Q2 2021 Orgenesis Inc Earnings Call

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Please stay on the line will be getting started shortly thank you.

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Good day, ladies and gentlemen, and welcome to the or Genesis second quarter 2021 business update call. All lives have been placed on a listen only mode and the flow will be open for your questions and comments following the presentation.

If you should require assistance throughout the conference. Please press star zero on your telephone keypad to reach a live operator.

At this time it is my pleasure to turn on the floor over to your host David Waldmann Investor Relations. So on the floor is yours.

Please stand by for David Walton.

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Yeah.

Yeah.

Okay, David you're on the air I'm, sorry about that.

Can everybody hear me.

Yes.

Great.

Alright, Thank you and good morning, everyone and welcome to our Genesis second quarter 2021 business update conference call on the call with US. This morning are very capital and Chief Executive Officer, Neal <unk>, our Chief Financial Officer.

Yeah.

Yeah.

Yeah.

Yeah.

And about the company. Please contact Crescendo communications at 21267110 to zero. The conference call contains forward looking statements, which are made pursuant to the safe Harbor provisions of section 27 day of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of.

<unk> 34 as amended these forward looking statements involve substantial uncertainties and risks and are based upon our current expectations estimates and projections and reflects our beliefs and assumptions based upon information available to us at the date 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 risks 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 the risks and uncertainties discussed under the heading risk factors in item 1 a of our annual report on form 10.

<unk> K for the fiscal year ended December 31, 2020, and in other filings with the Securities and Exchange Commission, we undertake no obligation to revise or update any forward looking statement for any reason I'd now like to turn the call over to our Genesis as CEO Mr. Barry Kaplan. Please go ahead Barry.

Thank you David and thanks for taking care of them with technical problems and thanks to everyone for joining us on our call today.

I'm pleased to report we achieved over 6 fold increase in revenue from the second quarter of 2021 compared to the second quarter of 'twenty 'twenty.

We believe this reflects both the smokeless and the sustainability of all point of care strategy.

I'll talk more about this in a moment.

My first take a minute to discuss and remind you all about a point of care strategy, which we believe is the key to unlocking the full potential of the cell.

LNG from the industry.

As I've stated in the past all business is built on 3 key pillars, our point of care Therapeutics, a point of care technologies in all point of care network. Each of these components aligns the interest of the therapy developed who's the hospitals the patients and the company in a way we believe it has not been done before we on.

Apathy, gaining traction with all point of care platform by adding new point of care therapies and technologies as well as expanding our global networks collaboration with Lisa centers hospitals, and biotech companies around the world.

Currently most cell and gene therapies are manufactured using a centralized production either through in house production on.

This is a C D M o's contract manufacturers, which is standard across the biotech industry centralized production has its limits. It requires massive capital investments. It is very expensive to operate and can take years to bring production online meaningful scale at.

At the same time with the explosive growth of the cell and gene therapy market the industry faces major bottlenecks and capacity shortages.

See it at the C D moes in total manufacturing and logistic problems, reflecting the cost of manufacturing delays with these therapies.

Needless these options either internal or using a centralized even though.

C D flow a cost effective are sustainable as the industry continues to grow a good example of this is a car T therapies, which have faced supply chain issues and can range in cost in the hundreds of thousands of dollars per patient.

With rising resistance from pants as both clinicians and patients go more with these new treatment modalities as demand goes but the industry lacks the capability to ramp up to meet them.

Some biotech companies are trying to build up in total capacity to meet growing demands, but this is a lengthy process. Even if the required manufacturing know how is in place setting up G. M. P. C facilities based on clean rooms training, new employees and putting in place like quiet quality systems are extremely legacy voice assistant.

He has some hospitals on trying to solve the supply and cost issues by manufacturing those therapies. In house. This is also fall from simple hospitals set up for treatment of patients and in some cases the leases, but GMP manufacturing is typically a biotech so most hospitals.

Lack of acquired infrastructure not only the clean who's, but the entire quality assurance and supply network required for complex the production.

Innovation is springing up all around and trying to solve these problems. Many engineering companies are trying to develop closed the automated systems that will allow simplified manufacturing of these therapies. This is a great step forward and we as a company collaborate with many of these innovative integrating zone innovation into our plan.

But having the Papa equipment manufactured onsite is just 1 piece of a much more complex puzzle in order to enable decentralized supply of cell and gene therapy.

Much more like wild the key factor is standardization, so that no matter, which side of the product is produced it's exactly the same pulses to enable such standardization.

Several factors on acquired in these factors was the foundations off the old Genesis point of care platform on home, a nice quality system, well established training protocols auditors and consistent suppliers and vendors of materials involved in the production.

And couldn't.

