Q4 2021 Thermogenesis Holdings Inc Earnings Call
Good day and welcome to the ThermoGenesis Holdings conference call and webcast to review financial and operating results for the year ended December 31 of 2021. As a reminder, all participants are in a listen only mode. There will be an opportunity to ask questions at the end of today's presentation. If you would like to ask a question, please press star then one on your telephone keypad. And if you wish to withdraw your question, please press star then two.
Good day and welcome to the Thermogenesis Holdings Conference call and webcast to review financial and operating results for the year ended December 31 of 2021 as a reminder, all participants are in a listen only mode. There will be an opportunity to ask questions at the end of todays presentation. If you would like to ask a question. Please press Star then.
One on your telephone keypad and if you wish to withdraw your question. Please press Star then two.
If you should need assistance during the conference call, please signal our operator by pressing the short key, then zero. As a reminder, this conference is being recorded, I would now like to turn the conference over to our host today. Ms. Paula Schwartz of RX Communications, please go ahead.
If you should need assistance during the conference call. Please signal our operator, bypassing the surety then zero as a reminder, this conference is being recorded I would now like to turn the conference over to our host today. Its polished words of Rx Communications. Please go ahead.
X communications: Thank you, operator. This conference call contains forward-looking statements within the meaning of the federal securities law. The company's actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that might cause actual results to differ materially from those in the forward-looking statements is contained in the company's periodic reports filed with the Securities and Exchange Commission.
Thank you operator. This conference call contains forward looking statements within the meaning of the federal Securities laws. The company's actual results may differ materially from those projected in the forward looking statements.
Additional information concerning factors that might cause actual results to differ materially from those in the forward looking statements is contained in the company's periodic reports filed with the Securities and Exchange Commission.
X communications: The information presented today is time-sensitive and is accurate only as of the date of this call, March 28, 2022. If any portion of this call is being re-broadcast, re-transmitted or redistributed at a later date, the pharmacist will not be reviewing or updating this material. Participating on today's call are Dr. Chris Chiu, Chief Executive Officer and Jeff Cobble, Chief Financial Officer. I'd like to now turn the call over to Chris. Please go ahead.
Information presented today is time sensitive and is accurate only as of the date of this call March 28 2022.
If any portion of this call is being rebroadcast retransmitted or redistributed at a later date. So much on this this will not be reviewing or updating this material.
Participating on today's call are Dr. Chris Xu Chief Executive Officer, and Jeff Cobble, Chief Financial Officer, I'd like to now turn the call over to Chris. Please go ahead.
Chris Shoe: Thank you, Paura, and thank you for everyone to join us.
Thank you Paula and thank you for everyone.
To join Us.
Chris Shoe: for our fiscal year 2021's earning causes optner. We appreciate you taking the time.
For our fiscal year 2021 story and he calls this afternoon.
We appreciate you taking the time to do singing.
Chris Shoe: For the past two years, our industry and the entire world have been affected by the COVID-19 global pandemic.
For the past two years, our industry in the entire world has been affected by the COVID-19 Global Pandemics.
Chris Shoe: We are happy to see that we are now getting close to the end of that.
We are happy to see that we're now getting close to the end of that.
Chris Shoe: and our customers and our clients are rebonding in many aspects.
And our customers and I'll try and hide rebounding in many aspects.
Chris Shoe: As for thermogenesis, we are not only taking this opportunity to grow our existing business, but also to get ready to transform the company into a new direction for its future growth.
As both Homogenesis, we're not only taking this opportunity to grow our existing business, but also to get ready to transform the company into a new direction for its future growth.
Chris Shoe: ever since we established in 1986.
Yes.
Ever since we established in 1986 for more than 30 years. So more Genesis has always been focused on the development and production of cutting edge automated cell processing medical devices for the cell banking and south therapy industry.
Chris Shoe: For more than 30 years, thermogenesis has always been focused on the development and production of cutting-edge automated cell processing medical devices for the cell banking and cell therapy industry.
Chris Shoe: For example, we have supplied many automated cell processing and cryogenic storage technologies to words major public and private code blockings.
For example, we have surprised many ultimately did cell processing and cryogenic storage technologies to where its major public and private cord blood banks.
Chris Shoe: Our bioarchive smart-quile storage system warehouse close to 90% of all U.S. FBA biological license application or BLA approved clinical grade corporate unit.
Oh about archive smart cryo storage system warehouse close to 90% of all U S. F D. A biological license application or BLA approved clinical grade Cobra corporate units.
