Humacyte Q1 2025 Earnings Report

Humacyte EPS Results

• Actual EPS: -$0.10
• Consensus EPS: -$0.19
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: N/A

Humacyte Revenue Results

• Actual Revenue: $0.52 million
• Expected Revenue: $0.46 million
• Beat/Miss: Beat by +$59.00 thousand
• YoY Revenue Growth: N/A

Humacyte Announcement Details

• Quarter: Q1 2025
• Date: 5/13/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 8:30AM ET

Humacyte (NASDAQ:HUMA) engages in the development and manufacture of off-the-shelf, implantable, and bioengineered human tissues for the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas. The company using its proprietary and scientific technology platform to engineer and manufacture human acellular vessels (HAVs) to be implanted into patient without inducing a foreign body response or leading to immune rejection. It is developing a portfolio of HAVs, which would target the vascular repair, reconstruction, and replacement market, including vascular trauma; arteriovenous access for hemodialysis; peripheral arterial disease; pediatric heart surgery; and coronary artery bypass grafting, as well as for the delivery of cellular therapy, including pancreatic islet cell transplantation to treat Type 1 diabetes. The company was founded in 2004 and is headquartered in Durham, North Carolina.

Humacyte Q1 2025 Earnings Call Transcript

Key Takeaways

• CymVes commercial launch: First shipments made to three level one trauma centers with 45 hospitals evaluating and five VAC approvals within months of late‐February launch.
• Dialysis access pipeline: VO7 phase III trial met endpoints showing superior patency vs fistula, VO12 trial has enrolled 84 of 150 patients, and a supplemental BLA filing is planned for H2 2026.
• Coronary bypass program: Plan to file an IND for first‐in‐human testing of the 3.5 mm small‐diameter acellular vessel in CABG later this year following a productive FDA meeting.
• Strengthened financial position: Completed a $46.7 million public offering, implemented cost cuts including a 31‐headcount reduction, and extended cash runway with over $50 million of savings expected by 2026.
• Market headwinds: Volatile economic conditions and unfounded negative press (including a New York Times article) have introduced VAC review delays, although management is addressing criticism with science‐based facts.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Humacyte First Quarter Results Conference Call. Currently, all participants are in a listen only mode. Later, will conduct a question and answer session. Instructions will follow at that time. As a reminder, this conference is being recorded.

[Operator]

I will now turn the conference call over to Tom Johnson with LifeSci Advisors. Please go ahead, sir.

[Tom Johnson, Director - Corporate Communications at LifeSci Advisors, LLC]

Thank you, operator. Before we proceed with the call, we'd 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 historic experience or present expectations.

[Tom Johnson, Director - Corporate Communications at LifeSci Advisors, LLC]

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 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, after filing, may be accessed from the Investor page of the Hemocyte website. Joining me on today's call are from Hemocyte are Doctor. Laura Nicholson, President and Chief Executive Officer Dale Sander, Chief Financial Officer and Chief Corporate Development Officer and Vijay Seseli, Chief Commercial Officer.

[Tom Johnson, Director - Corporate Communications at LifeSci Advisors, LLC]

Doctor. Nicholson will provide a summary of the company's progress for the first quarter and recent weeks, and Dale will review the financial results for the quarter ended 03/31/2025. Following their prepared remarks, BJ will join Laura and Dale for the Q and A session. I will now turn the call over to Doctor. Nicholson. Laura?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Thank you, Tom, and good morning, everyone, and thank you for joining us for our first quarter twenty twenty five financial results and business update call. Following the landmark success of obtaining FDA approval of CymVes for the treatment of extremity vascular trauma late last year, we're keenly focused on the commercial launch of this groundbreaking product. Supporting the launch is our number one priority, and we're pleased by the traction gained in our interactions with hospitals, despite the current volatile economic environment. Based upon our March 2025 financing and some recent cost reductions, we've taken steps to extend Humacyte's cash runway. With this extended runway, we'll continue to aggressively expand our commercial launch, while creating additional enterprise value from our bioengineering pipeline.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Upcoming major value drivers that we anticipate include publication of additional clinical results in trauma and in dialysis access, and filing an IND with the FDA later this year to enable first in human clinical testing of our small diameter ATAV in coronary artery bypass grafting. In addition, as a result of reaching a major milestone in enrollment in our VO12 phase three trial in dialysis, we're also on track for filing a supplemental BLA for the ATEF in dialysis in 2026. During today's call, I'll review these developments in more detail before turning the call over to Dale for a review of our financial results. BJ Chesley, our Chief Commercial Officer, will then join us to help answer your questions. As I start the review of the quarter, I want to acknowledge the strong support that we've had from surgeons who have treated patients with CymVes, and the resiliency of our team members in the face of some unfounded negative press regarding CymVes and Humacyte.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