Consistent quality controlled validated automated solutions that minimize human error and closed units to control infection.

No less important is also a consistent manufacturing environment 1 of the reasons, we liked to use on polls on mobile units. This ensures we are always duplicating the exact same environment no matter, where we manufacture.

We believe on strategy of decentralized supply of cell and gene therapies based on standardization of the manufacturing environment will ultimately becomes a solution for this industry, enabling lower cost accelerated development and ultimately provide a scalable long term option to overcome the industry wide capacity constraints.

And while the rollout of our decentralized point of sale strategies in the early stages. Once the foundations are well established it is much quicker and lower cost to expand capacity and increase a lot.

Once we have validated the production posters and 1 on pool at 1 point of care location, we can add additional oh, both under the same quality system and infrastructure.

We continue to strength from the foundations of our point of care and that will be a new joint ventures partnerships with leading hospitals and research institutes across North America, Europe Asia on the Middle East and on investing all assets and validating our point of care platform was in each region.

Mostly simply I'm pleased to report we entered into an agreement with a local partner to expand our point of care network in Australia. We are also seeing growing government interest in our JV partners and have identified a number of potential opportunities for government grants and other support.

Each of our partners have aligned interest with on them as committed to support the validation development in clinical trials with advanced therapies, utilizing our point of care platform within their respective markets.

As we have discussed in the past, we grant of partners geographic supply lights in exchange for future royalties and revenue share agreements well biogenesis, providing ongoing support for the operations and deployment of the target. The piece. We believe this approach is highly scalable as it derisk development through outside.

Support from all partners if.

If you look at that 11, new growth for the quarter. This reflects the first day also validation stage of fallout all out.

Specifically, we are providing our partners and the hospitals that we work with directly with technical regulatory and clinical support to establish on operations and on the long term contacts as we move into commercialization phase within respective point of SKU incentive and potentially launch news flow.

We expect to benefit from revenue sharing and royalty evenings.

Once in the commercial phase, we expect that I'll pass on those would be in a position to add additional sites and ramp up capacity very quickly to meet the needs of customers and the other choice.

And that's 1 example of the growth in our point of care in that book is in the U S where in most cases, we worked directly with incentives and all expanding our collaboration with a number of leading global how school institutes such as Johns Hopkins University, where we are establishing a point of care development Center similar collaboration with UC Davis in California.

We could not be more excited about these partnerships on the support we have received from both day, 2 and UC Davis, we've added additional validation sites across the U S.

In fact, we recently began setting up an additional center in the Boston area, which will help expand our present presence in the north east and expand on capacity.

Together with our partners, we now have a number of sites across Europe and other that's always on how the world, including Italy, Spain, The Netherlands Gleason rule on most leasing division was a Premier center in Lithuania, clearly our business model is taking hold and we're all doing our utmost to provide all the support each point of school region like Wyatt.

Our goal is at the moment is not to add on as many sites as possible, but the other choose the optimal sites full validation of all point of care platform. Once we have received the required approvals. We believe we can quickly expand capacity with the support of file JV partners.

Also keep in mind, we on our partner sold master cell not long ago, So approximately $300 million when all avenues of mass to sell off the $30 million and although mass peso was a cutting edge C. D. M O. We still face the same industry challenges that doesn't see demos utilizing a <unk>.

Alive to poach and contest on annualized revenues based on initial partnering partnering programs on all of the kneeling master cells at the point, we sold reflecting the quick capacity buildup with the decentralized point of kill approach enabled and that's on the foundations. We are solidly building up for <unk>.

Your children.

Turning now for a moment to our point of care technologies, we have been very active adding a number of highly advanced automated technologies into our platform. As an example, we have commenced enrollment for phase 2 clinical trial using the tissue Genesis isolate though.

The hospital for special surgery in New York, but tissue Genesis isolate is designed for the use of point of care and as a practical and cost effective solution for clinical applications of storm on vascular sales from polygon adipose tissue. We are also advancing our point of care therapies, which now span immuno oncology and.

Vital therapies metabolic autoimmune disease tissue of generation and more our strategy involves in licensing therapies from leading research centers hospitals and biotech companies, taking on responsibility of industrializing and supplying these cell and gene therapies, and a consistence and standardized manner in all locations.

Well the Genesis lease search and development teams have been working closely with our global partners in academia and industry partners collect collaboratively progressing towards a goal of enabling the researchers discover they used to become clinical grade therapeutics at the heart of our business model is our goal to make these.

Therapies available to a large number of patients that reduced cost. So on site. Both the thing off also using the point of care model, which we believe will support pay uptake on.

