Navidea Biopharmaceuticals, Inc. (NYSEMKT:NAVB) Q4 2020 Earnings Conference Call March 24, 2021 5:00 PM ET

Company Participants

Jed Latkin - Chief Executive Officer, Chief Operating Officer and Chief Financial Officer

Joel Kaufman - Chief Business Officer

Michael Rosol - Chief Medical Officer

Conference Call Participants

Michael Okunewitch - Maxim Group

Vernon Bernardino - H.C. Wainwright

Operator

Greetings. Welcome to the Navidea Biopharmaceuticals Q4 2020 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Jed Latkin, CEO of Navidea. Thank you. You may begin.

Jed Latkin

Thank you, Hillary. First off, I want to start by saying this call is being webcast live on our website and a replay will be made available. Following prepared remarks, we will be conducting a question-and-answer segment. Navidea’s Chief Medical Officer, Dr. Rosol and the company’s Chief Business Officer, Joel Kaufman, will be joining me on the call today as well.

During the course of this conference call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop Navidea’s molecular diagnostics and immunotherapeutics, which include clinical and regulatory developments and timing of clinical data readouts along with capital resources and strategic matters as well as the impact of the COVID-19 pandemic on Navidea’s business operations. All of these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions, risks and uncertainties and could cause actual results to differ materially. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events or otherwise. Investors should read carefully the risks and uncertainties described in – within the Safe Harbor section of our website as well as the risk factors included in the company’s most recent quarterly and annual filings with the SEC.

The fourth quarter and beginning of the year marked several key moments for the company. We were able to successfully complete enrollment and complete all the imaging in the Phase 2b study. This was something that I thought we wouldn’t be able to do given the situation with covet around the country, but I would like to thank the various sites for keeping the recruiting open and getting all the patients in the door and image successfully.

Our discussions in Europe are progressing well. And in the meantime, we will be distributing the product with the assistance of a company that has excellent distribution capabilities throughout Europe. I want to thank my transition team for continuing to push forward with what has been a very difficult transition given the COVID restrictions. It has been quite the task to set up a network of distribution without being able to do any face-to-face meetings or market the products to any new partners. We have had quite a few meetings with potential partners and are working through some potential arrangements to find the right partner to agree with to distribute and sell the product. It’s important that we bite our time and make an agreement that will benefit the company and its shareholders for the long term. The European market is much different than the U.S. one, and our previous partner was not skilled in radiopharmaceutical product distribution, which has created some unique challenges in finding another partner.

In this past quarter, we completed a $5 million placement with our largest shareholder, Mr. Scott and continued to receive inflows from Keystone as they work towards completing their $15 million commitment under the Series D preferred. Our discussions with Jubilant continue and we have turned our focus towards the data that we will generate over the next several quarters in the 3-32 trial. The biopsy data that we hope to generate as we start to enroll patients will be invaluable towards increasing the value of the RA product. We feel strongly that positive correlation results in this trial will enhance the label of the product right from the get-go.

I am happy that we are able to start enrolling in – at northwestern, and hopefully, the lockdown in the UK will end soon so that we can start enrolling over there as well. It’s unfortunate that the COVID lockdowns inhibited us from starting the trial on time. But the second we got the green light in Illinois, the paperwork had all been filed, and we were ready to roll. We are also ready to roll in the UK as soon as the surgery centers reopen for elective procedures. We expect the next quarter to be very busy as we continue the dialogue with the FDA and get ready for the launch of the Phase 3 for RA. We made the decision to finish as many of the arm 3 patients as we could before submitting the briefing book and I believe that was the right thing to do in order to give the FDA as much data as possible as we move towards the Phase 3 launch.

Before I turn things over to Dr. Rosol, I want to once again thank my entire team for all their tireless hours of work in this most difficult environment. I also want to thank our European consultants that have been invaluable in helping us move the European partnership forward since we have been unable to travel over there to do the necessary face-to-face partnering meetings that would normally get a deal done.

Now I’d like to turn the call over to Dr. Rosol, who will cover the clinical portion of the call. Mike?

Michael Rosol

Thank you, Jed and hello everyone. As always, I am happy to participate in today’s call and provide you with updates from the clinical side. I will begin with the progress on our Phase 2b trial, NAV3-31 in RA. I am pleased to announce that we have had the last patient, last visit event in this trial, meaning all of the patient-related events are completed, including imaging and clinical assessments. I would like to thank the clinical team as well as well as all of the PIs and personnel at the various sites for their tireless efforts to complete this trial during particularly difficult times. Final data monitoring, validation and analysis are ongoing.

As you know, this trial and the data we have analyzed from it thus far were critical to moving us forward in RA. As a reminder, this Phase 2b is a three-arm trial. And arms 1 and 2, we have been evaluating the repeatability, reproducibility and stability of our tilmanocept imaging readout in both healthy subjects and in patients with active RA. And in the third arm, we are mirroring the upcoming Phase 3 study to obtain data to help with sample sizing for the Phase 3 as well as to have a first look at the ability of tilmanocept imaging to serve as an early predictor of treatment efficacy and as a monitoring tool.

As we have discussed and presented in the past, the interim results to date in all 3 arms were very positive. We have data demonstrating that technetium 99m tilmanocept can provide robust quantitative imaging in healthy controls and in patients with active RA that this imaging is reproducible and can define joints with and without RA involved inflammation and that the tilmanocept imaging readout can provide an early prediction of treatment efficacy of anti-TNF-alpha therapy, in some specific cases, using the baseline scan alone. In November, we presented the positive interim analysis results of arm 3 at the American College of Rheumatology’s Annual Meeting and we provided an update on the positive interim news on our last shareholder call.

We have also submitted our briefing package containing interim results from this study as well as the proposed Phase 3 design and analysis plan to the FDA and the FDA is currently reviewing these formal briefing documents. This was a large undertaking with the final package of information containing over 800 pages, covering our complete RA development program with an emphasis on the data from NAV3-31. As you may know, this is a regulated process with guidances recommending specific time lines for material submission as well as FDA responses.

Based on the guidance, we expect to hear back from the FDA shortly. Keep in mind, however, that these are guidances only, and so the response to our materials might take longer than expected. Once we receive the response, there might be clarification or responses requested, and we will work diligently to respond in a timely fashion to any and all questions so that we can initiate the Phase 3 as soon as possible and we are preparing for that currently. You should also know that while the strategy we pursued is an aggressive one, we believe we’re doing it smartly. Usually, this type of FDA meeting would occur after completion of a Phase 2 or Phase 2b, following full analysis of the data with the Phase 3 discussed and beginning, thereafter.

In conjunction with the positive interim data from the current trial, we’ve sought guidance from the FDA and have aligned development of our RA program with the agencies suggestions. In so doing, we have integrated their earlier suggestions into the proposed design of the Phase 3. Because of this, we believe we have presented a strong data package in support of the study design and indications. This strategy will enable us to begin the Phase 3 with confidence earlier than might otherwise be the case. Our goal in seeking feedback from the FDA at this time is to ensure we maintain alignment and that they agree that our proposed plan, if successful, could be used to make the case for approval of tilmanocept in RA.

