Q3 2020 Applied DNA Sciences Inc Earnings Call

[music].

Good day and welcome to the applied DNA Sciences fiscal third quarter 2020, <unk> financial results Conference call all participants will be.

No.

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After today's presentation will be an opportunity to ask questions to ask a question you Press Star then one on your phone to withdraw your question. Please press Star then too.

Please note today's event is being recorded I would now like to turn the conference ever decide Hey, Hurry Executive Director Investor Relations.

Please go ahead.

Thank you Jordan good afternoon, everyone and welcome to applied DNA is conference call to discuss our fiscal third quarter 2020, [laughter] updates on financial results you can access the press release that was issued after market close today and slide presentation accompanying this call like going to the investors section of our website.

Yeah on the call today are Dr., James Hayward, our CEO and Beth Jantzen our CFO.

Before we begin please note that somebody information you will hear today during our discussion Macon consist of forward looking statements.

I refer you to slide two of the presentation of the company's form 10-K filed on December 12 2019.

Form 10-Q, four all the for a while ago four important risks factors that could cause the company's I told performance and results to differ materially from those expressed or implied in any forward looking statement.

We undertake no obligation to update or revise any forward looking statements or other information provider on this call. That's the result of new information or future results our development.

Now what is my pleasure to introduce our first speaker on todays call. That's transom. Please go ahead.

[noise]. Thank you saw Jay good afternoon, everyone and thank you for joining us.

I will begin this afternoon with a review of the consolidated financial results.

Fiscal 2023rd quarter.

Then dr. James Hayward, our president and CEO.

Well update you on AERCO, Vin 19, diagnostics and vaccine development programs as well as other business progress being made in our biotherapeutics segments. We'll then open the call to your question.

[noise] two preface my view at our quarterly financial performance.

New York observing quarantine and stay at home protocol during the majority of our fiscal third quarter.

As an essential business as defined by the state we kept our operations up and running as they relate to our diagnostics.

I've seen and biotherapeutic.

Pharmaceutical and dietary supplements Mil Gov, and law enforcement work and contract.

And our supply chain businesses global demand slowed abruptly and as a result, we have experienced a decline in revenue from non biologic tagging and related services.

Concurrently we shifted much of our head count and resources towards a fight against covert 19 to leverage our DNA expertise and ability to manufacture linear DNA at scale.

As you will hear Jim detailed later.

Starting with the statement of operation.

Total revenues for the period declined to approximately 432000.

Approximately 2.1 million and a third quarter fiscal 2019.

The year over year decrease in total revenue is largely attributable to a 1 million dollar licensing agreement fee received in the prior period from a foreigner warmer Canada partner.

[noise] product revenues declined to approximately 57000 for the period compared to approximately 393000 prior year pop in the prior period.

The decrease in product revenue, but revenue is attributable to the decrease in biotherapeutic revenues due to the timing of shipments.

As well as lower product sales to our textile and cash invaluable in transit customers due to the ongoing pandemic.

Additionally.

The retail sector is undergoing a drastic changes the men due to stay at home orders and economic uncertainty both nationally and internationally.

Before we expect that revenues associated with the marketing of cotton, which historically was recognized in our fiscal fourth and first quarter may not occur for this fiscal year.

We continue to work closely with both cotton manmade fiber partner to assess demand trend.

Fiscal third quarter service revenues were approximately 375000.

As compared to 1.7 million in the prior year period.

As I noted in the year ago period includes the licensing fee from a former kind of his partner.

The year over year decrease also reflects service revenues in the prior period related to the government contract award that was completed in the second half fiscal 2019.

As well as a decrease in the number of textile and cannabis feasibility pilot project [noise].

These decreases were offset by an increase in service revenues in our biotherapeutic contract research business, primarily from two validation studies.

Cost of revenue as a percentage of products revenue in our fiscal third quarter of 2020 [noise].

Increased to 272% as compared to 69% for the years okay.

