Humacyte, Inc. (HUMA) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to Humacyte's second quarter 2026 earnings conference call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the call over.

Thank you, operator. Before we begin with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. Forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements except as required by law. Information presented on this call is contained in the press release we issued this morning and in our Form 10-Q, which after filing may be accessed from the investor page of the Humacyte website. Joining me on today's call from Humacyte are Dr. Laura Niklason, President and Chief Executive Officer; Jim Mercadante, Chief Commercial Officer; and Dale Sander, Chief Financial Officer and Chief Corporate Development Officer. Dr. Niklason will provide a summary of the company's progress for the second quarter and recent weeks. Jim Mercadante will provide an update on commercial transformation and the progress with the [ Symbest ] commercial launch. And Dale Sander will review the company's financial results for the quarter ended June 30, 2026. With that, I'll now turn the call over to Dr. Niklason. Laura?

Thank you, Tom. Good morning, everyone, and thank you all for joining us for our second quarter financial results and business update call. During today's call, I'll review progress across our development programs for the quarter and recent weeks, and then I'll turn the call over to Jim Mercadante for a review of our commercial progress for our [ Symbest ] launch in the vascular injury indication. As you know, Jim was appointed as our Chief Commercial Officer in April and is a seasoned commercial executive with a track record of successful leadership across medical devices, diagnostics, and healthcare technology. We're pleased to have him with us on today's call. After Jim's update, Dale will review our financial results for the quarter and six months ending June 30. As a reminder, our goals for 2026 include the advancing of the U.S. and global commercial launch of [ Symbest ], completion of our V012 Phase 3 pivotal trial of our ATEV in dialysis access, and filing of a supplemental BLA with the FDA in the dialysis indication, and the commencement of a human study of our coronary tissue engineered vessel, or CTEV, in coronary artery bypass grafting. I'm happy to report that our second quarter and recent weeks were a transformative period for Humacyte across all of these fronts. With that, let's begin. In June, we presented breakthrough top-line interim results from our V012 Phase 3 trial in female dialysis patients at the Vascular Annual Meeting in Boston. Results from this trial exceeded our expectations, showing that our acellular tissue engineered vessel outperformed autologous fistula, which is the current standard of care. In a pre-specified interim analysis of the first 80 patients from the study, women who received the ATEV achieved 91 more catheter-free days than those receiving AV fistula. This difference was highly statistically significant with a p-value of 0.0007, thereby meeting the primary efficacy endpoint of the study and consistent with our expectations for ATEV in hemodialysis. Infections of catheters and surgical access wounds were also less common. There were 6 infections per 100 patient-years with ATEV as compared to 23 infections per 100 patient-years for patients receiving the AV fistula. We believe these data from our V012 study are a breakthrough for women who have historically been left behind by the fistula procedure, leaving many women being forced to rely on infection-prone plastic catheters and grafts. Combined with results from the V007 Phase 3 trial that we reported previously, we believe that the ATEV could represent a major advance in hemodialysis, the largest advance in decades. As I stated earlier, we plan to submit a Supplemental Biologics License Application, or sBLA, to the FDA in the second half of this year. And to help prepare for that planned commercialization in dialysis access, we have appointed Robert Kossman, M.D., and Prabir Roy-Chaudhury, M.D., Ph.D., as advisors to Humacyte. Dr. Kossman previously served as Executive Vice President and the Chief Medical Officer for Fresenius Medical Care North America. Dr. Roy-Chaudhury is the immediate past president of the American Society of Nephrology and is co-director of the UNC Kidney Center. Both Robert and Prabir are contributing to our health economic reimbursement and market access strategies. They will also provide peer-to-peer scientific support and medical education as we prepare for the planned hemodialysis access launch. Turning to our pipeline, we recently announced that the FDA has accepted our Investigational New Drug Application, or IND, for a first-in-human clinical study of CTEV in coronary artery bypass grafting, or CABG. As you'll recall, the CTEV is a smaller diameter version of the ATEV, which was bioengineered to be suitable for CABG surgery. CTEV has been tested in large animals for more than 5 years, and these results have supported the FDA's approval of our IND study. There have been no new off-the-shelf conduits that have been prospectively tested in CABG in the U.S. in at least the last 40 years, and our preclinical results suggest that CTEV may be a promising off-the-shelf alternative to saphenous vein grafts. To support this Phase 2a study, we completed the first large-scale manufacturing lot of CTEVs in our commercial-scale production facilities, and we plan to initiate the Phase 2a study of CTEV in CABG patients during the current quarter. And with that, I'll now turn it over to Jim for an update on our progress with the global [ Symbest ] commercialization.

