Q1 2020 Earnings Call
Thanks to them when they could run a virus pandemic was declared we were ready with pandemic plans and actions to ensure.
The safety of our people in the integrity of our operations our entire global logistics network has not Mr. B. notion of with the aid of collaboration and communications technologies and we have people working from offices.
Practicing the appropriate precautions.
In total our personnel have acted responsibly.
And taking the appropriate actions when necessary I'm impressed by our team at large and the way we have planned acted and country.
We've made this afternoon as our Chief Financial Officer, Mister Rogers Savant image and aren't cheap commercial officer Doctor marks the Wickey.
As a reminder, we have uploaded our first quarter <unk> 2020, Henry to the Investor Relations section.
In the events and presentations section. This document provides a review of our recent.
[laughter] financial in operational performance and general business outlook I didn't download it.
As with previous quarters on this conference call. We will provide you with a brief general up.
Date, then we'll move to addressing your queries regarding our company's results.
We were 40 revenues of $9.8 million for the first quarter 2020, an increase of 47% from the first quarter of 2019. This was primarily driven by record revenues from our commercial agreements supporting Gilly edge ESCADA in Nevada says Kim Ryan.
[laughter], which contributed $2.9 million in the first quarter of 2020, representing a 110%.
Increased team.
In addition, bio services revenue was $1.3 million and not included and last year's numbers.
Yeah.
We are pleased to report that in April gilliatt renewed disagreement Crown court, which covers guilty as entire portfolio of that.
[laughter] therapies in development as well as yes, carda poor or.
<unk> supported therapies file for commercial approval during the first quarter of 2020 and a third.
Filed subsequent to the quarter in demonstrating they continued focus cues to market even with the current challenges in uncertainties, resulting from <unk>. The cobin 19 endemic.
As providers of mission critical logistic solutions to the healthcare industry were carefully monitoring the spread of covert 19, and any potential impact it may have on our clients.
<unk>.
I'm going to go get 19 pandemic, a meaningful number for our clinical trials, we support have been temporarily paused.
We are please.
As a result look of it 19.
Because I said at the beginning I'm proud of our great team of leaders, who have implemented multiple business mitigation plans and I'm confident in our ability to navigate the uncertainties plugging the world and our market.
It's today as a business. This is a lynch as a business that is they lynch pen and the life Sciences industry and one that prides itself on supporting resilient supply change mitigating risk and having best in class validated cleaning and disinfect <unk>.
[laughter] processes that ensure effectiveness.
We are fortunate to have continued business and to have considerable resources at our disposal, allowing us to continue to operate during this time.
We have not laid off any employs as a result.
[laughter] port on pause trials as soon as their restarted new trials as they begin and of course commercial products as soon as they.
[laughter] do everything in our power to contribute to the fight against Kobe at 19 teen pork potential cover at 19 treatments and vaccines.
As the life Sciences industry leader in temperature control logistics, and bio storage of life saving advanced selling gene therapies vaccines, and other fragile and high value about.
Logics, we're proud to be in a position to use our expertise to support the development of these much needed therapies and vaccines.
Fortunately, we also supported by strong balance sheet, along the long term agreements, providing vital solutions to the life sciences in healthcare industry.
Benefit from an exceptionally loyal client base, which we attribute.
[laughter] tar consistent performance in parallel experience.
Which result.
We can be confident in our future and will continue to execute on her plans to expand our capabilities and until.
[laughter] suspicion of the expected growth in demand for our supply chain.
<unk>.
And the question answer session.
<unk>.
Okay, Pat you'll hear a tone acknowledging your request if you're using a speaker phone. Please take out your handset for catching any keys to let's try your questions place Crestar then too.
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The first question as <unk> as STP Leerink He's got ahead.
Oh.
Oh, thanks for taking the question.
So I want to do.
Down a little bit more into the trial delays that you mentioned.
It was curious if.
You know at the rate of of of new pauses that you're seeing has been slowing in recent weeks or in other words.
Cards do you expect most of the trials that are going to be pause.
Already have been pause and and we and it's kinda biking.
Yeah. The next we've actually seen the activity yeah from our perspective bottom.
Out in or already starting to see some improvement and volumes at we're cautiously optimistic that we're starting to come out of it.
But I got it and it's great to see that you got involved in some covin trial.
It should we expect you know even more business from this movie forwarded that was it's kind of just the beginning of it. It we can expect more of a tail end as we move out through the throughout the year any more commentary.
<unk>.
Well, that's that's that's really hard for us to say in terms of you're you're asking if there's more more support we can get the cup at 19 issue that is that what you're asking.
