current period increase resulted primarily from the transition to being a public company in preparation for the anticipated U.S. commercial launch of the HAV, including increased personnel costs, professional fees, and insurance costs. Other net expense was $1.8 million for the third quarter of 2022 compared to $11.0 million for the third quarter of 2021, and other net income was $55.5 million for the nine months ended September 30, 2022, compared to other net expense of $9.5 million for the nine months ended September 30, 2021. The reduction in other net expense for the current year's third quarter and the increase in other current net income for the current year's nine months resulted primarily from the remeasurement of the contingent earn-out liability associated with the August 2021 merger with Alpha Healthcare Acquisition Corp. Net loss was $25.3 million for the third quarter of 2022 compared to $31.6 million for the third quarter of 2021, and net loss was $8.2 million for the nine months ended September 30, 2022 compared to $69.1 million for the nine months ended September 30, 2021. The current period decreases in net loss resulted from the reduction in other net expense and increase in other net income described previously, partially offset by operating expense increases also described previously. With that, I'll turn it back to Laura for concluding remarks.

Laura Niklason, CEO

Thank you, Dale. To conclude, we've made significant progress over the last quarter in both our clinical and our preclinical programs. As we approach year-end, we're excited by the coming months and the prospects of bringing this important technology to surgeons and to patients in need, and we look forward to providing further updates as we approach clinical and regulatory milestones. Operator, we're ready to take questions now.

Operator, Operator

We will now begin the question-and-answer session. The first question is from Josh Jennings with Cowen & Company. Please go ahead.

Eric Anderson, Analyst

Hi. This is Eric for Josh. Thanks for taking the question. Wanted to start in vascular trauma. Just thinking about your discussions with the FDA and their thoughts on the inclusion of the Ukraine HAV experience. Do you think there's any possibility that the bar for your 75 patient enrollment number could be lowered in your Phase 3 trial? And if that is possible, when do you think we would hear about a lower enrollment target? Do you have any upcoming FDA meetings where this could be discussed?

Laura Niklason, CEO

Thank you, Eric. This is Laura Niklason. Yeah, that's a very good and insightful question. I'll answer it to the best of my ability. So the discussions at late last month with the FDA were productive. We shared with them both the V005 data in which we've enrolled 56 patients and also the nine patients in Ukraine, which add up to about 65 total patients. Clearly, our results in Ukraine have been very positive and are strongly supportive of the 56 patients that we have in V005. And clearly, the Ukraine scenario is a real-world scenario where you could argue, the wounds are dirty and the care of the patients is more difficult. I want to be clear, the humanitarian use patients in Ukraine are not part of the V005 study, at least not yet, although we are contemplating adding sites in Ukraine to the V005 trial. So I think it's too early to say that a specific number of patients. What we're talking about now with the FDA is really a statistical tool that will drive the size of the total number of patients that are under consideration. But it remains our estimate that the total number of patients, if you were to include the V005 patients and the Ukraine patients, which is now at 65, it remains our estimate that all patients added together is approximately 75. But this is going to be based on finalizing our statistical approach with the agency. Does that help?

Eric Anderson, Analyst

That does. Yeah. That makes sense. Thank you. And then secondly, I know it's still early on, but as your later-stage trials come to an end and we start thinking about top-line readouts and potential approval submissions. Is there any work you're doing to set up or organize the commercial infrastructure? And again, I know it's still early on, but when do you think we may hear more updates on that front?

Dale Sander, CFO

Yeah, absolutely. Yeah. Certainly, Eric, we've brought on Head of Commercial Operations, BJ Scheessele, who has been with the company for a little more than a year now and he has a team around him that is doing many of the long-term planning activities that are going to be required to support all the commercial launches, but in particular, our initial commercial launch expected in vascular trauma. As we've talked about before, vascular trauma within the United States is certainly a nice place for the initial launch. It's a relatively concentrated market. It's about 200 Level 1 trauma centers in the United States. So it requires a relatively smaller sales force than other indications. As we get closer to the actual anticipated launch date, we'll continue to add other marketing infrastructure and longer-term activities that are required such as reimbursements, patient access, and things of that nature, and then as we get even closer that's when we'll start bringing on the actual sales force.