The year over year increase is due to poor fixed cost absorption given our low level of reported product revenue.

The increase is also due to the change in product sales mix as a year ago period.

It was comprised primarily of cotton revenue that carries a higher gross margin.

Total operating expenses increased 8% or by approximately $250000 to 3.5 million in the third fiscal quarter of 2020 [noise].

Compared to approximately 3.2 million.

For the same period and the prior fiscal year.

Selecting higher actually in a cost due principally to higher stock compensation expenses and to a lesser extent from an increase in consulting.

Offset by lower Investor Relations and travel expenses.

Third quarter R&D expenses.

[noise] increased by 95000 to approximately 815000.

720000 over the prior period.

This increase reflects increased development costs as they relate to our biotherapeutic contract research and manufacturing.

The majority of which is ascribed to the development of our cobot 19 diagnostic kit.

Expenses associated with the formation of our new clinical labs subsidiary announced last month.

Well be reflected in our fiscal fourth quarter.

[noise] net loss for the third quarter fiscal 2020, why didn't you 3.3 million, that's compared to 1.5 million [noise] in a year ago period.

[noise] as a reminder, we implemented a one for 40 reverse stock split on November 1st 2019.

As a result reported earnings per share for the third quarter fiscal 2020, and 2019 have been calculated using opposed to reverse stock split share count.

We were at weighted average shares outstanding for the third quarter fiscal 2020 and fiscal 2019.

4 million 577, 997, and 952835, respectively.

Net loss per share for the third quarter of 2020 [noise].

Improved to 72 cents compared to a net loss per share of $1.55 cents.

For the same period in fiscal 2019.

Excluding noncash expenses consolidated adjusted EBITDA was a negative 2.8 million for the third quarter fiscal 20 as compared to a negative 1.2 million in the prior period.

Turning to our balance sheet.

At quarter end cash and cash equivalents totals approximately 10.9 million.

This figure includes approximately 4.4 million in net proceeds received during the fiscal third quarter for the exercise of warrants issued as part of the company's November 15, 2019 underwritten public offering.

Each weren't entitles its owner to purchase one share of common stock and the company at a per share price at $5.25.

Until November 15 2024.

[noise] our quarter I'm cash balance also includes 874000 dollar P.P.P. long secured during the quarter.

We utilize the entire rolling them out unqualified expenses as defined by the Paycheck protection program.

And plan to filed for forgiveness of the entire some once the portal to apply for a good given us is available.

Total debt comprised of our secured convertible notes was 1.5 million at quarter end.

[noise], our average monthly cash burn rate that is net of warrant proceeds for the nine months ended June Thirtyth 2020 was 837000 compared to 407000 for the year ago period.

An increase of 106%.

The increase is due to lower cash receipts as a result is a decline in revenue period over period.

Subsequent to June Thirtyth, we received additional warrant exercises totaling 852000 and net proceeds.

[noise] currently approximately 979000 wise.

Issued as part of the November 15th offering remained outstanding.

Our cash position at July 31st was approximately 10.4 million.

This concludes my prepared remarks, thank you for joining us today I'd now like turn it over to Jim for his comments.

Okay, well. Thank you Beth good afternoon, everyone. Thank you for joining our call. This afternoon.

Covert 19 has been applied DNA. His primary focus since the start of this pandemic threat as Josh the Spirit Science and creativity is a global society in economy.

The first phase in our company's response was focused on the health and safety of or employees and in this regard I'm pleased to report that we have and continue to execute well I also want to use the opportunity to praise the performance of our team throughout the lock down and in their content.

When you die solution on social distancing.

Those of US working from home of actually showing an increase in productivity while many in the loves soon in production work throughout the locked down and took on extraordinary goals that required working around the clock.

This is how our linear cope with 19 diagnostic came to be.

We all shareholders amount is minimal alike, how many reasons to be proud of our team.

Today fully 60% of our technical headcount is dedicated to our co. Good 19 diagnostics business in vaccine development programs.

