Question-and-Answer Session
Operator
[Operator Instructions] Your first question comes from Louise Chen with Cantor. Please go ahead.
Louise Chen
I wanted to ask you a few things. Firstly, will you give a public update after your FDA Type 2 Meeting? And secondly, what's the expiration date on the inventory that you have on remestemcel that was ready to go? And then lastly, do you have any sense of what the cost and timing of your adult study will be? Thank you.
Dr. Silviu Itescu
Sure. Thank you for the questions. So, yes, we will be providing a detailed update post the Type A meeting to the market. Secondly, our inventory does not currently have an issue with expiration because as long as it's tested we're able to demonstrate a shelf-life that can be extended. I think our shelf-life at the moment is up to at least four years, but it can be extended providing the tests continue to be performed.
Thirdly, the question was the cost. We're projecting a relatively small targeted study in adults. The reason we're working with the bone marrow CTN network across the U.S. is that they have an established infrastructure in place. And those are the relationship with them allows the CTN to conduct the trial in a manner that results in a very inexpensive clinical trial fraction of what a trial would normally cost with a commercial CRO.
That's precisely why we are working with the CTN. They are developing the protocol together with us. And I am very excited to get this trial started in a patient population frankly that has no alternatives. The patient population is patients who have failed a second -- have failed steroids and at least one other agent, which today the only approved agent across the U.S. is ruxolitinib.
There is about 45% of patients who are treated with ruxolitinib have failed. And those patients have nothing else that's approved or that works in the mortality rates. Survival in those patients is abysmally lower at 20% to 30%. That's exactly the patient population where we have been treating with under expanded access, and we are seeing a 63% short-term survival benefit. That's the reason that the Bone Marrow CPN Network is very excited to conduct this trial.
And from our point of view, we will be providing product that we have already made, and the additional costs are relatively very low relative to what a normal large trial would cost, and certainly will be picked up by the cost reductions that we have just outlined in terms of reduction in research and payroll and alike. So, I hope that answers your questions.
Operator
Your next question comes from Edward Tenthoff with Piper Sandler. Please go ahead.
Edward Tenthoff
Thank you very much. Appreciate the update. Just digging in a little bit more on the last [indiscernible]. How large do you think the adult trial might be? And will the 23% cost reduction be offset by the adult trial so that cost will be the same? Or will the actual cost reduction just be a little bit less than with the 23% that you mentioned? Thank you.
Dr. Silviu Itescu
The size of this trial is relatively small. And again, until we have full agreement with the agency, we need to be a little bit circumspect. But we are looking at per arm something like 60 to 70 patients, something like that per arm. And the overall cost, given that we are working with the CTN, it's going to be in the mid single-digits, that sort of thing.
So, we are talking about relatively inexpensive trial costs. And so when you say, how much will this offset around 25% cost reduction, over the next six months, a very little will offset good reduction. That's sort of being fairly circumspect. But obviously, the detail of this will be, I will be able to talk to you in more detail after the Type A meeting.
Edward Tenthoff
So, we kind of add that mid single-digit millions for the Phase 3 back on top of the 23% cost reduction when it begins, got you.
Dr. Silviu Itescu
And then again but remember that, that's annualized, we are talking about the next six months in terms of trial costs.
Edward Tenthoff
Yes, absolutely. No. It was helpful color. Thank you, Silviu. And then a quick question just with respect to chronic lower back pain. I know you mentioned that you will start this trial next quarter, which is fiscal first quarter. How much will this cost and how do you anticipate paying for this? Is that in the budget?
Dr. Silviu Itescu
Again, the costs over the first six months are already in the budget. And again, this is a relatively inexpensive trial. It's a little bit more than the -- it's more expensive than a network based study, but it's already well covered by our existing budget, so yes.
Edward Tenthoff
And then just one for Andrew, if I may. How long do you anticipate the cash on hand of fund [indiscernible]?
Andrew Chaponnel
Well, the cost containment strategies that have been enacted will allow us to have sufficient cash through to the end of first calendar quarter at least next year. And our strategy to bring in more cash is three parallel strategies that we're currently acting and working through strategic partnerships. In a number of areas remestemcel and rexlemestrocel, those strategic partnerships are active and ongoing in a number of areas.
Secondly, monetization of royalties, both real royalty monetizations as well as synthetic royalty monetizations, those activities are active and ongoing. And thirdly, there's always the accessibility to capital markets.
Operator
Your next question comes from Sami Corwin with William Blair. Please go ahead.
Sami Corwin
Hi, thanks for the update. I guess I was curious with the adult trial, if you've thought about what the control arm might be. And then with regard to the chronic lower back pain trial, I just wanted to confirm that the FDA is okay with you proceeding with saline as the control arm.
Dr. Silviu Itescu
Yes. Maybe I'll take the second question first. The FDA's perfectly happy with sailing as a controller arm, absolutely yes. With respect to the GVHD program, one of the main reasons to be working with the CTN network is that they also have access to investigators that have large contemporaneous controlled patient populations that we can access and use potentially as controlled arms through our treated arms.
