Q1 2021 Thermogenesis Holdings Inc Earnings Call
[music].
Good day and welcome to the Soma Genesis Holdings Conference call and webcast review of the financial and operating results from the first quarter ended March 31, two of 2020 one.
As a reminder, all participants will be in listen only mode, there will be and opportunity to ask the questions at the end of todays presentation, if you'd like to ask a question you may do so by pressing Star then one on your Touchtone phone.
The Star then two if you were true withdraw your question if you need assistance during the conference call. Please see to an operating ROE of pressing Star then zero.
As a reminder of this conference is being recorded.
Now I'll turn the conference over to your host Paula Schwartz of Rx Communications. Please go ahead.
Thank you operator. This conference call contains forward looking statements within the meaning of the federal Securities law and the company's actual results may differ materially from those projected in the forward looking statements additional information concerning factors that might cause actual results to differ materially from those and the forward looking statements is contained and the company's periodic reports.
<unk> with the Securities and Exchange Commission.
The information presented today is time sensitive and is accurate only as of the date of this call May 13, 2021, if any portion of this call is being rebroadcast retransmitted or redistributed. The later date, so much and this will not be reviewing or updating this material participating on today's call of Dr. Chris Xu Chief Executive Officer, and Jeff Cobble Chiefs.
Financial Officer, I'd like to turn the call over now to Chris. Please go ahead.
Thank you Paula and thank you to everyone for joining the call of this afternoon. We appreciate you taking the time to destiny.
And also I apologize for my voice and the season the.
And let your desk kicking.
So as you May know this year. He is the city of fifth anniversary of the company C and say what founded in 1986.
And recent study by Mckinsey phones at the average lifespan of a private companies are less than 10 years in the states and that of the company. This day doing standard and Poor's 500 today, yet and the 20 years.
Throughout our 35 Years' history, So I'm with you and this is core competence has always been it's engineered engineered T and.
And I get the capability to create various a very sophisticated set of the processing medical devices.
Our brand is well recognized by.
The cell banking the street.
In fact by the archive, our smarts quire storage system, yes, you're used to warehouse close to 90% of all U S. FDA approved.
Throughout the us corporate units.
Today, the newly emerging immune cell banking industry, which allows individuals to stores the our healthy immune cells to be used for making potential of cancer treatment such as car T therapies and the future is viewed in the same ways that whole blood banking with 30 years.
No.
Immune cell banking is technically challenged due to the traditional use of the labor intensive manual cell processing technology.
And the the dependency of the use of our grading and chemical reagents coal at FICO.
How could you help isolate the immune cell from blood.
So again this is demonstrated again, it's engineered engineered T.
And the introduced the PSP when.
<unk> thousand and system in 2020, which is a a.
FDA five 10-K class III medical device design for isolating various et cetera, the component from Brett.
This is the first in class system for the industry.
Which can process 200 meal breath.
And a fully coast GMP compliant medical device.
Yes average is 30 minute for each simple processed and reducing yet from the current four hour processing time.
Which would drastically reduce the time and cost and could make immune cell banking possible.
In February of 2021, the company completed the development of another new device the.
The PSP laboratory system.
Which is an option of reformulation and accessory for cell therapy designed for us along with the PX Q1 thousand and system.
The GMP compliant DXP laboratory allows for fast automated and reliable cell, Washington, and south of the formulation.
Which are essential for all of cell therapies, regardless, whether it is a stem cell therapy or immune cell therapy.
These newly introduced the medical device systems.
Will have significant impact for the future of immune cell banking and the immuno oncology such as car T therapies.
With these new devices introduced the lately, so and <unk> is proud to provide a full suite of automated solutions for cell banking, south processing and south of that Arps.
Which includes the.
First for cell processing and large scale of cell manufacturing, we offer the ex series product spot January of laboratory of use.
And the PX P series products for clinical grade views, which includes the the <unk> 1004 cell isolation, and the PSP and <unk> four cell, Washington, and the formulation.
Both of the ex serious and the PX G series products are part of our Kottke Express platform designed for large scale cell of cellular manufacturing flow.
