Q1 2020 Earnings Call

Ladies and gentlemen, thank you for standing by the cultural begin shortly.

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Leaps and gentlemen, thank you for standing by welcome to evidence first quarter 2020 results conference call all participants.

Following that went for teaching.

Given for the question answer session.

During the conference. Please press Star Zero as a reminder, this conference is being recorded 26 2020.

Before we begin I would like caution that certain statements made during this earnings conference call the evolution.

Forward looking statements that relate to future but.

Sure confuse regarding business strategy operation to future performance and results above budget.

I encourage you to review evidence filings with the U.S. Securities and Exchange Commission.

Regarding forward looking statements in the earning releases, which states such statements made in those leases and in a similar way.

Conference call.

Not historical facts, maybe deemed forward looking statements.

Oh, the private Securities Litigation Reform Act of 1995.

Forward looking statements made here and speak only as of the deal announcements are the result.

Many of the factors impact with the forward looking statements will come to our beyond the control of epogen cause actual results could differ materially from anticipated results.

Virgin is under no obligation the publicly or are forward looking statements. What's the result of new information, which are events or otherwise, except otherwise required by law, we expressly disclaim any obligation to do so more detailed information about the risk factors potentially adversely impacting our performance can be found in our reports filed with Securities Exchange Commission.

That said I would like to turn the call over to Ofer Haviv urgency Ofer. Please go ahead.

Thank you and good day everyone.

We appreciate you joining us today for first quarter Twentytwenty corporate board.

Joining me today.

Hi, there our CFO.

Mr Guy dependent seem our newly appointed executive Vice President.

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I would actually take this opportunity swisscom got into the team.

Got it brings more than 20 years old Restel international commercial and strategic experience.

In the pharma industry walking with Stephens.

Well he held various senior leadership position.

I'm confident that he would be very large assay to our team.

Thank you all her ethical drawing this exciting company I look forward tool.

Yeah.

Like we've got.

I would again my comments today by addressing the impact on the corner virus outbreak.

I will then briefly give some insight into our rebranding, which we unveiled last week.

And provide an update on some recent developments.

Following my comments.

To summarize.

Internationally.

First quarter of Twentytwenty, We would then open the call for your question.

As mentioned.

That's good that's the before the call me 19 pandemic on the company's activities.

I want to assure our ship order.

The company it and its employees.

Well in compliance with restriction and guideline provided by the Israeli health authorities.

Order to ensure the health of our employees.

I'm pretty sure the evil job operation have not been severely impacted and that we have almost.

Full activity in line with don't get shells guidelines.

Today, we have not all the necessary to change any of our men collagen.

Gordon for Twentytwenty.

And we'll update you just changes.

I would also like to take this opportunity to thank our employees.

The great airports and commitment during this challenging time.

At the beginning of the outbreak.

To strengthen the companys ability.

We started thinking about opening team.

The company initiated a temporary wage reduction across the board.

In addition, we decided to kind of big once it comes every activities that does not directly connected to our near term milestones.

These adjustments in expenditure and expected increases in revenue attributed to the collaboration eggplant, saying with whatever.

And it allows us to not only maintain our expected cash burn rate of $14 million to $16 million, but 2020.

Initially estimated.

But potentially we use it even further.

Turning to $15 million.

He's the Guy time excluded our subsidiary Levy Bye.

I would now like to discuss Epogen rebranding announced last week.

And your branding reflects the Companys expended vision and new business model and facilitate clear communication with potential partners and investments.

This is a significant step in our evolution.

And we are happy to share and you investor presentation and additional material.

If anybody in our filings and on our website.

I would love to give some insight on why we believe in the company needed this rebranding to better reflect its gone offering.

Established as you know from college and interest other than to.

And was initially focused on a plane capabilities.

Additionally, biology in agriculture, and more specifically on improving ceded to eight yeah genomic modification.

That will generate genius logo was based on elite and it's in a leaks and was the inflection over the company's activity during this period.

This focus on improving seeks rate based on genomic modification.

Shifted following changes.

This market.

And even consumer date that led ampligen to border provision and focus on several new target markets.