Unlike a traditional biotech with a handful of therapies on the pipeline, we continue to evaluate new therapies at all stages of development. So our growing partnership with researchers commercial entities and hospital, we have built a robust therapeutic pipeline, which includes more than 30 advanced selling potential gene therapy.

And we continue to evaluate new therapies every day.

More recently in June 2021 we achieved the multiple on pulling US development milestones based on Bill Genesys acquisition of the Tamil Biotechnology assets last year.

<unk> has completed its behind day constellation was the U S. FDA regarding the development of Atlanta, a topical gel formulation flow on filling off for the treatment with add on genital warts. We are on track to start phase 2 trials in this indication ask them completing the F D. A plenary and deal with quest, we have recently announced that our licensing thought.

On the oxygen presented positive interim phase 2 clinical design was also okay Gee, mostly on 1 an ocular formulation fly on putting us in acute the dental vial and just like this this is search provides encouraging scientific validation from continued development of flying through the noise and the polymer.

Patients.

<unk> plans to progress to faithfully tie in Thailand has presented its plants does FDA regarding on collaboration with latest we are preparing additional materials that we believe to lead to an eye on the submission for a clinical trial for on putting us from the systematic pretence of patients infected with COVID-19, We're also planning to test on Panther.

I was against other potential target infections, which are high on the U S National Institute of allergy and infectious diseases emerging infectious pathogens list, including a ball on eastern equine encephalitis virus.

Lastly, we have begun feasibility studies to combine line on pulling us with little Genesis buyouts on technology Blackstone's, all extracellular vesicles that we believe can provide some therapeutic benefit themselves without the difficulty of administering the entire cell to the patient the sleep formulation of fine putting on man has to deliver on it.

The antiviral activity of fly on putting those without increasing the risk to the patient. This is just 1 example of force we're planning to leverage I'll buy it from technology across our platform.

In addition to the therapeutic programs I mentioned, while also engaging in numerous additional collaborations to advance our pipeline, including collaborations on the development of new manufacturing methods for tumor infiltrating lymphocytes and car T and NK based therapies.

In addition to our technical and manufacturing expertise. We also provide us therapeutic development partners with extensive support from quality assurance regulatory and clinical development utilizing our internal expertise with the aim of accelerating to develop on him coarsely commercialization commercialization pathway.

So to wrap up on our main doesn't college does ever by the outlook for the business and believe we are building a sustainable revenue model. This will allow us to support our global partners, while the advanced our product suite was on required regulatory that's we have invested to expand on capabilities and really caused some of the top industry X.

To help us capitalize on this unique opportunity to potentially plans forms of cell and gene therapy market.

We all share a combined vision of bringing breaks loose a piece of the market in a cost effective way that will ultimately benefit patients and save lives I truly believe on revenue growth coupled with a solid balance sheet and the fact that most of our heavy investments are behind us all bode extremely well for the future on that note on now.

On the call over to new life and go on Chief Financial Officer.

Yeah.

Thank you Barry.

Our revenues for the 3 months ended June 30th 2021 were $10.5 million compared to 1.7 million for the 3 months ended June 32020, the increase in our revenue is attributable to technology transfer shut up scale up and validation of our therapeutic pipeline and point of care systems for clinical use through long term car.

Trucks on our regional partners.

Cost of services and other research and development expenses for the 3 months ended June 30th 2021 for $9.7 million compared to $25 million for the 3 months ended June 32020, representing a decrease of 61 per cent. The net decrease during the quarter is mainly attributable to the purchase of the assets up to near about technology in 2020.

Salaries and related expense increased by $1.3 million.

During the quarter as we have expanded our internal.

Capabilities, including recruitment of leading industry experts to continue the development of our cell and gene therapy, our product pipeline as we expand our PSC operations globally.

At the same time, we experienced an increase in professional fees and consulting services of $3.3 million.

Continue to invest in the development of automated processing units and processes as well as owned and licensed advanced therapies to enable commercial production, while working with our partners to address the yoga and needs.

Selling general and administrative expenses for the 3 months ended June 32021 were $2.9 million compared to $3.6 million for the 3 months ended June 32020, representing a decrease of 20 per cent deep.

A decrease in selling general administrative expense is primarily attributed to a decrease in accounting and legal fees. As a result of decreased corporate investment activities from 2021 compared to 2020.

In terms of liquidity, we ended the second quarter of 2021 with cash and cash equivalents of approximately $28.4 million. We continue to maintain a strong balance sheet with sufficient capital to fund development of per appeal care strategy.

Operator, we'll now open the call to questions. Thank you.

Thank you.

Questions. Please press star 1 on your telephone keypad at this time if any time. Your question has been answered you could remove yourself from the queue by pressing 1.

Again, ladies and gentlemen, if you have a question on please.