Whether that will be the basis of the exact trial we need to consider a randomization strategy is something that that will continue to be discussed with the agency. But we have various current strategies for what the appropriate control will be. Remembering that there are no approved drugs for the control patients and the controls whether they're randomized or contemporaneous will be on -- will be receiving best available therapy, which are unapproved drugs that target inflammatory pathways and that today when used result in with 20% to 30% survival only.
Sami Corwin
And then just one more if I may. I know you mentioned that in the extended access protocol in adults, you've seen enhanced survival compared to patients treated with standard of care. But if I recall correctly, the adults treated in Study 280 didn't achieve their primary endpoint. So I guess if you could kind of contrast the two studies and what gives you increased confidence that heading into this adult study that it will achieve statistical significance?
Dr. Silviu Itescu
That's a very, very good question. Thank you. Study 280, which was performed about 10 years ago, was performed by Osiris using a product called PROCHYMAL. That product was a first generation mesenchymal stem cell product manufactured using a different process. When Mesoblast acquired the product from Osiris, we made some manufacturing modifications, substantial modifications, and the product with its improved manufacturing is called Ryoncil.
The Ryoncil product has demonstrated superior efficacy to the old PROCHYMAL product in a range of pediatric studies. And now that we have data with Ryoncil in adults who failed steroids plus a second line including ruxolitinib, the type of survival that we're seeing with Ryoncil 63% is very, very different than the our PROCHYMAL achieved in trial 280. So, the potency of the product is a measure of its efficacy and that potency is measured using the potency assays that are now in place.
And that have in part been shown to the FDA although there's additional potency assay work that we're now undergoing that we intend to show further to the FDA. But those potency assays confirm the greater potency of Ryoncil and we believe are the basis for the explanation that survival benefits are greater with Ryoncil in both pediatric and adult populations than with the old PROCHYMAL product.
Operator
The next question comes from John Hester with Bell Potter. Please go ahead.
John Hester
Good morning, Silviu. I want to refer back to your prepared comments. There, Silviu, we discussed about your intention to provide additional data on potency to the FDA. It sounded to me like you were leaving the door open there with respect to their recent decision. I believe you said that you were hoping to show additional data to prove the potency of the current product relative to what was used, the product that was used in the pediatric study from several years ago. Can you just confirm I understood that correctly and what exactly do you mean by those comments and what do you hope to prove?
Dr. Silviu Itescu
Well, that's exactly right. The primary reason for the CRL was that the FDA remains wanting to be convinced that the product in our current inventory that is to be for commercial launch is substantially the same as the product that we're using in the Phase 3 trial. And our potency assay needs to be substantially the same potency assay as was used in the Phase 3 trial in order to demonstrate that the two products are the same. We have those data that are currently being developed. Some are in place. Some still need to be added. We expect that in the next few months we will complete those data. And that is part of the discussion of the upcoming Type A meeting.
Perhaps, Philip Krause could add some color to my comments. Philip?
Dr. Philip Krause
Sure. I will make a quick point here and that is the CRL had, although, of course, the disappointment of being a CRL, but had two positive indicators in it as well or two significant positive indicators. One of course was the favorable results of the inspection, but the other important thing to take note of is that, the CRL did not question the efficiency of the product as was demonstrated in GVHD001, as had been the case in the previous CRL.
But the CRL did continue to question and raise questions about the potency assay. And specifically, the characterization and standardization of product that went into GVHD001, and then the ability then to make future product that was similar to that, which went into GVHD001. And so, this leaves open the real possibility that by using exactly the same assays that were used to characterize the product going into GVHD001, for a new commercial product that it would be possible to show that the new commercial product is similar enough to that, which was shown to be effective in GVHD001.
Now, the CRL then went on to say that, if that can't be accomplished, in other words, this demonstration, then the only way forward would then be another clinical trial in either adults or pediatrics, which would then allow this connection between potency assay and clinical outcomes to be made, and thus allow future product to be related to product that was shown to be effective in a clinical. So, maybe I will stop there, but could take a follow-up to previous one.
John Hester
Maybe just one follow-up Mr. Silviu, if I may. What are the fundamental changes between the product that was used in the 001 trial and the product you were now attempting to have registered?
Dr. Silviu Itescu
I can address that. There were no changes. The same exact manufacturing process and the same product went into the Phase 3 trial as it's currently in inventory and intended for release. And that's really what the inspection of the process and the plant and ultimately concluded. So, there are no changes to the product. What we need to ensure is that, we have a potency assay in place that was used precisely in that Phase 3 that continues to demonstrate the same attributes of the existing inventory. Phil, would you add anything to that?
Dr. Philip Krause
I would not. I think that's exactly right. The manufacturing process has not changed.
Operator
Thank you. That brings us to the end of today's call. I will now hand back for closing remarks.
Dr. Silviu Itescu
Great. Thank you everybody for joining us today. We hope that we have been clear in providing details around our interactions with the FDA our upcoming Type A meeting, our focus on finance and cost reductions, managing our cash runway and laying out the upcoming milestones on some of our most important products and whether value proposition is for our shareholders.
Thank you very much.
Operator
It does conclude our conference for today. Thank you for participating. You may now disconnect.
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