As you probably know, we've addressed these critiques in public statements in recent weeks. In short, we believe that these criticisms are ill informed and without merit. Over the last two decades, we've worked hard to build Humacyte into what it is today. The body of clinical results supporting the use of SimVes in extremity vascular trauma will be further strengthened by upcoming publication in peer reviewed medical journals of our long term patient outcomes. We will continue to combat unfounded attacks with science based facts.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

With that out of the way, I'm proud to report that Humacyte commenced its commercial launch of CymVest in late February twenty twenty five. The first commercial shipments containing multiple units of CymVest were made during the first quarter to three level one trauma centers. As a reminder, commencement of sales to hospitals for new products typically requires review and approval by a value analysis committee, or VAC, which is a centralized decision making body within the institution. Only a few months after commercial launch, we're excited that 45 hospitals have already commenced an evaluation of CymVest as part of their VAC approval process. Approximately one quarter of all level one trauma centers nationwide.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

The VACs of five hospitals have already approved the purchase of CymVest, and we expect this number to grow throughout the second quarter, based on current discussions with hospitals. Our commercial launch of CymVest is further supported by publication in March of twenty twenty five of our budget impact model in the peer reviewed Journal of Medical Economics. This publication shows that CIMVEST provides economic value to the healthcare system. By reducing conduit infections and limb amputations, SimVest provides a strong opportunity for cost reduction as compared to synthetic conduits and as compared to xenografts and the like. In addition to the civilian market, Humacyte has been working to address the military market for CymVest and extremity vascular trauma.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Multiple military treatment facilities have already expressed an interest in purchasing CymVest. To facilitate these purchases, we expect that CymVest will shortly be listed in the electronic catalog, or ECAT, which is an internet system that provides the Department of Defense and other federal agencies with access to manufacturers' products. As we've previously reported, due to the nature of the VAC process, we have consistently forecast that the majority of first year sales will occur in the second half of the year. We're pleased that the sales and the VAC activity to date is in line with our goals for this early period of market launch. The US commercial launch of SimVest this quarter was a major milestone for Humacyte, and we're excited to provide this transformative product to surgeons and patients in need of a new option to save limbs and lives.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Let me turn now to the ADEV indication that is our next priority, which is in dialysis access. As you'll recall, about six months ago, we reported top line results on our prospective randomized head to head VO7 phase three trial, which compared our vessel to the gold standard, which is autogenous fistula. This trial met its primary endpoints, and showed superior patency at six and twelve months as compared to fistula. We were also able to identify two subgroups of patients who could benefit the most from the ATEV, which includes all women and men with diabetes and obesity. These two groups make up more than half of the dialysis access market.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

We believe that the efficacy and safety results in the subgroups, combined with the approximately fifty percent failure rate of standard of care in these vulnerable populations, means that they are important targets for the marketing of ATEF in dialysis access. We expect that the results from the VO7 phase three trial will be published in a major peer reviewed medical journal in the near term. We're also conducting an ongoing phase three dialysis access trial in women, which has passed a major enrollment milestone. The VO12 study is a small phase three trial of 150 patients, which compares the efficacy and safety of ATEV to fistula for hemodialysis. A total of 84 patients has already been enrolled in the trial to date.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