Thank you, Laura, and good morning, everyone. It is a pleasure to be speaking with you all. Our second quarter was focused on rebuilding our commercial effort for [ Symbest ] designed to drive product adoption by hospitals, expand product usage, and to strengthen the site for sustained growth. To that end, we have remodeled our commercial team to ensure that all members have relevant long-term relationships in the vascular surgery space. We've also refined our introductory pricing incentive programs, professional education, and Value Analysis Committee engagement to better drive [ Symbest ] adoption. These initiatives are designed to create a scalable engine that converts interest in our first-in-class product into approvals, utilization, and sustained revenue growth. As we move into the second half of 2026, results are beginning to materialize with influential hospitals adopting [ Symbest ] and utilization is increasing. Surgeon feedback on patient use cases has been excellent, and we look forward to assisting these physicians as they share their success stories with their colleagues. Elsewhere on the commercial front, our Marketing Authorization Application for approval of [ Symbest ] for arterial injury repair was accepted for review by the Israel Ministry of Health in April of 2026. The Ministry set a 180-day working period for the MAA through the existing FDA approval of [ Symbest ] in extremity vascular injury. Last quarter, the fiscal 2026 U.S. Department of Defense Appropriations Act included dedicated funding to support the evaluation and cooperation of biological vascular repair for the warfighter suffering traumatic vascular injuries. We are continuing to work with leaders in the military and Pentagon to assure appropriate access to [ Symbest ] for American service personnel. During our second quarter, we also strengthened our team with the appointment of Dr. Todd Rasmussen as our Chief Surgical Officer. Todd has extensive experience and expertise in vascular surgery, gained over a 28-year career in the U.S. Air Force, during which he deployed multiple times to the Iraq and Afghanistan wars. He is a recognized leader in peripheral vascular surgery and trauma repair. At Humacyte, his focus is providing peer-to-peer scientific support, medical education, and technical insights to surgeons and other healthcare professionals. He brings experience, surgical perspective, and leadership to our educational clinical support programs and will help us align regulatory guidance with the safe, appropriate, and effective use of [ Symbest ]. With that, it is my pleasure to hand the call over to Dale for the review of our second quarter results. Dale?

Thank you, Jim. Commercial sales were $0.4 million in the second quarter of 2026, which is really a rebuilding quarter, compared to $0.1 million for the second quarter of 2025. For the six months ended June 30, 2026, commercial sales of [ Symbest ] were $0.9 million compared to $0.2 million for the six months ended June 30, 2025. There was no contract revenue in either the three or six months ended June 30, 2026, due to completion of a research collaboration project in the prior year, compared to $0.2 million and $0.6 million for the three and six months ended June 30, 2025, respectively. Cost of goods sold were $1.2 million for the second quarter of 2026 compared to $0.2 million for the second quarter of 2025. During the second quarter of 2026, $0.2 million of cost of goods sold related to the cost of units recorded as sales revenue during the period, and the remainder were primarily comprised of a $0.7 million inventory reserve recorded to reduce certain inventory balances to their estimated net realizable value, as well as overhead related to unused production capacity, which was reported as an expense in the period. The cost of goods sold was $3.3 million for the six months ended June 30, 2026, compared to $0.4 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, $0.5 million of cost of goods sold related to the cost of units recorded as sales revenue during the period, and the remainder was primarily comprised of a $2.3 million inventory reserve and expenses related to unused production capacity. Research and development expenses for the three and six months of 2026 were $8.1 million and $37.6 million, respectively, compared to $22.0 million and $37.4 million for the same periods in 2025. The decrease in research and development expenses during the second quarter of 2026 was primarily due to a reduction in non-commercial manufacturing runs and reduced clinical trial expenses. Selling, general and administrative expenses were $8.0 million and $16.0 million for the three and six months ended June 30, 2026, respectively, consistent with the $7.8 million and $16.0 million recorded for the same periods in 2025. Other net income or expense was a net expense of $9.8 million and net income of $1.5 million for the three and six months ended June 30, 2026, respectively, compared to a net expense of $7.9 million for the three months ended June 30, 2025, and other net income of $54.5 million for the six months ended June 30, 2025. The increase in other net expense for the three months ended June 30, 2026, and the decrease in other net income for the six months ended June 30, 2026, compared to the prior period, resulted primarily from the non-cash remeasurement of our contingent earn-out liability and other derivative liabilities. Net loss was $36.8 million and $54.4 million for the three and six months ended June 30, 2026, compared to a net loss of $37.7 million for the three months ended June 30, 2025, and net income of $1.5 million for the six months ended June 30, 2025. The increase in net loss for the six months ended June 30, 2026, compared to the prior year period, was primarily due to the non-cash remeasurement of the contingent earn-out liability described. We had cash, cash equivalents, and restricted cash of $80.3 million as of June 30, 2026. Total net cash provided was $29.4 million for the first six months of 2026 compared to total net cash used of $6.9 million for the first six months of 2025. The increase in total net cash provided for the six months ended June 30, 2026, resulted from higher proceeds from sales of equities and a reduction in net cash used in operations. With that, I will turn the call back to Laura.