Indeed, the followed the company management took the suicidal steps they the past tweets meal value proposition.

Okay decision I realize this development.

The first we're expanding ampligen technological capabilities in competition of LNG to include development product based on my calls and more more important in addition to genomics and the second it was quick spend Ampligen book was beyond I'll be culture do human health.

This decision led to the creation of the two main pillars of our new offering.

Our competition, a biologic technology better known as the CPB platform.

And our rapidly growing subsidiaries.

I would like to elaborate more on these two pillars.

Let's talk to me the first be there the security platform.

After two decades of hardware.

Because of dollar invested.

And validation in the form of kind of Russian Weve strategic partner.

And we'll just now or what can be considered one of the living competition authority platform, which aim to evolution I put a development in life science into three the seem to be platform.

Using our CPP based solutions in the discovery and development of lifetime best for that.

Expected to substantially increase the for what did you book successful product launch.

While reducing the time and cost of development.

And deep understanding of biology.

Combined with destructive competition on technologies.

Including artificial intelligence and big data.

Have led to the birth of these powerful platform.

That's helpful by tailor made solutions for the discovery and development of products.

Based on micro small molecule and genetic elements.

For Lifesize based industries, including you unhappy.

Gotcha industrial application.

The new local aim to reflect this expansion in our capabilities.

And the mission.

No we didn't technology in our hands.

And new branding, we're ready to engage with work leading companies across the versus market segments focusing on different for the site.

In respect to the second pillar our subsidiaries.

With that punishment of our powerful technology.

We decided that in certain markets segments, we will utilize the seem to be platform internally to build a product pipeline in such segment.

Just a few the reason we stopped leased over the past few years were built on views internal product pipeline.

He subsidiary was established within existing and future candid that brought that toward commercialization in a defined market segment.

Using a fourth the DPP platform.

When exclusive license for these fields.

The subsidiary, maybe decided to develop and commercialize its product independently or through strategic collaborations.

Good day.

It wasn't has five subsidiaries but.

But only time company in the area of human hands.

Atlanta ends up being value endeavor culture.

And constella in the area of industrial application.

I'm proud of our subsidiaries and what they have accomplished in such a short period of time.

The 11 opportunity.

Those subsidiaries had reached and the rapid advancement achieved in product development is that they left squeeze out of the use of the CPB platform.

It is important for me to note that each subsidiary has several upcoming milestones, which muktar development roadmap.

And this can be viewed in our presentation fine last week.

I'm happy to share the during the first quarter Act plants, which one of these milestones.

With the announcement of does put operation, we put them up for the co development of new modes of action herbicide.

Based on herbicide candy that discovered by excellent.

We see these collaborations to hold great promise.

Other shipments and now by our subsidiaries during the first quarter of Twentytwenty included.

But your Mika entering an agreement with bio industries for kill up and GMP production of direct candy that BM C 121, and BM C 127.

<unk> immuno oncology program.

Which is intended to support the progression toward anticipated first in man proof of concept clinical trials.

Lastly, can oneq and now an agreement with that's a medical center footprint clinical studies.

To support the development of colonial medical cannot these products.

Putting on implement touring indication as professor Rubin or laboratory.

I'm very pleased with the progress we have made so far at the company and I'm certain that we haven't sold strategy. This would prove fruitful over the next few years.

We will continue to develop the security platform.

Interesting our technology to Fortune your strategic partnership why you powerful hardening subsidiary, a comfortable to their milestones and supporting them in any way possible.

We're ready to benefit as a shareholder from our subsidiaries as the volume outlook and become apparent.

With that I would now like turn over the call to the rigs.

Thank you all so I wouldn't begin by reviewing our cash balance.

It's also described earlier the company has taken certain measures to mitigate the impact of the covert 19 pandemic cousin to company, including a temporary reduction in some other based expenditure and it got better secondary activity.

In addition, the company expects an increasing revenue for the remainder of Twentytwenty. Following that collaboration agreement I've been assigned with cooked into during the first Philadelphia.