Please press star 1 on yourself on keypad at this time.

And our first question is from Bruce Jackson.

Please go ahead Bruce.

Good morning, and thank you for taking my questions. If we could take a look at the revenue number.

A bit more detail. So you mentioned tech transfers scale upset a validation as this COVID-19.

Could you give us a little bit more on the composition of that revenue number is debt primarily related to the the JV partners or is there anything else in there.

Well, yes, because I remember most of our therapies are being deployed throughout JV partners and clinical costs line. So the first step before you stopped manufacturing a product and this was the same type of revenue we saw on mass to fill on the centralized services, we used to get.

You have this initial step where youre doing actually the tech transfer and you're preparing everything in the environment. So you can begin manufacturing it's.

It's actually.

This initial step sometimes you do validation on sometimes you do a quality control validation all kinds of steps required in order to validate the manufacturing process before you begin your clinical work. So this is very standard in the industry.

And of course, when we charge all partners, we charge it was on overhead, but we really want them to get to the clinical stage, but they are paying us for and this is why we believe this is a sustainable model because as they begin the clinical work the manufacturing they need they need all constant support on the service.

Just as we gave the support before to a customer or a biotech companies. When we were working through all centralized C. D M O structure.

And I hope that kind of answers the question.

Yes, it does that clarifies thing at things and then if I could ask a follow up question on the mobile processing unit.

Just curious to know how.

Rollout of those units is going on do you have anything operational yet.

Yes, so we haven't actually made any public kind of disclosures about the the entire rollout on the numbers.

But I think we're very much on plan as you know as we discussed and I think we'll we'll get all.

At least most of the systems out and working.

What's important for US is the rollout itself like sending a system is quite system simple line you ship it out and its position.

Think what we're trying to achieve here is a validation of manufacturing in the systems and making sure we're aligned with all the regulatory requirements around that.

And so that I think we're doing good poleglass, we're getting good feedback from regulatory and from other you know government approvals needed. So I think the feeling and understanding them, both regulatory and economically and from the different governments and health care institutes, but this.

Actually.

A good way to manufacture this is no.

You don't have to give up let's say quality or safety, maybe the opposite when you on working with such mobile units.

Okay.

That's helpful. And then last question I'll hop back in queue.

So the revenue spin big Brian Kuwait National here to the extent that you can provide some guidance on where the next couple of quarters. My follow up would you anticipate that revenue continues to run at this level or could it be somewhat variable.

So you don't the viability of these are long term contracts, we have with all partners I suppose the.

Typically though until the first stage of clinical and then they continue for support and numerous other piece, though each partner.

No.

We kind of more or less know that.

This is the level of revenue that is sustainable sources of business and.

And makes sure that wheel sustainable as we continue giving support because we want to make sure that even doing validation stage for each partner, we all Oh, we will not financially you know what per SKU and so we kind of more or less know that this is the expected revenue per quarter.

And the real ramp up will begin on we believe it will begin once they start the clinical work once they start receiving revenue from the hospitals all the different payers.

And as this goes and expands and today the ratio is much more on the validation study, but side, but as they get more presence in each region that moves more and more to payment on this side and then we are getting additionally to the the sales.

This payments, we get them the support we're giving them. We also get the royalty payments and additional payments we have in our agreements with them.

So I think for the you know again, we don't give any guidance on it but if you look typically axis industries. These type of contacts but continuous for the next year the usually the fill.

<unk> Tec Townsville phases anywhere between 6 months to 24 months, depending on the therapies of complexity.

And as I have explained before I go on allow us not to really charge on partners as much as possible, but clearly we take a continuous overhead overlap costs to make sure we all sustainable as a business.

Alright, that's on that's helpful. Thank you very much.

Okay. Our next question is from other Sito. Please go ahead.

Hi, Barrett and now we have been following the progress on Occupancies and I continue to be a strong support on what you do.

Early on.

You've made a good point.

So on Mako salary, while spending about guidance.

$3 million in revenue annual sales bar try 15 million.

So Kevin line. So it really shows that you know the on people that strategies are wrapping up. So I think you know I believe it's on.

Paul we've discussed about kind of shell. So currently we are looking to perform automation and seeking approvals additional pool. Thus 1 he's brought up so could you share more updates in terms of other business plan and a growth on this business in the next 2 to 3 years.

So as I said and I remember this question and thanks for bringing it up again, well, we're very committed to kind of sell in we can see there's a lot of interest from other regions around the world and introducing it but again you know kind of thought is just the exact example of the challenges this industry faces.

It's a it's a great product, it's approved markets and yet it's very limited in its capacity. So we are still working on the automation and the I'll call. It on <unk> of this therapy and as I said I think this is not a trivial phocis, but I think we all are making steps food and in.

