Q3 2021 Ibio Inc Earnings Call

I O fiscal 2021 third quarter of financial results call.

At this time, all participants are in listen only mode and.

After the Speakers' presentation there'll be a question answer session to ask a question. During the session you will need the five star then one on your telephone please be advised and todays call maybe recorded.

You've acquired the small system, that's starting and Cmos, which and operator I would like to hand, the call over to Stephen Kilmer Investor Relations. Please go ahead.

Thank you good morning, everyone. Let me start by pointing out that this conference call will include forward looking statements regarding <unk> bio and the systems.

Often but not always forward looking statements can be identified by the use of words such as May might will should believe expect anticipate estimate continue predict forecast project plan intend or similar expressions of statements regarding intent belief or current expectations are forward looking statements such statements are based.

On the current expectations of management.

The forward looking events and circumstances discussed in this conference call may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company and.

Including the risks regarding the companys ability to obtain regulatory approvals for commercialization of its product candidates or to comply with the ongoing regulatory requirements regulatory limitations relating to its ability to promote our commercialized its part of candidates for specific indications acceptance of its product candidates and the marketplace and the successful development market.

And of course, the hell of products and its ability to maintain its license agreements and the continued maintenance of the growth of its Pat and the states, it's ability to establish and maintain collaborations its ability to obtain or maintain the comparable or grants necessary to fund its research and development activities competition or its ability to retain key employees.

Although all of bio has attempted to identify important factors that could cause actual actions events or results to differ materially from those described in forward looking statements. There may be other factors that cause actions events or results to differ from those anticipated estimated or intended no forward looking statement can be guaranteed except as required by applicable securities law.

Forward looking statements speak only as of the date on which they are made and I.

I wanted it takes no obligation to publicly update or revise any forward looking statement, whether a result of new information future events or otherwise other than as required by law.

On the call today, representing the company and Mr. Thomas is that I, Bio's, Chairman and Chief Executive Officer, and Rob Lutz, The company's Chief financial and business officer with that said I'll now turn the call over to Tom.

Great Thanks, Steve and good morning, everyone.

So please let me begin by providing some quick context to our fiscal third quarter results. As you May know, we undertook an initiative in December 2019 to transform <unk> from a modest pharma services provider with the limited offering into a vibrant diversified biotech the algae and are better.

And this initiative is rooted in the aspiration of fundamentally changed the bioprocess paradigm, but are fast farming system.

Today, not only are we and the process of transforming the bile by harnessing the power of plans to rapidly develop our own biopharmaceutical candidates.

But we're ultimately seeking to enable our entire industry to reduce drug development times and costs with our fast plumbing system and.

We hope to continue to show how our platform provides a better more sustainable alternative to the standard mammalian cell culture processes.

To that and today, we announced a major step forward and our transformation with the planned establishment of our own in house drug discovery capabilities.

Work has already begun to assemble a team of talented scientists and San Diego, a group, who will be charged with discovering new drug targets with an initial focus upon molecules for use in oncology.

We expect the team will help provide additional fuel if you will for our fast farming machine, thereby creating a larger more valuable pipeline of assets suitable for al licensing or further internal development.

I'd like to turn out of the advancement of our COVID-19 vaccine development program earlier. This month as you may have seen we announced the successful toxicology study results from bio two of them.

This vaccine candidate combined antigens derived from the spike protein fused with our patented lithia and booster molecule to enhance immune response.

As you know there are now multiple vaccines approved for use of many countries. In addition, there are over 100 vaccine candidates currently at some stage of clinical development.

There has been a great deal of progress made and fighting the COVID-19 pandemic significant unmet needs remain.

Some of the major ones include thanks.

Vaccines and provide broader protection against many existing and emerging variance longer duration of effect and greater access to vaccines worldwide by going beyond the needle with alternative routes of administration and reverse reducing certain cold chain management requirements.

Presently the approved vaccines and most of the new ones being developed target the spike protein and.

Indeed, we had earlier selected high biofuel one is our lead COVID-19 candidate based upon its production of higher and he spike neutralizing antibody titers at least as compared with our <unk> vaccine platform high bio too.