Thank you, Dale. So we're very pleased with the progress we've made this past quarter and with the excellent progress in our pipeline programs and our reinvigorated commercial execution. With our dedicated team, we remain committed to delivering truly transformative regenerative medicine solutions that will improve patient outcomes. We believe we're positioned for growth and value generation for the balance of 2026 and beyond.

[Operator Instructions] Our first question is from Ryan Zimmerman with BTIG. Please proceed.

Maybe to start, a question for either Laura or Jim. Around the commercial changes that you're making, maybe you could reflect on what was challenging prior to Jim coming in and taking over. What needed to be refined and what you're seeing tangibly, I think Jim you talked about picking up since you've made some of those changes. Can you share with us kind of what you're seeing from that that kind of can give us improved assurances that we could see a commercial inflection in trauma.

So yes, so Ryan, thank you for that. You know, I'll sort of answer the pre-Jim question and then I'll let Jim sort of talk about the changes that he's put in place just in the last 3, 4 months. You know, I think that our commercial uptake in vascular injury was not as rapid as we'd been hoping. And so that led us last fall actually to move our prior Chief Commercial Officer out. And then we began a search and then, you know, Jim began in April of this year. You know, what I can say is that, as a new conduit, the first new conduit to enter vascular surgery in the last 40 years, and I had said this multiple times, you know, I think that the education challenges were something that I think we underestimated as a company. And so one of the ways we sought to address that is to bring in Rasmussen and really increase our contacts with thought leaders in the industry. But in addition, something that I think we didn't appreciate is that if you have something fundamentally new and transformative in the space, you really need a saleable, executives and leaders who have really deep, strong connections with very active practicing vascular surgeons. And while some of our people had that, a lot of our people did not. And so that made sort of breaking in with this fundamentally new product more challenging than it had to be, and I think that's one of the things that Jim saw immediately when he joined us, and I'll let him take it from here.

Thanks, Laura. I appreciate it. Great question. And I'll echo Laura's comments here. One of the key things when you're looking at a technology like this, and this is the reason why I'm here, I believe this technology is going to revolutionize open surgery for sure over time. But you have to have deep vascular surgery relationships. This is a 90% of the call point is vascular surgery for what we're trying to do here. And so the people that we're bringing in are people that have deep vascular surgery relationships and have built something from nothing. There's a difference. And those are the type of people that are used to what I call doing therapy development or new product launches. And this is a new concept and product going to vascular surgery, but it's being, I will say, well-accepted once the story is told. And it's certainly welcomed and we're already starting to see that uptick just a few months in. Hopefully that answers your question.

Yes, thank you. And if I can follow up and turn to dialysis access for a minute here and just ask, you know, we're in that window of getting the BLA submission into the agency for clearance potentially in the future. So, Laura, maybe you can just talk about kind of what you're doing to de-risk that. Give us maybe a little tenor of the conversations with the agency around submission for ATEV in dialysis access and kind of how you think about, you know, potentially bringing that to the market. If you have any thoughts on timing too, certainly those are appreciated. Thank you.