Paolo will also working on understanding the clinical and regulatory requirements for other agents. So we're working in parallel so as we continue to automate and non pure life and validates that which is very important. We are also expanding the market for this so we believe that will be a sink.

Conization between the on P utilization on the automation and the ability to lag a little he wise expand to additional markets.

Alright, thank you.

The other question that's on now so.

Compared to quarter, 1.2021 on.

Using the contact center business alone.

I came up with a roughly above the gross profit margin on <unk>.

<unk> 4 per cent.

In quarter, 2 similarly, using our customer services alone.

Gross profit margin is down from 8%. So could you share what are some factors leading to this change in gross profit margin and were there any 1 off costs or is this debt.

Our ramp up in expenses in anticipation of future revenue. Thank you.

That's true.

I didn't hear your second figure what was your second.

For gross profit.

That 1 price.

<unk> gross profit margin I'm using the cost of services alone.

You get you came to Oh gosh profit of 74, you said.

7.8.

7.8.

No not at all where you.

Might get that yeah, yeah that number Neil why don't you, let me answer that and I'll give a bit of explanation and then you can go into the financial thing you know.

Well I don't I'm, not sure which for me on it used to to kind of because we don't have really because this is a kind of R&D development and remember even though on all partners are selling these products right now pushing them into the market we still do.

Benefits greatly from royalties and other things, we still have an ownership stake in these therapies. So.

And the way accounting work why is it works is it actually.

It's not considered as Cogs, okay, it's not considered as cost of goods. The work we've put in.

It's actually considered you know cost of services in all M D.

So when you look at our financials and Neil can explain that more you can it's difficult to differentiate what is R&D investments. So that we are doing internally and what Oh, Oh I would say.

So to speak Cogs, even though you can't call them that are what our cost of services.

I can tell you that in terms of cost of services for us it's quite simple because we take a clear on overhead so I'll I'll gloss profit so to speak has not really changed.

What may have changed we may have invested a little bit more on R&D. Maybe we've finished them on D. Work. All of you know finished paying suppliers for work that's ongoing so I'm not sure. These numbers you have really reflect all kind of gross profit Neil do you maybe want to add to that.

Yeah, you're correct. There is no real thing its gross profit in our business, it's not like building a car. It leaves the production line and obviously, it's done and you can see it's a contingent on it.

This is this is a very complex process by which we.

<unk> provides services by which we develop and also see the result of those because some of these benefit us as well like research and development that may be a benefit to a partner or to a customer quote unquote customer JV partner, but it also benefits us. So this becomes more of a a collaboration with those costs as well that we recognize that.

Our own expense as well as then as well as the benefits of that Judy partnership right. So yeah. There are labor their services Theres lab costs, and so on that could be quantify those into identifiable amount, but our business doesn't operate by way of a gross profit about where you literally see that at the line, it's really a matter of the collective revenue.

And what it takes to drive that and also make.

Our successful along with them and benefiting from each of those are mainly especially that R&D you sort of.

<unk> is not is not based on a gross profit model in terms of whole cost share accounting. Okay. So that's not just regenesis debt.

And just in the cell and gene therapy World that has that been.

Comes more of a holistic type of measurement in terms of a cost share because it's a complicated delivery of our service and an unresolved okay.

And in.

Maybe I'll give an example to make sure. This is clear let's say we've licensed a therapy that's specific quality from a specific hospital. Okay. Let's say, we've just licensed the car T for pancreatic cancer and we thought it and.

Now we have a stage, 1 where nokia licensing it out to all partners and we're not getting revenue from it from all partners Slash distributors. Okay. So we're still working on that product in house preparing it for the next stage when we start licensing it out so let's say this quarter.

We've been doing a lot of work on new products.

Products that we've licensed them, okay, but we the Nokia flirty for licensing.

Our analysts seething payments on.

But they still become part of fall on the in cost and services.

So you could say and not in an accounting matter that we are investing in our pipeline because once we in license of therapies that becomes on revenue generating for us once we license it out to our partners distributors. Because then they need all support the manufacturer and 2 per pill.

From manufacturing and to make it available in the area. So.

So this is why you will see maybe a difference. So I think this quarter, we had a bunch of new therapies at all almost 35 out licensing and I think next quarter, we have some of that but these therapies. We believe and we know this because we actually ask I'll pause most if not interested in licensing the CS will soon be.

Come on revenue generating assets to us.

I hope that explains kind of a bit more but if not let me know and I'll try to add more detail.

Thanks, So much favorite and now I think the clarification was really good.

So a lot of confusion.

I'm really proud of the progress right now.

Go to the next quarter, so ill jump back in line. Thank you.