The concept behind the biofuel one was that the addition of the lithium and booster to of subunit and Jim might improve the likelihood of achieving single dose prolonged of EBIT.

While we were conducting the Tox studies with the biofuel of one other spike based vaccines began receiving regulatory clearances, including single dose products.

So anticipating the potential for the emergence of Sars COVID-19 two mutations. We also began designing <unk> low twos of differentiated next generation sub unit vaccine candidate directed at the nuclear captured or and protein.

Nucleocapsid protein and the many corona viruses are highly immunogenic and are expressed abundantly during infection.

In addition, the and protein is more highly conserved and spike protein and therefore, new viral variance may be less likely to escape vaccine protection.

And finally IMMU.

Immunization with more conserve sequences like the and protein may generate longer lived T cell memory, that's preclinical studies of show.

To date, we have successfully express nucleocapsid protein and agents and have initiated both the intramuscular and nature and Angel preclinical studies in order to identify favorable antigen adjuvant combinations.

We expect the initial results from these studies and early Q1 FY 'twenty two.

Turning now to the animal health markets for our vaccine candidates and we're pleased to report progress with our lead product <unk> hundred the vaccine against classical swine fever.

As projected we submitted an outline of production for our U S and veterinary biologics establishment license and.

This is an important first step and what is often a multiyear regulatory process.

And if successful we would not only have our fast farming facility and Texas approved Fry bio 400 off of.

The other animal health products as well.

While we have been heavily focusing on our transformation and building our vaccine and therapeutic pipelines were also pleased to note of favorable trend for our contract development and manufacturing services.

This is occurring despite not yet having hired of commercial lending injection. Nevertheless by coupling our relatively new like and nearing services with our fast farming system and some modest initial marketing efforts, we have begun to unlock and number of runways of opportunity for our C. D M O surfaces.

We anticipate adding more services like the new Bioanalytical menu, we announced earlier today. This part of the plan to support our clients as well as to develop our own catalog of research and bioprocess products.

And example of this can be seen and our agreement with SAP and bio solutions, our work with saffy towards generating growth factors and cytokines from research and further manufacturing and uses continues to progress.

The customized proteins, we are developing per chassis will be used as part of their effort to develop red blood cells and neutrophils to create what they describe as on demand blood.

Meanwhile, we plan to commercialize standard recombinant proteins that we develop as part of the project the.

The new research and bioprocess product catalog.

We see the markets for bioprocess products is attractive with several segments growing of double digit rates.

The opportunity for <unk>, instead of a customer purchases of recombinant protein from our catalog for the purpose of researching and ultimately developing of biological medicine, and our product has the potential to be designed into the customers' biopharmaceutical manufacturing process those of raw materials.

Raw material demand tends to increase significantly as customers move through clinical trials.

So we plan to begin offering the new catalog of high quality of research and bioprocess proteins the summer.

While we.

To make investments and our product and service portfolios. It is important to ensure that our growth opportunities are well protected.

And that regard we were pleased to reach of successful resolution of our lawsuit with from hall for USA, which confirmed our ownership of certain plant based bio processing intellectual property.

As part of the settlement, we granted front half of USA of fully paid up license to use the recombinant protein manufacturing technologies. They were at the center of the dispute.

The settlement also involves other compensation the net <unk> of approximately $12 million and aggregate cash recovery after legal expenses and other costs.

This outcome gives insurance to our licensees and clients that they can continue to depend upon us to develop enhance and protect the aspects of our fast farming system that provides them with the speed scalability and eco friendly advantages of plant based biologics development and manufacturing.

While we are excited with our progress to date, we believe that the investments, we are making and innovation processes and people will be foundational for achieving our longer term growth goals.

Did that and we have attracted a world class leadership team the chairs our mission to fundamentally change the bioprocess paradigm of the sustainable plant based technology platform.

The key addition to our C suite during Q3 was Dr. Martin Brenner, Chief Scientific Officer, who joined US in January as.