Soon, you will see on the clinicaltrials.gov site that we will have opened up a healthy control study to establish what is called a normative database for tilmanocept in RA. An integral part of our ability to discriminate RA-inflamed joints from those that do not have inflammation is the knowledge of what healthy joints look like quantitatively. We use the healthy control data from arm 1 of the Phase 2b to start to set these parameters, and we will use this study to add to the size of the current normative database. This should enable us to discriminate RA-involved joints from non-RA-involved joints with improved accuracy and should have a positive impact on our ability to predict treatment response. An additional objective of this trial will be to evaluate SPECT/CT in a number of healthy subjects in RA-involved patients in order to establish the feasibility and possible utility of SPECT imaging for these purposes. There are some potential advantages to using SPECT/CT for this type of imaging, and this pilot arm should put us in a good position looking ahead to the application of SPECT/CT for tilmanocept imaging in RA. This trial should open for enrollment next month and will run in parallel with the Phase 3 as well as the biopsy study.

And speaking of the biopsy study, as Jed mentioned, we have opened up enrollment at Northwestern University into this Phase 2b comparative study of tilmanocept imaging to histology from the joints of patients with RA. In this study, we aim to recruit patients with each of the three known subtypes of RA in order to obtain comparative imaging and pathology results from biopsies of their RA-inflamed joints. In addition to Northwestern, we are working to open up our first UK site and we are scheduling a remote site initiation visit to occur in the coming weeks.

As you heard from Jed, there were a couple of rounds of COVID-related delays in opening up the UK site. But as of this moment, things appear to be on track for opening up the site and recruitment into the trial. The reason we have selected this UK site, you might recall, is that our lead principal investigator for the trial is located there and he is the world’s leading physician in joint biopsy of patients with RA and he maintains a laboratory specializing the examination of the pathological results from these biopsies. Remember that this trial is not required for FDA approval in the initial indications in RA that we are going for, but we believe it is critical in order to achieve qualification of CD206 as a biomarker for RA as well as to engage with pharma for use in clinical trials of new RA therapeutics. It will also provide rheumatologists with gold standard information related to our imaging readout and the fundamental biology of a patient’s rheumatoid arthritis. For example, results from this study could directly demonstrate that tilmanocept imaging can be used to determine a patient subtype of RA. This would have implications for what class of therapies might or might not work on that particular patient. This could, therefore, have immediate impact on the management of RA patients.

On the cardiovascular disease front, work is continuing on the investigator-initiated atherosclerotic plaque imaging study at MGH in Boston. They are very close to achieving full enrollment after a slowdown due to COVID restrictions. The data we have seen thus far have been promising in terms of localization of tilmanocept to sites of atherosclerotic plaque and have been in line with what was reported in the pilot study we co-published with them previously. Preclinical studies of Gallium-68 tilmanocept imaging for our NIH-funded project with the University of Alabama, Birmingham, are also ongoing.

We have also made important strides forward on the therapeutic front. I will just touch upon a couple of these here. For indications in oncology, we have performed preclinical studies that demonstrate macrophage phenotype change from an immunosuppressive to a pro-inflammatory state and a synergistic effect on tumor growth reduction in animal models using our doxorubicin-containing construct with an approved checkpoint inhibitor therapy. Put more simply, the tumors grow at significantly reduced rate with our molecule, combined with an approved drug compared to the approved drug alone. We have now seen this in different tumor models and combined with different therapies. These are important mechanism of action and proof-of-concept studies that need to be done in order to move forward, and we are excited by these results thus far. We plan to present these results at a conference as well as in manuscript form in a journal. Currently, we are preparing to initiate a preclinical dosing schedule study, looking at different starting points for therapy and are looking to run a toxicology study this year with an eye towards first-in-human studies.

We also have promising preclinical results related to increasing the delivery of our molecule whether it be labeled as a radiopharmaceutical or with a drug for a therapeutic to areas of interest versus off-target localization. This could have far-reaching positive implications for our compounds related to efficacy and safety. We continue to make significant strides towards producing the next-generation of our molecule that we think will improve performance in both diagnostic as well as therapeutic applications as well. We believe we have also improved the methods of synthesis for both diagnostic and therapeutic constructs and are currently working on and intend to file another provisional patent application covering a new synthesis protocol.

We have also had positive developments on the IP front. We received a notice of patent grant from the USPTO for application-entitled compositions for targeting macrophages and other CD206 high expressing cells and methods of treating a diagnosis. The main IP here relates to the linkers we used that deliver our drug payload, whatever that payload might be, to the cells that express CD206. This is an important and fundamental protection for our therapeutics pipeline. We have also received the notice of allowance from the USPTO for the patent application titled [Technical Difficulty] diagnosis and treatment of viral infections. This relates to possible therapies for a variety of viral diseases, including dengue, yellow fever and other diseases caused by fever viruses. I can assure you that we have an active IP protection strategy that we believe will provide needed protections and rights to both our current diagnostic and therapeutic agents as well as to our next-gen molecules and disease indications.

Those are just some of the highlights of the last quarter that we wanted to touch on for this update. We remain largely focused on the RA pipeline, specifically preparation for the Phase 3 enrollment in the currently open biopsy study and opening of the normative database study while we also continue to support and push for progress on our other diagnostic and therapeutic indications, some of which I’ve touched upon today. As always, I want to thank the team here for their tireless efforts to keep things moving and our network of clinical trial sites and academic research collaborators for all of their hard work. I wanted to keep these remarks relatively brief today. I’m not sure that I did. But please feel free to ask questions during the Q&A. And thank you.

Now I will turn the call back over to Jed.

Jed Latkin

Thank you, Mike. I think one of the points that I do want to update you on, that Michael discussed, was that IP, I think that IP might have gotten lost since it occurred around the time when I know many of you were tuned into trial in December. But that IP is really key and that’s something that we have been negotiating with the individuals at OSU for many, many years. That was something that at one point in time looked like would never happen due to some issues in the past, but we were able to successfully navigate around those issues and get those patents, which really cover us and protect us out to 2035. And that’s something that is very, very important as a step towards making some of the therapeutics a reality. Obviously, in the future, we will talk more about it. A lot of the foundational work is being done now since it wasn’t done in the past, and it is being done now. So it’s something that we are taking those necessary first steps to really make this a reality, and it will become an increasing focus for us.

With that, I just won’t want to turn it over to Joel to give some of the financial update and discuss some of the detailed financials from the K. Joel?

Joel Kaufman

Thank you, Jed. Here are the financial updates for the fourth quarter and full year 2020. Total net revenue for the fourth quarter 2020 were $219,000 compared to $119,000 for the same period in 2019. Total net revenue for the full year 2020 were $914,000 compared to $651,000 for 2019. The increase in revenues were primarily due to increase in revenue related Small Business Innovation Research grants from the NIH supporting the Manocept platform, coupled with increased license revenue from net translational sales in Europe.

R&D expense for the fourth quarter of 2020 was $1.3 million compared to $1.7 million in the same period 2019. R&D expense for the full year 2020 was $4.9 million compared to $5.3 million in the same period 2019. The decreases were primarily due to net decreases in drug project expenses, including decrease in Manocept therapeutic development costs, decreased Manocept – and decreased Manocept diagnostics development costs. The net decreases also included decreased regulatory consulting and travel expenses, offset by increased employee compensation.

SG&A for the fourth quarter of 2020 was $1.7 million compared to $1.2 million in the same period in 2019. SG&A expenses for the full year 2020, was $6.7 million compared to $6.3 million in 2019. The net increase was primarily due to increased legal and professional services, employee compensation European Medicine Agency fees for Lymphoseek and franchise taxes offset by decreased travel, depreciation and amortization, losses on disposals of assets, insurance and Investor Relations services.