For a future of cell and gene therapies.
Car T Express platform utilize our patent protected Boeing C activate the cell sorting all of the BACS technology.
Which is the new technology to locate the traditional magnetic beads activate itself. So the team.
Or Max technology.
Develop the 30 years ago.
The Cocky express platform, what provides a highly efficient and cost effective cell manufacturing solution for manufacturer of both car T car NK and of the.
The cell based therapeutics.
Second for Cobra banking applications, we offered the XP automated cell separation system and the bar archive of Smart Cryo preservation system.
These are the industrial leading processing and automated cryo preservation systems per.
<unk>, the ultimate performance and per packaging for today's high value to cord blood cells for Tomorrow's critical therapeutic needs.
Third for point of care of clinical applications, we offer the PSP point of care system.
And which is another five 10-K class III medical device, sorry, 500, K medical device and.
Allows for rapid and the automated processing of patient cells from.
From peripheral blood or bone marrow at the point of care, such as surgical centers or clinics.
In order to grow the company successfully.
I'll have to undergo a critical corporate strategic shift to meet the trend of the future.
The <unk> is committed for another critical transition moving from being a device only company to one focused on providing comprehensive cellular manufacturing solutions, including tools and services.
Let me describe further why we are doing that.
It's it is a wealth of it as well believed that cell and gene therapies, such as the car T therapy are post to revolutionize the the future of the medical care and disease treatment.
According to the latest reports true.
To date <unk> cell therapy has been approved including five car T therapies.
There are also over 1000 active clinical trials of additional car T therapies for various different.
The answers.
And another 1000 plus clinical trials.
For stem cell therapies for regency and Madison.
The in the and the industry expects to see a wave of additional FDA approvals.
And with as many as 10 to 20, new therapies each year of stocking from 2025, and this will likely to accelerate over time.
Cellular manufacturing is a critical bottleneck and and unmet medical unmet need for the industry.
Currently each of the five approved the car T therapies.
And is extremely expensive line.
Limiting patient access to these lifesaving therapies, given that the cost between 375000 and up to half of million per dose.
And the expense is directly related to the fact that these car T therapies cost between 100000, and the 122 just to manufacture a single dose.
For companies that are currently developing cell and gene therapies, including biotech companies and research institutes of like manner.
Manufacturing of GMP grade set of cellular products to translate a cell based the address.
Biological concept to a scalable clinical treatment can be the largest of the challenge.
All sorts of the contract manufacturing service or see the ammo is essential for the success of these companies.
And unfortunately.
And the search in clinical activity has not been matched with bi.
And increased and it was and the increasing <unk> production capacity.
According to the latest reports even those over 65% of all cell gene therapies are all manufacturers in our source of facilities only 5% to 10% of the required the commercial GMP manufacturing capacity exists in the marketplace crew.
Creating a long backlog in the commercial manufacturing of any proteins yourself based therapies.
This situation is caused by low manufacturing efficiency and will only be exacerbated by the accelerated approvals of additional sales therapies in the next five years.
To address these issues somewhat genesis intends to utilize its highly efficient car T Express platform.
Which could significantly increase cell processing efficiency by 45 both.
As compared to the traditional method.
And the potential of a decrease the manufacturing cost by up to $76, 60% to 70%.
Our goal is to launch CD, and most service and number of large global markets and <unk>.
Addition to the U S. So that we can begin to help fulfill the enormous gap in demand.
Currently exist among both biotech companies and research institutions.
The CMO market for cell therapy product is very segmented.
Most players are still using traditional technologies startup consider to be low efficient and lead to higher manufacturing cost.
Given the strength of our Cartage Express technology platform and the breadth of our product base.
This new C. The mobile focus of the direction, which leverage the the proprietary technologies that we already have and should allow us to capture a much more substantial portion of the value we bring to the table.
Four boats potential customers as well as for our shareholders.
We are very actively evaluating opportunities that can speed up our process to enter the CD most service market.
Which we will update you all in our next conference call.
Going forward, we will.
We'll continue to innovate internally.
And the will be increasingly focused on the service side of the business.