Thank you. Thank you thank you from them.

Our next question is from Megan Huang. Please go ahead.

Is there a new congratulations on your amazing quarter to reach out and of course, all your other achievements in the past quarter I really got to be able to speak with you today.

So in July I believe you put out some interesting news about young grandtop topical gel and they seem to be quite a number on uses for it.

Could you share with US should these put up become commercial does it have a material impact on your business. For example, the unit economy or some range on margin.

Hello is focused on the on top the ones that his plan.

To be made as a product that is to be used for foreign indications, it's really not a lot of politics, good products out, though and and we believe that once it gets approved it'll be a superior product to other pox, but we also believe this holds a lot of potential to use to be utilized together was al deliberately cyst.

So that was kind of a double impact here on the company.

Alright. Thank you so much. So it also seems like you are also opening up multiple conversations G. D. U F F D a and do you see.

Such conversations being pushed back due to COVID-19 O D. S T. A b coming Morris months. These D D.

No I I I I personally have not noticed a change in the responsiveness I think so always very responsive and continue to be so I think the the especially you know are responsive to patients at all are afflicted by COVID-19 or other indications, but you know the facts of cover it doesn't.

Means that isn't cancer, and and I think they're really trying to do a good job and just making sure that all patients and also a piece and companies get the response they need.

Alright, that's really great I just had 1 last question so.

So yeah I'm not shocked on me and all your investments.

Is that they are really a lot of corporate development and switch increase the intrinsic value of on Genesis, but then like getting him lucky he's not recognizing it instead I believe other than you know he's quite close to the revenue on Microsoft.

So from your perspective do you have any views on this disconnect Ah any thoughts on this topic.

[laughter] you know it's it's a question you know of course, I asked myself and I asked experts in the market about this why is is you know how the stock price does not reflect what goes on you know as a as we develop quickly so.

I don't know I think it's really a matter of things need to catch up I mean, I think will working in a in a sophisticated in this thing I think it takes time.

For people to realize how quickly this industry is growing and I think it takes time for people to realize.

What an impact we can have on this industry, so and I remember if you and I don't know how long you've been falling on Genesis, but if you may remember master cells revenue was doubling every yeah quite can kinda consist consistently and still you know only when we sold the company from the valuation.

And we did I.

I think the market's realize this so.

I think you know because it's a new industry most of the products have only been approved in the last 2 years. It takes time for people to understand those hundreds and maybe even thousands of great therapies in the clinical stage now.

Many of them are starting to get approved I don't think people understand what a huge problem actually capacity has put a tremendous lack of capacity who is interested in this leads to actually supplies. These dogs, whereas on a centralized though decentralized.

We believe that the decentralized not only allows you to.

Build up capacity, but it's lousy once you validated it till amp up very quickly and that's what I think is so important from what we're doing because okay. You can build clean them. So you can be on the build on pills, but the difference between adding another on people to an existing 1.

Compared to the difference of building another G. M. P facilities huge so we really think that the issue is building away building a platform and this is why I was so invested in this that Quinn quickly lamp up you can quickly and free for months you can add another on people you can add more sites. So this is.

What will allow these therapies actually to get the market now if you inside and just play on your therapy developed a biotech company or a hospital. It is completely obvious to you. This problem this lack of capacity.

But if you have a financial analyst and this is a new industry or if you. If you will just you know a shareholder somebody on out to that is not involved in the industry, it's a bit more difficult to understand what a huge problem is and how this person lives genetically modified therapies on really taking a huge space and.

[noise] biotech how's it going from indication to indication more and more cancelled and you know some people think the the the the the problem will be solved by making shelf box, but the whole beauty of this piece is that they oughta from life and that's what makes them. So so so pudic and have such.

[noise] clinical effect on patients so even though maybe some shelf politics will be produced most of this industry is still and will probably be in the future, mostly personalised, maybe even only half the bugs will be personalized, but still it's a tremendous amount of product getting out the other markets get.

Adding market acceptance and having no way to manufacturing. So I think once those kind of a general more public understanding that this is the new wave of biotech. So this is the way biotech is going.

[laughter] pills on life genetic capability to use your own selves to make the proteins you make to to treat this the the the ailments you have and they won't understand that the biggest issue here is not the clinical on the scientific stuff because that's a lot of work is being done but actually to provide a way for these box to get to access to market.

Then they will realize the value we have.

In terms of just financial value and of course, what I believe is value you know to people and patience all over the world.

Thank you so much for your thoughts there I really agree with you on those price and I'm also looking forward to a dentist is has to offer in the coming months in the coming year and.

And I really appreciate all day and you know you on your team are doing to make sure and gene therapy assess the bulk of all thank you.

Thank you. Thank you for your questions.