Eric Anderson, Analyst

Okay, understood. Thank you for the questions.

Matthew O'Brien, Analyst

Hey, this is [indiscernible] on for Matt. Thanks for taking the questions. Just a quick one on the V005 trial. I'll refer to it as 56 plus nine patients here. You added one patient outside of Ukraine in the quarter. Do you have any insight into patient additions in Q4? Can we expect things to pick up as we approach the end of the year and early next year?

Laura Niklason, CEO

We've been enrolling about one patient per month in the trial, with some fluctuations. We're continuously working to improve that pace. Recently, we've opened several sites in Israel, and in the spring, we plan to collaborate with the Ukrainian government to involve more hospitals that are already using the HAV on the frontline in the V005 trial. Given the increased use of HAV during the Ukraine conflict, we believe that adding sites in both Ukraine and Israel will help speed up enrollment. However, due to the unpredictable nature of trauma, it's difficult to forecast exact numbers. Overall, we've enrolled slightly more than one patient per month during the trial, and we hope to either maintain or slightly increase that rate.

Unidentified Participant, Analyst

No, that's very helpful. And I guess, just shifting gears here, can you speak to your entering this partnership with the DRI, down to Miami? And when we could maybe start to see some preclinical data on the BVP? Thank you so much.

Laura Niklason, CEO

Yes. I think we've been in discussions with the leaders at the DRI for a number of months. As you may know, and some of these listeners may not, the Diabetes Research Institute is probably the premier organization in the world that has been experimenting with islet transplantation. And they've been doing experiments in non-human primate models for decades with this therapy. And so since the biovascular pancreas is really an islet transplantation delivery method or technology, we view the partnership with the DRI as being a really important accelerator for what we're going to be able to do because of their expertise in primate models and immunosuppression and islet isolation, et cetera. With that being said, I think that, again, I hate to predict, but I think that we will have updates on the BVP project certainly by the middle of next year, perhaps earlier. We have multiple work streams underway, not just the work with the Diabetes Research Institute, but also work with various stem cell lines and various sources of islets that we would use in the BVP. So it's a little bit like duck feet underwater. We've got a lot going on, and I would expect more updates probably in the next six to nine months.

Suraj Kalia, Analyst

Good morning, Laura, Dale. Can you hear me all right?

Laura Niklason, CEO

Yes.

Suraj Kalia, Analyst

Perfect. Hey, Laura. A lot of questions have been asked on V005. And I was curious, the conditions for humanitarian use as I understand it, they're usually different than that in a clinical trial setting. Please correct me if I'm wrong, and I'm just curious if this would become apples and oranges if we try to reach the N is equal to 75?

Laura Niklason, CEO

So I hear what you're saying, Suraj, and let me try to clarify a little bit more. So, as you may be aware, the Humacyte HAV for the trauma indication qualifies for an accelerated approval pathway. And what the FDA typically specifies is that in an accelerated approval pathway or in single-arm trials, they often look for confirmatory information, either from other clinical trials or from laboratory-based studies, et cetera., et cetera., or even other indications. So the humanitarian data in Ukraine really falls into the category of confirmatory or supporting data. They're not primary clinical trial data in the V005 trial. However, because actually the patients who are receiving humanitarian use of the HAV actually fall under the inclusion and exclusion criteria that we've applied for the V005 trial. So they have the same types of injuries. These are injuries to the arteries and the limbs, with arteries of a certain diameter that's addressable by the HAV, et cetera. So actually, the comparability of the patients and the clinical use scenarios is higher than you might think. Although, I will say that the complexity of the injuries and the contamination level of the injury in Ukraine is probably worse than the U.S. because a lot of these patients have shrapnel and blast injuries that are fairly horrific. So from our conversation with the FDA, they view the Ukraine data as not equivalent to the V005 data, but as strongly supportive. And indeed, they view clinical success in Ukraine as sort of meeting a higher bar than a clinical trial site in the U.S. because it's a more austere environment.