Applied DNA is developed a highly sensitive and specific diagnostic assays for covert 19.

And since March our focus has been.

To developing a leading diagnostic kit and obtain the appropriate regulatory approvals.

To ramp up our production capabilities no measured in tens of thousands of patient reactions per day.

And to engage leading institutions hospital networks companies in schools as customers fraud diagnostic kits and testing services.

My remarks. This afternoon will focus on that portion of our response in which we moved to perform against our co bid 19 commercialization strategy.

Having secured the F.D.A. emergency use authorization for our linear Covidien 19 diagnostic assay kit and then several subsequent amendments.

I will offer insight into our go to market strategy as we anticipate receipt of our first commercial diagnostic kit orders.

I will also shed light on new style bushmen of our clinical labs subsidiary, but I believe has the potential to be a significant revenue and profit center for the company.

In our vaccine development program, we are very encouraged by our recent results in animal models that echo the effective does announced by some of the cobot 19 vaccines that are already in human trials.

We will look to build on this momentum in the near term with toxicology screens and large animal trials and with the support of industry in Big Pharma partners with whom we are already in negotiation.

[noise] beginning first with the science behind our coal with 19 programs. Our science is grounded in the central feature the virus that is the spike protein or the as Jean encoded protein to both detect and protect.

Against the virus.

For our diagnostic kit.

This means that we can detect all currently sequenced stable variants of the virus and we believe.

Any new stable and infective variance that may develop in the future.

Should some of suggested the virus eventually become seasonal our us they would be able to detect those new genetic variance.

Our focus on spike.

In the diagnostic ensures that we can detect all variance still capable of binding to the host so ace two receptor.

Without this event the virus would lose its mechanism to buying to enter whole cells.

Other diagnostics that are not focused on spike and there are many like this advantage.

Given this ability to detect current and future genetic variance.

Should there be a sudden mutation in the sequence of the virus that impacted the effectiveness of current unplanned vaccines.

We believe that in conjunction with our partner Takis.

We can more quickly develop a corresponding linear DNA vaccine.

That we believe could be manufactured at scale for global consumption faster than anyone in the industry.

And this is the power of our linear DNA platform.

Having received the way for a diagnostic kit in mid May.

We began to put into place the foundation necessary to commercialize it.

And the ensuing months our activities have yielded an expandable addressable market.

Further improvements to our kit.

And the installation of an expanded sales and marketing infrastructure with which to drive demand.

Our Kid comes in Threeq capacities.

100, 501000 reactions or tests per kit.

Our current manufacturing infrastructure can support the filling of tens of thousands of test per day with inventory managed to enable quick response to waters.

We're pricing within industry norms of 25 to $40 per test.

Our cost per reaction to manufacturer kit.

It's profitable across all these kids sizes.

And of course, our cost diminishes with scale.

Our commercial strategy is twofold one.

Gross sales of our dog Master kit to authorize clinical laboratories, and the large scale screening of asymptomatic individuals necessitated by reopening businesses in schools.

And to.

To grow testing volumes of our own kits out our own clinical laboratory and I'll address each of these interim.

Our kit is designed for high sensitivity.

With a low likelihood oh false negatives.

And is designed for high throughput and same day results.

You can be applied in 96 will high throughput systems.

The way you approved for use with our kids.

And is suitable for a laboratory screening large amounts of patient samples.

And to that in through a study campaign of you weigh amendments.

We have grown the footprint of systems on which our diagnostic kick in the wrong.

With the recent second amendment to our E. U way, we have added applaud biosystems Quantstudio five real time Pcr system.

To our fold that represents a 10 fold expansion in the addressable market for Kipp.

We are working on a new women men.

Targeting the use of our diagnostic kit.

On what we believe is the most prolific real time PCR system installed and clinical labs.

Which we believe will further increase our addressable market.

We anticipate this next amendment to our easy way in the coming weeks.

Increasing their relevance installed base of instruments can use our linear cold good diagnostics.

We will help us to gain market share against instruments that are not as widely approved.

