Q4 2020 Orgenesis Inc Earnings Call
At this time all participants have been placed on the list.
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Good morning, ladies and gentlemen, and welcome to the ore Genesis fiscal 2020 year end conference call. At this time, all participants have been placed on listen only mode and the floor will be opened for questions and comments. After the presentation. It is now my pleasure to turn the floor over to your host David Waldman Investor Relations.
Sir the floor is yours.
Thank you good morning, everyone and welcome to the urogenital ear and business update conference call on the call of this this morning are very capital and Chief Executive Officer, and Youre right think our Chief Financial Officer, If you of any questions. After the call and would like any additional information about the company. Please contact crescendo communications and <unk> to <unk>.
Seven one 102 zero. This conference call contains forward looking statements, which are made pursuant to the safe Harbor provisions of section 27 day of the Securities Act of $19 33, as amended and section 21 E of the Securities and Exchange Act of $19 34 as amended these forward looking statements involve substantial uncertainties and risks are based upon our current.
Expectations estimates and projections and we caution list and we caution and we reflect our beliefs and assumptions based on information available sources of data of this conference call. We caution listeners that forward looking statements are predictions based on our current expectations about future events. These forward looking statements are not guarantees of future performance and are subject to risk.
Uncertainties and assumptions that are difficult to predict our actual results performance or achievements could differ materially from those expressed or implied by the forward looking statements. As a result of a number of factors, including but not limited to our ability to further develop our products our reliance on and our ability to grow our point of care cell therapy platform, our ability to develop cell based anti viral technologies of our ability.
And effectively use the net proceeds from the sale of master cell, our ability to achieve and maintain overall profitability of the development of our point of care strategy. The sufficiency of working capital to realize our business plans and our partners the ability to develop therapies based on a point of cash and cell therapy platform technology, not functioning as expected our ability to retain key employees of our ability to satisfy the rig rig.
The regulatory requirements for new procedures, and therapies are competitors developing better and cheaper alternatives the impact of COVID-19 on our operations and the risks and uncertainties discussed under the heading risk factors and item <unk> of our annual report on form 10-K for the fiscal year ended December 31, 2019, and and our other filings with the Securities and Exchange Commission, we undertake no.
Obligation to revise or update any forward looking statements for any reason I'd now like to turn the call over to Mr. Barry Kaplan. Please go ahead Barry.
Thank you David and thanks to everyone for joining us on the call on uncle call today.
It has been a transformative year full of Genesis over the past decade, we've been dedicated to the the field of cell and gene therapy.
Well, there's so many of the health of school and the states become obvious that's the convergence of failure, such as immuno oncology genetic engineering and fills and lives till the school has made the field one of the fastest growing and biotech.
We have developed out of expertise and many areas both of the same engineering and quality clinical development and regulatory aspects.
Laying down the foundation of all of point of care business and until now we had going on and doesn't want to file divisions, which provided centralized manufacturing subcontracting services. The many of the leading cell and gene therapy companies. This business was incorporated into a master sales subsidiary of contact of developing and manufacturing business.
While gaining and growing understanding of the field, we realized that in order to answer the needs of CIS and the sleep as its materials to the marketing stage and to capitalize on the full economic value of Sao expertise, we must paves the way the naval cell and gene therapies for much larger population.
With the skull goal in mind, we've developed a point of care of business. We made the strategic decision to sell on mass the cell subsidies, the sand and the $15 million generating approximately 127 million net proceeds for Genesis.
And that's the Sun was based on the centralized approach and traditional Cleveland and while it served the needs of clinical development stage companies. It cannot provide a viable solution to support of therapeutic partnerships with hospitals and research centers and we realize it cannot provide the solution for supplying products to the millions of could potentially benefit.
From a growing pipeline of therapies.
We believed it was and the lifetime to sell master cell in order to maximize value for our shareholders and to accelerate the rollout of sort of point of care platform.
I think it's also important to note and five.
And I've used 11, you from the C D and the old business.
Some of them on rate of just 3 million to a run rate of approximately $30 million at the end of 2019.
And a compound annual growth rate of 59.
The sent them our leadership we.
We believe this is of Stangelo station and the value, we can build as well as the tremendous grosses industry of C based.
Based on in the understanding of this industry, we believe that our point of care of business has the potential to expand much followed with two of the dozens of C. D of all business.
As a result of the sale of mass the cell, we built an exceptional balance sheet, providing us the capital to execute on on point of care of strategy without unnecessarily. The 11 things are true.
In the meantime, we've been hard at work building the foundation and so on your point of care platform, which we believe will create tremendous value for shareholders and help unlock the full potential of the cell and gene therapy endlessly.
To provide some historical context simple life production, which is standard now across the industry has resulted in extremely high cost of cell and gene therapies. For example, called piece of these can all agent and the <unk>.
Hundreds of thousands of dollars per patient.
Significant cost of significance has inhibited the uptake by payers and limited the availability for patients.
And I'll go with the dramatically lowers the east coast.
Which will support pay uptake makes the yourself. These more broadly available to patients. We believe this is a crucial step and it isn't necessarily fulfill some of that needs to become widely available.
Let me take a moment to talk about how decentralized point of care platform and why.
The leaves this model is ideally suited for providing autologous cell and gene therapies to patients with point of care line.