Chris Shoe: Our AXP system has processed more than 1.2 million samples worldwide since it launched in nearly 40 countries and 140 instances.
Our XP system has processed more than $1 2 million samples worldwide since its launched in nearly 40 countries and 140 institutes.
Chris Shoe: And in the last, in the past two years, we continue to develop more FDA-approved medical devices for point-of-care clinical applications and for large-scale cell therapy manufacturers.
And in the last in the past two years, we've continued to develop more F. D. A approved medical devices for point of care clinical applications and for large scale salvage therapy manufacturing.
Chris Shoe: These intellectual properties, proprietary technologies and no-house are invaluable assets to the company.
These intellectual properties proprietary technologies and no house are invaluable assets to the company.
Chris Shoe: In the past five years, cell therapies have become the next pillar of medicine.
In the past five years cell therapies have become the next pillar of medicine.
Chris Shoe: In 2017, the U.S. FDA approved the first CAR T-cell therapy.
In 2017, the U S. F D. A approved the first car T cell therapy can ride here.
Chris Shoe: camryer, which uses cancer patients' own immune cells, and turned that into a cell therapy for the treatment of acute lymphoblastic leukemia.
Which uses patients which uses cancer patients' own immune cells and turned that into a cell therapy for the treatment of acute lymphoblastic leukemia.
Chris Shoe: The CAR-T cell therapy demonstrated close to 90% response rate in the relapse and refractory cancer patient group.
The car T cell therapy demonstrated close to 90% response rate in the relapsed and refractory cancer patients group.
Chris Shoe: In other words, patients who have failed chemotherapy, radiation, and all other therapeutic options.
Or in another words patients who have failed chemotherapy radiation and all other therapeutic options.
Chris Shoe: By the end of 2021, FDA has approved five CAR-T therapies for various forms of blood cancers. And globally, there were over 1,200 CAR-T cells related clinical trials, registers on the National Institute of Health website.
By the end of 2021 F. D. A has approved five car T therapies for various forms of blood cancers and globally. There were over 1200 car T cell related clinical trials registered on the National Institute of Health website.
Chris Shoe: targeting a variety of blood and solid tumors.
Targeting.
Targeting a variety of blood and solid tumors.
Chris Shoe: One of the major issues with moving cell therapy products from banks to bedside has been the manufacturing bottom line.
One of the major issues with moving cell therapy products from bench to bed side has been the manufacturing bottleneck.
Chris Shoe: the heterogeneous and personalized nature of the cell therapy product has introduced manufacturing and scaling up complexities that are not seen with the traditional pharmaceutical product.
The heterogeneous and personal lives the nature of the cell therapy product has introduced manufacturing and scaling up complexities that are not seen with the traditional pharmaceutical products.
Chris Shoe: A significant number of staff therapy-based companies are seeking external service provider for their self-manufacturing needs.
A significant number of cell therapy based companies are seeking external service provider for their cell manufacturing needs.
Chris Shoe: We believe that we can leverage our extensive IP and proprietary cell processing technologies to more effectively address cell manufacturing needs.
We believe that we can leverage our extensive IP and proprietary cell processing technologies to more effectively address style manufacturing needs.
Chris Shoe: With that said, some agencies plans to launch its own contract manufacturing service for self-serfee products, leveraging our significant amount of IP and proprietary technologies in the self-processing and self-manufacturing fields.
With that said similar Genesis plans to launch its own contract manufacturing service for cell therapy products, leveraging our significant amount of IP and proprietary technologies in the cell processing and cell manufacturing field.
Chris Shoe: By doing so, we are transforming some of the illnesses from a traditional medical device company to a contract development and manufacturing organization, or CDMO, for cell therapy manufacturers.
By doing so we are transforming so again this is from a transition from a traditional medical device company to a contract development and manufacturing organization or C. D M O for cell therapy manufacturing.
Chris Shoe: The company plans to develop and operate the CDMO business through a newly formed division, named TG-Biles Institute.
The company plans to develop and operate the C. D M O business through a newly formed division named T. G biosynthesis.
Chris Shoe: TGBIO synthesis intends to provide high-quality development and manufacturing capacity.
T G biosynthesis intends to provide high quality development and manufacturing capacities.
Chris Shoe: cell and tissue processing development, quality system, regulatory compliance, and other cell manufacturing solutions for clients with therapeutic candidates in various stages of pre-canicle or clinical development.
