Q2 2022 Ibio Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the <unk> fiscal 2022 second quarter financial results at.
At this time all parts of this.
I'm sorry at this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press Star then one on your telephone.
If you require any further assistance. Please press star Zero I would now like to turn the conference over to your speaker for today, Stephen Kilmer Investor Relations you may begin.
Thank you good afternoon, everyone.
Before we begin I would like to remind you that during this call. The company will be making forward looking statements regarding our current expectations and projections about future events that are subject to risks and uncertainties.
Reference to these risks and uncertainties are made in today's press release as disclosed in detail in the company's periodic and current filings with the U S Securities and Exchange Commission.
All forward looking statements can be guaranteed and actual results may differ from the results discussed in the forward looking statements. The information on this conference call is provided only as of today and we undertake no obligation to update any forward looking statements made on this call on account of new information future events or otherwise, except as required by law on.
On the call today, representing the company are Mr. Tom.
<unk>, Chairman and Chief Executive Officer, Martin Brenner, our Chief Scientific Officer, and Rob <unk>, the company's chief financial and business Officer.
I'll now turn the call over to Tom.
Thank you, Steve and good afternoon, everyone I'm.
Pleased to report another highly productive quarter for our biopharmaceutical development activities, where.
We continue to grow and advance our recently established immuno oncology pipeline, while also advancing our second generation COVID-19 vaccine candidate.
Last month, we received the Fda's response to our pre IND package for <unk> <unk>, two which is our nucleocapsid protein sub unit vaccine candidates against the Sars Covid two borrowers.
The agency's feedback we are moving forward with IND, enabling studies and we plan to file an investigational new drug application before the end of this calendar year.
We were guiding in the development of <unk> by what we call our JV strategy with the acronym reflective of the need for vaccines with greater durability access and various inclusion.
These critical needs are currently unmet by commercially available vaccines, all of which rely in some way out of the viruses Spike protein is there a basis for generating immunity.
Spike protein as a major modulator of <unk> activity of the immune evasion and as we've seen it as a subject it is subject to frequent mutations.
Since our last call, we saw the emergence and rapid spread of AUM across.
<unk>, which had over 35 mutations in it spike.
It is important to note that as one of the very few companies if not the only company developing a vaccine exclusively based on the far less beautiful nucleocapsid protein.
Has the opportunity to lead in the development of a true second generation solution.
Our preclinical data suggests that <unk> provides a durable memory T cell response and at least today, none of the variance displayed mutations in the region of the virus that we used for already end of June .
With our work on <unk>, we're aiming to deliver People's last Covid vaccine dose not just their next dose.
While we think that the switch to a nucleocapsid based sub unit vaccine to address issues with durability and the variance. We believe it also can favorably affect access as well.
This is because subunit vaccines typically don't have the additional cost and logistical challenges associated with frozen transport and storage like mrna vaccines too.
However, we see technology solutions for other complementary ways to improve access even further in.
In particular, there are new delivery technologies that can avoid the less labor intensive process of delivering intramuscular injections, while making it easier for people with a fear of needles to seek getting vaccinated.
To that end in November we executed an agreement with a leading innovator of microarray patch delivery systems to explore the feasibility of administering <unk> to intradermal.
Micro array patches are minimally invasive and contain micro needles painlessly penetrate the upper layers of the skin and dissolve to release their paper.
This intradermal delivery method may even allow for vaccine self administration, creating a more accessible alternative to intramuscular injections.
Interestingly. This route of administration May also enhance durability is targeting the large pool of immune cells in the skin elicit an enhanced immune response.
Term a stronger immune response to meet a lower dose advantage. It is required which then again could further improve access via lower cost of goods.
Turning now to our therapeutics, we're very pleased to see the investments that we began making in drug discovery R&D, a few quarters ago already bearing fruit with multiple new pipeline additions and advancements.
I would like to start our discussion in this area by pointing out that going forward, we will classify our discovery and preclinical programs into four distinct stages for greater clarity ease of tracking and consistency with our peers.
Stages are one early discovery to late discovery, three lead optimization and for IND, enabling.
Since we announced plans to create our in house drug discovery capabilities at the end of last fiscal year. We went on to add six new immuno oncology assets to our pipeline in just six months.
Our newest candidate a monoclonal antibody designed with machine learning tools has progressed the fastest.
And then anything from our partnership with Rubric Therapeutics. The concept for this molecule was only just identified in October but due in part to its high quality design. This candidate has already moved through to late discovery stage.