An interim analysis for the VO12 trial is planned for April 2026, when the first eighty patients will have reached the twelve month follow-up. Our plan is to submit a supplemental BLA in the second half of twenty twenty six, which includes data from the VO12 and VO7 phase three pivotal studies, and to add AV access for hemodialysis as an indication for the ATEF. Finally, I'll briefly discuss some of our earlier stage programs that we're also excited about. Our small diameter ATEF for the treatment of coronary artery disease. During the first quarter, we announced plans to file an IND application with the FDA to allow first in human clinical testing of the small diameter acellular tissue engineered vessel, which is 3.5 millimeters in diameter rather than the six millimeter diameter of the approved SIMVEST conduit.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Our plans for IND filing in 2025 to support a first in human trial in coronary bypass, are based on the outcome of a recent meeting held with the FDA. To date, only the six millimeter configuration of our vessel has been studied in human trials, to include AV access for hemodialysis, trauma, and peripheral arterial disease. We're very pleased to be moving closer to human clinical studies of the small diameter ATEF in coronary artery bypass surgery. And we believe our planned IND filing and initiation of first in human study after FDA clearance, will be another major milestone for Humacyte. So we're off to a good start in 2025, and we look forward to sharing our continued progress with all of you as the rest of the year unfolds.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And with that, I'll now turn it over to Dale for a review of our financial results and other business developments.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

Thank you, Laura.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

In March 2025, we completed a public offering that provided $46,700,000 in net proceeds to Humacyte. Subsequent to the financing, in part due to current market conditions, we implemented a plan to reduce our workforce by approximately 31 employees. We also deferred additional new planned hires and reduced other operating expenses. These reductions have been done thoughtfully, and we've retained key personnel, resources and initiatives to meet our corporate goals and milestones. We have undertaken these cost reductions to extend cash runway and better align our organizational structure with our top business objectives.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

These objectives include the commercial launch of CIMVEST, including sales, marketing and manufacturing completion of the B012 Phase three pivotal trial of the ATEEV in dialysis and the planned filing of a supplemental BLA with the FDA and the filing of an IND to commence human study of the small diameter ATEEV in coronary artery bypass grafting or CABG. We estimate that we will incur aggregate charges representing one time cash expenditures for severance and other employee termination benefits of approximately $800,000 of which the majority is expected to be incurred during the second quarter of twenty twenty five. We estimate a net savings due to the workforce reductions, operating cost reductions, and reduced capital expenditures, net of termination, severance, and benefits, totaling approximately $13,800,000 in 2025. Net savings are estimated to be as much as $38,000,000 in 2026 for a total estimated savings of over $50,000,000 in 2025 and 2026 relative to our original forecast. Regarding the first quarter financial results, there was $517,000 in revenue for the first quarter of twenty twenty five, of which $147,000 related to the initial U.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

S. Commercial launch of Cymbess in trauma. The remaining $370,000 in revenue resulted from a research collaboration with a large medical technology company to evaluate the potential use of our bioengineered human tissue in specific cardiovascular and vascular applications. There was no revenue for the first quarter of twenty twenty four. Cost of goods sold was $147,000 for the first quarter of twenty twenty five and includes overhead related to unused production capacity, which was recorded as an expense during the first quarter.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

There was no cost of goods sold for the first quarter of twenty twenty four. Research and development expenses for the first quarter of twenty twenty five were $15,400,000 compared to $21,300,000 for the first quarter of twenty twenty four. The decrease in 2025 expenses compared to the prior year was all primarily from decreased material costs as we began capitalizing expenditures for inventory during the first three months ended 03/31/2025 following the commercial launch of CIMVEST as well as a reduction in clinical study costs. General and administrative expenses for the first quarter of twenty twenty five were $8,100,000 compared to $5,300,000 for the first quarter of twenty twenty four. The increase in 2025 expenses compared to the prior year period resulted primarily from The U.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

S. Commercial launch of CymVest in vascular trauma, including increased personnel expenses associated with the sales effort. Other net income for the first quarter of twenty twenty five was $62,300,000 compared to a net expense of $5,300,000 for the first quarter of twenty twenty four. The increase in 2025 of other net income compared to the prior year resulted primarily due to an increase in the noncash remeasurement of the contingent earn out liability associated with our August 2021 merger with Alpha Healthcare Acquisition Corp. Net income was $39,100,000 for the first quarter of twenty twenty five compared to a net loss of $31,900,000 for the first quarter of twenty twenty four.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