Cell and tissue processing development ore Ritchie system regulatory comprised tests and other cell manufacturing solutions for clients with therapeutic candidates in various stages of preclinical or clinical development.
Chris Shoe: As you may have seen in our press announcement in 10K file today, which is March 28, 2022.
S. You may have seen in our press announcement and taking 10-K filed today, which is the March 28 2022.
Chris Shoe: Thermogenesis enters into your licensing and technology access agreements with boy-life genomics for a license in the U.S. to use boy-life genomics patterns and no-halves related to cell processing and manufacturing.
Genesis entered into a licensing and technology.
Assess agreement with boiler like genomics for a license in the U S to use boiler life genomics patents and no halls related to cell processing and manufacturing.
Chris Shoe: where my genomics is an affiliate of our chairman CEO , Dr. Chris Sue, and he is a China-based cell manufacturing organization that has developed substantial manufacturing technologies related to cell manufacturing services.
Whereas like genomics is an affiliate of our chairman and CEO , Dr. Chris Xu and is a China based cell manufacturing organization South has developed substantial manufacturing technologies related to cell manufacturing services.
Chris Shoe: Also March 24, 2022.
Also on March 24th 2022, some will Genesis entered into a long term lease agreement with these three investment another affiliate of our chairman and CEO to dis approximately 35500 square feet of space.
Chris Shoe: Somal Genesis entered into a long-term lease agreement with these three investments.
Chris Shoe: Another affiliate of our Chairman CEO ,
Chris Shoe: Approximately 35,500 square feet of space in Sacramento, California, to build out a current good manufacturing practice or GMP compliant cell manufacturing facility with 12 CGMP clean-room suite.
In Sacramento, California to build out a current good manufacturing practice or GMP combined cell manufacturing facility with 12, cgmp Crane boom suites.
Chris Shoe: The plan's build-out is expected to complete in six to nine months.
The plant build out is expected to complete in six to nine months.
We are targeting to launch our a C D and most service to customers by the end of 'twenty to 'twenty two.
We look forward to reporting more of this exciting pencil make them in the coming months.
Chris Shoe: And with that, let me turn the call over to Jeff to share the key financial results for the year 2021. Jeff.
And with that let me turn the call over to Jeff to share the key financial results for the year 2021, Jeff.
Thank you Chris.
Jeff Kabul: Net revenues were $9.3 million for the year into December 31, 2021, a decrease of 450,000, or 5%, as compared to 2020.
Revenues were $9 3 million for the year ended December 31 2021.
The decrease of 450000 or 5% as compared to 2020.
Jeff Kabul: The decrease was primarily driven by a decline in CAR T-Express revenues, offset by increases in BioRxiv service revenue and AXP sales.
The decrease was primarily driven by a decline in car T Express revenues offset by increases by archive service revenue and the XP sales.
Jeff Kabul: Gross profit was $3.5 million or 38% of net revenues for the year ended December 31, 2021.
Gross profit was $3 5 million or 38% of net revenues for the year ended December 31, 2021, as compared to $1 3 million or 13% of net revenues for the year ended December year ended December 31 2020.
Jeff Kabul: compared to $1.3 million, or 13% of net revenues, for the year ended December 31, 2020.
Jeff Kabul: The increase was due to lower inventory reserves and the year ended December 31st, 2012.
The increase was due to lower inventory reserves and the year ended December 31 2021.
Jeff Kabul: Selling, general and administrative expenses were $8.5 million for the year ended December 31st, 2021.
Selling general and administrative expenses were $8 5 million for the year ended December 31, 2021 as compared to $7 7 million for the year ended December 31, 2020, the increase was driven by stock compensation expense offset by a decrease in legal patent and other expense reductions.
Jeff Kabul: compared to $7.7 million for the year ended December 31, 2020.
Jeff Kabul: The increase was driven by stock compensation expense, offset by a decrease in legal, patent, and other expense.
Jeff Kabul: Research and development expenses were $2.2 million for the year end of December 31, 2021 as compared to $2.5 million for the year end of December 31, 2020.
Research and development expenses were $2 2 million for the year ended December 31, 2021, as compared to $2 5 million for the year ended December 31 2020.
Jeff Kabul: The decrease was driven by lower salaries and benefits and was offset by increased stock competition.
The decrease was driven by lower salaries and benefits and was offset by increased stock compensation expense.