No on July 24th F.D.A. issued new guidance.

That prevents the use of any way kit.

For the screening asymptomatic individuals without the specific approval of the FDA.

No we applaud the step.

That was not broadly anticipated.

Bother covert diagnostics industry.

That's necessary to ensure the safe screening.

Of Presymptomatic Ray symptomatic <unk> individuals.

Hi, analytical sensitivity increases the likelihood that.

So to test will be positive for any samples that contain the virus, even if the patient has no apparent symptoms.

Hi, specificity increases the probability that the test will remain negative for individuals with responded Tory illnesses that or others, then co vid 19.

But given the speed of the U.S. response to cope with 19.

There were no index to methods to evaluate the sensitivity and specificity across the spectrum of approved the ways.

That is until recently.

Roughly coincident with the guidance for asymptomatic screening.

F.D.A. developed a reference panel for the blinded assessment of both sensitivity and specificity.

And I'm pleased to say, we've just completed our analysis of that reference panel.

Submitted the results back to F.D.A.

In addition, we are now preparing another amendment to enable large scale pooling.

And testing or they symptomatic individuals as additional claims to are you way.

Whether utilized by our customers or in our own clinical hub.

We expect to submit our amendment to F.D.A. shortly.

It should be noted that F.D.A. recently granted a similar amendment to a large testing laboratory.

Sensitivity of their S.A. is 10 times less than ours.

In other words are lower limit of detection.

There's 210 times less vulnerable Arnie is to 10 times less borrow on AIDS in the competitors as say I'll say the again in other words are lower limit of detection is to 10 times less viral on a than our competitors that say.

I think you might agree that we're in a competitive position in this regard.

As parts of the country undergo their first wave will go virus and other parts that have endured the first wave or today seeing infection rates spike yet again.

We believe that pooled asymptomatic screening could help the nation alleviates the difficulties in keeping up with the testing demand.

And we intend to be ready to meet that demand.

No patient accessibility is also a crucial aspect of a diagnostic kits commercial success.

In addition to offering nasal for injury, all swabs sample collection.

Our eway provides us the ability to collect patient samples through the use of an interior nasal swab collection system.

No no as a in us this less invasive and far more comfortable not that should prove very beneficial in terms of accelerating screening for covert 19.

Especially in student populations that are unlikely to comply with repetitive news old for NGL swaps.

By contrast, our anterior nasal swabs or painless and easy to administered to testing subjects of all ages, including children.

To facilitate the use of an interior nasal swab collection with our diagnostic kit, we plan on launching our own proprietary nasal sampling kit in the coming weeks.

As our diagnostic kit becomes relevant to more laboratories.

We have expanded ourselves infrastructure through internal hires and external recruitment.

It is designed to get our kit in front of laboratories nationally.

We have invested aggressively in our supply chains.

And have established sufficient inventory to support our expectations for kit demand.

We are closing in on our first commercial diagnostic kit contract that we hope to announce very soon.

We expect the customer.

A major regional medical center in teaching hospital.

Will serve as validation of our kit in the marketplace and could ultimately incomeplus encompass testing across patients students.

And stuff populations.

This will be an important customer site and it will serve as second benefit. We've also been working concurrently to implement a high throughput coal the testing workflow for our kids.

They are laboratory, consisting of robotic arent any extraction robotics sample preparation.

And software.

Interfaces with the customers laboratory information system.

We believe this move workflows serves as a model for other diagnostic kit customers to adopt to their laboratories. It also serves as the basis for the end to end high throughput workflows solutions currently being deployed at applied DNA clinical hubs.

Our new testing subsidiary.

To offer testing as a service.

Now with regard to our clinical labs subsidiary, we established it to enable clinical testing a patient samples using our own diagnostic test to help satisfy the growing testing demand in the U.S.

The economics of testing however.

Make our intention to offer testing as a service or T.A.S., a hidden gem within applied DNA.