Navidea’s net loss attributable to common stockholders for the fourth quarter 2020 was $3 million or $0.11 per share compared to $2.8 million or $0.15 per share for the same period in 2019. Navidea’s net loss attributable to common stockholders for the full year 2020 was $11.4 million or $0.48 per share compared to $10.9 million or $0.76 per share for 2019. Navidea ended the fourth quarter of 2020 with $2.7 million in cash and cash equivalents. Since December 31, 2020, the company received $7.9 million of cash related to the Series D and Series E preferred stock funding transactions. To date, the company has received over $14 million of proceeds from the issuance of Series C, Series D and Series E preferred stock.

I will now turn it back over to Jed for closing remarks.

Jed Latkin

Thank you, Joel. Actually, with that, we will open up the Q&A and we will let – give a little bit of time to fill the queue. Hillary, please let us know when the questions are ready.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Jason McCarthy of Maxim Group. Please state your question.

Michael Okunewitch

Hey, guys. Thanks for taking the questions. This is Michael Okunewitch on the line for Jason.

Michael Rosol

Thank you.

Jed Latkin

Hello, Michael. How are you?

Michael Okunewitch

I am doing well. So, I would like to ask what additional analyses we should expect to see from the full dataset for NAV3-31? Is this just going to be a larger set or are there any additional data points in there? And then for NAV3-32, should we expect to see any interim reads from that study? And if so, when should we expect those?

Michael Rosol

Yes. So, this is Mike Rosol. So, good questions. For NAV3-31, for the – in the main, this will be the complete dataset that we will be analyzing. We will and we are – we remain diligent in looking for different ways to look at the data to make sure that we are not missing something. So, it’s possible that there will be a readout that amplifies or takes us – gives us something that increases our ability to predict response earlier. But in the main, what we are doing now is just analyzing the full dataset, but de-emphasis on the just there because we’re looking at things, any number of ways at all times. And that will take some time. It takes – to do these things fully in the correct way, it takes several months typically. We’re hard at work at it, and we will continue to be as we go. For NAV3-32, it’s an adaptive study in the sense that as you heard me mention, we’re looking to enroll patients with all three different subtypes of RA and what we’re doing is we can’t predict those in advance. We’re hoping to get a certain number of each subtype. And once we do that, we will then do an interim analysis to look at the data, once we have a minimal number of each subtype, and that number is 4, so 4 subjects with each of the three subtypes. We will then do an interim look, see how those data look and determine if we need to go further in the study or if we want to. We might have learned something that would give us reason to go forward in a positive way. And we will let you folks know then.

In terms of the time line, it’s interesting. I don’t want to make a promise I can’t keep, so I won’t. We – right now, the main sites that we – the site in northwestern that is open and the UK sites that we expect to open shortly, they would predict and they have predicted maybe a patient or two a month. We’ve been known to exceed, in concert with our sites, the enrollment projections that those sites have had. Sometimes, they won’t meet them, right. So it’s hard to predict. So it will take some months to get to that number. We will be working with those sites and the PIs actively to try to get those recruitment numbers high. There is always kind of a hurdle when you first open a trial to recruit patients kind of logistics need to be worked out and the site, the local site staff need to figure things out. And so there is oftentimes a slow open, but then things will pick up. We will keep you apprised to these, but it’s going to take some time to get to those 4, 4 and 4 subjects, but we will do our best to make it happen sooner rather than later.

Michael Okunewitch

Thank you, Mike. And then I’d also like to ask if you could talk a bit more about the Phase 2 in atherosclerotic plaques. How does the TC-Till fit into this market? In RA, it is a pretty clear path of monitoring a response, subjective imaging and phenotyping for macrophage activation, but how would it be applicable to atherosclerosis and when can we expect to see any data? What will be the next step for development?

Michael Rosol

Yes. So, also a great question. So fundamentally, of course, one of the key components of the atherosclerotic plaque is the macrophage. And what our previous work and what the data are showing to-date in this trial are that we – tilmanocept localizes to these atherosclerotic plaques at least in the areas we have looked at. And it looks like it localizes more to larger plaques, right. So we are still discussing with KOLs, what best indications might be, but in a general sense, the one idea would be that if we can detect plaques that may have more of a propensity to rupture, right, the so-called vulnerable plaques and maybe – we then might have a risk predictor, right. And so what might be done if a cardiologist sees this kind of plaque light up in their patient. Well, you might use this as a kind of determinant of should the patient be put on a more aggressive treatment regime or regimen, right. So like high-dose statins versus not being on statins right or maybe there needs to be an interventional procedure done to Roto-Rooter out to clear out the pathway where there is a so-called vulnerable plaque. In terms of those who would be imaged, we might imagine a kind of a medium-risk cohort at first, those folks where there may be some evidence already that they might need to be put on some therapeutic regimen that they’re not currently, but not just the general screening of the general populus as a whole. So – and they’re also not high risk already where they’re already put on a high-dose statin. Still though, even in those patients, we could possibly bring some value because we might be able to determine if the high-dose statin is working and/or if there is any particular area of interest that needs to have an interventional procedure.

So broadly speaking, it would be as a biomarker for risk, right, so risk of a cardiovascular event. And there is a need for those. The field is littered with molecular imaging agents that have had this potential. I can tell you that in our clinical as well as in some of the preclinical work we’re doing, the kind of leader in the molecular imaging domain is FDG, pet imaging. Our results look to be superior to that and by a lot. So that’s very promising. But again, we need to think about this carefully what the indications would be and what patients or population we would think about screening. But with cardiovascular events being the number one cause of death, overall we think there is an opportunity here to bring something to the market that could benefit a lot of people, but we will be meeting and we have been and we will continue to meet with KOLs to refine the strategy. We have some next steps planned. I don’t want to talk all day here on this, but we are thinking about this I think strategically. Is that a good answer?

Michael Okunewitch

Yes. And just when do you expect to see data from Phase 2? It’s – I know it’s investigator-initiated, so you might not even have that?

Michael Rosol

Yes. So they have been really great about sharing the data with us. So we just had a relatively recent – couple of months ago, we had an update from them. And they are – they actually – I don’t want to reveal too much of their inner workings, but they expect it to be done by now, but there were a couple of enrollment issues and they should be done very soon and they have assured us we are on the shortlist of the first folks they will share the data with and the first outside of their actual group. So, we should see results – we will see results, I think in the next couple of months and there will be ongoing analyses of those results, of course and as we make any decisions, we will keep you guys apprised.

Michael Okunewitch

Alright. Thank you very much for taking my questions.

Jed Latkin

Excellent. Thank you, Michael. Next question?

Operator

Our next question is from Vernon Bernardino of H.C. Wainwright. Please state your question.

Vernon Bernardino

Thank you and good afternoon guys. Thanks for taking my question. My question relates to the Type B meeting with the FDA, I know you can’t give a timeline because it is the FDA, but just wondering because this is something I have been surveying from all the companies I cover as well as just talk to in due diligence. And that is what has been your experience in your interactions so far? I think generally timely, very quick in replying to questions that could be easily answered or when they are involved though, are they taking a little bit of more extra time that you may have experienced in the past? Then I have a follow-up question.