He said, Jeff mentioned expenditure and than expected increasing revenues and allowed us not only two main 10, okay expected cash burn rate for 220, but to potentially I'd use it to tap into $15 million.

This guidance excludes cash usage of subsidiary let me back.

Evidence continues to maintain a sponsor Natchez position for some activities. We've got approximately 40.6 million in consolidated fish catch related accounts and bank deposits and the messed up is it fair twentytwenty.

Approximately 16 million a beverage and consolidated cash is appropriate to subsidiary that'd be buyer.

Consolidated cash usage amounted to approximately 6.3 million dollar during the first volatile twentytwenty or $4.6 million, it's excluding a b buyer.

The cash usage during the first quarter Philips cleared by the extensive another time payments of approximately.

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The company does not have back there.

Let's now turn to the statement of operations.

As discussed in prior calls epogen sort of in year to date, if consisted primarily of research and development revenue.

So that than yours represent R&D cost reimbursement and my son and Oh various collaboration agreement it's reflected in the cost of revenue.

The majority of these agreements also provide for royalties or other forms of revenue sharing so successfully developed for them.

R&D expenses for the first quarter of Twentytwenty, well $4.6 million, including a non cash expense of zero point $9 million fall motivational share based compensation.

In comparison to $3.5 million, including a noncash expense of 0.1 meal fall motivational share based compensation the first quartile Twentys 19.

R&D expenses in this quarter was attributed to positive development activities of the company and its subsidiaries, including fermentation lab walk and preclinical studies carried out by third parties as well as expenses related to corporate actionable.

Business development expenses for the fourth quarter of 20 $21 million, including a noncash expense or 0.7 million formalization of share based compensation in comparison to zero point $5 million, including a noncash expenses 0.1 million.

Formalization of share based compensation and the first for the 29 thing.

General and administrative expenses for the first part of Twentytwenty, well $1.3 million, including a noncash expense. So 0.3 Mariana for monetization of share based compensation in comparison to zero point $9 million, including a non cash expense.

$31000 formalization of share based compensation in the first well though of 2019.

Although I seen loss for the first photo Twentytwenty well $6.9 million included non cash expenses $1.9 million.

Walmartization of share based compensation, mainly attributed to auctions onto the v. buyer employees.

In comparison to $4.7 million, including a noncash expense of 0.2 million formalization of share based compensation in the first quarter of 2019.

Net financing expenses for the first quarter of Twentytwenty or zero point $4 million in comparison to net financing income of zero point Ninemillion unparalleled in the first quarter 2019.

Thanks, Chris Internet financing expenses during the quarter is due to the translation of the Israeli shekel denominated cash and marketable securities to U.S., though.

The loss for the fourth quarter of Twentytwenty was $7.2 million in comparison to last all $3.8 million during the fourth quarter of 2019.

This interest is attributed to an increase all $1.7 million noncash expenses, mainly related to amortization of share based compensation in the by all Internet financing expenses in comparison to next financing into informal spend in quarter 2009.

Yeah.

With that said, we wouldn't know likes to open up the call for any questions you may have operator.

Thank you ladies and gentlemen at this time will begin the question answer session. If you have a question. Please press star one if you wish to cap to your question. Please press star <unk>, if you're using speaker, but kind of just the headset for pressing the numbers your questions will be pulled in the order. They overseas. Please standby really pulled fair question.

I repeat if you have a question. Please press star one if you wish to cancer. Your question. Please press Star <unk>. Please stand by what we hope to your question.

There are no questions at this time before I ask Mr. Ofer Haviv to go ahead, but just closing statement I would like to my participants not a replay of this call is scheduled to be getting two hours. After the conference in the U.S. Please call one.

83 to 693 ones here in Israel. Please call the Ostomy nine to five 590 for internationally. Please call nine seven to 29 to five 590 for Mr. Haviv would you like to make her concluding statement yes.

Thank you. So thank you all for joining the call today I look forward to updating you with our progress over the next few months. Thank you and good day everyone.

Thank you. This concludes as it is first quarter 2020 results conference call. Thank you for your participation you May go ahead and disconnect.

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