Suraj Kalia, Analyst

Got it. And Laura, a couple of questions on the Fresenius and the AV fistula part of the equation, the 600,000 patients being analyzed. Maybe you can give some parameters in terms of what specific criteria are being used and how many of those potentially could be candidates for HAV? And on the same token, Dale, if I could just throw one question your way. Maybe you can help us understand $171 million on hand, a lot of stuff going on in the Fresenius side of the equation, just characterize where you're in terms of Fresenius' relationship with Humacyte? Thank you for taking my questions.

Laura Niklason, CEO

So, Suraj, I'll begin with the Frenova research. This is an exciting yet large project we are undertaking, involving 600,000 patients across the U.S. and Europe. We are focused on understanding the dynamics of dialysis access, specifically identifying patients who experience recurrent access issues. We are looking into the profiles of patients who might face multiple failures or infections with their access, or whose fistulas do not mature, resulting in dependency on catheters that can become infected. Our inquiry with Frenova is aimed at determining which patient profiles are most at risk of these complications. For instance, data may indicate that a 75-year-old diabetic woman is statistically unlikely to have a successful fistula maturation and is at risk for several hospitalizations due to sepsis, suggesting that this might not be the best route for her. This represents a different kind of data analysis than has previously been conducted in this field, as the USRDS has not evaluated data in this manner. Our approach centers on identifying patients who struggle the most with access issues, as we believe this group would significantly benefit from the rapid usability of dialysis and the lower infection rates associated with HAV. Currently, it’s challenging to determine the exact number of candidates among the 600,000 patients since we are still deep into the analysis. However, our previous guidance estimated capturing about 20% of the total market at full penetration, which remains a conservative outlook. Research indicates that women, especially older women or those with diabetes, tend to have difficulties with fistula maturation and often rely on catheters. I suspect that this particular demographic will benefit the most from the HAV. The advantage of this project is that it will provide us with solid quantitative data that we believe will be persuasive to insurers, healthcare providers, and hospitals.

Dale Sander, CFO

And Suraj, this is Dale, with regards to your second question around Fresenius. You may have been referencing some of the recent leadership changes as well as structural changes within Fresenius. Regardless of those events, we certainly don't see any lack of enthusiasm or change in the enthusiasm level of Fresenius for the HAV and the potential impact that promises with regard to the care of AV access patients, including improving patient outcomes and is more inferred from the Frenova Research, also providing the cost savings in the treatment of appropriate patients that are targeted. So we continue to work very closely with them, and I can tell you that we're still high on their priority list, the new leadership within Fresenius is actually visiting our offices next month to our facilities. So the relationship continues as strong as it has been.

Bruce Jackson, Analyst

Hi. Good morning and thank you for taking my question. I wanted to start with the pace of enrollment for the access trial of V007 trials. Last year, I think you mentioned around 222 patients last quarter, and it increased to 227 this quarter. Given that we are seeing about five to six patients per quarter, it seems like we have maybe two to three more quarters of enrollment to go. Could you discuss the enrollment pace in that trial and if there are any anticipated changes going forward?

Laura Niklason, CEO

I believe the last quarter was disappointingly slow and it was definitely slower than we've experienced in previous quarters, though I don't think that's a long-term trend. We have had follow-up meetings with several of our key enrolling investigators and have activated multiple new sites in the trial, which has generated a lot of enthusiasm among new investigators. The slowdown last quarter might have been due to investigator fatigue; this trial has been ongoing throughout COVID, and enrolling has been challenging because we are working with an elective surgical population that has faced interruptions in care during the pandemic and lockdowns. I'm optimistic that we won't need several more quarters to complete enrollment. We aim to enroll around 240 patients, though that number could vary slightly. I just want to emphasize that we are very close and are putting in significant effort toward this goal.

Bruce Jackson, Analyst

Okay. Great. And then once you've completed the follow-up in the data analysis, I'm assuming that the turnaround to a filing, with the FDA is going to be fairly quick?

Laura Niklason, CEO

It depends on the results, but yes, this would likely require an amendment to the BLA. By the time we file for the dialysis access indication, we would already have the trauma indication approved. The manufacturing, preclinical, and quality components of the BLA for the dialysis indication will be the same as what we have filed for trauma. It ultimately comes down to the summary of the clinical trial. You're right that the hurdles to filing a BLA could be shortened if we get favorable outcomes from V007, but we are still in the enrollment phase, and I cannot predict the outcomes.