Given its potential for revenue contribution at a level per test Oh, possibly up to four times that Oh Standalone kit sales.

Now to illustrate the current CMS reimbursement for Kobin 19 testing is $100 per test.

In a hypothetical scenario.

Sending a stand alone kids sale would yield $25 to us per test.

The lower end of the pricing range I provided a moment ago.

This then leaves $75 on the table that has captured bio laboratory conducting the testing.

By running our own kids through our own clinical lab, we can capture much of the increment.

To the approved Reimbursable $100 protest.

We can also serve as an overflow service laboratory for our own customers, who purchase our linear cope with 19 diagnostic kits.

Thereby providing additional value to our customers in times of stress caused by increased demand.

With cases seemingly on the raws that suggests greater on long term demand for testing, we expect fully to be an overflow facility.

In order to launch testing as a service our clinical lab must be certified by the state of New York.

This certification process has been significantly delayed by coal good 19 in the shutdown of government systems.

As a consequence of stay at home orders.

Certification requires an inspection of our clinical lab in the submission of validation data both of which we hope to complete in the coming weeks.

Now as we await certification applied DNA clinical labs is already generating a revenue stream.

In the form of sponsored research.

[noise] contracts under which we are performing anterior nasal swabs sampling research in pooling models that will help the you us increase testing throughput.

The advantage of recruiting for research use only sponsored studies at this time is the incremental revenue they generate as well as being able to leverage their data for use in our certification process with the state of New York.

Furthermore, the data also serves as the basis for application for a new approvals from F.D.A.

For asymptomatic screening testing and sample pool.

No the nucleic acid based responses to the pandemic.

Our being validated by other companies who are in pursuit of a cope with 19 vaccine.

Nowhere is that more evident.

Then the unprecedented pace of development that has a DNA or are in a based vaccine candidate comprising about 40% of all the current clinical trials.

A record break or for the first time.

In our recent tests conducted on mouse models, all five of our linear DNA covert 19 vaccine candidates.

Designed in concert with Tac as biotech.

Revoked zero conversion in all mice to produce Fiveg again spike protein by day 14.

And significantly enhanced those responses by day 38.

Our results suggest that a low dose vaccine.

Could be potentially effective in.

Providing protection with neutralizing antibodies.

While the T cell responses in both Cdfour and Cdeight lineages suggests potential long term immuno persistence.

And as I noted earlier these results in animal models Echo the effectiveness announced by some of the cold the 19 vaccines already in trial.

We believe this bodes well for the human responses to our vaccines.

Together, both tack is sent applied DNA have entered into dialogue with biotech partners and potential big pharma partners.

For the evaluation of efficacy in more complex animal models.

And to fund the completion of toxicology studies.

Our potential big pharma partner is already a customer of RCR old CMO Division linear Rx.

And has engaged in the valuation of many constructs of linear DNA for their plan therapeutics.

A second benefit of this potential collaboration on the linear DNA covert vaccines may include enhancements.

Through our DNA delivery systems.

Exciting.

We believe that our linear DNA vaccines, however have inherent advantages.

Over even the speed of development that conventional DNA in R&D vaccines offer.

We can revise our vaccines rapidly.

In days two weeks without the need for cloning techniques.

Our linear DNA vaccines, how's the inherent advantages of vaccine expression without integration into the human genome.

And the avoidance of antibiotics and the transference of antibiotic resistance jeans.

You avoidance of bacterial vectors.

And the high purity and a very very simple means of production.

Linear DNA vaccines are much more stable during storage and shipments and all Rene based vaccines, which is a practical advantage during world wide deployment.

No. We believe that we owe the world's largest manufacturer linear DNA should the virus mutate.

We could improve a linear DNA vaccine within weeks of obtaining the sequence of a genetic variant of that virus and with our manufacturing capacity, we could produce quantities for mass consumption globally.

Or should another company develop an efficacious vaccine, we would be in position to develop a linear DNA form of their vaccine and supply into the quantities relevant to worldwide inoculation.