The increase in 2025 net income compared to the prior year period was primarily due to the increase in the non cash remeasurement of the contingent earn out liability described previously. We had cash, cash equivalents and restricted cash of $113,200,000 at 03/31/2025. Total net cash provided was $17,900,000 for the first three months of twenty twenty five compared to net cash provided of $35,100,000 for the first three months of twenty twenty four. The net cash provided for the first three months of 2025 included the net proceeds in the March 2025 public offering. The decrease in net cash provided during the first three months of twenty twenty five compared to the prior year resulted primarily from the receipt of $20,000,000 in proceeds under a draw from our funding arrangement with Oberlin Capital, which occurred in 2024 but did not reoccur in 2025.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

With that, I will turn the call back over to Laura.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Thank you, Dale. The approval and the launch of CIMVEST is a powerful example of our commitment to delivering truly transformative regenerative medicine solutions to improve patient outcomes. Humacyte continues to deliver on our promises to physicians and patients. With our strong commercial execution, our promising pipeline programs, and our dedicated team, we're confident in our ability to continue

[Operator]

Please standby. One moment. Please standby. One moment.

[Operator]

Once again, ladies and gentlemen, we thank you for your patience. Please stand by. We will resume momentarily.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Hello, operator. We're ready to take questions now.

[Operator]

Thank you. We will now conduct a question and answer The The first question comes from Ryan Zimmerman with BTIG. Please proceed.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

Thank you. Can you hear me okay?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yes, we can hear you.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

Okay, great. Thanks for taking the questions. Congrats on the first sale of CIMVEST. Maybe on those three sites that have purchased, Laura, I'd love to understand kind of what their experience has been since they've purchased, whether you service those cases, how you're servicing those cases, etcetera. And then, as we think about kind of the uptake of CymVest this year.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

I appreciate your commentary about it being kind of second half loaded. Love to understand how those 45 or so sites are running through the process and how you expect that maybe to translate into initial sales after you've now had a lot of back experience under your belt?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Well, I'll take the first part of the answer to this question, and then I'll ask our commercial officer, BJ Chesley, to weigh in as well. So, as far as the three commercial sites, we have performed our first implant. At that particular site, our sales rep was able to be there for the implant. Although, I will say that at many of the sites that have used the vessel before, having a sales rep in the OR is certainly not necessary. In addition to the clinical trial experience that a lot of surgeons have had, we have also been conducting sort of hands on training in hospitals where our sales executives have approached surgeons and VACs to get on the formulary.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

So, it's certainly not necessary to have a sales representative in the OR for the initial cases, although sometimes we do do that. As far as our experience with the VACs, we have had a fairly good conversion rate of VAC approvals. I would say that there was a little bit of a headwind that was imparted by the New York Times article, particularly during April, but that seems to be receding as the facts of the clinical experience become clearer to surgeons and to hospitals. And we also expect that publication of long term data will also further improve our position there. The Health Economic Model that we published in March is also a huge help, because it shows pretty clearly that on a per patient basis, the total cost of the initial admission for patients who are treated with CymVest should be lower than the total cost of the initial admission for patients who are treated with a synthetic graft.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And this is independent of any NTAP reimbursement. So, you know, I think that the growing number of publications and the growing factual story around the conduit is helping us get traction. But I'll let BJ weigh in here as well.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

No, Laura, I think you covered things well. Yeah, Ryan, I would add that not only of where those three institutions have acquired product, but even of the VAC submissions is a good mix of hospitals and surgeons that have known us, known us from our clinical studies, but others that have no experience with us. So I think that's a good sign. You know, and in terms of the, you know, the VAC submissions and the sales funnel, feeling good about, you know, that we're laying the groundwork now. We have a full sales funnel with the 45 submissions.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

We continue to add those on a regular basis. As Laura mentioned, we had some quick wins. On the other side, absolutely. The New York Times article with a couple of the VACs, some pushback for us that we've you know, now had to respond to to get back on track. I think also the tough economic environment we're in has pushed out some of the the VAC reviews and add in additional financial reviews, you know, under bringing a new product to market.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

You know, we still see this as a three to six month back process for the majority of the ones that we're facing and that we've submitted to. And, you know, as Laura mentioned, the early feedback from those where we have had the formal back review, the conversion to approval has been strong. Now with the five approvals and obviously looking to build upon that. So, it's now building momentum currently and we absolutely expect to see in the back half of the year the full impact of that.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

Yeah, that's very helpful and appreciate that. And on the ECAT and some of the government hospital, the federal hospitals, whatever you wanna call them, is the process similar? I mean, I'm curious, once you get on the ECAP, can VA hospitals or whoever within that order CIMVEST as needed, or is there more hurdles to go through on that side of things?