This example helps demonstrate the power of artificial intelligence and developing higher quality therapeutic candidates and Martin will speak to this further.
Meanwhile, another element of our partnership with rubric as our worldwide exclusive license agreement to a novel IL two sparing anti CD 25 antibody for the depletion of immunosuppressive regulatory T cells.
This is a promising anti cancer therapeutic candidates with the potential to turn cold tumors Hot.
We've transitioned the development of the molecule from the mammalian cell culture production methods rubrics GMO was using.
Plant based fast farming manufacturing system.
In addition to the scalability sustainability and quality advantages. We're now realizing by switching to past farming. We also avoid the costly and complicated process of licensing the intellectual property needed to produce an AEP postulated version of the molecule in mammalian systems.
We can achieve the same end by simply deploying our proprietary <unk> technology to AC constellate the antibody implants.
Data generated to date demonstrates that the quality of the fast farming produced antibody is comparable to traditional medallion by our production methods. We continue to advance. This candidate is <unk> 101, and estimate that we may enter the IND, enabling stage before the middle of calendar 2022.
We added another candidate to our oncology pipeline in November when we announced the research collaboration with the University of Texas Southwestern Medical center to explore the anti cancer potential of the <unk> molecule in solid tumors.
A version of this <unk> protein has anti fibrotic properties can make up the core of the <unk> hundred program.
While we continue to develop <unk> 100 for two major fibrotic diseases systemic scleroderma and idiopathic pulmonary fibrosis. This new collaboration with UT SW is based on <unk> potential to address tumors with a strong fibrotic component like those associated with pancreatic cancer that make them so hard to treat.
On a related note last week I buy on a license or for the fibrotic indications the University of Pittsburgh signed an amended license agreement that extend the number of development milestone related deadlines, probably by a 100.
Now I'd like to turn the call over to our Chief Scientific Officer, Martin Brenner, who will provide us with an update on our recent R&D activities and pipeline drug candidates pardon.
Thank you Tom we continue to be very pleased with the progress, we're making building out our drug discovery and development infrastructure, which we initiated in May last year.
We have since ensured access to multiple diverse antibody libraries, and a broad range of screening capabilities <unk> partners and at the same time have built a team of highly skilled drug countries at our San Diego site.
This team has not only entered six new oncology programs into the pipeline in less than seven months, but has also successfully advanced two of those programs from the early discovery to the new discovery stage.
I want to put this effort into the context of the one to two years. It typically takes to establish a new R&D center in the three to five years in antibody drug discovery program in oncology, usually takes from target identification to clinical development.
As Tom mentioned earlier.
Distinct stages of the discovery program.
The early discovery phase includes the identification of novel targets, which is followed by an antibody screening campaign and can take somewhere between six to eight months and delivered early active molecules.
In the late discovery stage these molecules undergo a thorough characterization, where they have to show among other things potent and specific binding to the target protein the desired biological effect in tumor cells and their efficacy in a cancer animal models. This face usually takes six to 12 months and is followed by the lead optimization phase.
During fleet optimization molecules undergoing improvement of the overall characteristics, which might include increasing potency or manufacture ability by altering physical chemical properties.
Lead molecules are subjected to a whole battery of tests, including animal models, which more closely represent the cancer indication in patients.
At the end of the space the molecule with the best overall funds selected as a clinical candidate and interest into the IND, enabling stage the lead optimization phase dependant on the complexity of the molecule can take anywhere from eight months to one and a half years. Following IND, enabling phase is focused to a large degree on developing dominion.
Picturing process for the molecule and establishing that it is safe to be administered to patients. This is the most expensive face apart from clinical development, depending on the molecule and the indication can take 18 months.
Even two years.
So we are obviously moving extraordinarily fast enabled by our unique platform.
Today, I will share some additional details.
We report a discovery program, which we refer to as targets on that.
Our web site.
I hope you understand that we can't disclose the molecule targeted at this early stage due to the highly competitive nature of the biotech industry targets.
<unk> targets <unk> is a protein on the surface of cells and as widely distributed throughout the body.
Mutations in several solid tumor indications changed the structure and the function of this protein in the specifically.
Machine learning technology allows us to exactly reproduce the three dimensional shape of the mutated region through generation of artificial proteins. So called meso scale engineered molecules on nims.
Using these Memphis Fischbach's, we were able to identify or fish antibodies from our library that specifically bind to the mens and therefore to the mutated region.
Protein.
This ensures that all antibodies only bind to the mutated protein in tumor cells and not to the normal protein in healthy cells.