Our next question comes from.

Please go ahead.

Hi, congratulations for the Coffees also.

Yeah, I agree with you to see what's your true English not fully recognized by the market, especially.

I shall leave and you'll have to say my opinion. The on Pew said you have done this very good production from sofa scalability.

However, we do not see much publicity on the implementation of on pews.

Would you be able to share with us the adoption or.

On the implementation offer on <unk> up to date and also how are you planning to make the public more aware of what you're doing with on pews.

So look we we haven't given any public kind of information, we I will and I can tell you that I'll go and we have shows this for this period, we believe the thirty-five center really kind of map out the regional kind of.

Oh, yes, we want to cover these on validation center.

And as I explained before I go now is not to ship out as many on pills as possible I'll go on is really defined the the best hospitals as last month's of excellence line to validate the the manufacturing in these on pills and that does not mean getting clinical approval for a dog.

Means being able to manufacture as I said in a standardized manner and all of these sites in a mobile unit all in some of the mobile equipment for you okay.

And to show, we can generate the same products and all these sites because 35 sites Lady covers quite on [laughter], coupled with the glow more or less I mean, you know, we're just looking for Ah what kind of setting up and looking for the best piece to implement in Australia. Okay. For instance, so we're really trying to.

Makes us the global distribution kind of availability.

And what we really and you know because there's such a big need and because there's such a lack of capacity. We we continuously get requests, though even though we decided on thirty-five validation centers. We may go up a bit because you know if if there was a great research centers wants to get involved now I I don't want to say no to it because.

It's Ah you know we can we can already get bowling, though but that's how I go because once we validate once we we really make sure 1 centers working properly and that legal regulatory region.

<unk>.

It's much easier to quickly lamp out and expand to as many centres of as many on pills as needed.

So that's why I don't think you know on a lot of time people ask me well how many have you done now that's not the issue I think we've we've covered the ground we want to and now we really have to focus on validation and I think I'll model of being kind of sustained and paid for all the services. We give them. These units by our partners makes us.

Stable during the validation though.

Now for public awareness of this many cases were working was very high level of research institutes and hospitals.

Not when we Wanna, let's say put out on announcements, we always have to ask the permission now most seriously searched institute on not in a hurry to put out P. O. Oh look we've put in and on people. We put into this until everything is loading smoothly and validated and we have to respect that.

So.

We're really focusing now on validating everything making sure things on place and I think as the hospitals, we work with as a research institutes, we work with will feel that we've got everything running and we're all in the manufacturing they will see him on more comfortable and of course.

As we stopped rolling out we are less I would say rely on on the hospitals, because we can all out in any location.

So remember this is like a better size he's on a validation sites and for me I think it's it's it's really wonderful that even during the validation mode. We on sustainable which means we can add more sites if needed.

But this is al.

So I think you can deduct from that more or less where we all have to Lola.

Yeah, I think that that is true Jacob.

I fully agree that the vegetation. So jessie get more confirmation stuff. This is working solution. This isn't working solutions. So when did you say to veterans Validations.

Oh shut some colors for over the next few quarters.

This may selfish on how we do you expect that and the last question is when you answering 1 off the investors questions on licensing would you mean to the next how do we expect for the next few quarters, appearing yeah. That's actually my last question.

Okay. So validation is is is really something that it was kind of flow regulatory define right. Yeah. The way you do this you usually take a product and you want it for free validation on typically this will take free to 6 months, Okay. That's kind of how it works.

And that's kind of a typical validation posted okay I I hope that answers your questions and it doesn't matter. If it's just you and why does it take sleep 6 months because you know that's the time it takes to manufacture on those shows you know, making a free lunch and you're you know OK. So that's kind of a validation timelines on.

How much that takes asfaw in terms of the second question about licensing.

Look we have so many requests to to to give us therapy, okay, not even first to pay for them to you know for people that are struggling even and not only hospitals by the way small biotech companies bigger companies that have these great therapies and have shown even.

In many cases clinical validity, but on really stuck at the point, where they can't make these products from more than 510, maybe at most 20 patients like using a typical clean.

And we really tie I mean, we we really when we eat in license something what we tried to do and we we really haven't quite a huge network and expertise on the field right because we've got all these centers on all these people well.

Such great the expert on this field so what we typically do we kind of.

Ask the opinion school. So we have a great model for actually assessing is this product something that is.

Clinically useful does it have a good day regulatory pathway can we be supportive on the automation on the roll out and these are typically the questions. We ask ourselves if we want to add in a product. So we typically licensing some things that we already know we have a lot of input somehow global platform.

To to Utilise, sometimes it needs some work from outside as I explained before to Kevin, but we know that and is true too and we can get this out to all partner. So they can start pushing it into different clinical Ah ways.