Michael Rosol

Yes, great. So, this is Mike Rosol answering. Good question. So, our experience and our interactions with this particular FDA group, has been great. They have been very responsive. They actually, thus far, have held to the timelines for the most part. It was the response, I think in April of 2019 that came a little later than we thought, but they were extenuating circumstances, the government shutdown namely that caused that, I think more than anything. They have been very responsive, very engaged with us. And so far in this Type B meeting process, they have exceeded the guidelines in terms of rapidity of response. So we will see. I think all of that is very promising. Along the lines of what you have experienced maybe with other groups is we have – I was speaking with a colleague from another company who said they put in a meeting request for a face-to-face or a Zoom-style meeting and they were told this was 2 months ago and they were told we can schedule the meeting in August. We think we did a – we took a more strategic approach and did a written response only. And those are usually – you are able to hold to stricter timelines, because you don’t have to gather a whole bunch of people in the room – in a room at the same time. And because of COVID, many of those formal face-to-face meetings have really dragged on and been put off. So there is a backlog. So our response is going to be in writing, which we think is the smart way to go given the circumstances. Okay?

Vernon Bernardino

Terrific. And my follow-up is related, so along those lines therefore, you don’t have studies, activities related to RA, the NAV studies dovetailing all in a specific time point. But there are – a lot of the things are going on in parallel at the same time and somewhere down the road is that initiation of the Phase 3. If you could provide any detail as far as any feedback you have received and this is something they may or may not want to or have provided as far as e-mail or written is concerned, what has been their feedback regarding how a lot of these piece parts as far as the clinical trials are concerned are dovetailing methods into one time point, but in which there is going to be a lot of pieces that you may need to consider at some point? And I know you gave the briefing book, but just wondering if you could describe what’s their mindset?

Michael Rosol

Sure. So, all of this has been done in alignment with them all along the way. So, they knew of our plans to run these trials in this fashion and in this sequence. And remember as well that the NAV3-32 as I said, isn’t part of the critical path, but it is critical we think for development in RA and will provide a great enhancement, as Jed put it, to the commercial product that physicians, rheumatologists, in particular are really excited about. But back to the FDA, we have been in alignment with them. And in fact, in the design of the – I mentioned this before, the design of the Phase 3, we have taken their comments to heart and crafted the primary objectives, essentially exactly the way they suggested we might. So, I think we are in a good place with them. They have understood our path and our strategic way of approaching this and the fact that we will, at any one time, might have a few plates in the air, but we are working our best to make sure those land at the same time or their cost at the same time and we can do this in a smart, but expeditious fashion. So we have been in tandem with them is the short version of all of that.

Vernon Bernardino

Terrific. Yes, it sounds like you got a lot of things in place and that you have – the approach you have taken or the strategy you have taken seems to be, for the most part, low maintenance. You just need to hear their feedback and then step on the gas again. Thanks for taking my questions.

Michael Rosol

You are welcome.

Jed Latkin

Thank you, Vernon. Thank you. Appreciate it. Next question?

Operator

Our next question is from shareholder, Jacob [indiscernible].

Unidentified Analyst

Yes, hi. So first of all, I have been a very patient investor here for a long time with Navidea. Last year at this time, there was a clear mention that Mastiff, a group was going to be planning on buying – they were guaranteed to be buying 1 million shares at $5 a share. From looking at the balance sheet, it seems pretty darn clear that didn’t happen. Can you explain this, please?

Jed Latkin

We entered an agreement with them in August of 2020 and they guaranteed a funding of $5 million at $5 a share. And to-date, they have not funded, no.

Unidentified Analyst

Is there any plans to do anything about that? I know it’s hard to go after a hedge fund or anything like that, you probably don’t want to, but is there any plans or we just let that slide?

Jed Latkin

We are currently in discussions with the Board as to what our options are in terms of dealing with them and they have acknowledged that they are still obligated to provide that $5 million and have said that they intend to fund at some point in time. So we are still in discussions with them and the Board to evaluate our options with – in relation to the Mastiff funding.

Unidentified Analyst

Okay. Secondly, I think it was about this time last year that we entered the agreement with Jubilant. It might have been August I might be mixed up on my time schedule here, when did we first signed the MOI or when did Jubilant first signed the MOI with us?

Jed Latkin

The MOU was signed in – the MOU was signed in August 25, 2020.

Unidentified Analyst

We have been waiting for that, because it was at the time discussed as being imminent, the partnership. How much longer do you think we should be patient as owners of Navidea, as shareholders of Navidea before we expect some sort of either sign or don’t sign final agreement?

Jed Latkin

We continued our discussions with them. I think the discussions have been fruitful. I think from our side as a company, we are comfortable to see more data from the trials. As I said in my remarks, I think that as we generate data from 3-32, that will allow us to increase what we could expect in any final signing of the deal with Jubilant as we continue the discussions. I think that it’s important that as we generate more data, we firmly believe here at the company and I think Jubilant actually agrees with us that the product increases in value. The biopsy data from 3-32 will set a bar. As I discussed in remarks that will establish what we feel is an enhancement to the initial label, which would allow an immediate diversion from the standard of care, which is the anti-TNF and potentially allow for doctors to move from that Tier 1, which the insurance companies don’t like to do. But if we prove within what we have seen in the arm 3 of the Phase 2b as well as what we hope to see in 3-32 that there is a certain percentage of the population where a greater than 80% plus part of the time, the anti-TNFs just won’t work if they have a particular phenotype, then that gives us a very potent weapon as part of the label. That also makes it a very convincing argument to start using our imaging agent right away, if we know that we can eliminate say 35% to 40% of the population from using an anti-TNF for any period of time [Technical Difficulty] has come with a lot of side effects, and they don’t work all the time. And if we have – and we have seen this in the arm 3 and this is something to lead back to the question that Michael had asked earlier, we see that there is a population, and it’s a big portion of the population that just won’t respond to anti-TNFs and once we get that data from 3-32, I think that that’s going to be something that is very key into the completion of the final deal with Jubilant, which should also lead to some increased consideration as well.

Unidentified Analyst

Okay. And then one last thing, we talked about funding last year and that we had enough funding to get us through, I believe the Phase 3 trials. Do you still feel it that way with where we stand right now with our cash balance?

Jed Latkin

Yes. We are getting the money from Mr. Scott. As you pointed out, Mastiff has made a commitment and to-date has not funded. We got terms that we thought were attractive – were very attractive from Mr. Scott, especially given that he is a continuing and supportive shareholder. He is limited. He obviously can’t go above 33% ownership. So, there are those restrictions in his ability to covert on the Series E preferred that he subscribed to, but he did fund that upfront. So that money is there. Keystone continues to fund and so from taking into consideration the funding from both of those sources, whether we get the Mastiff money or not, our Phase 3 trial is fully funded.

Unidentified Analyst

Alright. That’s it from me for now.

Jed Latkin

Thank you, Jacob. I appreciate it. Thank you. Next question?

Operator

Our next question is from Mike [indiscernible]. Please state your question.

Jed Latkin

[indiscernible], we finally got it right last time, [indiscernible].

Unidentified Analyst

We are getting there. I do appreciate it. Thanks for taking my questions. As you know, I will have several of them, so I appreciate it. Thank you. More on to what I believe Jacob just asked on the funding, so do you still believe that we have funding for the full 2 years as you stated last conference call, Jed?