Which is believed to improve the safety of the molecule.
In collaborating with <unk>, we were able to reduce the time and the early discovery phase from usually six to eight months to three months and since the molecule identified from Rupert <unk> antibody library, we have already built in a certain degree of optimization. We can also potentially reduce the length of the lead optimization phase lastly, if the program reaches the.
Enabling stage fast farming technology has the potential to further shape of nine months, leading to development tons savings of more than one year.
I'd now like to turn the call over to our Chief financial and business Officer, who will provide an update on our financial results Rob.
Thanks Martin.
Rather than reiterate the details of the company's financial results are available in the press release and the 10-Q I will simply speak to a few financial highlights.
Revenues for the second fiscal quarter of 2022 ended December 31 were approximately $200000 a decrease of 76% versus the second quarter of fiscal 2021.
As is commonplace for early stage pharma services companies.
Bayou has experienced significant quarter to quarter revenue variability driven by factors such as the number and size of customer contacts.
Contracts and the timing of revenue recognition.
As previously communicated the company expects revenue growth to return in the second half of fiscal 2022.
R&D and G&A expenses for the second quarter of fiscal 2022 increased 40% and 48% respectively.
The comparable period in fiscal 2021.
This reflects the companys growing investment in our pipeline platform technologies employees and related infrastructure.
I bio anticipate this trend continuing however, the rate of growth is expected to moderate over time.
In November <unk>.
We used approximately $6 million in cash and took on debt to purchase of our manufacturing facility in Bryan Texas.
As well to acquire the remaining equity interest in our <unk> subsidiary, which is now wholly owned.
This strategic transaction provided by with full control over 100000, 130000 square foot manufacturing facility as well as the CMO entity, which holds the exclusive rights to produce biologic.
Using the fast farming system in the United States.
Following the purchase of <unk> and exploring the potential for a sale leaseback.
Whereby a buyer with purchase of the facility and lease it back to us, enabling us to repay the debt to recover the cash we put in and perhaps to receive financial help from the buyer with funds to expand the facility.
With the transaction can be completed would help by bio raised non dilutive capital to grow the business.
In terms of liquidity I bio Rad $57 $4 million in cash marketable securities and investments and debt maturity as of December 31, 2021 <unk>.
Excluding $5 $9 million in restricted cash.
Based on recent initiatives undertaken to extend our cash runway by our now believes that it has adequate cash to support our activities through September 32023.
Thats two quarters more than we were expecting previously.
With that I will now turn the call back over to Tom.
Great. Thanks, Rob.
We are of course very pleased with the performance of our recently established biopharmaceutical discovery and development capabilities here this past quarter.
We've exceeded standard industry benchmarks for the speed with which we've added our six new oncology assets and we are also encouraged by the forward momentum each of our therapeutic and vaccine programs have demonstrated this quarter.
Looking ahead, we will focus on continuing to advance our oncology assets and in particular, moving <unk> 101 towards IND, enabling studies.
We're looking forward to efficacy study results for <unk>, 400, and progressing I buy a 100 to lead optimization stage.
Finally, we will work to bring it last vaccine dose rather than the next vaccine dose as a response to the COVID-19 pandemic with the goal of filing an IND before calendar year end.
Thank you.
And with that concluding our highlights we are happy to take any questions you might have operator.
Ladies and gentlemen, as a reminder to ask a question you would need to press Star then one on your telephone.
All your question press the pound key.
Again, Thats star one to ask a question please.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Christine Kafka with Cantor Fitzgerald. Your line is open.
Hi, good afternoon. Thanks, so much my question here.
Related to oncology, so I understand that target.
AI driven Io targets.
I think with time, but wanted to see.
Information you could provide for us on a big picture basal cell for example, I know with <unk> collaboration you highlighted.
Sure.
Challenging target, but then also recognizing that target.
Well understood in the cancer setting.
Can you maybe high level about the validation of the target youre going after or perhaps.
A little bit more novel to the company.
Yeah, you bet. Thanks.
Thanks, Kristen for the question I'll hit it at the high level and then let Martin talk a little bit to the validation.
Second portion of the question so.
At the high level I think there's a lot of interesting targets out there of course, but a lot of times easier said than done to get to the endpoint and I'll take what we're now calling I buy a 101, which rubric previously called.
There are <unk> three molecule is a really good example of this so for years and years people were trying to find a way to.
Lockdown.
Immunosuppressive regulatory T cells in the tumor microenvironment.