Yes, so again, we have had multiple discussions with the FDA over the years on dialysis access. And we actually have scheduled a pre-BLA meeting, which is happening in the very near future, which we're excited about, but the structure of that meeting is really not around whether to file, but around the structure of the file. Our anticipation is that we will include data from essentially all of our Phase 3 studies, and we've done three of them, as well as a number of Phase 2 studies. And so, you know, the total exposure that we have in our patient population is well over 1,000 patient-years. This is the most studied conduit ever in dialysis access. So we believe that the data that we have is not only strong, but there's a lot of it, and so we do not anticipate any pushback on filing. It's really about how we structure the file and the overall safety experience. So that gives us a high index of confidence that this will go forward. I'll tell you our plan, we've said second half filing. Our target right now is that we'll file in November because there is a lot of data to pull together. When we file, we anticipate that we'll ask for a priority review. We anticipate that we should receive a priority review because, again, this is a supplemental BLA and we have multiple priority indications for dialysis access. If we're granted priority review, then we would see a PDUFA date sometime in May. We would expect to launch at the end of Q2 in 2027. As far as what we're doing to prepare for the launch, there's really a tremendous focus on reimbursement and on creating the value story for insurers, both CMS and private insurers. It's a huge expenditure for Medicare and for private insurers. And as you know, there's a lot of downward price pressure on reimbursement. But our data from especially, well, from all of our Phase 3 trials really show that there are patients who get off catheter quicker and more reliably with our vessel than with any other method. And there's cost savings to be shown there. So we're putting together a budget impact, and we're also looking at Medicare claims data to really nail that argument to the wall because there are many high-risk patients who sit around on catheter for a long time and are extremely expensive to the system and cost an extra $20,000, $30,000, $40,000 per year every year. So by getting those patients off catheter with a low infection conduit, we'll be able to save the system money and also just generate better patient outcomes. So I know that's a long answer, Ryan. That's how we're thinking about it.

Yes. Thank you so much, and certainly best of luck on the submission this fall.

Our next question is from Josh Jennings with TD Cowen. Please proceed.

I was hoping to just follow up on some of the details on the rebuild of the commercial effort. And with any help just thinking about, I guess, number of reps that are pushing ATEV in the vascular trauma channel today versus prior and how that could potentially ramp up, and then also any help just thinking about introductory pricing incentives that you've called out and streamlining the VAC process. Sorry, three questions in one, but what does streamlining mean and how many processes are in play right now, how many centers could be on the adopter list by the end of this year and heading into 2027?

So, let me see if I can at least get a few of your questions here and start to answer them. So, first, what I'll say is when you look at the submission process for a VAC approval, there's several ways to go about it. We've streamlined it because we became more flexible in the process, made it a little more open so it's quicker adopted. Couple that with vascular surgery relationships, major KOLs across the U.S. that want to try the product, want to use the product. That's how it really speeds up. And the second piece to that is you need a national account strategy. And when I came in, there wasn't a national account strategy. So we hired a very specific individual who's done this with me in the past to build out that national account strategy so you can get access to another 1,000 hospitals in the United States, which we currently didn't have. So those are some key elements in any commercialization. They have a national account strategy to streamline the VAC process, et cetera. And the creation of introductory pricing is because, you know, surgeons, what I love about surgeons in general and vascular in particular, they really want to know how it behaves in their patients and they want to try it. And you really need to create a system where it becomes easy for them to be able to try it on several patients before they start to adopt it and put it into their practice. One of the key principles is just to be easy to do business with, and we've changed our philosophy in how we're interacting with administrations of healthcare systems. I can tell you right now, we've got at least 20 major healthcare systems in the U.S. in the process of bringing it into their healthcare systems in the back half of this year. That's not to mention everything else that we're working. Hopefully that answers your question.

Yes, that helps. Thank you. And I'm sorry for loading you up with a three-level question, but just on the sales force numbers, have they been reduced? Are they stable? Are they increasing for the vascular trauma build? And then how are you thinking about the commercial strategy for the AV access indication and what's that like opens up and will Fresenius play any role in terms of helping drive the initial commercial push, at least at their vascular surgery centers?

Sure. Let me just start with the dialysis one. We have already begun preparation, no matter when we receive approval, on what that launch will look like so we're ready day one. So everything that leads up to that is, you know, if you really look at our strategy, we're using vascular injury now to get into a healthcare system. And we are seeing adoption of that. I mean, it's certainly a great product. And for the right patient, of course. And it's always about patient selection. But that prepares us for dialysis because if you're already in the healthcare system and you're through the VAC process and already on the shelf and you have another indication, that will accelerate launch when we do launch dialysis. So that's the strategy. The strategy is we're utilizing our current indication and that's what we're selling on, also preparing for dialysis because if we have it already adopted into these healthcare systems and it's on the shelf and we launch in dialysis, that's instant access to dialysis patients. And that's what we're preparing for. Now, we're also looking at, you mentioned Fresenius. It's a great question. I will say this. Besides Fresenius, we're looking at probably 5 or 6 other strategies and particular verticals for dialysis in the U.S. So I think it's going to be much broader than just working with Fresenius, while we would love to work with Fresenius and will. But I think we have to work with some others as well as we look to launch this in a major way mid-2027, so long we have the approvals that are needed.