And then lowering costs streamlining logistics and enhancing distribution.
As we've described in the past.
Our business is still down sleek keep pillows therapies technologies and the network. These pillars of lines of interest of the therapy developers and the hospitals and the patients and of what.
That has not been done the school from.
From the perspective of therapy developers of system provides a much more streamlined and efficient pass the market. Our goal is to partner and license or acquire the Beast.
Well, we have the ability to adapt these therapies tool of point of care of production utilizing the second pillar of the technologies here, we utilize and advance the only of automation technologies between the license dissolved the pulse on it with the parties using these technologies, we are able to adapt the therapies from onsite closed production and.
Supply.
Integrated closest allows us to support all stages of development and validation of this combination of the therapy and the post the Siem technology from all of indeed, the clinical development and C of O activity, all the way to commercialization.
To date, we have developed as well and licensed more than 30. Some of these and continue to expand the on pipelines of little partnerships with the point of care centers, we on that.
Active discussions with many more centers and look forward to providing for the sales of updates as developments unfold we've.
We've also invested resources and the new point of care of technologies, we believe the belief of the ski manufacturing challenges across the industry. The.
These technologies of the quality control scalability and produce.
Put usability speed.
Speed secrecy of cell production and much more.
The oldest to integrate all of these processes and simple systems into a single automated given the sufficient and expandable on site production of cell and gene therapies.
What we call out old Genesis mobile processing units and the labs.
We refer to them for the on pools.
And I'll talk more about the on pools, and a moment, but before doing that and I'd like to explain the sort of pillar of our point of care of platform, which involve partnering with these leading hospitals and research centers and setting up.
And people are assessing and supply units as the basis of a harmonized supply network for soup.
It is apparent to us having a comply and GMP clean room facility is a major major the bottleneck from any of these institutes and building up of high grade Canadian it's costly, it's a lengthy process and mining such clean and requires highly trained personnel as well and implementing complex and costly maintenance procedures and eat.
Even for those hospitals that you have these facilities, they're usually insufficient and size on quality.
I am pleased to report and now we have partnerships with leading hospitals and research centers and 14 countries around the world. These centers of setup for validation of therapies and technologies, but they also provide the basis of all truly global distribution platform.
In line with the strategy I'm extremely pleased to announce the leasing on the dealing of somehow on pools for those of you haven't seen them, yet or haven't had the chance to discuss and what was asked I would keep the the latest invest the slide presentation on our website, which has the images of the examples and illustrates the small footprint.
Allowing them to be rapidly and cost effectively deployed and hospitals around the world.
And a short period of time, we are significant.
Vance the validation risk analysis, and regulatory and other task related to some of these.
And these mobile systems will be utilized to produce the point of kills the therapies and to reduce cost without the logistical nightmare of centralized production facilities all of the difficulty of building up and maintain and clean it was and the hospitals.
The response from the industry has been over amount of welding and especially at the hospital with visa on pools of low medical institutions of of overcome the historical challenges that have made it difficult to provide these of these patients in a timely and efficient manner. The.
The number of advantage to the systems just to name a few of the design from the short setup time and have a small footprint and low the cost of production through automated operation and Palo Alto.
In addition, we design them and the scalable modular format. So we can add capacity of the needs of the hospitals and three all.
All of these factors enable us to produce its all of the cell and gene therapies and along with vital testing capabilities directly at the point of care and a consistent and standard manner and all locations. We believe the on pools on important additional steps to expanding out of capacity and we look to forward the expanding both the quantity and the locations of.
And the systems.
We've established point of care of development and sales of centers in the United States, Belgium, Israel, and South Korea, We've established 10 joint venture agreements with the regional pulse most of the adult financially committed to validate us little piece of clothing to local regulatory requirements.
Ooh Channel partners, we've set up and the international network of hospital as I mentioned earlier, we now have pulses and 14 countries and we expect the sign agreements with many more on the coming weeks and months. These partners are also helping us develop and adapt the point of care systems to the local requirements.
As a public company and vessels of.
Often want to put us in the bucket and I'll be of cell therapy developed the OEM manufacturer of weird the stupid stuff, but if you break down each component of our business and see how these pieces fit together, we believe there's a tremendous unrealized value in each of our pillars.
What do I mean, if you just look at the first pillar of our business. We believe our pipeline the 30 soup season going on.
On par with many of the world's premier cell and gene therapy companies, but more importantly, each of these pieces of the optimized for production and distribution.
As a case and point, we have all sales commercial part of Tyler, So which came to us through acquisition of callable pass on is already of commercial product in the United States for chronic and Cleveland the acute pancreatitis.
But the more importantly, calling on and recognize the value of working with Roche and the system and looks for the full commercial potential will kill the working at the back and kind of a cell phone on site automated production the supply from a point of scale platform or as we say on penalizing and films of all point of care and network just yesterday, we announced the collaboration.
And agreement with Doggie University Hospital, and South Korea, and Q4 of Pudic thing developed of immuno oncology and the cell and gene therapies. So as this collaboration we plan we plan to deploy on pools at the University hospital sort of point of care of development of cell and gene therapies and immuno therapies disagree.
And this agreement follows the leasing joint venture agreement with full with chemotherapy seeks to develop and co commercialize with pipeline on the global basis.