The strong history of success heading drug discovery and development teams and several of the world's leading pharmaceutical companies, including Astrazeneca Lilly Pfizer and Merck <unk>.

Naturally he will be leading the establishment of our new drug discovery team and San Diego.

Our most recent addition to our leadership team came with the appointment of <unk> as Chief financial and business Officer.

And he is managing our licensing and financial operations, including reporting budgeting and strategic planning.

Rob's wealth of experience across corporate finance and business development functions with public companies and the biopharmaceutical space positions us well and the continued transformation of our company and execution of our new business model with that I'm thrilled to formally welcome Rob to his inaugural <unk> Investor call Rob.

Thanks, Tom.

I'm excited to join the distinguished team and I bio and I look forward to helping the company unlock the value of the proprietary fast farming technology.

Based on the premise of the plant and more quickly and sustainably produce biologics.

Rather than reiterate the details of the company's financial results, which are available and the press release and the 10-Q I will simply speak to a few highlights.

Revenue for the nine months ended March 31, 2021 with.

With $1 $9 million, which is more than three times the revenue from the same period and 2020.

Revenue was based primarily on contracts with the small number of customers and revenue recognition from development and manufacturing services is generally subject to volatility.

So we expect revenue will remain variable quarter to quarter and the near term.

However, we believe the Directionally revenue will continue to grow over time.

Starting this quarter I bio has chosen to reclassify some of the line item on the income statement.

For the first time, we are breaking out cost of goods sold as a separate line item.

And we're also providing more distinction for the costs that are related to R&D.

We believe this presentation provides more clarity for investors and is more similar to the presentation provided by our peers.

Our cost of goods sold and gross profit percentage will also be variable and the near term.

Our R&D and G&A expenses and fiscal year 2021 for both Q3 and year to date, we're up significantly from comparable results and fiscal year 2020.

R&D expense grew primarily due to increases in personnel and other expenses to support the company's development of our portfolio of proprietary therapeutics and vaccines.

G&A growth resulted primarily from increased head count and increased operations expense to support the growth of the business.

In terms of liquidity I biohazard of $103 9 million and cash cash equivalents and debt instruments as of March 31 2021.

And I've mentioned previously the company further strengthened its financial position through the settlement of litigation with Fraunhofer USA.

We believe that we have sufficient liquidity to continue planned operations through at least March 2023.

Inclusive of our planned investment and the fast farming discovery platform.

And potential in licensing opportunities.

With that I will now turn the call back over to Tom.

Uh huh.

Thank you Rob so to summarize as much as we are pleased with what we have achieved to date to develop our pipeline of biopharmaceutical candidates. We're even more excited about what we expect to follow from the investment of new drug discovery team and San Diego.

We're also optimistic about the continued growth of our CMO services business as well as the strategic opportunities, we see and our emerging RVP or research and bioprocess products business.

With the bolstered leadership team the carriage and accomplished track record of success strong balance sheet, and and engaged and supportive shareholder base, we continue to transition into a diverse innovative and industry, leading biotechnology and biologics contract manufacturing company. So thank you and me.

With that concluding our highlights we are happy to take any questions you might have.

Peter.

As a reminder to ask a question. Please press Star then one and.

And for your questions and answers and you'd like to remove yourself from the queue press the pound key.

Our first question comes from Kristen <unk> with Cantor Fitzgerald. Your line is open.

Hi, good morning, everybody. Thanks for taking the question. The first one is on the COVID-19 vaccine.

And I know this is still in the emerging topic, but wanted to ask how youre thinking about the long term need for vaccines and boosters and then I saw you recently posted results from a third party survey with epidemiologists regarding the virus and mutating does the.

And that the first generation vaccines may no longer be effective. So I'm wondering if you could talk about your thoughts on this and what you've heard amongst your conversations as well.

Yeah, I agree questions, Chris and I think here is we've been looking at the situation. You know we started our work on two O two even before the British Varian first came out.

Knowing corona viruses and how the evolution should of been expected the pathway expected.

And to take this is not surprising in some respects, but and others. It really is the number of variance and in several cases the.