Yeah. If you if you expect maybe bring on any more trials from the sex you mentioned.
<unk> Yeah, I mean, you know the bottom line is is the word constantly being requested by our our portfolio companies to support different aspects. You know if any of them do would make a determination to start additional programs are expectation is that we will get them. So you know.
I mean, there's a net upside of six already but obviously, our core activity clinical trial and commercial activity for trials in that we're supporting from that perspective. So you know we're still looking for two three commercial filings, so which already.
Six more this year and.
Well, you think that they're still going to be three commercial approvals.
We're very positive.
Okay Gotta, if I get a slip or football more in on the international business.
If you're running into any difficulties shipping international into the restriction and just in general it just kind of speak about the state of the business over there. Thank God.
Yeah, <unk>, Yeah, I mean in your best tracking very similar to the U.S. <unk>.
[laughter] eat we sought impact you know last month due to the act.
[laughter].
The next question as <unk> as jeffrey's, he's going to hats.
[laughter].
The the just the gross number of new clinical trial additions in face too.
Yeah, It stays three a week.
We see and at some time.
Mostly collect from existing clients, so perhaps new clients that were in source, but are now outsourcing is they move into later stages in the <unk> share.
So this later stage you ads.
I am aren't comment on that it's it but it's it's a combination.
Yeah, but to to add on that I mean, we had a very aggressive acquisition policy, what our sales and marketing organization.
You know trying to capture as much market share over time that we do a biopharmx clients and a quarter. So I think that that acquisition strategy is going well and so as Jerry and mention Nee.
That in source activity as well as our our existing client portfolio.
[noise] yeah.
Neat update you can share with this sort of with respect to cross selling a existing.
Customers with the.
Since asset.
With watch assets I'm, sorry cut out.
Just a you'd think any progress attraction in terms of you know cross selling existing customers with the newly acquired Bibles forage services business.
Yes, we've made we have made progress there most of it has been.
Using <unk>.
Brian's coming from cropping systems to Crow gene, so, but but yes, we're making progress and anticipate.
<unk>.
Nice progress with tight any update on didn't know bardas side with Kim My in terms of the contract renewal, which I think is a three year term and maybe.
No for renewal C.
You know Mark is working on that one should come huh, Yeah. I mean, we're we're active in negotiation for that extension would novartis and we anticipate that we'll be able to announce something along those lines and and you know relatively short time period.
Good thank you.
The next question is from Paul Nighttimes Kenny. Please go ahead.
Yeah Jere on the 50 eaten.
Mark <unk>, you don't have to add or something so what we're seeing as it's it's an accessibility issue into clinical psych had hot U.M.D. Anderson that they're not accepting of supporting any clinical activity because they're focused on <unk>. So so the vast majority of of what we're seeing is.
Is focused around.
Clinic.
Oh access.
You know.
All of these programs a into sites that are.
[laughter] spread out across the all phases. So it's not anything particular to any given phase demographic, it's it's spread out over over phase one two and three programs.
Oh, yeah in order to six coded trials within that gain in in in <unk> client numbers that you gave us the tomo above 60.
Excuse me up for a 65.
No they are not because they all initiated after the end of the first quarter.
Okay. Thanks, and then.
You would also previously announced I don't think isn't relief, but you were hoping for.
Find commercial approvals this year in 10 additional D.L.A. filings 2020, how do you feel about that now.
Yeah that we're supporting we anticipate at least six more so I think we're relatively on track with those initial projections that would.
And on reproductive a side of the business can you talk about how things are going there Jerry.
Oh <unk> the most impacted you know by the coven pandemic because it's the most personal you know part of the business in in many ways.
If people and so it was impacted the some of the larger clinics actually suspending their operations from month. They are now starting to come back to be active again and and that we <unk>.
Fate that business to recover you know as as soon as you know as soon as as practical but it isn't recovery stage now.
Okay, and then lastly, I know, obviously, you know airfreight under pressure from the commercial airlines side, but I guess that axis and others are still operating of course, but is the disruption commercial air travel affecting you at all.
No and the reason is that we have a fantastic logistics department and we've been able to establish work arounds and alternatives for without and and and so consequently, we haven't missed missed any shipments are missed any any any openings at all we've it's due to our our people though and.
You're right. It definitely has had an impact is created a lot of work, but we've been able to to handle that.
Okay. Thanks.
[noise] [noise] connects questionnaires from Shakeup Johnson <unk>. Please go ahead.