Jeff Kabul: Interest expense declined $1.8 million to $6.1 million for the year ended December 31st, 2021 as compared to $7.9 million
Interest expense declined $1 8 million to $6 1 million for the year ended December 31, 2021, as compared to $7 9 million for the previous year.
Jeff Kabul: The decrease was driven by lower unamortized debt discount of the beneficial conversion factor associated with the revolving credit agreement with Boyle Life, Asset Management,
The decrease was driven by lower unamortized debt discount of the beneficial conversion feature associated with the revolving credit agreement with boy life asset holding.
Jeff Kabul: For the year ended December 31st, 2021, the company reported a comprehensive loss attributable to common stockholders of 11.4 million or 96 cents per share based on approximately 11.8.
For the year ended December 31, 2021, the company reported a comprehensive loss attributable to common stockholders of $11 4 million or <unk> 96 per share based on approximately approximately 11 8 million weighted average basic and diluted common shares outstanding.
Jeff Kabul: weighted average, basic, and diluted common shares outstanding. This compares to a comprehensive...
This compares to a comprehensive net loss of $16 3 million or $2 60 per share based on approximately $6 3 million weighted average basic and diluted common shares outstanding for the year ended December 31 2020.
Jeff Kabul: $22.60 per share, based on approximately 6.3 million weighted average basic and diluted common shares outstanding for the year.
Jeff Kabul: December 31st, 2021, the company had cash and cash equivalents totaling $7.3 million compared with $7.2 million at December 31st, 2021.
At December 31, 2021, the company had cash cash equivalents totaling $7 3 million compared with $7 2 million at December 31, 2020.
Jeff Kabul: Working capital was $8.6 million at December 31st, 2021, as compared to $9.2 million at December 31st, 2021.
Working capital was $8 6 million at December 31, 2021, as compared to $9 2 million at December 31 2020.
Speaker Change: This concludes our prepared remarks, so now we'd like to open the call to your questions.
This concludes our prepared remarks, so now we'd like to open the call to your questions operator.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys and Swift draw. Your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Speaker Change: And to withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster.
Speaker Change: And the first question will come from Sean Lee with HC Wainwright. Please go ahead.
Andy first question will come from Sean Lee with H C. Wainwright. Please go ahead.
Sean Lee: Good afternoon, Christian, Jeff, and thank you for taking my question.
Good afternoon, Chris and Jeff and thank you for taking my question.
Sean Lee: It's very good to see that the CDMO project is moving forward. I was wondering if you could provide some more details regarding how you did.
Oh I see.
See that this will be a more project gets moving forward I was wondering if you could provide some more details regarding the.
How you would take this project.
Speaker Change: So, first of all, what exactly are the know-hows and such that BoilerLife is providing to you?
So first of all what is.
What exactly are the no housing in such that Voya life is providing to you.
Speaker Change: Thanks, Sean. Very nice talking to you again.
Thanks, Sean a very nice talking to you again so.
Speaker Change: The cell manufacturer requires an accumulative knowledge, which includes some of the knowledge that the company has, and also some of the licensing technology from BoilerLife, which includes, but not limited to, the enzymatic combination, cocktail, process of a tissue, and the potential application in shipping logistics.
The cell manufacturer requires a accumulative that knowledge and which including some of the knowledge that the company has and also some of the licensing technology from Voya life, which including but not limited to the enzymatic combined.
Nation cocktail processed solved by pits U and a potential application and shipping logistics. So so I think we are in a very good position means that we not only have the capacity to provide the service, but also to provide pot pie.
Speaker Change: So I think we are in a very good position that we not only have the capacity to provide this service, but also to provide proprietary service that put us ahead of our competitors.
Terrorists service side that are put us ahead of our competitors.
Speaker Change: Thanks, Lassie. Then, in terms of...
Uh huh.
And then in terms of.
Speaker Change: the location and you're set on Sacramento, so what made you decide there and what is the area that the CDMO service you expect to serve, is it just the U.S.?
Location than you said Paul in Sacramento. So what made you decide there and what is the area that most of this and we expect to start up is it just the U S.
Speaker Change: So the current location, which is, by the way, 35,000, next to our existing operation.
So that.
The location the current location, yes, Oh, yeah, which is by the way at 35000 are next to our existing operation, we choose our location carefully because that by being close to our existing AR facility that allows lots of obscene.
Speaker Change: We choose our location carefully because by being close to our existing facility, that allows lots of synergistic effects to take place.
They are synergistic effect to take price, we can leverage our existing staff, which including Cory T regulatory and also allows us to build out our future talent pool. Since we are in Sacramento and that also that the price where you see David.