[BJ Scheessele, Chief Commercial Officer at Humacyte]

Well, again Oh, ahead, Oh,

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

I'm sorry. Yeah, BJ, I'll ask you to weigh in too. So, the ECAT process, which we're nearing completion on, does technically allow military hospitals and VAs to order the product. However, typically, certainly in military institutions, there also has to be surgeon champions. Certainly, addition to working with civilian hospitals, as I mentioned, our sales executives have been working closely with some military institutions.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And we, in fact, have previous relationships in some military care facilities who participated in our clinical trials and our compassionate use cases. So, we are building out that sort of surgical support for the product. Military hospitals tend not to have a formal VAC process. I'm not sure if that's true in all cases. But really, having surgeon champions and being on the, having the correct distribution and being on the ECAT are really key inputs there.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And I'll let Dale, I'm sorry, I'll let BJ correct me where I'm wrong.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

No, I think that's exactly right that in parallel with building surgeon advocacy, which we back to clinical studies to our sales efforts, you obviously absolutely have to jump through those procurement hoops and soon getting on the ECAD is going to be a big milestone and ability to order. And yeah, we've been fortunate. We've actually been working with an outside DoD procurement partner to help in that regard given their expertise and connection. So I think that gives you a sense of where we're at in this particular.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

That's very helpful, BJ. And this last one, I'll sneak it in. Do you have to expand the sales force or can you service the military hospitals with your existing sales force right now, as well as the 200 or so level one trauma?

[BJ Scheessele, Chief Commercial Officer at Humacyte]

Yeah, I would say now our current sales force feel comfortable being able to cover the sales targets for the geographies that we have, those hospitals and submitting to those vaxxin. And again, you kind of got a sense of the full sales pipeline. And then certainly for early interest from the military treatment facilities match up well with where we have our sales reps and sales force deployed. I think, you know, as we increase success, both civilian and military, we'll look to add to our sales force at that time.

[Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG]

Okay. Thanks for taking my questions.

[Operator]

Absolutely. The next question comes from Josh Jennings with TD Cowen. Please proceed.

[Josh Jennings, Managing Director at TD Cowen]

Hi. Good morning. Congrats on the progress with The US MS launch. Lauren, Dale, you were gracious enough last on the last earnings call to just comment on where Street estimates stood for 2025 and just wanted to check back in after the last month and a half of the experience and the progress you've made. Do those estimates still seem reasonable or in the ballpark of kind of the internal expectation for the revenue ramp here?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

I think we remain in the same place with our expectations, but I'll let Dale comment further.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

Yes, I agree. I think we gave some guidance, Josh, on the first. I'm sorry, seemed like a first quarter call, but that was our year end call happened in March. Based on the traction we're seeing, the number of hospitals that are involved in the BAC processes, as BJ mentioned, we're still comfortable with the guidance. And again, as Laura mentioned earlier in the call, due to that BAC ramp, expect most of those revenues to come in, in the second half.

[Dale Sander, CFO, Chief Corporate Development Officer & Treasurer at Humacyte]

But we're not seeing anything currently that would suggest we need to move off those estimates.