As we develop commercialize and supply of Genesis, the pubic pipeline and South Korea, Korea, and Japan, we can clearly see the synergies and how many across the all sleep pillars of our point of care platform.
We have many similar collaboration agreements underway that we expect to announce in the coming weeks supporting the sleep. The lives of our point of care platform. We are amassing enormous patents and IP and state we couldn't the one will have exclusive rights of 2018, United States pass on some of the six four and issued patents and 25 pending patent applications and the United States.
45, pending patent applications from companies around the world and two international and PCT patent application and addition to our first mover advantage advantage will building defensible moat and I don't know of point of care platform that will make it an advantage.
Other industry players the collateralized with the others and compete with us.
Turning to our financials for a moment I'm pleased to report on revenue nearly doubled in 2020 to $7 $7 million seasonal revenues and related technology plans, the set up and validation of social therapies and systems for clinical use as we roll out the point of care platform and expand the capacity globally, we have.
Good says the feasibility into a few children of a new growth in fact, we anticipate more than doubling on revenue and 21 based on just the existing contacts the town.
In terms of our balance sheet, despite significant investment and the point of care platform. In 2020, we ended the year with over $44 million in cash and the sale of mass of self providers. The lethal symptomatically accelerate on point of care of business without having two of these capital.
We have been and say well funded for the well very well funded for the foreseeable future and in fact, we even have of Bipack plan in place, which we use of the opportunity lies and we will consider using and the future.
And as I mentioned earlier, we feel on the assets of significantly undervalued by the strength, but I'll go on in 'twenty. One is to build willingness of the company. We look forward to holding quarterly conference calls going forward and plan on attending a number of upcoming investor conferences and lines of always open and we're happy to answer any questions investors may have.
So to wrap up by more than and college.
More than ever by the outlook of the business and I'm truly appreciative of the support of our shareholders doing of this transition period I'm also extremely grateful to all of our employees and suppliers advisors and industry partners sort of helps us accomplish everything we did in 2020, especially given the personal and global challenges created by the global.
With that kind of dynamic.
And I'm very confident we will achieve even more in 2020, one which will not only be meaningful for all shareholders, but equally important for the patients in need of cell and gene therapies I believe that our focus is live and by our strong commitment to our shareholders appreciating the patient and post and uncles and a genuine desire to help patients.
There's no reason children and adults around the world should be dying because they don't have access accounts of food lifesaving slew of piece of cost hundreds of thousands of dogs.
This is not a sustainable models of the cell and gene therapy industry, it's not a sustained the model for a hell of a skill systems.
We have been very fortunate in the past the sea of government support from many countries and we believe we will continue to the benefit from such sport technologies available today of capable of providing us the acquired solutions and the technology providers on Eagles to collaborate with us the leg.
The literally agencies of open to adopting innovative pathways that can expedite market approval and the east coast and health care systems of calling out the solutions. So we look forward to sharing more exciting developments and to be announced in the weeks and months ahead.
On this note I'll now turn the call over to the life and group Chief Financial Officer.
Thank you Barry.
Our revenues for the year ended December 31, 2020 were $7 7 million as compared to $3 9 million for the year ended December 31, 2019, representing an increase of 96%. The increase was mainly attributable to growth and revenues related to technology transfer setup and validation of both of our therapies and system.
And for clinical use.
It's also important to note that we have already signed master services agreements with partners and the aggregate amount of over $38 million for services to be provided from 2021 to 2022.
Research and development expenses for the year ended December 31, 2020 were 84 million compared to $14 million for the year ended December 31, 2019. The increase was mainly attributable to expansion of our poker therapies and our P O care technologies, including our uncles of note $17 million of this stock base.
Jason for the purchase of up to mirror of Biotechnology and April 2020.
Selling general and administrative expenses for the year ended December 31st 20 were 29 million as compared to $11 million for the year ended December 31, 2019. The increase for the year ended December 31, 2020 is primarily attributable to the increase and accounting and legal fees of $4 6 million, which is mainly due to additional.
Legal fees incurred for recent business and collaboration agreements and and increase in business development expense of $2 4 million as a result of the increased activities to establish our presence and new markets. We expect growth in revenue and 2021 based on contracts already in hand.
Each will substantially offset of R&D and SG&A expenses going forward and.
In terms of liquidity, we ended the year with cash and cash equivalents of approximately $44 9 million and have no long term debt.
Overall, we believe we are on a solid financial position and expect our investments and 2020 will be realized and a meaningful way beginning of 2021.
Operator, we'll now open the call to questions.
Okay.
Thank you, ladies and gentlemen of the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.
And we asked about pulls on your question you. Please pickup your handset and for listening on speaker phone to provide optimum sound quality. Please hold while we poll for questions.
And the first question is coming from Bruce Jackson from the Benchmark Company Bruce Your line of his life.
Hi, everyone. Good morning, and thank you for taking my questions.
So first.
First with the the on pools have you deployed any of them, yet and which are development programs are they going to be targeted to.
So the on pulls all of them, we haven't actually given the public disclosure of flu, which hospitals and on so I can't say that but.
I think it will be soon announcing that so that's and so you'll get an update us as locations and we also needs of hospitals approval always to give significant announcements like the us but they are adaptable actually to most of us will be suddenly to the immuno oncology and don't want to beat it.
And because of the diabetic programs on now being adapted to as well.