CD 25 was it was a great.
Target to search and folks were able to create molecules that could go ahead and buy really nicely, but guess what it is.
Interfered with IL two signaling to the T. Effector cells. So you were getting rid of your immunosuppressive T cells, but you werent letting the cancer, killing capabilities of your T. Effectors function. So it's areas like that that we're really seeking these hard to solve problems with antibody engineering that we think.
That with a combination of some of the ways in which we're designing our methods. Some of the library some of the VISO scaled engineered molecules and Martin mentioned that rubric has.
Using some of the artificial intelligence techniques that are out there we can solve for problems like the one Martin alluded to so again without getting into.
Any detail you can take a look at it what's a really attractive marker.
Im sorry target for going ahead, and targeting solid tumors, but the.
The particular molecule is also present on healthy cells. So the challenge there is engineering something.
Specific enough.
For your tumors without obviously, creating a toxicity issue with.
That particular molecule also being displayed on other healthy cells. So.
That's.
Helpful towards sort of the Big picture view, and then maybe Mark you could talk a little bit further too.
Can we get to the validation challenges that are out there.
Happy to Tom Hi, Kristen, Yes, so I think what is important to mention here is that we are utilizing the rubric technology here in this particular case.
To go after a relatively well validated target, but where we see there is improvements in upsides on the safety side as I mentioned earlier on this target is expressed in healthy cells and in tumor cells, it's slightly different and our technology hopefully helps to only target.
This protein on the tumor cell, which then would avoid the toxicities one would expect to see when you are targeting.
<unk>.
Endogenous protein on the healthy human cells.
Maybe kind of a play here in.
Going after a target that's relatively both on the data, but increasing the safety margin.
Got it thank you.
And for your oncology pipeline, how do you think about precision medicine approach.
Types of sequencing to identify who might not respond there versus <unk>.
Looking at targets that might potentially have a broad effect, either as a monotherapy or in combination.
So I'll make a comment here on generally speaking with regards to the markets and then the <unk>.
Art and chime in it's to say that.
We're hoping to find in as part of our development.
Efforts and goals.
Solutions here for unmet medical needs for broader groups of people.
So we think like in the case that we just described.
Cases, I guess I should say between I buy a 101 and some of the new targets that we've entered into our pipeline there.
Some of these hopefully will be broadly applicable to a whole variety of cancers and favorably helped a lot of patients in the end.
That said to your point on precision medicine.
Taking a look at smaller patient populations and maybe getting after some of these rare cancers I think what we can say there is that the nature of the SaaS farming manufacturing platform.
<unk> itself to helping in some of those cases, because if you think about some of these really rare cancers, where you may only have.
Some of these instances a few dozen patients worldwide in any given year.
Being able to efficiently produce small quantities of molecule.
<unk> of the therapies is not necessarily so easy when one thinks about some of the traditional methods and in our case.
As we need material, we can obviously plant a lot of plants to make larger quality quantities of product, but if small quantities are required are our production systems kind of modular each one of our little plants has its own protein factory. So if we only need a little bit.
That's what we can just plant only a little so.
I think in that way, that's how I kind of think about your question Kristen with regards to precision medicine, but Martin anything to add with regards to this.
From a design and development strategy perspective.
Happy to weigh in here, Tom and Kristen.
<unk>.
If you consider your typical solid tumor.
Oncology indication, Chris and what you're doing.
Is often an all comer trial. So these trials can be lengthy they can be massive and they have been over the past few years, some efforts to characterize tumors specifically individual.
Individual patients better, but also kind of using machine learning to that effect as well. So I think this is an evolving field, we keep a close eye on what's happening outside specifically now that we're implying employing machine learning and earlier stage, obviously, we want to keep our eyes out to kind of see if there are other gains we can we can.
We have with that technology and the clinical sites on the biomarker side and so on.
Okay. Thank you last question two part here. So you talked about four different phases, a little bit more detail, including the timeframe that we typically see.
I wanted to ask with all of your platform capability.
All of your partnerships et cetera.
Can you talk about lead optimization.
Molecule with the bat.
Data is collected to enter IMD, enabling aim.
All of your platform technologies and everything we talked about do you think that process will be more seamless Kevin and then Dan.
Yes, Scott.
Together and be.
The end result, being a much more efficient.
<unk> here with fundamentally more shots on goal for less money than the traditional way in which pharma has done it in.
I'll just cite some studies that are out there that take a look.
All of these processes together.
As we all know if you just start with let's say 10000.