[Josh Jennings, Managing Director at TD Cowen]

Appreciate that. And just wanted to ask about V012 and you guys are enrolling that nicely. I was hoping for just a review on in terms of how the clinical development team or your team has kind of applied the learnings from other Phase III studies clearly in the patient selection and the subgroups you guys are going after is one. But just I think what are the learnings that are being applied yet? Anything from the procedural technique to anything else that you want to comment on in terms of helping us think about the potential for success for V012?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yeah, Josh. So, certainly have, we've treated a lot of dialysis patients, and as you know, this is a complicated and sick population, and we have benefited from our prior clinical experience. You know, there are a couple of key outputs that I think we're following. One is, it's not just the surgical implantation of the conduit, what happens to the conduit in the dialysis center and in the hands of various interventionalists for these patients is very important to the outcome of the study. And so, we're paying close attention to how the dialysis centers are handling the conduit, and how the dialysis centers are adhering to the clinical trial protocol.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And we're doing the same thing with interventionalists because our surgeons do a great job of sewing the vessel in, but what's important for the execution of the clinical trial is that we follow-up on these later healthcare providers who are also working with patients. So we're paying a lot of attention to that, and again, I think that the female population struggles so struggles so much with fistula. We do anticipate that the results of this trial will be positive.

[Josh Jennings, Managing Director at TD Cowen]

Great. Maybe just one follow-up on the access indication. Just in terms of the kind of partnership with Fresenius, the investment there, have there been any changes? And then I guess the second layer is how involved are they in the V012 and terms of the design of the trial, anything else that you can share? Thanks for taking the questions. Appreciate it.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yeah, so the partnership with Fresenius remains strong. I think that the Fresenius leadership were particularly encouraged by the wonderful results that we had in VO7. Fresenius is also fully aware that women, in particular, but also patients with obesity and diabetes, not only have trouble with their access, but they're very expensive to care for. And in some cases, know, Fresenius, as sort of a holistic healthcare provider for these patients, has to bear those costs. So, as I think I've mentioned in previous calls, you know, we have been working with Fresenius to quantify the added costs that are incurred in patients who have an access that isn't working, or in patients who are forced to remain on catheter.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

And those costs are significant, and we believe there's going to be a strong health economic case. You know, I think I also pointed out on the last call that dialysis access centers used to penalized for not having a sufficient number of fistulas, but the reimbursement penalty now has been altered so that if centers have too many patients on catheter, their reimbursement is penalized. So, I believe that CIMVEST, in the dialysis access space, which has the potential to get so many patients off of catheter, really aligns with the reimbursement objectives and the business objectives of Fresenius.

[Josh Jennings, Managing Director at TD Cowen]

Thanks, Laura.

[Operator]

The next question comes from Kristen Cluster with Cantor Fitzgerald. Please proceed.

[Kristen Kluska, Managing Director and Biotechnology Equity Research Analyst at Cantor Fitzgerald]

Hi, good morning, everybody. At your Analyst Day two months ago, you gave us a very early review and we heard from some surgeons directly. So now that you've added about 20 more hospitals since that time, I'm just curious on the VAC questioning, if you're hearing that it's fairly consistent. It sounded like at that event that the surgeons were alluding that it was pretty straightforward. Sometimes they were asking about how often the products would be used and costs, but has anything changed since you've added more hospitals?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yeah, I'll let BJ answer this as well, but I would say that no, the dialogue and the talk track is pretty similar. The clinical data that we published in JAMA Surgery in November are very strong, and the label is really not, you know, I mean, that just doesn't come up as an issue very often. We do have to talk about the price point, so, leveraging our published budget impact model that came out in March, I think is going to continue to be important. When we get in front of VACs and when we present the budget impact model, our success rate is very high. BJ, do you have anything to add?

[BJ Scheessele, Chief Commercial Officer at Humacyte]

No, I think that covers it well. Yeah, strong clinical belief and understanding based not only on clinical data, but their personal experience, either questions on price value. But again, as Laura mentioned, published BIM and the data from that, again showing that the cost offsets fewer infections, fewer amputations more than offset the upfront cost of our product versus a synthetic or versus an allograft or xenograft. And then I think just the other piece of the equation is obviously we're working on our NTAPs. And so the proposed ruling was put out by CMS.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

We're in the process of putting our response back due mid June and then ultimately you hear in August and then hopefully enacted in October. So that's obviously piece of the equation to the incremental reimbursement part of the NTAP and the follow on effect with private insurers.

[Kristen Kluska, Managing Director and Biotechnology Equity Research Analyst at Cantor Fitzgerald]

Thanks so much. And of the 45 hospitals, can you give us a sense of roughly what percent of them were involved in your clinical trials and have prior experience?