Jed Latkin

I think that we have a very good runway from here that should allow for a completion of substantially all of the Phase 3, yes.

Unidentified Analyst

Okay. And on the – so is the Keystone on track then to finish their conversion funding by the end of May?

Jed Latkin

They have until the beginning of June to do that. And we have had discussions with them and yes, they are.

Unidentified Analyst

Okay. And so just my comment, it looks like they still need to fund some place between $5 million to $10 million. So anyway, I don’t know if that’s correct or not, but it’s just my observation. Is there a milestone payment from Cardinal for the North America rights in reach? We continue to hear the number of imaging they have been doing. Is there a milestone payment in reach or not, can you share that?

Jed Latkin

So, I have not gotten the last year’s data. I mean we got...

Joel Kaufman

June 30.

Jed Latkin

I mean, so we should get it on June 30, the data for the full year. I mean, it’s a possibility. Prior to COVID, we had seen renewed growth in Lymphoseek. And so there is a possibility that down the road, there could be that milestone payment and once it passes $100 million a year in sales.

Unidentified Analyst

Right, okay. Alright. So there is something – there is a possibility, but not a probability. Is that fair?

Jed Latkin

Yes, I believe so down the road. I mean, there are some other things that we potentially have. I mean, obviously somebody might have noticed in the press release that we made an – that there was something about 4694 expenses. Interesting to note, the reason why we said in the press release that the expenses increased, they actually did increase. In 2019, they actually were negative, because we were able to realize some gains against it and they were zero for 2020. So on accounting basis, from a negative to a zero is actually an increase, but given that there are two treatments out there that do target the beta amyloid, whether or not they work or not, there is always that possibility that we will have a $1 million milestone coming from Meilleur at some point in time. I think that as those treatments get more play in the news, I am not going to comment on what I think about the Biogen versus the new Lilly, the path forward, but there is always that potential that without spending any money, we could see $1 million payment from them. And there are actually also a couple of other opportunities to get some milestones on 5001, which we have actually taken in a little bit of money on that. That is something that we still hold the database on. That product has actually been moving forward with an undisclosed partner. And if that does get approved and we think that it might get approved as an imaging agent, we could see $1 million approval milestone from them. That is something that we actually signed a contract on to have. So, that’s something that, that could happen in the future. I don’t know the timing. It really depends on this company getting the approval. And then after that, if it actually makes the market, we could receive up to an additional $2 million in sales milestones over the next several years once the product starts selling.

Unidentified Analyst

In addition to that, in the press release, you mentioned the new grant can you give us more details on that?

Jed Latkin

No. I mean, we just thought that was the Gallium grants at...

Unidentified Analyst

That was the Gallium.

Jed Latkin

Yes, yes, the Gallium grants that we have been working on. I mean we do think that there is value there and we hope to really get some very good data from that, which we can then use. I mean I think as you know, we have been – there are lot of other things we are working on that we haven’t discussed. I mean, I think it’s important that we continue to move the ball forward in many different areas and we will discuss those areas when we feel there is something really to talk about. I really do want to stress that I am not going to be talking about things that are really not fully baked. I mean I think that’s a mistake that had happened in the past. I don’t want to revisit those mistakes that have happened in the past when other individuals spoke about potential things, but I assure you, we are moving forward in a lot of different areas. And as soon as we have something tangible that we can actually really talk about we will be talking about that. That’s why we waited a lot to talk about OSU. I mean, the OSU negotiations were going on for 2 years to finalize those patents. And we didn’t really discuss it or even mention it until it actually happened, because I want to try to avoid sending any unrealistic expectations, but I am excited. Like I said, 5001 is something we sort of kept in our back pocket. We did take in $200,000 in revenues on that. And I do expect with the backing of this big partner in conjunction with the new partner that has it, they do think that they can get it across the finish line. And if they do get it approved, then that will be $1 million that we have never counted on. I am still not counting that in the budget, but if it does get approved, that will be something nice to have.

Unidentified Analyst

Okay. On Jubilant, a couple more questions on the Jubilant deal, did due diligence get extended? There has been a lot of discussion on that.

Jed Latkin

Given what’s going on with COVID and the fact that we have just not been able to meet face-to-face and all of our discussions have been through Zoom and we have had many and we continue to have many. We have agreed on both sides to continue the dialogue. I think that in exchange for that agreement. We are very much pushing for a rework of what we think will be the upfront and it’s a rework in a positive manner, because as more data is generated, the product generates more value. So, in order to increase and continue the due diligence time, we had to make sure that any increased negotiations due to the COVID delays would net potentially more money for the company. And so that has something that we have agreement on both sides, so as we continue these negotiations and the due diligence and coupled with the data we hope to generate with 3-32, we feel that if we decide to go forward and sign the final agreement, we think that the shareholders hopefully will be happier with what would be an increased upfront versus what we had announced in August.

Unidentified Analyst

Well, that’s an excellent piece of information. Did Jubilant – in their due diligence, did they find some excitement in the molecule itself or can you share that?

Jed Latkin

I mean, it’s hard for me to comment on what Jubilant – on what they thought or didn’t think. I think that – and I choose my words carefully, I think that they were very excited about the predictive power of the molecule in the arm 3 based on one of our theories. And our theory, which is really a linchpin, as I discussed earlier, for what we are working on for a part of the usefulness of the molecule will be backed up by 3-32. And when that happens not if, but when that happens, we feel that, that is going to unlock an increased amount of value. But the key is as we have always talked about in the past, even when we were discussing the NASH stuff, biopsy is the best way to look at things, but biopsy is just something you are never going to do. And so looking at the biopsy that we are going to do on 3-32, which are completely elective and I want to thank in advance the patients that sign up for it. I know that we are looking at and we are actively recruiting. So I want to thank those patients in advance when they step up to do that, because it will really give us an amount of data that we think is going to establish a baseline for whether or not a patient is going to get an anti-TNF right off the bat. And for anybody – and listen, I come from this from experience as I’ve never made any secret about I suffer from Crohn’s. I’ve gone through a lot of different medicines over a lot of different times. Thankfully, as a Crohn’s patient, I have the ability to get a colonoscopy. It’s not the most pleasant thing in the world. But certainly, for anybody over 50 out there, I do encourage you to get those colonoscopies.

But for me, the only way I can get my insurance to pay for my medicine is if I go for a yearly colonoscopy. And the insurance company is very, very strict. It’s actually funny prior to this call, the insurance company actually just called me to get the colonoscopy results that I just had a month ago because they had not seen it, or else, they won’t approve the medicine. But with an RA patient, you don’t have that benefit. And the insurance companies say, treatment number one is anti-TNF. And the anti-TNF doesn’t work a lot of times. Way back when, when we started this whole process, Dr. Cope, Dr. Goldberg, we all said the exact same thing. It is the largest product in the world, and it doesn’t work 50% of the time. We actually now have a molecule that we feel that with a certain phenotype, we can spot that early. And the 3-32 will confirm that, and that will create a lot of value because we can then go to the insurance company and say, listen, we’ve done a full Phase 3 trial. We know that 35% to 40% of the time, patients with this phenotype will not respond 80% or greater of the time to anti-TNF, why bother putting them on it when there is so many other choices. And we think that will be compelling, and that is really what we’re hoping to do with the 3-32 trial as well as the full Phase 3 trial and also don’t – not minimize the effect of the 3-35 trial that we’re going to launch, where we’re going to get more and more of the normals, so that when we do launch the product, we really can hit the ground running with a very fulsome database that will allow the AI really to take over. We’re not going to cut out the people reading it. We want people to look at it, but we’re going to make sure that the artificial intelligence, the AI portion and the algorithm portion really works and is really honed for when we’re ready to launch. And we’re in active discussions with several different groups working on that, working through the data. And this 3-35 trial will give us a larger database of images that will really help make that AI work faster and faster. Similar to the example that I gave years ago when talking about Alexa, when Alexa – Amazon’s Alexa first started, it really wasn’t very good because they just didn’t have a big body of questions being asked to it. But now it’s fantastic, and everybody has one in every house, and everybody uses it everyday. We want our product to be used a lot right away. And so by doing 3-35, we will be increasing that database, and we’ll have more and more images that we can use as reference points to really make sure that we can get the doctors to diagnose it, get the doctors to prescribe it, use it to diagnose and really move through the process, that flow diagram that we put together that it’s on our website. We really want that to be as quick as possible.