Is that right. Thank you.

[laughter] yeah. Okay. Thank you very much later on.

Yeah. Thank you.

[noise] [noise] force again later.

If you would like to ask a question on that please.

1 on your telephone keypad episode on next.

From D O [noise].

[laughter].

They were congratulations on the on Greek water.

Company fall on Iraq Amish at G M X.

Phone call patients so true Christian.

Oh checks we saw on it.

With the heat on global R&D operations and be all global development. So we see my Hydrangeas has destroyed.

The company.

Sure I lost the background on B B D dash free expose that recently.

And how it is true <unk> helped to push forward.

<unk> on people.

On globally. Thank you.

So I mean for business development, we've come to stay till the day that you know, even though it's not like it's not an issue of marketing okay for us it's because as I said, there's such a lack of capitalism capacity and so it's not that we need to go sell ourselves.

Too much because.

I I think we have too much. We you know I wish we could take on more hospitals, even today, that's kind of what I wished, but I I I think we have to kind of finish the validation state but for US. It was very important to take a Greg was on V. P. O found he was a great guy and and he's very very.

Experience, both then blood banking different cellular product and he's worked and decentralize the poachers before on diagnostic issues on different blood products. So he understands they deeply the concept of Decentralisation now when you are offering a decent.

I saw this I think it's very important that when you build it up you build it up in a way that is.

First of all sustainable and as you grow you don't home any of you know you keep the same level of quality.

And I think that is doing a wonderful job and really are lining and making sure everything is kept at the same level and making sure what other components, we need to continuously monitor and in true. So we are as a business as we grow and as we expand we keep the same level of service to each of style partners.

That's on that side and pull ahead of you know on the the people have tremendous and know how in biotech today many of them. So other people will Oh, we have a a wonderful team with a lot of Noel and on the in biotech in development.

But I think for us it was important because we have different development.

Is to have you know just a centralized making sure the information flow between the different on the units is flowing clearly because.

End of the day, that's what's important when you have a decent life with any information any development, you're having at 1 location.

To come back and benefit relocate.

Alright, Thanks, Alright, So my first name is really.

Joint venture.

So obviously, we need a joint venture up on them.

Other regions such as.

Korea Bachelorette.

Excellent as on wall.

I'm, referring to is solved by collaborating with small.

So they're working according to a plan each each regional plan, we try to take to flee major Institute.

And I think well we have wealth I'll get the institute as well. So I think in terms of that everyone is working according to plan what I do think you know and interestingly enough has this industry and that goes back to you know kind of thing I think the government and the Houska institutes on realizing more and more.

But there is an issue. So I think what we're seeing is Ah more government support 2 O J D partners in terms of even easing the way legler 3 wives, even you know willing to support financially listening to them cause other.

Coming I would say more prominent in the region not all of them, but it certainly some of them and once at a more advanced we can see how they all kind of gaining recognition as an important player and will there working and of course those successes al success.

So I'm from me, it's great to see how the growing and expanding the activity how the working more closely how they're working more closely with regulators, how they're getting more support locally how them, becoming I would say leading pillow.

In the the the.

The cell on gene endlessly in the region with where they on active each was zone expertise of course.

Okay, Alright, so I just on 1 last question is regarding the cut your <expletive> on Congress you on on.

Pipeline so based on the on.

Line to get on.

Kind of shell.

On your view by ourselves.

On the news page so could you share with US how is the market demand for these reached day shall we have right now and on any pledge too pushy, sorry, Yeah, how would you like this.

Yes, yes. So this is again a same issue of automation it's being.

Marketed in 1 side and we're working very hard on the complete zone penetration of this and I'm, hoping that this would be quite soon and then we'll do like a fool I on before.

Okay. That's all I have on the question.

Yeah on my phone is fine thank you for.

Have a great day.

Thank you. Thank you very much [laughter].

[noise] no further questions at this time I'll turn it back to the management for free.

Moving remarks.

Okay.

So that's all thanks, everyone for the questions lately for participating and I know many share holders called me up even not feeling buildings calls and I'm always happy to chat and talk to them. So thanks for participating in a second call, though 2021 business update conference call well very excited about.

The outlook for the business and appreciate the strong supporter Sasha share holders looking ahead goes to continue the validation of health point of kill platform, while building the foundation for a market expansion in the village geographic regions.

Look forward to providing for the day after work in close collaboration with our partners to deploy a point of kill strategy worldwide. Thank you.

Thank you [noise].

I mean from.

[noise] Okay. Thank you. This concludes today's conference.

Oh. Thank you for your participation you may disconnect. Your line is at the time and have a great day.

[music].

Yeah.