And Theyre mutating to not only improve transmissibility, but then also severity of disease and a few of these instances is remarkable.

So I think as we looked at it for the reasons that we talked about in the introductory remarks. The this issue around the variance.

The access.

Globally to vaccines and durability is a big big question.

And I noted with interest I believe it was madera and of that.

Put out of pre print last week looking at durability.

Here for their vaccine and in some respects it looks like it's only a matter of maybe six months.

And so some of the data suggested that and then when compared to natural COVID-19 infection and was it was better but.

COVID-19 natural infection seems to give you neutralizing antibody titer is only up to about four months.

So to your good question around boosters, and some of the rest and needs.

Again, we've <unk>.

Taken the decision to stay and the development of a vaccine because of the speed of the platform when it comes to scaling up from.

From manufacturing and because we believe the there's enough data out there and we've seen this last fall to suggest that the more well conserved and other words less likely the mutate.

Nucleocapsid protein can.

Prospectively convey some longer term durability of the immunity and again in addition to.

Coverage for the variance the one presumably you could expect to see with that particular antigen the <unk>.

The thing that we're looking at as we indicated and our preclinical studies are alternative routes of administration, so intranasal <unk>.

And certainly as within scope and Theres also some reason to believe that and intranasal delivery could.

Potentially convey greater durability of the annuity as well so we think that there's a lot of uncertainty out there still.

And that prospectively, we could.

The potentially contribute to the future of control of the pandemic, especially as long as some of these durability questions are out there.

Thank you for that and then in terms of your drug discovery capabilities that you're building out and San Diego could you talk about how youre thinking about potentially roughly how many hires you might have for the site and when it could become the operational and then just on the back of <unk>.

Your prepared remarks for oncology what might be some of the starting areas or criteria that you're considering when developing candidates is it going to be just based on the target selection indications with unmet need and how might you decide what's the most appropriate to bring forward in house versus through partners.

Yeah. So in terms of the size the team.

And we see two things at play here, one because of the way in which we're thinking about the discovery platform itself.

We're evaluating of certain method that.

And would convey speed just on the upfront discovery and so.

We think about 'twenty scientists or more.

In the San Diego area.

And we'll be able to one of the platform as we envision it and that group would then.

Fairly quickly be able and of translatable way and the method that we're thinking about using should scale directly into our plant based system. So we're using of plant based discovery platform and then driving that into process development.

At the Texas location per scale up of any hits that we may get out of the discovery program.

And then in terms of.

And how we're thinking about targets and and in which spaces.

We've communicated in the past two of degree that we think that the gleick and nearing technologies that we have are important in the area of monoclonal antibody development and in particular, a few costs relating.

The monoclonal antibodies, which can give them greater.

The ADC or.

The cancer cell.

Cell killing of FX.

And so that gives us the chance for both innovator molecules, so where we design and develop.

Ourselves all the way true or fast followers and the ability to take something that was out there and.

Get the IP advantages of being able to produce Napoli and our fast farming systems and get the glide constellation profile correct.

We think to answer the question the will have significant areas of significant unmet medical.

The medical need in cancer that we can address here with some of the areas that we're targeting.

That said if the opportunity presents itself for a fast follower or biosimilar whereby.

Perhaps the company or institution may desire for us to develop the molecule for research purposes, and then ultimately converted over.

For the.

Therapeutic purposes, well, then we got as part of our CD ammo business the opportunity to.

To do that on the contract basis for those that are interested and just provide the supply agreement. So the.

The the creation of the four business units.

As we have them, we think provide some synergy.

But for US right now we see the gas farming platform in particular, it's sort of it's killer app seems to be monoclonal antibodies and what the Gleick and hearing are quite postulation controls that we can offer.

We were going to be spent a little bit of time, and the oncology field and in developing the portfolio.

In particular for.

The likely solid tumors here as we go but more to follow in terms of the specific areas.

Thank you and then on the CMO of business service could you talk about some of the trends you've seen with some of your customers or potential customers in terms of returning to work in light of the pandemic and then how might you plan to utilize your team to highlight the expanded menu that you announced today.

