ThermoGenesis Holdings Inc. Q1 2023 Earnings Call
Speaker 1: You
Speaker 2: Good day and welcome to the Thermogenesis Holdings conference call and webcast to review financial and operating results for the first quarter ended March 31, 2023.
Speaker 2: As a reminder, all participants will be in listen-only mode. There will be an opportunity to ask questions at the end of today's presentation.
Speaker 2: If you'd like to ask a question, please press star, then 1 on your phone. If you wish to withdraw your question, please press star, then 2.
Speaker 2: If you should need assistance during the conference call, please signal an operator by pressing star then zero. As a reminder, this conference call is being recorded. I'd now like to turn the conference over to our host, Paula Schwartz of RX Communications. Please go ahead.
Speaker 3: 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 statement.
Speaker 3: Additional information concerning factors that might cause actual results to differ materially from those in the forward-looking statement is contained in the company's periodic reports filed with the Securities and Exchange Commission.
Speaker 3: The information presented today is time sensitive and is accurate only as of the date of this call, May 15, 2023. If any portion of this call is being rebroadcast, retransmitted, or redistributed at a later date, Thermogenesis will not be reviewing or updating this material.
Speaker 3: Participating on today's call are Dr. Chris Hsu, Chief Executive Officer, and Jeff Cobble, Chief Financial Officer. I'd now like to turn the call over to Chris. Please go ahead, Chris.
Speaker 4: Thank you, Paula. And thank you to everyone for joining the call this afternoon.
Speaker 4: We appreciate you taking the time to listen in.
Speaker 4: During the first quarter, we are making progress towards executing our plans to transform from a medical device company to an integrated contract development and manufacturing organization, or CDMO, for the cell and gene therapy market.
Speaker 4: In March 2023, we closed a 3 million private placement, which will help support the planned launch of our CDMO business.
Speaker 4: The goal is to leverage our unique and proprietary automated and semi-automated cell processing technologies, including the COTSHE Xpress platform, to manufacture future cell gene therapies cheaper and more efficiently.
Speaker 4: To that end, we have made significant headway building out a 12-unit ready-start CGMP suite.
Speaker 4: at our 35,500 square foot facility in Sacramento.
Speaker 4: These Class VII clean rooms are designed to meet the highest scientific quality and regulatory requirements that would be ideal for the early stage companies and institutions developing next generation of cancer medicines such as Cauchy cell therapies.
Speaker 4: And to accelerate drug candidates into connect quicker and safer.
Speaker 4: Our goal is to establish solutions for customers in order to streamline the supply chain, increase manufacturing predictive predictability and manage overall risk.
Speaker 4: We have begun to market this turnkey solution to early stage life science selling therapy companies.
Speaker 4: who are looking to jump-starts their development efforts and scale up in the same facility. We expect the ReadyStop CGMP use switch to be available for these two customers in the second or third quarter of this year. As you may know, for over 35 years, so Modenesis has pioneered the development and manufacturing of a series of innovative automated technologies and products.
Speaker 4: specifically for the self-banking and self-serve industry. In fact, some of the audiences have been the leading provider of choice for automated self-processing and automated smart, quiet storage technologies for some of the world's most important public and private cell banks. Thank you.
Speaker 4: Our bioarchived smart, cloud storage systems has warehouse close to 90% of all US FDA BLA approved clinical grade co-vlogs units or CBUs and our AXP system has been used to process well over a mid-in sample from well over 100 institutes globally.
Speaker 4: In addition to our manufacturing know-how in salging therapy,
Speaker 4: the intellectual properties that we have a mass over the years are invadible.
Speaker 4: Driving our ship to a CDMO in a large part is the continued growth of the industry, focusing on the potential for personalized cell engine therapies.
Speaker 4: Since 2017, six autologous carchisell therapies have been approved by the FDA.
Speaker 4: Carti-South peace were approved as the last line of defense for those patients who did not respond to other therapeutic options.
Speaker 4: More recently, there have been several car key trials that have shown that such therapies can outperform second line or standard of care options, indicating that the applications for car keys to a therapy may expand it in the future.
Speaker 4: Recent reports show that the industry anticipate additional FDA approvals with as many as 10 to 20 new cell therapies potentially being approved for commercialization and rate.
Speaker 4: starting in 2025.
Speaker 4: With more cell therapies such as CAR-T cell therapies received FDA approval, the demand for manufacturing of these life-saving therapy continues to grow.
Speaker 4: As we speak, there are more than 350 US companies alone working in the South-South South-South Vietnam and more than 1,000 pipeline assets in clinical development globally, targeting a range of blood-installed tumors.
Speaker 4: While a majority of these innovative research were driven by small, community-ensized biotech companies and medical research centers.
Speaker 4: The demand for Serpati manufacturer
Speaker 4: Sir Pachi Manufacturer, continue to grow.
Speaker 4: Each of our well-encompassing registered CGMP suites will provide a flexible option.
Speaker 4: enabling small to medium-sized companies to achieve their anticipated milestone faster and more efficiently.