Unidentified Analyst

And how many sites have been contracted to start in the RA P3? You said it will take some point between 25 to 50 sites. Have you actually firmly contracted sites and if so, how many?

Michael Rosol

No. We’re in the process of doing that. This is Mike. It will be 25 to up to 50. As you said, we are on the works. You’re actually right. Jed gestured right next to us here in the Board. The conference room is a giant, and our whiteboard is the list of the sites. So we’re in the process with all of those to get them ready to go. And as heard me mentioned several times, some of the key sites from our currently running trial that have recruited especially in arm 3 are anxious to be sites for the Phase 3. And so likely, those – they have a running start, and likely, those will be the first ones that we open up. So we are preparing to open up as quickly as possible. We don’t have contracts specifically signed for that yet. It’s part of a – there is – the reason for that is because that’s the way it’s done, right? So we need to finalize protocol, IRB approval, all sorts of things before you then move to that stage. And all of that is happening behind the scenes. And once the FDA gives us their feedback will hit go as soon as possible.

Unidentified Analyst

Well, how many sites have tentatively agreed? Are you over the 25 with tentative agreements?

Michael Rosol

Yes. So we have 50 who are interested, yes.

Unidentified Analyst

Okay. So, that’s important. Now with what you are talking to the FDA about your preliminary package, are you still looking at a 12-month trial around that?

Michael Rosol

Yes. We have mapped out a number of different scenarios depending on how many sites we can open and looking at our average recruitment rate from our currently – the trial that just completed, as you’ve heard me mention before, in that trial, we actually enrolled at a more rapid rate than the typical Phase 2 or Phase 3 study in North America for rheumatoid arthritis, which I think is a great testament to the hard workers in the clinical team as well as me aside as well as in the sites themselves. So there is a 6-month follow-up for these patients in this study, right, because as you know, the standard of care is to put a patient on an anti-TNF alpha and then bring them back 3 to 6 months later, to do clinical assessments. For our predictive capacity, we really need to target the 6-month time point as well as the 3-month, and that’s, again, in agreement with the FDA. And so there is that tail, right. So our goal will be to recruit as many subjects as rapidly as possible in order to make the trial run as efficiently but also as short as possible, right? So I don’t want to promise a year. It depends on how many sites we can open and what the recruitment rate is, but we are going to do our level best to make it as short as possible. And we have a track record showing that we do a really good job of that.

Unidentified Analyst

My last question is more on the scientific side. So, on your two last patent applications, the one on method for altering the macrophage phenotype and then the other one was the more recent one in February on the ablation of the M2 macrophages. In there, in those two patent applications, it was indicating that three human blood samples were taken to run some of the tests. Can you share any more on what those three human blood samples were and what actually transpired on those oncology tests?

Michael Rosol

Yes. No, these are samples that are available from – in working with our contract research organization, collaborators or companies that we contract with, who are expert at some of these in vitro assays. What you can do is you can get these samples and take out the macrophages and then grow them up and culture the way – so that you can then perform tests on those macrophages derived directly from human subjects. Now we haven’t done those just from the work we’ve done with contract research orgs. I just want to elaborate on that a little bit. We also did this work in collaboration with UCSF on separate samples. So now we’ve actually taken data from more than three, at least six. And actually, at this point, I think it’s nine different human subjects taking their macrophages out from the peripheral blood, growing them up in culture and shown that we can flip the phenotype or drive the phenotype to different types of macrophages, depending on what kind of construct that we’ve generated, we pour on top of them, right. So the two patents you’ve mentioned are, we refer to them internally as flip the TAMs or flip the tumor-associated macrophages to – and by that, I mean the phenotype flipping; and then kill the TAMs, and that is to ablate them. And we’ve shown in vitro as well as in vivo in tumor models in rodents that we can change the phenotype to a more pro-inflammatory state to enable the body’s own immune system to attack tumors as well as therapeutics that we approve therapeutics that we introduce. And we can also kill those as well if we want to. But the main – we think the main benefit is from the flipping them, driving their phenotype to a pro-inflammatory state. But basically, the short version of my answer is that these are samples from humans, not specific with – to oncology cases. We’ve taken their blood. You can isolate their macrophages grow them up in vitro and then do things to them to see if you can moderate them in different ways. In parallel, we’ve done these tumor models in different rodents, different tumors and shown that those in vitro results can be replicated in vivo and that they also have an impact on the tumor growth.

Unidentified Analyst

So is that the myeloid-derived suppressor cells impact?

Michael Rosol

Yes. Yes. So we saw that, and that’s a really cool finding. So it turns out that in order for cancers to – many cancers to grow and metastasize, there are a group of cells called the myeloid-derived suppressor cells that seem to play an important role in that, and I won’t get into the literature there too much. But it turns out that those myeloid-derived suppressor cells are one very important subtype-expressed CD206. And we actually can impact those, and we’ve been shown to reduce them by about a half. And we think that we’ll have implications for reducing the possibility of certain cancers to metastasize. So that was kind of an added bonus, if you will, of our therapeutic constructs. And we’ve shown that in vivo, indeed, we reduced the numbers of those myeloid-derived suppressor cells by about a half. And long-term, we think that’s going to be very important.

Unidentified Analyst

Well, from a layman’s observation, that’s kind of a by-targeting, isn’t it? Because you’re targeting the tumor microenvironment or the TAMs and you’re changing those. And then also at the same time, you’re seeing an impact to the cancer cell itself. I call that a by-targeting, I guess, but how would you phrase that?

Michael Rosol

Yes. Well, well, to be clear, we’re not targeting the cancer cells directly, although there might be indirect effects from the whatever payload we are bringing. But the primary action of our construct is on the TAMs, as you mentioned, the tumor-associated macrophages getting rid of that so-called force field that my predecessor here had referred to it as and others as well in the field. So we kind of eliminate that force field and actually ramp up the body’s immune system to enable it to attack the tumor as well as increase the efficacy of other therapeutics that have been prevented from reaching the target by that so-called force field. The myeloid-derived suppressor cells themselves aren’t the cancer cells. But they support the cancer growth as well as metastases. And we do target those, and that is a direct targeting. And we are ablating those or at least reducing their numbers. I say that because there may be different reasons that’s happening, but we’re reducing those numbers. In that sense, if you’re referring to those as cancer cells, they are really cancer-support cells. We are indeed targeting those and having a direct activity.