No our COO role CMO service business has since it's a beginning developed a strong client base.

Many of those clients with state of the art challenges in the manufacturer contemporary gene therapies.

And recently, we have succeeded in the production.

No single stranded DNA by PCR a real feet.

And in the production of the linear jeans necessary for the manufacturer of some viruses that play central roles in gene therapy and in redirected cell therapy.

These are not inconsequential developments.

We've received requests to scale these processes under cgmp in quantities adequate to serve initial clinical trials.

Although our business focus year to date has been on our co. Good 19 programs, we have not lost sight of our supply chain security business and those Beth noted the impact to cope with 19 and business activity has had a negative in pronounced impact.

On the supply chains, we service.

That generate the bulk of this segment's revenues.

[noise] segment revenues, principally generator from textile industry that uses our molecular tax for the marking of cotton uncertain man made fibers that are sold at bed Bath and beyond an older retail channels.

As we await the return of increased demand patterns.

We're focused on business building across key industrial regulated markets, including textiles, as well as cannabis personal care Nutraceuticals and pharmaceuticals.

By setting the stage today, we're positioning the company for further adoption of our supply chain security and authenticity solutions Tomorrow.

No even though we've been working at break that speed to address the covert 19 pandemic, we've not forgotten about the importance of our intellectual property, which is always been one of the central underpinnings of the company.

Over the last few months, we've received four notices of allowances for important patent applications related to cotton tagging Beacon, which is our locked optical markers system.

And assistant to DNA tag in inventory [laughter] excuse me through the use of a fogging system that has broad applicability to several markets, including cannabis.

In addition, we continue to bolster our IP estate in the domestic and biotherapeutic markets with the recent filings of several patent applications, where our covert 19 diagnostic and novel bio therapeutic applications of linear DNA.

We also continue to prosecute previously filed patent applications related to the use of linear DNA in car T therapies in vaccines.

And so now to conclude my remarks.

We really have accomplished much over the quarter.

To position applied DNA to serve on that.

And evolving needs for both covert 19 testing.

And vaccines.

We are today primed for increased market penetration on commercial sales.

With our strategy set and supported.

By solid cash reserves.

And with the continued laser focus on execution.

We believe we are very well positioned to succeed.

This concludes my prepared remarks, operator, please open the call up to questions.

We will now begin the question answer session to asking question you Press Star then one on yourself. If you are using the speakerphone. Please pick up your headset before passing the <unk>.

And the same time your question has Angela and you would like to withdraw your question. Please press Star then too.

This time, we'll pause momentarily to assemble roster.

Our first question comes from Yi Chen with H.C. Wainwright. Please go ahead.

Thank you for taking my questions.

My first question is do you expect to ship the Carbonite team test kits for additional you he meant amendment.

Yes, we do.

We expect that the Additionally, you weigh amendment will facilitate incremental rates of those shipments.

Got it.

And could you give us some color as to you know to potential 20 frames. The intermediate term in coming weeks phones are coming months.

Well certainly in the coming weeks to the immediate term.

Very close.

Got it.

And when do you expect to received in New York State specification for the clinical labs.

That's a little more difficult to nail down <unk>, New York State.

ER is working very hard to keep up.

With the testing demand.

But we've made great progress on the assembly of our compliance documents on our proficiency testing and or Validations, so that could happen in a time frame.

As short as two weeks.

But we're not in a position to control not.

[noise] kinda.

Given the current Kogan 19.

Status in New York State.

Is there actually testing shortage or backlog in New York State or yeah. Once you get this certification you plan to primarily service states that are currently cover 90, hospice, such as California, Texas and Florida.

No there are existing or testing short shortages in New York state and when that will become particularly apparent.

Is as students return from across the country.

Who.

Colleges and universities in New York State.

And as the administrations of high schools.

Even middle Middle schools and colleges.

Come to grips with evolving testing strategies for both symptomatic asymptomatic and Presymptomatic students.

And that demand could.