[BJ Scheessele, Chief Commercial Officer at Humacyte]

Yeah, it's interesting. I would say it's actually the minority, so less than 50% would have to look up exactly what that is. And so, yeah, back to my earlier point, I think there was a lot of understanding and visibility, both from publications, the clinical data, the approval, industry conferences, medical education, and events that we've held that brought visibility to what we're doing, that gave us a jump start when we went into these institutions. And then obviously our sales force through their relationships and being able to communicate the clinical and economic value have brought these surgeons, advocates and hospitals along through the VAC process. So a good mix and knowing that that's going to be important going forward because you kind of work through those that you tell you, but the majority do not and feel good about our conversion rate at this point.

[Kristen Kluska, Managing Director and Biotechnology Equity Research Analyst at Cantor Fitzgerald]

Thank you.

[Operator]

The next question comes from Bruce Jackson with Benchmark Company. Please proceed.

[Bruce Jackson, Senior Analyst at The Benchmark Company LLC]

Hi, good morning and thank you for taking my questions. I was hoping to get a little color around the surgeon adoption patterns at the accounts using the products. So usually you get the surgeon advocate champion who starts doing the first procedures, and then the other doctors will follow along. So do you have any anecdotal information on how that's going?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Well, is truly anecdotal, Bruce. We do have a vascular surgeon who was actually new to the product who treated a patient at one of our commercial sites and said he had a great experience and, quote, know, was looking forward to using the product again, quote unquote. But you're right, I think that in most institutions, this will start with one or two surgeons and then move outward. There's always an early adopter in every crowd, and those are probably the first surgeons who we'll work with.

[Bruce Jackson, Senior Analyst at The Benchmark Company LLC]

And then oh, go ahead.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

Oh, ahead. Go ahead, Bruce.

[Bruce Jackson, Senior Analyst at The Benchmark Company LLC]

No, no, no, no, go ahead.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

Oh yeah, no, I would just add, you know, and it's also a mix between vascular surgeons and trauma surgeons. Ultimately more vascular than trauma, but trauma obviously in some ways see these patients can be first and also influence on being able to not only treat these patients but bring in new technologies into the hospital. So I think we see it as a mix of that, wherever we get the traction, I think we're able to port over to that other group, be it if you start with a vascular to go to a trauma or trauma go to a vascular weave. Again, it's early, but we've seen the ability to get that message with one group to the other group and then obviously build upon interest from there.

[Bruce Jackson, Senior Analyst at The Benchmark Company LLC]

Okay, great. And then a question on the pipeline. Is there anything new on the biovascular pancreas or any upcoming data?

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yes, we have continued primate implants in the biovascular pancreas. We're also continuing laboratory experiments. I don't have anything new explicitly to report now as compared to our last call six weeks ago, but we are going to publish preclinical results probably later this year.

[Bruce Jackson, Senior Analyst at The Benchmark Company LLC]

Okay, great. Thank you very much.

[BJ Scheessele, Chief Commercial Officer at Humacyte]

You got it.

[Operator]

Thank you.

[Operator]

At this time, I would like to turn the call back over to management for closing comments.

[Laura Niklason, Founder, President, CEO & Director at Humacyte]

Yes, thank you, operator. This has been a great opportunity to share our progress. These are exciting times in the world, as we all know, and with all of the flux going on in the economic markets and in the healthcare markets, we're pleased that despite all of that, we are getting important and substantial traction at level one trauma centers with our first commercial launch. So, our fabulous commercial team will continue to work this, and we anticipate more good news going forward. So thank you for your time.

[Operator]

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Participants

Executives

• Laura Niklason, Founder, President, CEO & Director
• Dale Sander, CFO, Chief Corporate Development Officer & Treasurer
• BJ Scheessele, Chief Commercial Officer

Analysts

• Tom Johnson, Director - Corporate Communications at LifeSci Advisors, LLC
• Ryan Zimmerman, Managing Director & Medical Technology Analyst at BTIG
• Josh Jennings, Managing Director at TD Cowen
• Kristen Kluska, Managing Director and Biotechnology Equity Research Analyst at Cantor Fitzgerald
• Bruce Jackson, Senior Analyst at The Benchmark Company LLC