Unidentified Analyst

Okay. The last comment that I have, there was a Tuskegee University study in the NCI and the NCATS also participated in it in middle of 2020. And they clearly identified the CD2 macrophage as probably the ancient entry point into the body, the MR – the CD the ancient entry point in the body for the original bacterias and viruses. So however we, Navidea, got to this point that seems like an exciting observation as part of a tool to educate people on the potential here, particularly as these preclinical evolve. Was that fair or not?

Michael Rosol

Yes. No, that’s fair. I actually saw that article that you referenced. And indeed, I mean, this is an ancient system that evolved in order to – for the body to fight off the invasion of different attacking agents. And it’s been co-opted and used by the body’s immune system for many different purposes. And the fact that we target it and it plays such a crucial role in so many different disease processes is a great advantage of our molecule, and it gives us the ability to possibly impact a really great variety of diseases, both from a diagnostic perspective as well as therapeutic. So, absolutely, yes that was a good find, yes.

Unidentified Analyst

Yes, the point on that is our CD206 MR’s evolved over the last 10 years. It looks like an opportunistic target, that the market hasn’t recognized yet. And I think that’s a fair statement. The market just hasn’t given any credit to it.

Michael Rosol

Yes, you’re right. This molecule was ahead of its time in many ways. And now the world is waking up to it. And the scientific literature is growing that that marker and these macrophages play a role in so many diseases in a fundamental way that again, this is an exciting time for the technology and the company, all else aside for the reasons that you are mentioning. So I agree.

Unidentified Analyst

I’d like to finish by thanking the Board and Jed and everybody for getting the financial position of this company back. It’s been a long time. Many years since the balance sheet has had cash on it and of this sufficient amount. So, thank you for strengthening the balance sheet and keeping the company liquid. And lastly, I would like to thank you for all the fights you did for – to get back MT to the shareholders and the rights to that science. That’s a big success that I don’t think much credit is given for. So thank you for getting back to that therapeutics right. It was a good win. That’s all I had.

Michael Rosol

Thank you, Michael. I appreciate that. So I guess move on we to any other question?

Operator

Yes. Our next question is from Michael Lowe. Please state your question.

Unidentified Analyst

Yes. Hi, I appreciate that. I have an overarching comment and then a couple of quick questions, all of which derived from that comment. And the comment seems to – the comment is that, in my opinion, it seems like for whatever reason, which I can’t, frankly, figure out, there seems to be a strong reluctance on the part of the company to make disclosures that are positive and that might do things to increase the stock price of the company in no particular order. For example, I noticed in the press release, and Joel reiterated this on his comments that since December 31, 2020, the company has received $7.9 million of cash. So I saw the press release that Mr. Scott invested $5 million. Could you guys please explain to us where the incremental $2.9 million came from and the price per share, etcetera, and the timing of that investment?

Jed Latkin

That’s the continuing funding from Keystone on the Series D preferred. And that...

Unidentified Analyst

So why was – I got to believe that $2.9 million to a company of Navidea’s current financial status is a material amount. Why was that not disclosed or did I just missed that press release?

Jed Latkin

We disclosed that in August when they signed the agreement that they would be funding $15 million at an average price of $2.915 per share.

Unidentified Analyst

Wasn’t there a floor of $5?

Jed Latkin

No. It was – this is the Keystone Series D preferred that was disclosed in August, I believe, was when we signing the agreement, and the funding is for a 9-month $15 million guaranteed funding with a floor price of $2.915.

Unidentified Analyst

So what – so we’ve had some off-line conversations about the – one of the press releases back then about the $5 million – I’m sorry, the $5 per share floor in the $5.75 or whatever cap, what was that in relation to?

Jed Latkin

That was the Mastiff funding.

Unidentified Analyst

Are Keystone and Mastiff not affiliates?

Jed Latkin

They have signed a document that they are not affiliated. Mastiff is run by an individual named Dan Weinstein, and Keystone, the portfolio manager is somebody Fred Zaino.

Unidentified Analyst

Okay. So they are not affiliated entities in any way?

Jed Latkin

They have signed agreements disclosing that they are not affiliates.

Unidentified Analyst

Okay. A couple of minutes ago in response to one of the questions, you made a comment that the Jubilant due diligence is ongoing and has been slowed down a little bit by COVID. The MOU was signed in August, right, 2020, so we were smack in the middle of COVID. There the Jubilant press release says they made a $1 million equity investment in exchange for a limited exclusivity period. Obviously, limited is in the minds of the beholder, but we’re not going on 7 months here. And to my knowledge, the company has not disclosed what that exclusivity period is to the extent that results keep coming in and are positive. I would – it seems to me they are getting basically a free look, right?

Jed Latkin

They are not getting a free look. So as more data is generated, the cost of them goes up.

Unidentified Analyst

Okay.

Jed Latkin

So if we decide to sign an agreement, a final agreement on it, the cost would increase based on the amount of data that is generated by the company.

Unidentified Analyst

But the MOU has been described as binding. Is that binding from start to finish? Or only certain provisions of that MOU binding, like cost and expenses and exclusivity and certain other terms?

Jed Latkin

There are certain provisions that are binding and certain that are not. Yes.

Unidentified Analyst

Okay. With respect to the IP, and I think it’s terrific to hear about some of the progress that the company has made, and I think we might have also had a off-line discussion about this. But I think in one of your fireside chats previously and one of the prerecorded videos, there was mention of some press releases relating to patents. And I understand, obviously, I understand the reluctance of the company to discuss these prior to filings with the USPTO, etcetera. But it seems to me that once filings have been made and/or granted the company is protected. Why are disclosures not made regarding these?

Jed Latkin

We made – we actually did do a press release on OSU to discuss the IP and the filings of that. So that was press released, and it’s been discussed on multiple presentations since then.

Unidentified Analyst

Well, I have asked you and Joel in e-mails for copies of those and you said, there were no press releases. You couldn’t point me to any, but okay. And I guess my last question is, I think it was last week, possibly 2 weeks ago. Mr. Scott filed another amendment, I don’t know, 3-45 to his 13D about a scheduled conference call. Has that conference call happened? If not, when is it scheduled for? And if it has happened, can you please disclose what if anything was discussed there to the extent that it’s not MNPI?

Jed Latkin

We had a conference call with Mr. Scott, and we’re just discussing – he’s made suggestions, and we’ve had some open dialogue, but that conference call has taken place. I would say that nothing material was discussed on the call.

Unidentified Analyst

When you say suggestion, are you free to discuss what those suggestions were?

Jed Latkin

No.

Unidentified Analyst

Okay. I tried. Thank you.

Jed Latkin

Thank you. Okay, thank you. Next question?

Operator

Our final question comes from Edward English. Please state your question.

Unidentified Analyst

Hello Jed, this is Eddie English. Thank you for taking my questions. I have about three or four, if you would indulge me. I think you probably have some insights into what these are. My first question is around the marketing of the RA product. If we assume next year, we’ll have an approved product. I’m interested to know how you will be marketing that to the rheumatologists to the RA patients. Will you be using or planning to use TV advertising like other pharmaceutical companies do to sell their RA drugs? And lastly, informing the insurance companies of the benefits of this product from their perspective. Can you shed some color or details around those strategies?

