Thank you. Good morning, everyone.

Thank you for joining our call. This is an exciting time for us at Biostage and we’re very pleased to be able to share with you a summary of our first quarter activities and recent events as we’ve made toward our plan to transition from a preclinical company to a clinical stage company in 2017.

Jim McGorry, our CEO, is also on the call this morning. As you know, earlier this morning, we reported our first quarter 2017 financial results, an update on our recent operational progress and commentary on our expected near-term milestones.

As a preclinical biotech company, we are measured more against progress towards achieving our strategic milestones and a bit less on our quarterly P&L. Therefore, I’ll first give an overview of our first quarter 2017 financial results, and then I’ll turn the call over to Jim.

Jim will walk you through the company’s recent developments and layout our 2017 plans and milestones to illustrate how we’ll transition to a clinical stage company this year. So let me start.

We reported a Q1 2017 net loss of $3.8 million or $0.14 per diluted share compared with a $2.5 million net loss or $0.18 per diluted share for Q1 2016. The $1.3 million year-over-year change was primarily attributable to an $800,000 non-cash expense for the fair value of warrants and a $700,000 increase in R&D spending, partially offset by $100,000 decrease in general and administrative costs.

During the first quarter, we completed an $8 million public offering netting $6.8 million after issuance costs. In this offering, we issued 20 million common shares at $0.40 per share.

We also issued 21 million warrants. The current common stock price is below the warrants' exercise prices.

However, if in the future, the common stock's market price were to increase and market conditions were such that all the 21 million warrants were to be exercised, then such exercises could provide approximately $7.8 million of cash proceeds to the company, net of issuance costs. At the end of Q1 2017, we had $6.6 million of cash on hand.

We believe that that cash on hand will fund operations through September 2017. I’ll turn the call over to Jim.

Thank you, Tom. Good morning, everyone.

I’m very encouraged by our progress. Q1 2017 was a productive quarter for Biostage.

The highlights of the quarter were operational improvements, clinical readiness and greater scientific validation. We built on the sound operational and clinical foundation put in place in 2016.

Building the necessary infrastructure and capabilities are not glamorous but they are required to run in a clinical stage company. Biostage has now implemented phase-appropriate quality systems with proper traceability and testing, batch records, release assays, SOPs, and documentation are now a standard part of our company.

Our science has been repeatable and capable of tech transfer. Under an improved quality and regulatory system, we better understand our stem cells, our procedures and prophesies are being tested and improved.

So in summary, Biostage continues to be in the transformational process of exiting 2017 as a clinical stage company. On the next slide, just look at all the activities in a four-month period.

Q1 was action packed and the pace continues in Q2. All efforts converge on Biostage four overlapping strategic imperatives.

First, clinical development. Our goal is translating our Cellframe technology into patients.

This starts with preclinical activities and building our development capabilities. Our animal studies continued to show constant regeneration and we remain on track to file our IND into Q3 2017.

Next, collaborations. Our goal here is to work with innovative and thought leaders to advance our technology into man.

Bringing on Dr. Badylak to Co-Chair our Scientific Advisory Board with his good friend Dr.

Joe Vacanti is a major vote of endorsement from two regenerative medicine experts. Our third strategic imperative is operational execution, getting things done cost effectively and efficiently.

Our quality, regulatory and operational plans are all tightly coordinated. And now let me also address financial security.

I know Biostage has a financial overhang. Problem understood.

And we are taking action. During the quarter, we continued to meet with investors and other collaborators to fund and expand the financial options for Biostage.

What I mostly hear from fundamental healthcare investors is, you are an interesting company but early. I get it.

We are early and we are very interesting but only now starting to generate the data to support an increased value. That said, we’re making material progress to move to the next stage, a clinical stage company.

As we look to finance the company past our IND filing, we will continue to emphasize the emerging and operational progress to support the increased value. Scientific data is starting to get us clinical validation.

That clinical validation will hopefully transfer to financial validation and more strategic alternatives for Biostage. I hope you see on this slide as I do the many strategic actions that we are executing to transform Biostage.

Now, what can you expect to see from us quarter-by-quarter for the rest of the year? More progress, less risk, more data and collaborations.

By the end of the year, all operational and manufacturing systems will be in place for clinical use. You will see continued expansion of our Advisory Board, additional collaborations and more data at conferences.

I am also proud of our growing relationships. Biostage is right on the transformational path with collaborators like Mayo Clinic and Connecticut Children's Medical Center.

Doctors Wigle and Finck are top in their field as surgeons, researchers and regenerative medicine experts. Dr.

Finck’s poster with Biostage won Best Poster in Basic Science at a prestigious pediatric surgery meeting. In summary, the science is catching up with the medicine.

We are seeing preclinical progress and the continued replication of safe and consistent data. These are good signs that the clinical community sees the value of our technology and is looking for ways to get involved.

So in summary, Biostage executed well on our plans in Q1. Our operational improvements, clinical readiness and greater scientific validation helped de-risk the company and positioned Biostage to execute on our clinical transformational milestones in 2017.

I thank all of you for your time and look forward to sharing with you our progress. Operator, please open the line for questions.

Good morning. Thanks for the information and the outlook on the upcoming years.

It sounds exciting. I had just a quick question just looking at the details in the numbers.

You did have a significant reduction kind of quarter-over-quarter in both your major line items. Is that something – those levels you can maintain with these goals you have set and specifically I guess what remains on the operational manufacturing side getting that where you want it to be by year end, this cost kind of built into maintaining this burn?

Thanks, Laura. I’ll comment and then see if Tom wants to dovetail further.

All of our costs are built in. We are working in an efficient way.

We are working in terms of isolating, expanding and shipping cells almost under a GMP process. So we have all of our quality and regulatory plans in place.

We are outsourcing what we believe is not the cost that we need to take on and we believe that we have a speed to market and an efficient build-up of our firm. Tom, thoughts?

Sure. Laura, using two lines on the P&L, you’re saying sequential quarters.

Is that what you’re asking?

Right. It looks like both line items quarter-over-quarter went down a couple hundred thousand each.

So is that something with all these goals looking especially into this third quarter that is that a level that can be maintained, or will we see some fluctuation?

Yes. We’ll see fluctuations specific to R&D.

So quarter-to-quarter, depending on how the studies – we recognize the expenses based on sort of the essential [ph] completion on those. So they do tend to go up and down a bit.

But as Jim said, I think if you look at especially the statement on cash flow that’s in operations, we spent about $3 million in the quarter. I think that’s the level we’re at.

We are almost I would say as Jim just said fully staffed for what we need to do to proceed to an IND and secure the past several quarters that we’ve been building our organization and capabilities.

Right, okay. And then in the press release you mentioned the pediatric voucher.

Can you tell me a little bit more about that program? I’m not familiar with that, but the subsequent priority review on a different product.

Can you just elaborate on that?

Thank you. The FDA wants to incent companies to be able to focus in areas of true unmet medical needs.

Tropical diseases, like malaria comes to mind and also into the pediatric area. And so there is under the 21st Century Cures Act an opportunity for a company to be able to be eligible for a voucher and a priority review voucher that is also transferrable.

I think most recently Sarepta, another company in Boston, in Duchenne muscular dystrophy was awarded one. And I think they sold that voucher or transferred it for 150 million.

Others has been up as high as 300 million. And so it’s just an opportunity and a business opportunity into pediatrics, as we continue to look at the adult esophageal issues as well as the pediatric one.

So thank you.

Well, great, interesting. Okay.

Well, thanks for the information. I’ll get back in the queue.

Okay. If there’s no extra questions, operator, we thank you for the call and we’ll continue to keep you updated.