Hey, Thanks first just on the the renewal with cake L. Yeah does this change any of the economics of that agreement or should we just use this as sort of a three year extension.
I would use it as a three year extension.
Got it and then maybe following up on Paul's questionnaire [noise], obviously, we've seen a pretty big slow down in commercial air traffic. It seems like he'd been able to mitigate in the near term basically make out longer term could there be some structural shift in that the types of shipping lanes you are using.
No we no no the as a short answer is no. Our logistics folks are a habit pulling a fully under control and and do have a vision on on what's happening in the future and so forth we constant dialogue going on yeah. I mean, obviously are very strong relationships with the integrator in in.
In a freight networks has allowed us to be very creative inflexible in ensuring that we can shift volume in in you know from the consumer network into the freight network pretty seamlessly.
Got it thanks for that and then trying a question just on the operating expense fine can you get some additional collar on investments, you're making there and maybe particularly on the engineering side. It is that related to the shipper itself or or shall we think of this more sort of software work.
This is actually more broadly I'm gonna turn that to Robert and it'll give you some more detail, but it's it's broader than just a shiver. So yeah. There's there's a number of significant initiatives, yeah that are underway and having them away for a while low and and they all relate to you know Rodney our solution and and and bring it to the next level.
So we're we're having this is related to software to 'em communication also some some you know really significant potential investments in the Super technology.
And then as we discussed last quarter.
Listen to that yeah, we are the costs of setting up to global supply chain centres, one in Houston and one in in New Jersey and listen to that we have we have expanded our sales force. We were structure. The these sales organization, though to really be regionalized at the handle yeah. The Americas.
Any and and Asia Pacific as we start you know expanding our reach and supporting no global client base.
Got it takes fact, Robert and I think straight in the questions.
The next question is from skate anger as need Peace go ahead.
Great. Thanks, Hi, everybody.
Eating a lot of questions from investors regarding Cryoport and cobot 19 vaccine developers specifically in the dark now is there any comments you can make regarding your involvement in the back in Cobin 19, vaccines and how it and if so how meaningful.
I'm a revenue opportunity is this isn't near term.
Okay. So it's really too early for us to comment very and very much doubt teaser in development right now and and they are vaccines in there aren't treatments that we're supporting we it's a policy we don't comment on anything specifically about any specific clients, so, but but it as a group pets.
What we are supporting Mart would you like to add to that.
Yeah, I can I can add a little bit of color to that.
You know Ah the bottom line is as it relates to vaccines were obviously supporting six programs or or you know a covert treatments were supporting six programs in that space, but you know one of the things that can point out is you know for example.
Our relationship with lawns, you know, we're supporting all logistics distribution of any product being manufactured in that physical and any of their their location. So you know if they're going into third party contract manufacturers, we will have play a role in the in that.
Got it in and and when it comes to the suspension <unk> I believe there with some impact in the first quarter are you able to quantify that and and what is your expectation and for the impact in the second quarter from the suspension.
It's <unk>, we we haven't qualified that and and in the suspensions. We some continued to exist in some will start to start up again I mean look this it has to do with just the way. The the particular trials are runs the access of patients to the point.
Two of care for their inoculations, and so forth <unk> and staffing at the some in some cases at the at the facilities. So so we haven't quite about it and it's hard for us to tell you how that's going to unfold. We think it is it's loosening up and we think that it will unfold here shortly but but we can't.
Give you any more color on that right now.
Got it Okay, and then lastly, just.
On on the commercial therapies is there a reluctance to get patients involved in either Kim dry Ah or E.S. card, Oh wait whether it be in Europe, or the United States. During this sort of heightened.
Period.
<unk> <unk>.
No. The answer is no our commercial activity is a absolutely stayed up and and we're saving what were you know helping save lives throughout this whole tragic situation that we have going on with the pandemic. So <unk>. So the short answer is there's no <unk>. There's no. It has been no reluctance and.
The commercial volume as you can tell by our increase has has continued to say.
Excellent appreciate the answers thanks, everybody.
Thanks.
The next question is from Andrew <unk>, Please kind of had.
You think a good afternoon. Thanks to take my question and also just a glad to hear everybody sounds healthy and that is doing well. It's just the first question is to get to cope with 19 ones out of the way.
He mentioned the you know in advance therapy shippers just curious this and that became more of a talking point is you're you're talking to clients right now and then [noise].
Just.
Obviously lot disruption from macros standpoint, you have a significant amount of capital right now any any new m. any opportunities pop up any any ideas.
Companies that are a thong on a little bit harder times, and and looking to to scale up with a partner.
So.
The the.