Yeah the.

In terms of our client base.

We have to target early stage entity, so because it's very difficult for a biologics developer of biopharmaceutical developer to switch contract manufacturing suppliers midstream and the clinical trial setting.

We need the target those usually and the.

The preclinical stage, so relative to return to work matters generally per our client base, we've not necessarily observed.

The significant impact.

We can say that because of the speed of our platform in part and also some available capacity that's led.

The early stage developers to turn to us because oftentimes they have to wait in line. If you will at the large multinational.

The <unk> that are out there.

So and.

And those terms I think where we're seeing everything kind of move along as planned there with development of the services and to your second question around what is the need in terms of the.

Portfolio of line extensions, the we announced today. So we have a couple of product groups within the services business. So one is development services, which is the majority of what we do then there is the contract manufacturing, but then also.

There are bioanalytical services, so that's where we get into the characterization of the molecule.

And <unk>.

Previously we had only offered that service capability to those clients who are working with us.

And to use the fast farming development service to produce their molecules. However, what we're doing is we're opening it up today.

And making the service capability available to any third party, who client who may wish.

Take advantage of the capacity and capability that we have for that service. So we see the opportunity to monetize the capability and drive some incremental revenues through the bioanalytical services area. But then also all of that capability that we have once again back to this point of synergy between.

And our business areas.

We see this increase capability, helping the work that we do and the future, California and drug discovery team as well as with other collaborators and partners to do comparability and analysis and molecule characterization to compare what comes out of the fast farming.

Some with the traditional.

Mammalian cell culture or other production platform methods and.

And demonstrate continued to demonstrate.

And that we produce very high quality pet rather consistently high quality.

Monoclonal antibodies and other.

And the proteins if that makes sense.

Yes, Thank you Tom.

Our next question comes from Jim Tucson, and now your line is open.

Thank you.

Right.

And I have several questions. Some of them are aimed to help people and the stock towards four of them that we're asking these things.

And.

Two of them one has the tox done.

Some people were asking did that and.

We'd like to hear from you I guess.

And does it talks on tier one and also cover two O two and the tentative two of three.

So the talks onto of one was primarily driven by regulators interest and seeing.

The results with the liquor and immuno stimulator molecule so to the degree that we.

Want to include that molecule or do include that molecule and.

And future designs gives us the ability to go to the agency and in our.

The pre IMD reviews to be able to request an exception for tops and.

And also.

If one takes a look.

The others moving through processes and to your question around <unk> and the <unk>.

Mike.

Several companies have been moving their candidates through with just the spike or just a nucleocapsid protein without necessarily having.

And to perform Tox studies, so we're encouraged by that.

Needless to say once again this is a conversation with FDA.

But we're optimistic about the prospects for our future of vaccine candidates and prospectively not having to take that step but of course, Jim we will we won't know that until we have the the meetings.

Okay.

Another one on the small one but in the lobbyist section and it looks like Steptoe is out of catching that correct and you still have from.

The trolls either.

That's true.

And that's correct.

Got it and the help of the Patricio group.

Steptoe.

Had helped us last year.

And had some notable strength with the defense side of the government of pictures of the group has a lot of strength with <unk>.

And human services areas. So indeed, that's correct, where we're working with the pictures of the group at this point.

Okay, and I would think that probably and the number one topic for the retail investors is a question of funding.

And to get some idea of when you're out on that.

The Ah.

The situations change, but it looks like seppi is.

The hotspot for the company now is there to try and it appears we're trying to fund.

Similar to yours and all that.

Uh huh.

Our early stage looking for.

Uh huh.

Vaccines that that will work against numerous strange and being affordable and have long lasting effects. So.

I assume of course that <unk> has applied for SAP the funding.

So I think it's fair to say this which is the we don't intend to leave any stone unturned.

And as I think I've mentioned in earlier calls.

Back in March when we had all of maybe even 12 weeks of making the move into being a biopharmaceutical developer and <unk>.

Rather than just the CMO.

We had gotten and invite and submission from BARDA and.

