Good morning, everyone. Thank you for joining our call.

With me on the call today is Jim McGorry, our CEO. I’ll start the call with a summary of the fourth quarter and fiscal year 2018 financial highlights, then I’ll turn the call over to Jim, who’ll provide an operational update.

We had a very active fourth quarter, continuing with significant set of proof-of-concept pre-clinical studies for pediatric esophageal indications and by continuing to move forward operationally, proving our pre-clinical data set in preparation for filing our first IND for a Cellspan Esophageal Implant product candidate. We reported a net loss of approximately $1.8 million for the fourth quarter of 2018, compared with a net loss of approximately $1.2 million for the fourth quarter of 2017.

The increase in the year-over-year quarterly net loss was due to greater R&D spending as the company's overall activity rate increased during 2018 from the Q4 2017 level. To reflect back to the position the company was in at the end of the fourth quarter of 2017, we had four employees at the end of that quarter.

During 2018, our activity levels increased significantly and we finished the year in 2018 with 16 employees. For the 12 months ended December, 31, 2018, we reported not loss of approximately $7.5 million, compared to a net loss of approximately $11.9 million for the prior year.

Year-over-year decrease in net loss is primarily due to lower R&D spending as we experienced a dramatic decrease in headcount and overall activity in the fourth quarter of 2017 following the failure of investments to fund capital transactions. We then recovered during 2018 to more a normal staffing activity levels following series of private placements at the end of December 2017 and through the first half of 2018.

We consumed approximately $2.2 million of cash in operating activity during the fourth quarter of 2018 and about $7.6 million for the 12 months ended December 31, 2018. At December, 31, 2018, the company had cash on hand of $1.4 million and no debt.

In February 2019 we received $1 million in cash proceeds from the exercise of warrant. I'll now turn the call over to Jim.

Thank you, Tom. Good morning, everyone.

Thanks for sharing your time. Biostage has spent much of 2018 heads down executing on our transition into the clinic.

Our ultimate goal of course is to bring our potentially life-saving Cellframe platform for the underserved patients who need it most. And first and central to all we do, I'd like to take a moment to talk about these patients.

From there I'd like to highlight why we believe 2018 was a pivotal year in positioning Biostage for a value inflection year in 2019. Let me take a quick moment to describe the terrible burden of esophageal disease.

If you've ever known someone who suffered from any one of the many kinds of diseases of the esophagus, sadly you know how debilitating and deadly these conditions can be. Deep burning chest pain, coupled with an inability to swallow deep solid foods leads to a horrific quality of life.

And in the case of cancer, very low survival. Currently many complications are not diagnosed until after severe damage is done, and the only recourse I complex surgery with high morbidity and mortality.

In children complications can come right from birth as one of every 3,000 kids are born with an incomplete esophagus, a gap in their chest where the upper and lower esophagus should meet, but never developed into the womb. The current treatment options for these kids are inadequate and doom them through a lower quality of life and some do not even live a full life at all.

This is a classic underserved patient population that needs a scientifically proven clinically alternative to the current standards of care. In Asia, complications of esophageal disease are even worse and considerably so.

Almost a half a million people in Asia die each year with esophageal disease. Our long-term Chinese investors have a simple investment thesis.

They want to help children in the US and Asia suffering from the esophageal disease, developing game changing alternatives to help kids and improve the standard-of-care in a life threatening disease, drive each and every employee at Biostage including our strategic investors and every clinician, consultant and scientist, helping to translate our novel technology into the clinic. I spotlight these patients and the disease to highlight the need and the opportunity.

Here’s a quick summary of why 2018 was a pivotal year at Biostage. We improved on many fronts including three new additions to the Board of Directors to increase the company's financial expertise and capital raising support.

We brought in Ms. Ting Li in November.

Ms. Li runs an asset management company in China and was invaluable in securing funding for our continued research this past year with her two decades in investment banking experience.

We also brought on two new members to the Board's Audit Committee who both have extensive experience in the broader life science industries; Matt Dallas, CFO of AVEO Oncology, Jeff Young is the CFO of Axial Biotherapeutics. Young is also the new Chair of the Audit Committee and they’ve brought a combined four years of financial management experience and strong knowledge of the US capital markets.

So in summary, 2018 was a pivotal year for Biostage. The details of our groundbreaking first in human use of our Cellspan Esophageal Implant were released.

We earned them $2 million in non-dilutive financing in grants from the National institute of Health and we advanced our clinical stage plans with the FDA. Our clinical and pre-clinical evidence have de-risked the company.

Our strategic financial investors have funded the company throughout all of 2018 and increasing -- and in increasing values and their strong support continues. Let me highlight our Chief Scientific Officer and why we believe we are on track to do the things we say we're doing.

Bill Fodor, our Chief Scientific Officer is one of the Founding Scientist of Alexion. He has all the relevant experience in leading our IND process with his background in molecular genetics and cell biology.

We are exploring gene modified cell therapy improvements and other genetic advancements to enhance our technology. Bill is supported by our first ray team of scientists, KLO experts and regulatory advisors.

We have spent a year addressing every prior FDA question to ensure we file a scientifically sound IND. And it is for these reasons we are confident in meeting our IND filing deadline in mid-year.