So they're very flexible nature of so it's the easily adaptable I'll first focus has been and adapting them to the immuno oncology products.
Okay.
Great and then.
With one Toledo of that transaction closed in the October.
October I believe did kish Lasalle contribute anything in the fourth quarter revenue and then how much do you think it's going to contribute in 2020 one.
So Neil and correct me, but I think it was on a minor.
The revenue coming from Kyle of cell, but I I want all of them. That's great brings us as an example of what happens in this industry the wonderful therapy being developed.
Actually getting market approval and clearance, but so difficult to deploy and many centers. So I think the major change and revenue will be once we've finished adapt and chylocele too on the automated mobile system. We're also expanding and them to try to get the pergola to approval. That's how it is the U S.
I can tell you there's a lot of excitement about this sort of beat the answers and very much on and some of the medical need.
And not only will it make it more available. So we can easily be deployed and other centers now and thinks of working only in one of two centers.
What we can also do is also reduce the cost of none of the soup and make it easier to get at the patients.
So once we finish that technology thing, which I hope will happen and the next six months I think we'll see Oh.
A major change and revenue and this is very typical of for the industry great therapy available to patients that can't be distributed widely because it's not adapted to automated close systems and can also be deployed easily and many centers.
And then on moving to the the pipeline has got a great pipeline chart on your on your website a lot going on on many of them are being prepared to go into the clinic for for clinical trials.
Are there any particular programs that you'd like to highlight as being the ones that are most likely to begin.
Trials here in 2020 one.
So one of our focuses and most of all of this will really putting a focus on the immuno oncology products. Because you know the such a crucial needs of patients disease. The piece, but also to kind of proof of point is even if we're doing of CD 19, and that's exactly true.
Very similar let's say the other the CD 19, and so it does have some advantages of being a lower those CD 19, and we believe it has less risk for many reasons, but the whole goal is to show that we can provide the therapy at a fraction of the costs and other providers.
And really that I think we're going to suddenly see that go into the clinic.
And so we've we want to get the pills program out as well.
And of those repeat it should be and clinical use and for the other therapy some of them already and clinical stages. So we're waiting for regulatory feedback to see if we can get the agencies the kind of forget us to the next stage of phase two and so on.
But I want to point out and other things as many of these therapies.
And that's been used in hospital and kind of use before the the interesting thing about the space is if the law.
Two of flame will cause the difficult defense and a typical book you can have a therapy being given to hundreds of patients on the hospital exemption, but the only at one location.
So what we try to do as Lee the adapt these sort of pieces of even shown clinical benefit and value, but now makes them available and many centers. So I hope that kind of fans of the question.
It does thank you very much for answering my questions I'm going to hop back in queue.
Thank you. Thank you for your questions.
Thank you.
And the next question is coming from Anthony Marchese, Anthony Your line of life.
Hey, Barry congratulations on what looks like the very successful year and it sounds like based on the backlog and.
2021, as well could you do me a third of and take us through.
And example of what the economics might look like from a hospital and more importantly, what it might look like for Genesis and the over.
The.
From the point, where you.
And one of these units and the hospital to let's say five years down the road, what kind of revenue potential does that have.
So.
Look let me give you and the description of it and again, we worked through a distributor of site. So it's it's really I'm gonna what on what we'd like the happened, okay and the scenario and so the hospital, let's say the begin was one on pool and that on Polk and and generate a product from let's say.
70, or 100 patients of you because that's I'll go right to maximize the utilization of the systems and.
And once that system is working and these patients. So we don't want to be selling of product for $500000. The patients that we've kind of.
Mr go by that and I thought of everything we're doing is to reduce cost and expand capacity.
So once that system is working the bill.
If we can you know, we're hoping to get these therapies to actual patients $200000 per patient.
Now that's kind of flow to begin with that and hopefully even lower okay and that's the that's a major reduction now if we can achieve that if we can achieve that goal, which I personally believe is very achievable.
And maintain the same loss profit because for those of you remember mass the cell and the discussions on the financial we made about of 50% gasp of its like Neil on on Master cell, that's more or less of the numbers and maintaining that type of profitability is but allowing that capacity to go very quickly.
Okay that I think is the basis of what we believe can be really good financial model for us revenue model from us.
Once the system is all of the installed one on pool, Okay, you've got the quality system and place deployed you have the GMP regulations. He's got the system, all wired up and connected and and everything working smoothly, it's actually quite easy to add another one of the systems into the same site and even in our planning today.
Most of the sites. We begin was two of three of the home.
So the idea is to really allow these leading centers to expand and then we can expand and parallel to the additional centers. So I hope that kind of gives the Oh a framework, yes, yes, and yes. It does and I just my one follow up question within the United States, what is what if any the.
The impediments to growing into it I don't want to go first let me see how of the other half of them. Let me see another hospital that I'll I'll sign up or what do you find them to be more of the impediments of 32 growth in the United States.
Well, it's it's basically the validation issue of gay and its the regulatory thing once we place them, we validate them and have not seen any impediment. So far in terms of the the interest from the hospitals. All from you know and I have not received any negative feedback from regulators and if you think of it and.
And of the kind of state for the logical way, it's actually if you're doing exactly the same pulses and and automated manner and exactly the same units, it's actually safer than the you know a bunch of biologists working and a clean room every time and you've you're basing your quality on the training and the liability. So I don't think we're going to find it.