Perspective discovery initiatives.
Usually the numbers are something like five ever make their way to an <unk> out of that 10000, and what's interesting about it of course is that.
The time and the money that it takes so you are often seeing as Martin.
Starting to characterize there better part of <unk>.
3456 years to get to <unk>.
And youre spending $20 $25 billion to get to that point. So this whole initiative in everything that we're doing both on our own and in partnerships.
The idea is that indeed, we do expect that the power of these.
Approaches.
And sort of a measure twice cut once even in the early go.
We will significantly help to bring down the cost and time for development and again this concept of taking more shots on goal.
We think really applies here so.
Sure.
I think what we're seeing granted it's early days and we've only got a handful here, but really really promising.
And we're seeing what we had hoped and expected we would see with this build and then with respect to the Covid vaccine.
And timing again, yes, we do believe that.
We'll be looking at.
IND filing before the end of calendar and it's just very interesting to watch the environment as it is right now a lot.
<unk> still from the standpoint of the regulatory approach and I think here to seeing this emergence of OMA crown and all the other.
Variants that we think will still be coming and while indeed.
This change is likely where we're moving from an environment, where we're dealing with the pandemic and we're moving to an endemic.
And endemic doesn't mean less of a problem.
Phil.
I'm serious issues out there.
We deal with this virus.
It'll likely pickets spots, but.
It's microbiology and we do believe that we're likely to see more variance where like everybody hopeful that you don't see a true escape variant come out.
But we do believe.
Normally the.
Our second generation solution that is not.
Solely dependent on the constantly changing spike protein as the basis for providing the immunity is the way to go we need we think that there needs to be alternatives. We know that theres a couple of a couple of handfuls of companies out there working on it.
And we also think.
That there is the opportunity to look at the second generation vaccines to also any on whether ours or somebody else's.
We do believe that there is the opportunity to provide.
Cross protection with other beta coronaviruses, depending upon the design, whether it's ours or some of the others that are that are moving through development and we.
We think.
Governments and others should continue to look to fund it.
Improvements here, so that we can get after not only.
This boosting and dosing so frequently but also.
The accessibility so that we can move it to endemic and hopefully from there.
Get it even more under control.
For long term doses of vaccine that can last for a very long time, not just just a few months does that hopefully that answers the question Kristen.
Yes, Thank you again.
Thank you.
Our next question comes from the line of Roy Buchanan with JMP Securities. Your line is open.
Hi, great. Thanks for taking the question I guess the first one a follow up on Chris' first question.
Around kind of the.
Target.
Oncology.
Target set for the other and harvest.
About the.
<unk> <unk> hundred one you have a pretty good amount of preclinical data as part of six similar or just a general philosophy around whether you're going after totally novel targets.
That has some degree of validation.
Yes, I'll, let Martin speak to this.
Worthwhile point to underscore is that not dissimilar again to what we saw with CD 25, you can have a well validated target, but not necessarily an antibody that's engineered properly to maximal effect either for efficacy or for safety and as you know.
I think we've got obviously for data.
For the molecules that are later in the stages. So 101 as that case, we've got a decent amount of preclinical data, but what were seeing on target six is that it's moving through quickly and putting us in a position to.
Possibly move over to animal studies, but Martin do you want to comment a little further.
Yes, Ryan I think it's fair to say right. We are currently looking at targets that do have clinical validation ideally.
In.
Betting distance to our competitors.
And we are specifically looking at targets that we can actually that are clinically degree to a degree de risk but at the same time also provides a path forward for us might it be on safety might be on the efficacy I think it's fair to say that we don't take on the risk right now to come after a completely novel target.
<unk>, we are trying new technologies, considering reapplying, our existing technology to antibodies right now.
This would just be.
The dramatic increase in risk if we went after very early targets. So at the moment, we're more focused on areas, where we already know the target or a molecule might have worked but might have failed due to safety reasons in the clinic or hasnt gotten to the efficacy we are expecting.
Okay perfect that's super helpful.
So for our buyers.
Currently we do have a challenge.
That would reflect that.
Talent study and if so I have some questions around that but it often.
<unk>.
Alright.
Yes with respect to the challenge study.
His guidance that we took from the review that led US to go to this next step for the challenge studies and Martin you want to take it from there.
Yes, so as you know both Pfizer and modern went through challenge studies.
And since COVID-19, the pandemic is a very fluid environment.
This is something.
Now truck manufacturers and developers have to kind of take into consideration.
At the moment in the planning stage of this study.