The the the first question on the crowd <unk> the crowds fear in the the advanced are they there was that are the best Air shipper, Yeah, Yeah, Yeah, Yeah, So mark should take that and I'll take the last part yeah. So the short answer is yes. There is is define interests increased interest in H.P.S. in particular because.
Alright, he s. product line is what we call her very clean patented validated clean methodology, which is the only methodology in the space that has a demonstrates a six long reduction in in contaminants, which in doing does include current a virus in general it hasn't been implicitly tested against Colvin, but it has been test.
And against General Corona viruses, I'll, let Jerry comment on the second base.
A second question was about acquisitions, and and and our position and you know the answer is we do have a strong pipeline and we are looking at opportunities, but we have nothing underway at this particular time, but we definitely you're looking at opportunities for.
For companies that Ken Ken further hour mission and support our strategy and broaden our footprint in in the foot in the footprint that were in in in the <unk>. So that's that's that's where we are with <unk> no nothing nothing underway right now, but we were actively looking.
Okay, Great and I I was just spending some time coming through your website I was just <unk>.
Curious if you could expand upon some of the.
Additional bio services that that you're trying to implement rhino <unk> outside of storage right Crier Jean.
Things like the regulatory Q.P. services packaging and leave leasing drag return.
Can you talk about how that would tend to logistics and.
Oh well go ahead.
Yeah, Yeah, Oh, what Mark a supplement this the the bio services is if we do have a crowd gene and it was the beginning and then we're developing bio services operations in the two new global supply chain centres that were building in Morris planes, New Jersey in Houston, Texas.
Those facilities should be online at the end of this year or first part of next year, but they they they there'll be revolutionary type facilities, providing providing kidding and.
Labeling and and supporting you know therapies in in a way that that they have never been supportive before so that shouldn't development and those are those are the the those services. We don't offer today. It's it's evolutionary the thing that we have today is bio bio storage, primarily and that is crowd Jean.
And we do we we're looking at other services that we can offer there, but we that's that that is in process is nothing particularly knew about that is just the espouse George operation you know handling.
Precious specimens et cetera. So mark you may want to comment further on that yeah, I mean, the whole point behind the bio services competency is is it's being driven by client request, we have very strong relationships with a portfolio.
They they have we have a very strong track record of of being able to effectively support their needs and they've come to us and ask us to support the storage aspects in particular on the allogeneic a side of the business in a lot of the pending B.L.A. filings in 22.
The one in particular, having allogeneic bend to them.
So at something that we've had significant requests on as well as expand a temperature ranges, which would also fall into a that bio services competency.
Okay, Okay, great and how you may have mentioned this I was hopping between calls it a little bit earlier <unk> did you do you know how many B.L.A.'s and or M.A.A.'s are currently under review right. Now so has already been filed.
Oh three.
<unk> three in 2020 today.
I mean, how many there are lots and they had another six here.
I'm, sorry, I said, we anticipate approximately on another six this year.
I do you know how many were outstanding from 2019.
From.
They have three three from 2019 as well.
Oh, okay. Okay.
Great <unk> last question for me as you integrate bio services and just exclude crier Jean storage from that just additional by services is that something we should expect to result in just ink <unk> Ah A.S.P.'s when when we're talking about you know.
Per shipment costs or how do you see that kind of filing or to the p. now.
It'll it'll be a supplementary to two logistics I mean, what what we're getting ready for his Allen generic we are 30% of our trials are allogeneic, we know it's coming down the path when it's going to come down quickly and we'll we'll be there just service that that knew that.
New category.
This is commercialized.
Okay, great. Thank you very much stay healthy and best of luck dropped 2020.
Yeah. Thanks.
That's considered state question and answer session I would like to turn the conference back I vegetarian shall 10 for any closing remarks.
Thank you operator, I'd like to close this call by highlighting that we are competent and our ability to adapt to the uncertainties in new challenges presented by the ongoing health driven crisis or foundation is strong or expenses are carefully managed and we continue to have confidence that notwithstanding potential delays you to cover at 19.
The regenerative medicine market will continue to mature and provide opportunities to crop or to further extend its market, leaving position and build out it's ecosystem products partners processes and systems. Most importantly, our relationships across the border strong and we're working harder than ever to prove or.
<unk> as an outstanding partner to our clients during these difficult times.
Closing I'd like to extend our heartfelt thanks to all of our loyal shareholders for your own going belief in our business and our future until our next earnings call. We did you a good evening.
This <unk> you may disconnect. Your <unk>. Thank you for participating and have a classroom day.
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