And thanks to them had made the connection with injury of the infectious disease Research Institute and then ultimately.

We moved very quickly to make those submissions and the anymore.

And I guess now in hindsight.

And I suppose to a degree of it's understandable that we did not get included in operations warp speed much like many other entities.

But that we remained undaunted throughout the summer even before we had understood fully what OWS meant and how other companies who had obviously been in this.

And this field for many many years if not decades.

And how that process was rolling out and.

So in the meantime, we've continued to strengthen.

Our offering and the design of our vaccines were continuing to demonstrate the with the platform.

And that we can make a contribution here in this space and so we're aware of all of these funding opportunities that are out there some of them are.

New and forthcoming others had been tapered back.

Two of significant degree.

But we are looking globally for non dilutive support.

Across all the areas and categories and modalities.

And which we operate.

Yeah, well I hope that seppi sees what most of us see with two O. Two it looks like your it might well be and the lead and that.

Nucleocapsid and vaccine race.

So okay hey.

And so theres no funding at least for a while.

Those of the plan to push into phase one and.

Two of them too.

Yes, so and I think to Jim just to kind of go back to the point here on <unk>.

As I understand it there of calls really are going to.

Pan Coronavirus vaccines and in particular hitting on themes that we're hitting on here to for us to have relevance range. So once again, it's durability access and the variance right.

And I think here and along the way.

We'll be looking and seeing how much of the contribution that we can make towards providing a differentiated product and watching how the pandemic unfolds with the existing vaccines and their ability to provide a durable immune response. If this continues and youre youre looking at something on the order of six months.

Seven or eight months or whatever that may be and thats not the speak generally I don't think there is enough data that's in there, but I'm just prospectively.

As we as we think about our role here if that turns out to be the case will then the capacity that we have and the potential for nuclear caps and based protein to provide more durability and more coverage for the variance will be important but then also to if one looks at co backs and that.

And how it's relating to the World Health organization the.

The this pandemic raging and indeed, the impact of the P. One very and down in Brazil, and so much more indicates that we may very well need.

More solutions and if we can't get non.

Non dilutive government funding will then it is the question can we and should we.

On our own fund the phase one study and I think we're going to look at.

Not only the.

The medical unmet medical needs that are out there, but also the commercial opportunity and if we believe we have a viable product candidate and then indeed.

We've got the funding in place, we have and understanding of what it would take in terms of the cost for that kind of the clinical trial, but in some respects. We're we're almost happy.

We didn't get selected before because it looks like and our view debt a spike only based vaccine. If we were going into a phase III clinical trial with that right now and our own vs competition, the likes of Pfizer of Madonna and Astrazeneca J&J.

That would be that would be pretty tough.

To be having to spend that money on a big phase three with <unk>.

Patients difficult to recruit at this point so in some ways, maybe we were lucky.

Got.

It's a long way of saying I think and the and we'll make the best decision on behalf of prospective patients and our investors. If we think we can bring a differentiated product to market that can be commercially successful that indeed, we intend to move that forward and trying to make an important contribution here tore.

<unk> and <unk>.

And mitigating some of the ongoing effects of the spend on it.

And do you have a rough timetable.

And.

Or do you dare to go into that area.

Well the.

As always the science has to drive this.

And we need to see what kind of results. We have and then also with regards to the big three that we've discussed durability access and the variance.

Once again if we.

Can pull it all together.

And and.

And really wind up creating a differentiated offering that can make a difference then.

We will go forward of bad and the better the data looks the faster we're going to want to go.

And so we'll promise to update as we've been doing here along the way.

Alright.

Digressing off the original list because of today's news on your new San Diego and facility.

And that was good question.

And then 'twenty scientists how.

How long do you think it'll take before it becomes operational or effectively operations.

Well, we were keen to announce this here.

The heater as early as we could.

We have been evaluating both the system the people where to place the location range. So it was all about talent and talent access and a hotly.

Well it's the.

It's true.

The access to talent and this market.

And is very very challenging, but the San Diego presents.

A terrific location and it's one of the top three so we've been thinking about it here.