In the second half of 2019, with the credibility of being in the clinic, we will look to uplift in NASDAQ with a plan of continuing to grow for value of Biostage. Thanks for listening.

Operator, I would now like to open the call for Q&A.

Can you please comment on your cash position and on your plans for financing to meet your cash needs for the year ahead?

Yes, thanks, John. I'll -- Jim here.

I'll comment first and then turn things over to Tom. Our first position that we have been using right now is a simple one.

We have been funding the company through our long-term investors, they've done in all 2018 and they continue it now in 2019. I know when you are hear the dollars of what's on our balance sheet, it doesn't give you confidence to be able to see the path forward.

So we have continued to move all of this private placement valuation into our company and move this forward. So we wanted to gain the financial -- or excuse me, the credit -- the scientific credibility of filing the IND before we went into any US capital markets.

That continues to be our plan. We will plan to be able to file as we've said mid-year, don't need to continue to say that, but that's what we're doing.

And then from there, we will look to do two things: We will look to be able to then approach the US capital markets in an organized and credible way; and we'll continue to be able to advance our subsidiary and other opportunities in China to continue to advance our technology. Tom, any thoughts?

John, that's really the plan, that's a good summary of where we stand and what our plan is.

That sounds good in terms of waiting for the IND to be filed, which will probably give you a positive revaluation and attract of capital. But how do you break your current cash position to -- when you get there, I think how low it is relative to the operating loss rate?

Yes, I think what you’re seeing John since December of 2017, we’ve managed by tapping into this network are very fundamental high network individuals who believe strongly in our mission. And that is our plan between now and the time we get back to the US capital markets.

Do you think you have a clear path to getting funding through your current sources up to the IND filing?

Not only up to the IND filing John. You saw, our OpEx at $7.6 million into 2018.

We continue to be able to be very prudent in terms of what we're doing. But we have -- we believe trusting our long-term investors as they do us, we're filing our position to enter the US markets with a position of strength, that's what we're looking to do.

But that comes with -- we'll see when we get there. It's not like we're -- we don't have the cash to get us where we need to.

We do -- we believe that we have, that's why we're executing what we're doing.

Can you also talk a little bit more about the importance of what Dr. Wigle presented recently on the human case study and how that as to the body of evidence that you have with the animal data that has greater scientific conviction in your technology?

Yes. So first of all, any of those listeners that follow companies and see an inflection in companies, the real moment is when you see what we worked on pre-clinically show it works in humans.

And that's simply what we have and yet it was very difficult patient, a tremendously difficult patient that was treated by Dr. Wigle in an FDA approved compassionate use study.

All done under GMP conditions, clinical trial and commercial readiness. And so, that’s what we have now.

The results of the autopsy of a patient who is not expected to live, lives an additional nine months, died from a different complication. But the results as well as the autopsy show that we generated esophagus with an epithelial layers and muscle layers going in and this is what Dr.

Wigle presented at the Society of Thoracic Surgery and that publication is being submitted to the New England Journal of Medicine. So it is first in new surgery, but matches totally the regenetive properties that we have seen in piglet models for atresia and our other models for adults and the regeneration was absolutely consistent.

Our histology, mechanical testing, all of the areas show that. So it gives us, if you will confidence that a very difficult area with a removal of the scaffold, a very unique and novel area all occurred into a human as it has in over 50 large animals that we've tested.

And I might ask a last question and then turn it over. What do you -- do you have a sense yet for what -- once you file the IND and start your trial, what that trial might look like in terms of number of patients, the timeline to completion and all that?

Thanks. We're working on all of those things right now.

We're working with the sites, we're working to all of the organization process and construction of all the modules into the IND but in early days we believe Dr. Wigle will be the primary investigator at Mayo Clinic.

We're looking at MD Anderson, we're looking at Michigan. We're talking to Mass General.

So, you can see, we're working with the who's who of the thoracic surgery and those areas. So, first in human trials, you know the FDA wants to manage it.

There will be a staggering within those patients coming in. But different than if you will, dose finding studies and phase ones and other drugs where you really don’t learn much early or maybe you learn a few things, the whole result is still the same; safety, we're trying to focus on safety.

But we know, you are doing the surgical procedure. You know that works or not.

And that is the thing about our technology where this Phase I, if you will, 2b clinical trial on if you will five to 10 patients will tell us an awful lot across this whole area. Thank you.

And do you envision doing the pediatric indication in this initial trial or you don’t or both?

That is your fourth question but I'm happy to answer it. We have -- we said it before, we've been very consistent in not going out and not trying to convince you of anything.

We are moving two indications forward, two indications, adult esophageal diseas and pediatric esophageal atresia, our first trial in adult if you will esophageal disease will be filed mid-year and following that we will make a statement when we will file our pediatric atresia. Yes, it will be two indications sir.

So we thank you very much. We know that we haven't been out in terms of 2018 counting what we're doing and going through it.

We continue to be heads down and focusing on it. We are trying to gain the scientific incredible financial credibility to be able to engage markets in the US and other places to advance that.

So we hope we can build our confidence and evidence in getting Biostage positioned for a clinical milestone and increased valuation in 2019. We thank you for those who have followed the company for a while.

We're moving forward. We're executing on what we need to.

And thank you very much.