The issue here and I think once we have the first validation sensors and there's no point and validating and 50 centers at the same time, just doesn't make sense economically and you want to do you of validation and and a few select centers and once that's done and when we say validation what do we mean validation is actually yeah.
Using these units the system for clinical use of it doesn't mean approval of the sales because it doesn't mean, we have to go through a full FDA compliant Doug we have shown with the regulatory agencies ugly and we are compliant with GMP requirements at the.
The point of care, that's the idea.
Hi, guys alright, Thank you very much and congrats again.
Thank you and the next question is coming from Calvin and Sito of Slingshot capital of Calvin Your line of lives.
Hey, Bert Congrats on your first earnings call I E. R of specialty Dow, who really cares about the industry and the patients are really blessed to be our share of water I. Just the one question right I think in the previous quarter, we see debt does the press releases that there's the possibility of boss, earning about a 40 million revenue over the next three years. So could you speak to the us about.
The nature of this revenue is it I'd.
And at any one of gravity of ours. It repeating revenue does it countries most of the off of amperes revenue. So I think any colors on debt would be really great.
Okay. Thanks for your question, so on and I'm actually glad to explain that and again I'm going back to a master cell line side. So what happens when you when you want to get a therapy like this to market. The several stages. The first stage you have to do kind of of tech of plants. The okay. So here.
Got everything working nicely and your own labs, and then you're deploying it into the site will you need to set it up and so that's a very important step and that's an initial step to get going full supply and manufacturing of these bonds and other thing is actually planing and al case, we kind of minimized personnel, but theres still signing you.
Have to do and.
And there's also some kind of validation and all quiet molecular through at the doses. So when we deploy these therapies and when we out license and some and let them be used and now systems as part of that agreement and we all being paid for both of the supports the Dewey.
And that which is very typical of this industry and this we will paid for that as a subcontractor as well. So so for the big Tech companies and the typical of kind of the lifecycle of a product like this would be first the initial payments of the tech transfers and the training and the validation and making sure kind of.
And once until you get the final approval to get working and the next stage is actually the post the thing and the supply during the clinical stages, all and other cases on the awful exemption or it's the products slowly approved. So this is kind of these revenues out of the initial step now for all of these therapies the tweet.
Kind of licensed out and all of initially getting these these are payments all of these the southern U. We of course expect and it's it's reasonable and logical to expect that the next stage they will be generating revenue as you and of the clinical stages.
When and if the funded by our partners and we will be getting a little royalty once they start being generating all of the new as well. So I think what when I see the seven you. It gives me very comfortable feeling because I know each one of these revenues are set up and I think sort of about Oh I don't.
The number of exactly what it thinks it was about 10 contacts Neil you can correct me on that but I think it's on the range of that so every one of these contacts I think what it lets US do is buildup of future revenue kind of a line of of financial income income that will be based on the.
Work, we're doing at the stage.
Does that answer your question on do you have any would you like more.
I think that's really great I just wanted to touch on so we didn't this 40 billion revenues and the licensing fetus and really part of the part of Midland revenue.
I know because of it.
It's not a licensing fee, it's all on the support payments until the validation of the actual post the thing. So that's that's kind of the model, but we don't typically take from all partners of the licensing people and distribution part of those license and appeal to the hospitals because of the member well all and validation stage now.
Well, we do not taken approach, maybe if we will of partnering with the large pharmaceutical we would ask for a licensee but in this case, we feel that it's better to wait for the royalties and makes us really enjoying partnership.
Alright, yeah. Thanks for the extra details I think that really help us to understand that business a lot better also of another question could you speak to us about the numbers of new.
New employees day, we had for this quarter and what are the focusing on and also one of some areas, where you believe that we need to hire more people.
So we've hired more people all of them.
And basically for processing.
And exactly doing and the work, we do which of the DAP things the biology to the cause of engineering.
So we've we really kind of make sure we have a very strong expertise on that also.
You know you can't underestimate the importance of of quality system and this type of business, because it's all about quality and sometimes like to call on quality system on ethical back from Mike. Because this is what allows us to make sure that the products leaching of the patient. So all of the best now when we build out of quality system, it's not the only about putting in.
And you know our standard operating procedures that everybody leaves, it's actually about implementing doing GAAP analysis, and making sure everything is harmonize the cost of the different units. So we've also invested and that in terms of just making sure. We have the highest quality people and well also because we're getting you know we're doing more.
Work, we've had to expand the clinical resources to make sure because we do have like all internal clinical research capabilities, which we we don't usually subcontract that out we actually.
And supports the third piece and by our own people. So that's kind of the basic the I'd say engineering clinical development and quality systems, and GMP and that kind of summarizes.
And to answer your question further on the numbers, we have about as of December. The other 110 of 111 employees at the end of the year and I'd say in the last quarter, maybe we hired 20 okay.
Yeah.
Yeah. Thanks, a lot of just one last question you know I actually had been looking at many companies such as a partner on a G. I see I think these companies really have several businesses of us depend nature and it. So I guess are you know.
<unk> redefined and quite hot to understand the value of each company and as the result, you know sometimes cannot be valued appropriately to the peers in the industry. So I mean, if you look at origin of CS and I'm thinking debt. That's exactly why that's happening you know if you have it on to your business you of a buffalo of promising therapies. So it sounds like me, who whereby you will consider us.