For a number of weeks and we think that we begin to turn it on and get yield.

Certainly use or I would say and as we get to the middle point.

The first half of FY 'twenty two.

Okay.

Back in the December.

December there was an offering of about $35 million and and the use of proceeds you had.

Yeah.

Some of the use of being to accelerate of vaccine candidates.

And also for the acquisition and possible investment and other businesses.

I'm curious are the acquisition of where it stood out to me it was like pretty pretty darn. Good for a company. It was near bankruptcy and you heard before and when you when you are taking over.

Are those things still on the table is there still a possibility that there might be and acquisition acquisition of an investment and another business.

Well I think.

Well of course that kind of thing would necessarily be confidential, but directionally, Jim and I would say this the.

The incremental cash here.

It is important to give us the business and our <unk>.

Shareholders' optionality, meaning not only are we investing behind and drug discovery platform and it will take time for hits the come from that program and then of course, one has to move from hit to lead and lead optimization before getting into and I and but that's where.

<unk>.

Having our pipeline and bridge through that activity is very very important, but while we get the San Diego operations to your good point and the last question is going to take a little bit of time to get that up and running and get the leasing and get people hired and then it takes.

Several months thereafter to get it spooled up well what about in the meantime are there opportunities for in licensing and you could be thinking about acquisition and that way to you could kind of the company could be acquiring assets or rights to assets as well as entire businesses. So.

The position of financial strength.

And strategic Optionality to take great advantage prospectively.

Prospectively of all.

<unk> that may come our way.

By having a strong balance sheet, we put ourselves in a and a good position.

And I'm here going forward and and that is the reason for the range that we did previously and the cash.

You know accumulation of up to this point and and I think here, we're certainly pleased with the incremental cash.

Debt is coming to <unk> bio as a result of the settlement of the case with Fraunhofer and so we were happy about the position that we're at and the.

And the Optionality that we have going forward.

The old Tom that was the good lead into my next question on the front office suite.

That was great news.

I think the stock price didn't do what many of us and expected because of I mean, it was the $300 million lawsuit of which <unk> had the chance to get $150 million and when it finally came down and it's about IP rates.

And I think all of us.

So.

That surprised you.

I can understand it.

And the IP rights, but only a little because when I when I dug into everything and I could to find out just exactly what IP was up for grabs so to speak it's really hard to find it anywhere on the line.

And do you have any worries about the value of of securing of IP rights. When you did and what they will do for the company.

Well sure and maybe I should speak to first something that was a little bit before my time with the company, but I understood. Those news articles and pieces that may have been now for many many years ago with.

Some of some pretty big numbers associated with them, you know of $100 million 300 million of.

Of note that was before there was a ruling and the court.

We're in.

Both front half of USA and Fraunhofer, Germany was attempted to be included and then partway through the case.

Because of timing.

<unk> was not able to continue to have from Hartford, Germany as part of the.

The litigation.

And so you know again as the.

The numbers evolved overtime and projections around those not not really sure where a lot of that comes from.

But nevertheless in the and what was an issue and the case was IP that was.

Developed by <unk> <unk> per on a contract basis for <unk>. So that's what the two parties were disputing. So it was always and IP and and IP Tech transfer lawsuit and.

And so in the and because it was the litigants.

The we're arguing over whether or not the tech transfer had in fact been made from from offered on the bio there was some IP that was developed that.

Bio was claiming that it did not have visibility to so that was generally speaking the context of the case, that's all out there and the public filings and so I think in the and.

Here.

And the outcome was a.

The good one for <unk> versus continued.

Oh, well likely appeals and other.

Distracting aspects for the company here in the and as you can see from the announcements of the parties agreed and so there were there was a license fee you can see the in the 8-K filing that went along with it.

What the value of the license fee was separate and apart from the balance.

And the balance if you were the subtract one from the other you get a sense for how the parties thought about.

The settlement and what what the impact was.

And so.

I guess, that's about as much as all I'll say on that Jim, but hopefully that clarifies it a little bit okay with that I am getting off right now so next call.

Tom.

Thanks.