Which is in line with our mission to increase patient accessibility and affordability Twosies lifesaving cell and gene therapies.
And with that let me turn the call over to GAAP to share the key financial results from the first quarter.
Thank you Chris.
Net revenues. The three months ended March 31, 2021, or $1 5 million as compared to $3 2 million. The three months ended March 31 and 2020.
The decrease was driven by lower XP disposable sales, primarily due to the COVID-19 pandemic.
Which as we previously discussed has had an impact on our revenues.
The more vaccines are administered and dependent and it continues to subside and many countries and.
We anticipate revenues will begin to rebound and the second quarter of 2021.
Hopefully returning to pre pandemic levels by the end of 2021.
Gross profit was 700000 of 47% of net revenues for the three months ended March.
<unk> 31 2021 <unk>.
Compared to $1 5 million of 47% of net revenues for the three months ended March 31 2020.
The decrease was driven by the lower HP disposable sales offset by an increase and bio archive device service revenue.
Sales general and administrative expenses and the three months ended March 31, 2021 for $2 million compared to $2 1 million from.
The three months ended March 31, 2020 of slight decrease of $100000.
The decrease was driven by lower legal and travel expense and the current quarter.
Research and development expenses were 400 thousands of three months ended March 31, 2021 compared to 600000 for the three months ended March 31 2020.
The decrease driven by lower personnel expenses and the quarter ended March 31 2021.
Interest expense for the three months ended March 31, 2021 was $1 5 million as compared to $3 5 million for the three.
Three months ended March 31, 2020, the decrease of $2 million.
The decrease was driven by lower amortization of debt discount related to the company's revolving credit agreement.
For the quarter ended March 31, 2021 of the company reported of comprehensive loss attributable to common stockholders of $2 4 million or <unk> 21 per share based on approximately 11 4 million weighted average shares outstanding this.
This compares to a comprehensive net loss of $4 6 million or $1 11 per share based on approximately $4 1 million weighted average shares outstanding for the quarter ended March 31 2020.
The company ended the quarter and a strong cash position with over $10 million on hand, and increase of $2 8 million from the end of last year.
Working capital at March 31, 2021 of $6 4 million.
This concludes our prepared remarks, so now we'd like at the open the call to your questions.
Operator.
Yes. Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
And if youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to some of the roster.
And the first question comes from Sean Lee with H C. Wainwright.
Yes.
Good afternoon, guys and thanks for taking my questions.
My first one is on the existing of blood banking business. So it's good to hear that you're starting to see some recovery towards the end of the first quarter. So I was wondering if you and comment on whether that trend has continued into the second quarter and.
Where do you see the most recovery and the where which areas maybe the still they're still seeing a lot of lackluster.
Yes, we have seen.
That trend continue going into the second quarter.
And we.
We do expect to see revenue start to start to come back close to the levels. They were pre pandemic.
Ultimately I think to get back to where we were from 2019.
B at least by the end of this year before that before that happens.
Great. Thanks.
My second question is on the newly launched the PSP systems.
Could you comment on what differences are there between that and the X series products and.
And how is it more advantages and what.
I'd like to just as they have over existing current.
The products on the market.
Yeah sure so.
And so the PSP a serious of products are more designed for clinical use.
And so originally our original rate design for the point of care applications and further expand it to other.
Other area. So the key difference is the PSP entire PSP here as products U S FDA cost too and.
The carrots, which means they are of.
The higher a regulation.
They've met the higher regulation and a requirement.
And the ex serious op of January or laboratory use so.
So it has the various different application lots of them may be ish share it with the PSP serious but.
The regulatory share and say yes.
Yes, the <unk>.
Lower due to the different therefore danger of usage.
Yes.
I see thanks, that's all.
All I have.
Thanks, Thanks, John Thanks, Sean.
Thank you and this does conclude our question and answer session. So I'd like to turn the floor the Doctor Shaw for any closing comments.
Thank you operator.
We look forward to updating you on our progress during our second quarter 2020 oil and coal and thank you to everyone who participated today and the full year interest in somewhat and this is holding.
Thank you.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your line.
Yes.