You know showing some of documents of slicing of Investor and they should all be down. The line you are separating the company sort of adding a business kind of understand the value.
More accurately.
So.
Strategically we felt it's really important too.
For us to have the ownership on the cities and the technologies and the supply network of clients why because this allows us to actually bring it altogether.
And even in the past decade, I mean, we've we're very Paul's line type of company because when the network company and light. So we love partnering with companies, we love partnering with Us and.
And companies that have of capacity and capability to do things maybe better than we do so it all comes down to the final cost right. So if the option for US for instance to have a good partner on the therapy.
And and and on the marketing side why not I mean, if that can reduce the time to market the patients and can bring you know at the end of the day I'll goal is to be a supply of these therapies and just debuted the the fact that we we we have ownership of these therapies and knocked means of and the future.
And we cannot pass most of it doesn't from that.
So, it's really about validating and getting to a point, where we feel you know the citadel business model is not questionable. So assets. Obviously, we're doing the right stuff, but it's also important and we show that and a very kind of the practical manner and as that goes ahead and I'm sure there will be many partnering opportunities and as always.
We're always open to these opportunities.
Alright. Thank you just wanted to add that I've spoken to many Ceos before and I think on one of the more authentic one so I'll just hop back to the queue. Thank you.
Thank you thank you for that.
Kind of.
Thank you, ladies and gentlemen don't forget if you have any questions. Please press star one on your phone and the next question is coming from Bjorn, Inc. From Nx capital B on your line of his life.
Hello, Hi, Thanks for taking the congratulations on your first earnings call I, followed your company for a long time and I can view your passion to create a photo of a gene therapy for all patients.
On to bear in your press release, I caught you share that our expensive tier of beauty pipeline is on par or superior to many of the world's premier cell and gene therapy <unk> therapy companies. So part of me for my ignorance, but could you elaborate by sharing with US which are the town of piece that we are on par.
Our superior please.
Yeah. So I mean look at the CD 19, Okay, we truly believe it out and see the 19 and the reason for this is when you look at the so because it's not it's not because you know who we think will of Sofia scientist on anything like that it's because when you look at the industry and you look at the difference between different CD.
19 therapies, there's not that tremendous the difference like are the differences is and the detail.
And why do we believe and say Oh, maybe superior well because we believe we can supply them with a much lower cost even if the clinical efficacy is the same and I think that's extremely important and we have taken into consideration of other things as well funds and such as the lowest dose. We believe we can do from the existing food market.
Politics and.
And let's take the other technologies, so many hospitals, whether it's synthetic vaccines and Tim.
The other types of immuno oncology products. When you look at what's being done and it's been done under like hospital exemption and that's been done and the hospital and lab setting and that's.
The expensive and the V on the expandable okay. So the difference here is actually and the reason we believe we can.
Have a more beneficial and a better product is because it's expandable okay. Even if we're not but on clinical efficacy and some of these products have amazing clinical benefit line, but still the just too expensive and they cannot be supply to why the population and that's why we believe the you know taking the same they sit.
The processes, maybe you know we've licensed with each one has its unique IP angle and and that's the typical of this industry that you know because the every every one of these therapies has you know, it's it's kind of and I like to compare it to the recipe. Okay. So the all have a recipe for making the same type.
Of cake, okay, but the difference one likes to put in a bit more of that one of likes to put on a bit more of this but at the end of the day, the reaching more of less the single, but can we reach the school and a way. The once we have the clinical approval. We can quickly expand the many patients and can we get the costs down from make it reasonable of the patients.
It can have can actually use the food.
So I have I answered your question well enough.
Yes. Thank you so much of a net has been a very helpful. So I just want the dual I'll find out more of about the kind.
And I shall put up so I understand that we have a quiet calling go to export their kind of channel product.
And you may not be easy to achieve breakthroughs ease of D. But I just wanted to hear your opinion on how we are progressing on that front with 8000 patients as of pocket be possible and would there be any current developments to share.
So we haven't put out anything about the kind of for the product yet because it was still and closer but I. You know we will update once we will kind of providing it and the new settings. Okay.
And and you know we're working on it typically I don't want to kind of I don't want the promise of food and the amount of time, but I can tell you the typically.
And the past when we look at different therapies, it's taken us between six months to the year to kind of work on the on more on adapting them to a more automated fashion, but I have to say that the collegial team all of these thinking about this before and they have.
I don't know if you've noticed but they also have of the tissue Genesis, which they acquired on the way we will acquire them and do an incredible team of engineers. The live all of the done a lot of interesting work on this and the the.
The very sophisticated team so working now with our engineering teams I'm really hoping we can get to the skull as quickly as possible.
Alright, thanks for the I just got one last question regarding the on Puce. So I can see how on pews can help our clients to manage costs and each on pews on modular and he can be customized the what sky has requirements of ashville. So on average how long does it take to complete the many.
<unk> station and on Pew, followed by the actual utilization and our revenue generation of it.
So it's really it's really based on the regulatory agencies and I can tell you of the regulatory agencies and I was very quick I you go in and you give them the paperwork and you know and once you do of first run of tubes are happy and that's it other regulatory agencies takes the time. So it's the it's very different from one.
And the regulatory agency to another.