And once we have more details about the Google report out.
About the results of that study.
Okay, great. So.
I guess.
Yes.
And the guidance that says whether youll need.
I know you've shown both antibody and T cell responses, but I guess more of a focus on the T cell response, given that it's an intra.
And is it internal of the virus is not a surface antigen anything you can say about T cells with antibodies.
Martin.
So I think it is an evolving area ROI and it shows basically we have more and more evidence from academic scientists around the world.
That there is.
Specifically in <unk>.
Mediated T cell response that seems to be protective I have to say.
Say here that the small studies, but it's accumulating evidence that kind of shows that the M protein might be more important than we initially even thought.
So I think this is speaking towards kind of the long range plan and our strategy to try to be ahead of the pandemic for once and not kind of chasing one variant. After the next so going after the end protein might cover us in the broader variant inclusion.
A range, but also might cover us from a from a durability perspective, but again I want to caution everybody here. It's early data.
We have not done the studies yet one of the areas.
We do a challenge study is to actually do that proof of concept and then obviously clinical data has to tell.
Yes.
The hypothesis actually holds true.
Okay, Great and then last one I have Rob the just remind us if there's a.
Cash guidance include.
Component for the sale of a manufacturing facility I think it did previously and then you guys also have bought.
A portion of the TV business back correct. So.
But youre not reselling that again sorry.
Essentially that the discount to the price you can get for their manufacturing facility correct. How do we think about that thanks.
Yeah. Thanks, Thanks, Roy So generally speaking right the assumptions, we're using we try to be.
Right down the middle of what we think is the most likely to happen or on the conservative side. So we're not out there ahead of ourselves.
So.
I think thats, the best way to position the guidance across all areas.
<unk>.
But does that give you enough color.
Yes, that's fair and then the CMO part of the business Thats not what Youre looking to maintain our full ownership correct. That's.
That's correct, yes, absolutely okay got it thanks.
Thank you.
Our next question comes from the line of Matthew <unk>.
With Matthew <unk> LLC your line is open.
Yes.
Hi, gentlemen, congratulations on the progress and thanks for taking my question.
Wondering if you could offer any further explanation regarding board recently adopted regulations.
Regarding that change in that.
Per center.
Shareholder ownership proxy for example, or is that related to any future plans for requests for increase in authorized share further stock split proposal.
Okay.
Yes, Matthew Thanks for the question.
We noted in our release here today and previously.
There are certain structural impediments that are in place here and without getting into too much of the detail I think you may be aware of that.
For companies.
Have very large retail shareholder basins like are very valuable.
The the voting of the shares in People's ability to do that there were mechanisms in place previously with some of the large brokerage houses whereby there were things such as proportionate voting and and other.
Mechanisms to help more easily translate the will of shareholder forward, but now.
Lot of those mechanisms have gone away.
There's many individual shareholders, who have small stakes or mainly be in.
Any one.
Biotech companies or any company for that matter for a short period of time.
So.
Vote turn out.
And there are many other companies that are in this in a similar situation as I bio whereby.
There is difficulties and even just doing the basics such as having enough.
Shares voted to even hold one's annual shareholders' meeting so yes. Some of the changes that we're making are in an effort to try to enable the company to be able to move forward.
With conducting its business, while still being in compliance.
With rules of exchanges and Delaware law, so yes.
Yes, we think as we've said before we did have strong support two to one in favor of the proposals that we have out there both.
All right.
<unk> split or had out there I guess I should say.
As well as.
Our net increase in authorized shares but an actual decrease.
On an absolute basis.
Yes, some of those changes are related to that and putting the company in the best position to conduct its business in light of.
Circumstances.
Okay.
Create the answer.
Thank you. Thank you.
Our next question comes from the line of Phillip Barnett Your line is open.
I missed or I sit and team. Thank you for your time today, it's always great to get updates on the company's progress.
I have a couple of quick questions.
There was a request for information posted by HHS BARDA for next generation COVID-19 vaccines was due back on February 2nd.
Reading through that it looked like the RFP was written for <unk>. Just wondering if you were aware of that and if you submitted a proposal for the rsi.
Tom are you on mute.
Okay.
Yes, Phil Thanks.
For that question and indeed.
We were aware of that.
And.
In particular, we've been very active in evaluating all the RFID actual calls for proposals and contracts.
With the U S government for related areas, so without being able to get into too much detail.
Obviously about.
Whether it's rfps or contracts that were applying for either at the federal or state levels.