Change wildly and very very short periods of time.

As the positivity rates.

Our affected by the arrival of unwittingly infected students from hot spots across the U.S.

Okay.

Got it.

And when you talk about the amassing Kennedy when you talk about B.

Potential collaboration was picked farmer and also a prison clean negotiating rights for two novel delivery system. So could you give us additional color on what novel delivery system that is.

I'd love to but it's a little premature to tackle we have an existing functional delivery system that gives us very high transfection efficiency and very high transduction survival rates.

So we are contented with the methods. We currently have in our tool belt.

But we're always interested in increasing efficiency are such that it lowers perhaps the dosage required for a vaccine and increases the relevance of single batches to larger number a larger numbers of potential.

Patients.

Okay.

My final question is.

Has the U.S. government approach true to potentially include.

Oh vaccine candidate operation watch speech, and if not or do you what kind of data do you think you need to generate to potentially tracked U.S. government agencies to.

Including the about seeing and potentially kids applied DNA Sciences additional grant for further develop on except for the Bassi.

Yes, that's a great question. He because we really are the only company commercializing a scaled linear DNA manufacturing platform, it's really distinct from everything else that has been considered in the March of covert vaccines toward.

Commerce.

We believe the there is a gradual the Tiffany.

Occurring across the biotech industry and we believe it will reach.

The the government's both the state and federal level.

Oh, so that programs like warp speed, we'll see that we are an alternative manufacturing route to a variety of.

Different vaccine candidates, including those produced from DNA or from our M&A.

And.

I think that that Epiphany will awake and Oh, all manner of municipal funding God willing.

Okay. Thank you.

My next question comes from Anthony Vendetti.

Oh wait Maxim. Please go ahead.

Thanks.

Thanks, Jim Yes, most of my questions have been answered, but just a little bit more on the big pharma.

Negotiations and.

Joint ventures or agreements you have with them.

I know its focus has been on uncovered 19.

But but.

In terms of how are you working with big pharma.

Outside of covert 19.

In terms of linear DNA is there is there anything else that.

You can talk about Jim in terms of your.

Negotiations with Big pharma.

Outside of covert 19.

That could be.

[noise] significant are instrumental as we move forward.

Sure one very positive aspect of the a linear DNA work, we're doing with big pharma is that it preceded covert 19 by six to 12 months.

And in some cases those programs that have been delineated with us or.

Long lasting and far reaching.

So we had their attention.

And our customers have analyzed our methods well enough to realize that there were worth testing.

On.

In some cases as many as 20, Oh, they're therapeutic constructs for evaluation in both in vitro systems and then animals.

So as big Pharma also turned its attention to covert and the notion of nucleic acid based vaccines. It was just a natural extension of the knowledge base. They acquired over the prior six months to contemplate that this would be a great way to make.

Ur Cobot vaccine.

Right. So so that was that was sort of my point was that you where you are already in negotiation with a number of these large pharmaceutical companies.

Our two co good ever.

Ever appearing on the scene, so I guess I guess, what I'm trying to get out is it.

Yes, there's.

Potential beyond covert 19.

For you to work with big pharma, and and and I know like I said, the Coke focus it's been I feel good night.

But this platform has many potential uses.

Outside of probably correct.

Yes, absolutely it's relevant to really all manner of gene therapy of redirected cell therapies like car T use of vaccines.

And on the like so that.

Those companies that enjoyed a having already climb the learning curve of the value of linear or DNA and a clinical scenario were quick to move to the covert concept.

Okay, great. Thank you.

Thank you.

Again, if you would like to ask the question. Please press Star then one.

Oh.

Okay. If there are no more questions operator, I'd like to thank you and everyone for your time and attention. This afternoon and as you've heard there's a lot of activity taking place within the walls.

I applaud DNA.

And while this is not yet translated into financial performance. We believe there are multiple avenues ahead of us to significantly drive shareholder value.

So thank you again for your time, please stay safe will speak again with you next quarter. Thanks.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.