No just the points that may be interesting and the U S. For instance, hospitals and not even obliged to show the happens I mean, there's no inspection of the G&P systems. So even though the no outside leg of Latoya agency for US it's extremely important to comply with our quality system and even if it does not we will be getting clinical Wilkins and there's no and.
Still no agency coming to kind of the oddest, it's still very important for us to have the own validation runs and again typically of validation on our system of you'll do like sleep validation of months and.
And for therapy, and depending on the therapy. It can take a if if let's say it takes a month. So if you can do a few and Paolo so it really depends on the therapy and the regulatory agencies, but again, we're not talking about he is okay and I think we have a very good teams on the ground the helps us happen as quickly as possible.
And <unk>.
Alright. Thank you so much it is a privilege to be of shareholder and we are supporting you on a we think of all your how much.
Thank you very much appreciate it.
Thank you and the next question is coming from Alan let Sac from Forest capital Allen Your line of glass.
Thank you so much for taking my question and can you. Please comment on the opportunities for grid on funding.
Yeah. So thanks for asking that because I think it's part of the strategy right I mean from day, one and we've always worked together with the governments why is that because when you go from company a country like Korea for instance, on Greece will of the active all Belgium, we've been the.
And the C supported.
It's part of the government's.
Need to reduce health care costs line. They they see very much I do I was us and our goals to achieve what we want to do and we've been very lucky so far and and you know and.
Having that understanding of activity from government people that issue of lot of these grants line. So many of the grant funding we've had so far has come from governmental agencies.
And and we on a path of tremendously appreciative of it and we like to have them involved okay. So glass from the space just and typically.
Round of 50% of investments island on the on Capex on Opex, depending on the different gun programs.
And the reason is not just financial but we like to get them involved. It's also in terms of strategy. Once you have the government involved and what you're doing and updated and understanding that the kind of benefits of this country's health care system. Then you also have a supportive approach on the regulatory front and you have the supportive of approach from the.
Some of the government hospitals. So that's when we say about grants and the past we've manage the fund the and many of our programs about 50% from grant grants and we we are working very closely with the agencies and to see how we can expand on that.
Well, thanks again on a great job growth.
Thank you.
Thank you. The next question is coming from and Nicole Kaufman from Blackrock capital Nicole Your line of Flash.
Good morning varied and congratulations to you and all of our Genesis team on the tremendous progress you've made this past year can you speak in more detail about the response from hospital to the point of care model and.
And are aware of the new therapies will come from and how this model will accelerate development of new therapies.
Okay. Thank you for your question. So just to give you a bit of kind of a background for me, it's obvious because and fill our teams because of all the time and hospitals, but let's look at what's happening and hospitals today, what what the situation is from the site.
The the cell and gene and Sue.
The industry is not gonna go on out of Big biotech companies, It's oncologist Immunologists Lee searches working inside the hospitals trying to improve therapies, whether it's and unquote oncologists working and a bone marrow transplantation centers of which isn't the immune therapy right, but without genetic modification of the sales so whether it's the.
Orthopedic surgeons was trying to get a better therapy to a patient for cartilage or whatever that therapy is.
These are scientific developments of come out of the Big research institutes and hospitals site.
So as time went along and the regulators and said Hey, you've got to stop. This these on Nox treatment sees on the dogs and these are products. So.
All of these therapies that were being used as you know as ive just the treatment of suddenly become a product that needs to be the regulator that needs of GMP and this is not something typically of hospital and knows how to do.
And the Amazing thing is every time you go to a major the research center.
Oh of hospital, you'll see the five.
510, and differently searches and all of some of them all of the doing clinical work, but the comp moved to the next step.
So from this side, so really eager to get these therapies of platform.
You know to get the patients so when we partner with them when we license was a nice day.
For them. This is in most cases and the only way to get the soup is out of the lab into the general population.
And I was also economic value for that from the hospital right. They wouldn't get a royalty stream as these therapies get the market, but there's also of research interest and of course, the basic clinician goal of getting therapies to patients and making patients feel better. So that's one aspect of it on the other side okay.
The they have you know everybody the home at.
At least not everybody, but the most patients today they get on the internet of things need about new therapies and eat about new programs line.
And when they come to a simple you know everybody wants the latest and the best obviously.
But if you're a leading research center of hospitals.
And you may have the most leading programs and radiology okay.
Chemotherapy or even immunology regular antibodies and your patients are really asking to get a therapy. That's the cell and gene therapy. You now have to tell them to wait three years until this hospital bills of the G. M. P unit is able to provide all of they need to pay 500000 or even of a million dollars to therapy.
And from one of the approved products all they need to find some other way to get these products. So when we come in well solving more than one problem, we're solving a way to get to the IP out, but we'll also solving a way to get other therapies in the leg of the.
And you know of at the operational cost.
And most importantly, we're cutting down times, because imagine what it is full of harmful to now start becoming a biotech company. It's just not the expertise of its not with them and to do so we become actually the biotech kind of [laughter] background.
The does this and so on the question of would you do you have another aspect of that.
No no I think that's great and thank you for clarifying and taking my question. If I have another one and I'll jump in the queue. Thanks very much and.
Q.
Thank you. The next question is coming from Megan Hot Megan your line of slashed.
Congratulations on your answer and you call.
Carl.
Hey, Ashwin.