Jed Latkin

Edward, that’s actually an excellent question, and that’s something that I think that people have like – have missed repeatedly, unfortunately, with this company that we – when we signed an agreement years ago, and I really – I don’t like to dwell in the past, so I’m not going to. I’m going to say briefly, we signed an agreement with a great partner in Cardinal. Although we find an agreement that didn’t really require any of that, and you really hit the nail on the head. This is a product that we feel strongly will do very well. But it will need to be marketed, and it will need to be pushed. And that’s why in our discussions, that’s one of the things that we really worked on with Jubilant. There is a minimum spend involved in terms of a marketing budget, which will be – which once the agreement is finally signed, when we decide to proceed with that will be extensive, will include a lot of marketing dollars. I can’t guarantee TV advertising. That will be their discussion, but we are going to be guaranteed minimum spend per year on a rollout, and that’s something that is really, really key for the product. Doing a deal for a diagnostic like this isn’t just, okay, how much money you’re going to give us upfront. There is so many different parts of it. There are so many different things to it. And marketing is a very big part of it. That was part of our discussions. That continues to be part of our discussions. And that’s something that, yes, there will be, in conjunction with a partner, very heavy marketing spend. And we looked at some of the other products in the market for diagnostics. Since this will be the first of its kind. We didn’t really have direct comps, but we looked at a spending level, and it’s going to be tens of millions of dollars that will be spent by our partner on the marketing. And we need to make sure that it’s money that’s spent, that they spend it, that it’s part and parcel of the agreement. That’s something that we didn’t have in the past with Lymphoseek in either Europe or the U.S. And those are things that we are making sure that are included in any agreement that we do now. And that’s actually also part of the diligence because as you’re going through the discussions with rheumatologists, the KOL panels, you have to set a bar and figure out what needs to be spent, how much should be spent and how it should be spent. And so your question was really fantastic, and there will be a significant spend, but that will be targeted and will be included in any agreement that we make. And that will be spent by a partner that we bring into the fold.

Unidentified Analyst

Okay, thanks. Thanks for that. The second question is around revenue projections. I’m wondering if you plan to start giving us any more detail in advance around your revenue projections, considering that we have a new emphasis on tilmanocept in Europe for revenue of 2021. And then perhaps any details you can give us or estimates you can give us on a breakeven considering the possible revenue from the RA product in 2022?

Jed Latkin

Well, we would expect revenue from the RA product in 2023, probably. And so I would say, as we get further along into the Phase 3, and we get a very good sense of when we can expect the last patient, last visit, we can start really start going through the revenue projections. And once again, that would also be something that would be done in conjunction with our partner. We will get to that point, but I still think we’re at least a year away from that before we can start talking about those projections. But we have looked at some third party. There have been third-party consultants hired by our potential partner that have gone through some of the revenue projections. They seem consistent with what we projected, which is we feel as an initial label, up to $500 million product; and with an expanded label, over $1 billion a year in revenue. But once again, those are things that will take time. So I would expect that the ramp-up will be similar to what you see with other diagnostic products. So you’re not going to – it’s not going to be – I said originally, a few years ago, I try to compare it to what you see with a therapeutic where you had Sovaldi and Harvoni, which was a product to cure hepatitis went from zero to $8 billion in one year. You don’t see that with a diagnostic. I think with us, you’ll see a nice increase, a nice ramp-up over time. The good thing about our product is we feel that its utility is going to create lifetime value patients. So unlike Lymphoseek, where we want to only see the patient once, we want to hope that we find the sentinel lymph nodes. They do the biopsy. Their cancer is cured. And hopefully, they live long, healthy lives, and we never have to see them again. With RA, unfortunately, since there is no cure, each patient we bring in is a patient we’re going to have for life, similar to – that’s why Humira is a $20 billion product. Because it doesn’t cure anything, it just hopefully puts patients in remission. And our diagnostic agent will monitor these patients to make sure that they are on the right care. So as the sort of – as it builds, you get one patient and then you have them for life, then two, so on and so forth. So the revenues build upon themselves. But that’s something that we will really start fine-tuning and start disclosing more and more of as we get further along into the Phase 3, but I would not expect any revenues until 2023.

Michael Rosol

One added comment, this is Mike Rosol. So of course, on the clinical side, what we’ll be doing along the way is as we will be publishing and getting a word out to meetings or at meetings where rheumatologists congregate. So there will be a growing awareness, and that onus is on us, of course, to disseminate these – the results that we’ve achieved so far as well as the ones that we predict we will achieve going forward. So there’ll be – we’ll be playing a role in the educational process of the rheumatologists as well as the new med docs, by the way, who are also excited in general to have another tool that they can use in their toolkit. So we will be doing that as well. So, back to you, Jed.

Jed Latkin

Okay, thank you. You said you had another question, Edward?

Unidentified Analyst

Excellent. Yes. Actually, I have two more, and I’ll try to wrap this up pretty quick.

Jed Latkin

Yes. No problem.

Unidentified Analyst

I am interested in maybe Dr. Rosol will want to comment on this, but I’m interested on any more detail you can give us on the work you were doing with IMV. There was a collaboration announced some time ago with them. And I am wondering what can you share with us about that?

Michael Rosol

Yes, great question. So we on – they actually essentially shut down all research activities due to COVID for a very long time. And then when they opened up, they opened up and focused solely, it seems on COVID. And so we have been this isn’t – I’m not disparaging them in any way. I’m giving the facts. So we’ve been checking in with them every couple of months saying, what’s the time, what’s the horizon look like? And just recently, we did this yet again, and we should be proceeding, knock on wood, with our first preclinical studies with them, where we’ll be evaluating our construct in concert with their so-called cancer vaccine. Although I think, actually, they themselves don’t like that terminology anymore, although they were using it. So anyway, we should start studies in the next several months with them preclinical, finally. But really, we’ve been ready and waiting in the wings and anxious to get going with them. But we – of course, we haven’t been sitting on our hands. And so, we have been doing our own studies with different therapeutics, as I mentioned, looking at tumor models ourselves, to show that our drug can work synergistically with already approved compounds to reduce tumor burden.

Unidentified Analyst

Excellent. Thank you. My last question is with the WorldCare Clinical agreement regarding the imaging workflow for RA, I was curious has that agreement been finalized. And are you using WorldCare with the existing RA studies? And will they be a part of the upcoming Phase 3 studies? And so they will be prepared to hit the ground running if and when the product is approved.

Michael Rosol

Yes. So we’re working with WorldCare on our NAV3-32 trial as well as on the normative database trial, they will be working with us as well as on the Phase 3. And we’re preparing with them behind the scenes to have them be ready for all of those and to be ready for the longer term play if and when we finalize that for the commercial product. And that we’re evaluating still, internally, for – because there are a number of options we might pursue, but we are working with them on the upcoming trials. And we are very excited about it. And they have great expertise in imaging in general as well as in nuclear medicine research, and I think it’s a good relationship.

Unidentified Analyst

Excellent. That’s all I have. Just close to say thank you Jeb to the entire team. You have done a lot of good work in the last year or so. Thank you very much.

Jed Latkin

Thank you, Edward. I really appreciate it. With that, I apologize, we have gone a little bit over time, but we are always available for questions. As Michael pointed out, I mean you’re always welcome to call or e-mail and we will be there to answer any questions that you might have. So I just want to close the call, say thank you everybody for being shareholders. I look forward to hopefully some announcements in the near future on the FDA and some of the trials and some other stuff in the future. Thank you so much.

Operator

This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.