Bruce Jackson, Analyst

Okay. Great. And then a quick question for Dale on the operating expense profile here going forward. So as we're looking toward 2023, should we be taking the current operating expense for the quarter and kind of like moving that forward? And then how do you see that profile changing over the course of 2023 as you ramp up the marketing expenses for the product launches?

Dale Sander, CFO

Yes, Bruce, you're correct. As we approach the mid-2023 filing with the necessary approvals, there will be a period after that during which we can discuss the estimates for navigating the BLA process. At that time, we anticipate an increase in commercialization expenses, but these will not heavily impact the timeline for approval as the sales force will be brought on later. Therefore, the marketing hires will occur earlier in the process. Regarding expenditures in 2023 and 2024, the amounts are not predetermined and will be at our discretion. While commercialization expenses are expected to rise, other clinical trial costs, such as those for V005 and V007, will decrease during that period. The actual burn rate will depend on our decisions about how rapidly we advance certain programs and expand our pipeline, particularly concerning the more advanced stages of earlier programs. This determination will also be influenced by market conditions and growth at that time. Importantly, we have sufficient cash on hand to navigate major value inflection points, with approximately 2.4 years of cash available at our current spending rate. Additionally, we have considerable debt capacity for working capital and data requirements related to the launch. However, we will not establish a fixed spending level for 2023 at this time, as it will depend on our discretion in response to the evolving global situation as we move into that year.

Bruce Jackson, Analyst

Okay. Got it. Thank you very much for taking my questions.

Dale Sander, CFO

You're welcome.

Operator, Operator

The next question is from Ryan Zimmerman with BTIG. Please go ahead.

Ryan Zimmerman, Analyst

Good morning. Thank you for taking my questions. I apologize if I missed this, Laura. Given the enrollment pace for V005, when do you anticipate having topline data before preparing the BLA submission?

Laura Niklason, CEO

We did not address that, and it's a valid question. The FDA's position remains unchanged; since we are on the accelerated approval pathway, the primary endpoint for this trial will be the 30-day patency, with secondary endpoints including patient survival and limb salvage. Being a single-arm open-label trial, once the last patient reaches their 30-day endpoint, we will have top-line results. I believe the time between the end of enrollment and obtaining top-line results will be minimal. Additionally, since much of our BLA regarding manufacturing has been submitted to our IND, we expect the interval between completing enrollment and filing the BLA to be just a couple of months, making it fairly quick.

Ryan Zimmerman, Analyst

Yeah, that makes sense. I would assume that, similar to other submissions, a lot of the work has been done in Israel and now you're mainly waiting on this last clinical piece. Just as a side note, I know you were bringing on the Israeli sites; are those sites currently enrolling patients? The numbers are what they are, but are they actively operational at this stage?

Laura Niklason, CEO

They're actively up and running. In fact, we had a visit from one of our operations people to Israel just last week. Israel has not enrolled as of yet, but we anticipate that they will.

Ryan Zimmerman, Analyst

Okay. That's very helpful. And then last one for me. Just what commercial activities are you guys preparing for, if you think about V005 and getting the BLA ready, you have started to make some hires on the commercial side with BJ. And so I was curious kind of what commercial activities are you preparing for at this stage as you think about V005, eventually making it to market.

Dale Sander, CFO

Sure, go ahead, Laura.

Laura Niklason, CEO

No. I'll just say a little bit, Dale. We have BJ on board, and we're expanding the commercial team focused on marketing. We also have staff dedicated to health economics and are planning to grow the market access team. Additionally, we are utilizing several third-party vendors for market analysis, examining price sensitivity, and exploring scenarios related to hospitals and healthcare providers regarding the potential utility of HAV in trauma. Much of this effort has been like duck feet underwater, not directly reflected in hires because a significant portion of this work has been outsourced. However, we are making substantial progress in analyzing the market through these third-party vendors, and I'll let Dale continue.

Dale Sander, CFO

No, I think you actually covered it all Laura.

Operator, Operator

Thank you. I'm showing no further questions in the queue at this time. This concludes the Humacyte third quarter results conference call. Thank you all for participating.