Speaker Change: we can leverage our existing staff, which including quality, regulatory, and also allows us to build out a future talent pool since we are in Sacramento and also the place where UC Davis locates and there are several major universities in town.
Okay and there are several major university in Com.
Speaker Change: So with location, certainly we are not just serving, servicing California, we are servicing the entire U.S. and actually we are servicing globally because currently one third of the clinical trials in cell gene therapy are from U.S., U.S. developers and two thirds are from overseas.
So with a location certainly we are not yet serving servicing California, we are servicing the entire U S and actually we are servicing globally because the current K one Stuart up the clinical trials in Celgene therapy are from you.
Yes, you asked about a purse and that true served off from overseas and many of those oversee a biotech.
Speaker Change: And many of those oversee biotech companies who are developing cell gene therapies, if they intend to file.
Company wide developing celgene therapies, yes, they intend to file.
Speaker Change: R&D in the U.S., they have to have the cells manufactured locally according to U.S. regulation. And one of the major clients, which we already seen coming, are from overseas, overseas developers trying to enter the U.S.
R&D in the yes, they have two men have the south manufactured locally.
Eating according to U S regulation and are one of the major clients, which we already seen commie are from overseas oversee our developers trying to enter the U S market.
Speaker Change: I see. Thanks for that. And my final question is, the 12 cleanrooms that are in the facility, what kind of throughput does that give you once you have it up and running, and do you need to hire a lot of additional staff in the second half of the year to get this running?
I see thanks.
Uh huh.
Our final question is.
Tall clean rooms that are existing facilities, what kind of throughput does that give you. Once you have it up and running and do you need to hire a lot of additional stops in the second half of the year.
To get this money.
Speaker Change: Yeah, so to give you a perspective, 12 GMP unit, historically, if it's, for example, used to manufacture car key therapies with previous technology, pervading technology, will roughly give you a throughput of one dose per unit per day.
Yeah, so to give you a perspective.
12, GMP unit historical rate, yes. It's for example used to manufacture car T therapies with previous technology, and providing technology well roughly gave you a throughput.
One dose per unit per day.
Speaker Change: So, but that's not what we are doing here. We, luckily, we have the Kachi Express, which is a proprietary manufacturing platform that will quadruple the throughput of that. So, all in all, with 12 GMP units here, we are talking about roughly 10,000.
So, but that's not what we are doing here, we Luckily we have the Kashi Express, which is a proprietary manufacturing path full software core drip poll the throughput of that so all in all with 12 <unk>.
Here, we are talking about roughly 10010.
Speaker Change: clinical dose per year, which is a quite significant amount.
Clinical dose per year at Kendall, which is a quite significant.
The amount.
Speaker Change: That was very helpful and for the second part of the question, do you expect a major staff expansion in the second half of this year?
That was very helpful.
Part of the question do you expect a major topic, especially in the second half of this year then.
Speaker Change: Sorry, can you repeat that?
Sorry, sorry, sorry can you repeat that Oh do you expect the major.
Hootman drive towards in the Middle and later half of this year.
Speaker Change: Oh, yes, yes. We have a very excellent talent pool with the company, who are very experienced in regulatory, in quality, in FDA compliance. With the new CDMO service, we are taking, we are taking additional staff, we are recruiting additional staff that will build up
Oh, yes, yes, we have a very excellent talent pool with the company, we have who are very experienced and regulatory inquiry key FDA comprised with the new C. D and most service we are taking we are taking.
Those staff, we are recruiting additional staff are that well do that be without those those C. D and most services. So yes. The answer is short answer is yes, we are expanding our staff.
Speaker Change: build out those CDMO services.
Speaker Change: So yes, the answer, short answer is yes, we are expanding our staff.
Great. Thanks, again for taking my questions.
Alright, Thanks, Sean.
Speaker Change: This concludes our question and answer session. I would like to turn the call back over to Mr. Chris Hsu for any closing remarks. Please go ahead.
This concludes our question and answer session I would like to turn the call back over to Mr. Chris you for any closing remarks. Please go ahead.
Chris: Thank you, operator. We look forward to updating you on our progress during our first quarter 2022 call. And thank you to everyone who participated today and for your interest in thermogenesis coding.
Thank you operator, we look forward to updating you on our progress during our first quarter of 2022 Cole and thank you to everyone who participate today and for your interest in Soma Genesis Holdings.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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