Speaker 4: Additionally, our team's strong expertise in regulatory affairs and product commercialization will help accelerate the development of our customers' products, allowing them to focus on their size.
Speaker 4: While some of the agencies will manage the regulatory and quality compliance associated with running a GMP facility.
Speaker 4: With Thermogenesis Strong Intellectual Property Position, cutting-edge technology and manufacturing service expertise,
Speaker 4: Our new facility will have the ability to address the increased demand for salient therapy manufacturer capabilities.
Speaker 4: We will remain focused on launching the CDMO service and ready-star CGMP unit to customers in the Selgin Serapy field in the next few months. We will continue to work with the CDMO service and ready-star CGMP unit to customers in the next few months.
Speaker 4: And with that, let me turn the call over to Jeff to share the key financial results for the first quarter.
Speaker 4: over to Jeff to share the key financial results for the first quarter.
Speaker 5: Thank you, Chris. A full discussion of our financial is available in our 10Q. So I will just take a moment to review key financials for the quarter ended March 31, 2023.
Speaker 5: Net revenues for the quarter were in line with the first quarter of last year at 2.6 million.
Speaker 5: Product mix was slightly different with higher domestic AXP disposable sales and bio-archive service revenue in the current year.
Speaker 5: Gross profit for the quarter was 1.1 million to 43% of net revenue. It created 900,000 or 35% of net revenues for the first quarter of 2022.
Speaker 5: The increase was driven by lower inventory reserves in the current year.
Speaker 5: Selling general and administrative expenses were $1.8 million for this quarter as compared to $1.7 million for the first quarter last year.
Speaker 5: The increase was driven by Rent and Operating Accountants for our new CDMHO facility offset by lower personnel expenses.
Speaker 5: Interest expense was $3.9 million for the quarter, driven by non-cash amortization expenses related to the company's convertible notes.
Speaker 5: So the Corps of the Company reported a comprehensive loss of 5 million or 404 per share based on approximately 1.3 million weighted average shares outstanding.
Speaker 5: The company ended the quarter with cash and cash equivalents of 5.9 million compared with cash and cash equivalents of 4.2 million at December 31, 2022. This concludes our prepared remarks. So now we'd like to open the call to your questions. Operator. Thank you. We will now begin the question and answer session.
Speaker 2: Task a question, you may press star then one on your telephone keypad. If you're using a speaker phone, please pick up your hand tip before pressing the keys.
Speaker 2: Draw your question, please press star then two. At this time, we'll pause momentarily to assemble a roster.
Speaker 2: Our first question comes from Shawn Lee from HC Wainwright. Please go ahead.
Speaker 6: Good afternoon, guys, and thanks for taking my question. I was wondering if you could buy some more color on the CDMO facility. Now that it's almost up and ready, how much you are pricing compared to similar facilities in the online web schools?
Speaker 4: Thanks for the question.
Speaker 4: Currently, the demand for CDMO facilities is pretty high in the entire United States.
Speaker 4: Many of the facilities require up to 12 or even more, 12 to 18 months waiting period.
Speaker 4: So that the average average
Speaker 4: pricing for the industry also is quite significant.
Speaker 4: We are priced ourselves comparable to what's offered in industry with some of the initial promotion, but I think what we offer is a missing capacity that the industry currently is lacking. And these procedures are...
Speaker 4: out this coming week, that tree this week, two science magazines. So I think even we were with a very comparable pricing to our competitors. It's really the missing capacities that we offer.
Speaker 4: So that's in high demand. That's great to hear. In terms of capacity, then, how many doses are we talking about? Is all 12 of these rooms being used? We intend to use that through a mixture of developers.
Speaker 4: of JamFey Coretti clinic already sawing therapy.
Speaker 7: A year.
Speaker 6: That's good enough. My last question is, as you mentioned, I've seen some of you are marketing efforts already other ways. Well, I was wondering whether you've had some idea comments or questions coming from the pleasure customers on the facility or how to improve it.
Speaker 4: Actually, the feedback curve very positive in a way that in our facility, we have the mixture of high-end, ready-stop CGMP suite.
Speaker 4: And also the common lab that develops can be used to develop the cell therapies.
Speaker 4: which is more of a generalized wetland.
Speaker 4: So having capacity of both in the same facility is really ideal for the entire industry, for many of the companies. We are actually, as we are aware of, probably the only one in the region or even in the nation that provides.
Speaker 2: This concludes our question and answer session. I would like to turn the conference back over to Dr. Chris Chiu for any closing remarks.
Speaker 2: question and answer session. I would like to turn the conference back over to Dr. Chris Chu for any closing remarks. Thank you, operator.
Speaker 4: We look forward to updating you our progress during our second quarter, 2020-23 call. And thank you to everyone who participated today and for your interest in some of your lessons proceedings.
Speaker 4: our progress during our second quarter 2023 call. And thank you to everyone who participated today and for your interest in some of yournesses' holdings. Thank you.
Speaker 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Connect. Congratulations.
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