Class a shareholder of second half of the Navy ships.
Guys on the normal course of crazy affordable and keep them.
And we saw.
And I'm really glad to be able to speak with use of D.
Okay. So maybe that the and again like agency debt kind of high cash flow and Putnam.
The per quarter.
On the cash and what are kind of.
On the U I left the Spotify and yet.
So the cash burn to be the.
The high and based on my calculation so of course.
Not the around most of the 17 minutes on that.
So could you elaborate whether this lawsuit.
The topics.
Oh, you mean on levels of expenses moving forward.
And also could you elaborate on what Wasatch the system.
Well. Thank you very good let me, let me take a couple of assets.
Yeah, No that's fine.
A couple of details on that and then you can expand on sort of other.
Parts of it.
Ah So correct. So you will in 2020, there was a 20 million was related to on R&D was related to the severe acquisition. Okay. Because that was expense dollars R&D based on based on how we need to be treated on the financial statements. So so I do want to call out that is one area.
Okay. The total on these expenses and R&D was about 84 million. Okay. You mentioned, the 47 million as far as your calculations, it's probably more like 40 to 41 million of procured services that were part of that R&D as well okay. So so the those those two numbers right there constitute.
Essentially when you strip those out you were looking about and and and.
In 2020 more of a burn rate if you will because I think that's what you're driving at rate of about $5 million per quarter now going forward. We expect those two things I pointed out number one is won't exist on the mirror side, obviously that was of one time charge and in <unk>.
Expense related to that and on the poker procured services, that's going to be reduced as well because we invested a lot and these relationships in order to build the foundation. We have now okay. So moving forward, we haven't given any guidance on the total expenses, but it will come down significantly but will also not be at the 5 million either per quarter based on 20, it will be higher.
Wouldn't say significantly higher but because we will continue to invest in other areas that we have to for R&D, but 2020 was.
The.
The year on which we expanded more in that regard pork where investment and this platform. Okay. So sorry go ahead, Gert and I just wanted to give out guidance.
So the hub.
But as Neil explained we we had the total value of what we needed to invest and develop one.
And for US it was really important to get that done quickly. It would have been you know we can back that expense out and.
On <unk>, we can just get it done.
And that's what we wanted to we wanted to get it done because the timing issue every time you wait as overhead for the companies of the other costs involved with patients waiting for visa.
So for US it was better to do it quickly I'm actually very proud of all of teens and and all of subcontractors and now Jade and and a lot of this was done with the help us all joint ventures, and I'll pause and those who understand the local regulatory needs and I'm very proud of the tremendous effort they've put on to actually get this done this year. So we can lead.
The letter for this year for deployment.
And and and it's at least been my strategy and I think of management. The rest of management and supports me on this debt you know if you're gonna have and expense, it's better to get it done quickly and get 30 and make them and generate revenue and I really feel that every dollar and that expense will generate of serving you and the coming.
The police and the coming year two of them, but certainly after that and I also believe that this investment actually cover a lot of L. A the valid.
Validation and development of the systems and once we've done. This now we can really rely on the.
JV partner from the validation of the dogs and the regulatory work, which is less on now kind of the balance sheet.
The commitment to get that done so I I expect the R&D to be.
Do you just because I think the team.
He has done a tremendous job of getting things done.
I hope that answers the question well enough.
Yes, thank you very much and so on that.
And.
Yeah.
On line of Genesis.
On the breakeven.
So I'll go as of this coming year to be so I don't know if Neil I mean, and that's how go and.
I think of you know with the hard work of all of the teams and hopefully there's no unexpected things I think if we look at.
And what we hope to achieve this year in terms of revenue we should be fine.
And so this one if the revenue realized in the comp if the revenue in the context of realized we should be fine.
Yeah.
All right. Thank you Barry and Mike.
Thanks.
Thank you and all the best.
Thank you very much much appreciate it.
Thank you and the next question is coming from Jason Ravelin from Revlimid wealth advisers, Jason Your line of Flash.
Thanks for taking my call. My question is actually already been answered so I will not the take up any more valuable time, but I would say congratulations and.
And I'm very excited for what the future of holds for the company.
Thank you so much thank you.
Thank you and we have Bruce Jackson and come back from the benchmark company with the follow up Bruce Your line of slashed.
Hi, Yeah. Thanks for the the follow up question on <unk>.
Going back to the R&D spend.
And did the <unk> acquisition contribute to the the fourth quarter R&D number and how much.
Sure.
I don't have exact numbers, but I don't think it was named the two like Neil do you have the exact number of the.
No. It's the it's not material because they the the proportion of that.
The difference of Kleagle was that increased our intangible assets because of the expense. The the acquisition of that was head of balance sheet effect, rather than the P&L effect, which was different than to mirror because of the way. The in process R&D was treated okay. So yeah, you don't have a material impact on the P&L on the collegial acquisition.
Alright got it thank you.
Yes.
Yeah.
Thank you and there are no other questions at this time I would now like to hand, the call back to <unk> for a kaplan for any closing remarks.
Okay. Thank you.
As of all on I'd like to thank everyone for participating on AR and business update conference call with really all the excited about the business and the outlook and we always appreciate the strong support of our shareholders.
And we look for the providing as much update as we can and pogos in the coming weeks and months and we're always available for questions and thank you very much.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
Okay.