Indeed, we've put resources in place here within the company as well as bringing on key advisors to help us.
With responding to opportunities for the U S government and really even looking at those rare instances worldwide. So this is a capability that the company didn't have when we first switch from being a CMO over.
To pursuing our biotech interests in December of 2019.
But we've gotten a lot of that in place and so thanks for that.
And indeed, we are.
Hopefully not leaving any stone unturned with regards to those kinds of opportunities.
Alright, well I appreciate.
Date that I know you never want to hear about reverse splits and dilution. So I'll trust that leadership is exploring all of those opportunities.
On the topic of two or two here.
I'm interested to hear that we're tackling both IND, enabling studies and alternative.
Drug delivery at the same time.
As I understand IND, enabling studies focus on that molecule efficacy.
I'm wondering how we're able to also look at alternative deliveries like this interim muscular <unk>.
Patch array.
How are we able to investigate both at the same time it seems to me like you would.
Look at the molecule first make sure. It's efficacious and then look at alternative deliveries. So could you speak to more of that effort.
Sure Good question.
Our firmly committed to driving behind the intramuscularly delivered <unk> and what we can say is that that effort is de linked from the exploration of some of these alternative routes of administration. So to a degree youre right I mean, we've got the antigen and the adjuvant <unk>.
Combination that we're very happy with.
And that's led to us.
Taking the decision to move forward here with <unk>.
And so we.
We can progress that but then also walk and chew gum at the same time, because all we're doing is evaluating the feasibility of the same.
Antigen for sure and to a degree adjuvant in combination with a different platform. So these are a feasibility studies more to follow on this but we've seen these microarray patch technologies improved significantly here over the years.
These first.
Emerged in the mid two thousands.
And look really attractive from the standpoint of what they can do too.
Ill provide a durable immune response, so there is a lot to like about them some of the manufacturer ability issues in some of the rest of your question, but now, especially.
In the past 345 years Theres been a lot of progress made on that front. So we don't think it negatively affects at all or.
Our plans and timing to push forward with than I am.
Second Gen Nucleocapsid based sub unit vaccine for.
For us to go ahead and do this feasibility work here and we're going to be looking at Sars Covid two the antigen adjuvant combination for that as we evaluate feasibility. But then also if this is successful we would see this prospectively being.
Our platform part of our platform.
For vaccine delivery in the human health area generally speaking that makes sense.
Yes, absolutely it.
Exciting I know him a little adverse to needle. So I was excited to hear about that.
And last question here.
I know back in May 2021, we heard that we won the case against fraud Hoffer.
Got a couple.
Cash.
Cash delivery dates there, but part of the settlement was confidential I'm wondering if we're ever going to here.
About what that information is and if not.
If we could hear like a high level is it confidential financials or is it possible contracts manufacturing potential future business.
There is a large part of that that's never really been settled for me.
Well two things Phil one don't feel bad about being one of those folks is not part of the needles Youre one of approximately 9 million. Other Americans out there who are in the same boat and having those how many worldwide. So I mean, we do that as part of the other reason why we want to bring these kinds of innovations out here in <unk>.
Big problems and Thats one of them.
Who don't want to get back to David just because they are definitely afraid of getting shot but moving on to the front half of the thing I would point you to.
Certain 8-K filings that we have out there so while the press release didn't necessarily have a lot of the financial details and at some of our other filings did so there is in fact quite a bit out there.
Yes, I think it even includes the specifics around some of the financial splits timing of when those come into the rest, but at the end of the day it was.
The $28 million, so we've got the cash and the cash payments.
First.
Set is due this quarter for both settling the case and then for the license to the fast farming technology and other IP actually that was created.
As part of the relationship.
<unk> also taken out a license to that and theirs.
Revenue is expected from that.
Coming up here in the second half of the fiscal year. So it's out there.
And available.
Alright.
Thank you.
Im still still I'm wondering about that because it said there was something confidential there.
I don't know if those filing you've ever really spelled that out but thank you very much for your time and Thats all I have today.
Okay, Great and Rob I don't know, if you want to add anything to that but.
So some of the confidential stuff goes to.
These legal cases.
Can have elements of them.
That certain parties don't want to have broadcasting.
But.
Rob do you want to.
Comment at all on specifics on the financial side.
No I think I think those financial the financial information is out there.
What Tom said some of the confidential information is.
To protect the parties, but it's not relevant.
I don't think Theyre enterprises hidden out there that.
We'd be required to make shareholders aware of those so nothing material should be out there.
Meaningful.