We're approaching the end of time a lot of for today's call. As a reminder to ask a question. Please press Star then one.

Our next question comes from Matthew Harrigan with Matthew HRM LLC. Your line is open.

Good morning, everyone.

Graduations tomo and wrapping up the front of most of our case I also have two or three questions. If the uptime today and said that you're paying.

And ask them off and you can answer it.

First I just have another quick one about <unk> can you, let us know, our Texas, A&M and IRI involved and conducting preclinical studies again, and then Keith I think Youre, just discussing talent recruitment and being the primary driver of troponin in the San Diego location and I was just sort of wondering if there's anything you can share with us about doctor Marcel and no longer being with the comp.

And he.

And then lastly, I think I heard Jim asking about the last offering and I guess I'll just have the press you a little bit more on that point.

Limited revenue and enough cash on hand share.

And operational until March of 2023, do you plan on increasing the number of authorized shares are performing the reverse split to fund operations.

I think that's it thanks.

Sure.

Thanks Matthew.

With regards to high bio too low too.

Indeed, as I referenced we are still working with injury.

And yes.

And he can share that in fact taboo, Texas A&M University, rather isn't the continuing to work with us so.

Relative to San Diego, Yeah. There was there was a couple of thoughts of.

On talent and some of the rest and where we wanted to take the organization.

I'll, just say the with regards to Doctor Marcel.

Nothing.

Particularly noteworthy to mention there in that regard.

And then finally with regards to the.

The shares and some of the rest.

<unk> is a biopharmaceutical development firm.

That's a long haul and as I think everybody is probably very well aware of it takes any company.

And typically.

About 10 years and $1 billion.

To bring.

The major biologics molecule to market.

There will be cash needs going forward that said.

And we're <unk>.

Quite satisfied with the liquidity that we have through now and in our business model. It's worth noting this synergy that I keep referencing and the Optionality. That's there because of if we take a look at having the benefit.

Of the manufacturing capability that puts us in a position to and you'll hear me say this on occasion. The work this fast farming and machine in other words, we can drop assets in.

Quickly develop them to a point and then make the decision ourselves is if we have something that's really attractive to take it through phase one and the phase III clinical trial, and perhaps beyond and Alternatively, there may be instances, where we start that work.

And perhaps identify a partner who may want to license that asset from us.

And in the field of oncology.

<unk> and fibrosis, the out of another key area and which we operate.

And depending upon the how far the asset and has advanced.

And one can see significant deals getting done so by way of example.

For the anti fibrotic and often times there are seven or eight figure deals as early as.

Preclinical stage, so that's a bit of a rarity, but and oncology what you tend to see is directionally speaking now.

Two of phase one clinical trial with an interesting assets.

Again, eight figure sorts of deals you get it to a phase two with good data.

I mean, there is 100 million dollar deals that get done and.

And of course, one of my favorites was Bristol Myers Squibb per IL 12, with Dragonfly I think it was last year $475 million granted phase three but these can be sizable and that's the opportunity per eye bio so it's both the.

And the asset and licensing put it in the past farming moving forward and advance it and prospectively out license it or carrier through ourselves to add pipeline value.

That we're seeking to have here so.

We don't know exactly when.

We might be and are positioned to in license and develop and then prospectively out license, but again thats why were setting up for the discovery team and the.

Needless to say as soon as we can.

Net to the point.

Of.

Having more non debt well. This is what this is all about creating.

Non dilutive revenues here on the around.

Is what we're building the business here to do.

So.

As we look forward.

The whole point is to return value to shareholders by building.

A significant leading biotech business and so that's the intention here and we're off.

Are you still going to be judicious with the dollars that have been investing in the company.

Great. Thanks for taking the question I appreciate it.

Thank you.

That's all the time, we ask the questions like to turn the call back over at the time was that for closing remarks.

Great. Thank you operator, and thanks, everyone again for your time today and your interesting questions. We appreciate all of our shareholders support.

And hope everyone has a great rest of the week.

Ladies and gentlemen, this does conclude the program you may now disconnect everyone have a great day.

Okay.

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