Thank you.
Thank you.
Question comes from the line of Patrick Wolff.
Your line is open.
I'm just kind of wondering looking at our sales numbers last quarter and seeing how really weekday or I'm. Just wondering what are you doing to put some food on the table here and get some cash out of it.
Ill.
For the $225 million shareholders that are starving to death, when you're sitting on a $100 million production plant producing nothing so I'm just kind of wondering where are we going with this.
Bought in on this extra percentage of this production plant.
Where are the sales I mean 200000 a quarter.
Shock.
Yes, Patrick So a couple of things. So we do have a large and diverse shareholder base I don't think we quite out of 225 million shareholders.
We do have.
That number of roughly that number of shares out there and held.
And with regards to the <unk> services and the revenue generating capability I think we've.
<unk> tried to be clear here with respect to the business model.
We're moving to so when it comes to the bioprocess areas, whether thats the service provision or other products that we're looking to put into the catalog part of the reason the company has struggled.
Previously it was that with this business model, where they were a CDMA only so that's how they operate.
We operated at <unk> from roughly 2016 to 2020.
The the ability to deploy that plant and have.
Large volume.
Contract development and manufacturing business switchover to it.
Is a challenge because one.
Once our molecule has already found its way onto our manufacturing platform like the standard that's out there mammalian.
Cell culture.
Once somebody has gotten into preclinical and then certainly by the time that they are in the clinic. They don't they don't switch that business over its they'd have to oftentimes creates so much risk that they might even have to rerun. The clinical trial, which is why you take a look at this kind of example, with rubric and we were able to switch and move it.
Onto our platform because they got hadn't gotten too far down the path. So we.
I'll, let everybody know that when we changed the strategy.
And built the team that we were going to build a biotech business in it along the way demonstrate and validate the strengths of fast farming.
And began after we got the <unk>.
Biotech portion of the business stood up which you can see here this quarter.
The previous one we've added quite a few assets.
<unk>.
Pipeline I want to get back to that in a second.
But in the course of doing that we're also self validating if you will fast farming platform and putting ourselves in position to go out and now.
Commercialize the facility.
And the manufacturing services with this extra comparability data that we now have in hand, so that's a lot of what we're at.
Doing right now I think the other point when you take a look at.
Revenues in any given quarter I, just want to underscore what Rob said and what we said in our press releases and what we saw last year and really what any.
Fairly young in its <unk>.
Business development cycle, <unk> was going to confront as a result, and thats, a certain lumpiness to the business and high quarter to quarter variability. So theres a lot of reasons for that.
It goes to everything from Rev. Rec, two <unk> manufacturing campaigns that get done at some times and not others. So you will see some ups and downs in the quarters. I mean, you look at last year, I think we had a quarter where or the one before where we had $1 million for the quarter and 200000, but look these are those are small numbers.
The business ramps over time.
As part of what we're doing here I just want to also make the other point is I mentioned that I would is that you have the ability to generate this business has the ability to generate non dilutive revenues from the sale of the CMO services, which we are.
Continuing to offer.
But then also what we're doing as we build a pipeline here of new molecules.
Folks will know right the biotechs don't necessarily always take all of their molecules all the way through the development cycle.
And to that end, because we're taking more shots on goal here our business model is such as that we're projecting the opportunity over time to have some of our molecules be partner.
And one perhaps noteworthy comp that's out there it goes to the anti CD 25 monoclonal antibody that we presently have in our portfolio.
<unk> comparable is two tusks therapeutics.
Which was a biotech with just two I think maybe three assets and its pipeline. They had a preclinical anti CD 25 antibody directed against those immunosuppressive regulatory T cells.
They.
They partnered with Roche.
<unk> bought just that one asset for $75 million upfront approximately maybe 81, I forget, but I think the <unk>.
Total deal.
Was $750 million of all of the milestones we're not so we're given the prom.
Promised everybody that we would build a business.
That de risks, where the company was before with its CMO only model.
And create optionality to monetize the technology, whether it be in <unk> services.
Or and ultimately driving for our own <unk>.
<unk> available products, taking them through the clinic and then also in partnership so so that's a little bit on it.
Patrick hopefully that helps answer the question a little bit.
Thank you.
Ladies and gentlemen, this concludes the Q&A portion I would now like to turn the call back over to Stephen for closing remark.
Thank you operator, and thanks, everyone for taking the time to join US today. This concludes <unk> fiscal second quarter 2022, Investor call. We look forward to updating you again on our next call.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
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