Q3 2024 Cibus Inc Earnings Call
Good day and welcome to the CEVA third quarter 'twenty 'twenty four earnings conference call.
All participants will be on listen only mode.
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Speaker Change: I would now like to turn the conference over to Karl Bruce Chief Financial Officer. Please go ahead.
Karl Bruce: Thank you and good afternoon, I would like to thank you for taking time to join US for <unk> third quarter 2017 for financial results and business update conference call and webcast.
Karl Bruce: Presenting with me today is already baked our co founder and Chief Executive Officer and Chairman.
Karl Bruce: <unk> co founder President and Chief operating Officer.
Karl Bruce: Before we begin to cool I'd like to remind everyone that statements made on the call and webcast.
Karl Bruce: <unk> those regarding future financial results and future operational and.
And industry pulls back.
Forward looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.
Karl Bruce: Please refer to see this as the SEC filings for a list of associate associated risks.
Karl Bruce: This conference call is being webcast the webcast link.
Speaker Change: Along with our press release and corporate presentation are available on the Investor Relations section. She does not come to assist you in your analysis of our business.
Speaker Change: With that I would now like to turn the call over to Mr. Rich go ahead Lori.
Lori: Thanks, Carlo and good afternoon, everyone before I begin I'd like to recognize Carlos participation on today's call as our Chief Financial Officer Carlo has stepped in for Wade King following wage leave of absence.
Speaker Change: Although karla was new to the investment community. He is a skilled financial leader, who brings nearly 14 years of experience at the cheapest alone and decades in a variety of roles, including his role.
Speaker Change: As head of finance for the EMEA region, and CFO for Netherlands, and Belgium, It Syngenta as well as his work.
Speaker Change: And ordered during its early years of Deloitte.
Speaker Change: We are grateful for his ability to seamlessly step in for Wade and look forward to his contributions as a member of our executive team as we look ahead to the future as a commercial enterprise.
Speaker Change: With that I'd like to begin today's call with a high level update on our business activities this quarter and year to date.
Following my remarks, Peter will provide a more detail on our recent developments and how we are progressing within our crop platforms. Carla will then conclude with the financial discussion.
Speaker Change: As you reflect on the first nine months of 'twenty 'twenty four it's clear that this has been a transformative period for <unk> as we evolve from an R&D based business. So the first commercial gene editing company in the industry.
Speaker Change: This continued transformation from an R&D focused company and so the first commercial stage gene editing company was central to the streamlining of our organization to more efficiently focus our efforts on executing on our products launches with our herbicide resistant traits in rice and trade for pod chatter reduction in canola.
Speaker Change: While maintaining the ability to capitalize on our positive progress in developing our soybean platform and advancing our traits for spirits senior assistance and herbicide tolerance, our age to trade.
Speaker Change: Our evolution is.
Speaker Change: It's been achieved through a series of successful milestones associated with three cornerstones of our business.
Speaker Change: The first cornerstone is the completion of our treat machine process and industrial technology breathing platform that creates a time bound and predictable trait development process.
Speaker Change: The second cornerstone is operationalize them or scaling that trade machine platform to develop a multi trade pipeline with the goal of commercializing plant trades with multiple customers and with multiple crops.
Our third cornerstone is represented by our ongoing collaborations with major seed company customers with a goal to develop to license and commercialize these traits in their seats for trade fees or royalties.
Speaker Change: These three cornerstones are the foundation of this new technology business of agriculture for the development of productivity trades, where trades that make farming more productive economical and sustainable.
Speaker Change: Our first cornerstone is the trade machine process.
Speaker Change: There's a paradigm shift in the breathing of complex trades.
Speaker Change: For each of our platforms and canola.
Speaker Change: And rice and for each of our traits for these crops. We can now complete our edits in a customer's elite germplasm and regenerate is a germ plasm plant within just 12 months.
Speaker Change: This breakthrough in speed and predictability of technology based breeding is foundational to developing each trade and to accelerate the timetable to commercialization for each trade once developed.
Speaker Change: We believe that this timetable also accrued or soybean platform a predictable timetable for integrating our traits into our customers' germ plasm is a key part of the commercialization of a customer trade, which begins with the receipt of a customer's germ plasm.
Speaker Change: Evidence of our ability to use the trade machine process to edit and deliver it to the greenhouse in a time bound unpredictable fashion can be seen in our recent announcement of successful greenhouse data for <unk> T to treat and canola.
Speaker Change: Less than 12 months from edit to greenhouse results for this trade.
Speaker Change: We've also announced successful disease program with which we also expect greenhouse results within 12 months of the edit.
Speaker Change: We now have a pipeline of five different trades briefly trades, we have completed edits and have had either successful field trials or expected greenhouse results for each of those trades.
Speaker Change: Our ability to develop so many as trade within a compressed timeframe is a testament of the efficiency, we develop of the trade machine process.
Speaker Change: Our second cornerstone is operationalize and are scaling our trade machine process to develop a pipeline of trades.
Speaker Change: This is also a paradigm shift and breathing new trades.
Speaker Change: Our ability to industrialize the transfer trades.
Speaker Change: And the development of new trade shows the power of our trade machine process to shorten the development timeline commercialization timeline.
Speaker Change: And the cost of developing new trades.
Speaker Change: The third quarter was a great quarter to show our ability to scale. Our trade machine process is not going production system with multiple different crops and multiple trades.
Speaker Change: In rice, we now have multiple customers each having multiple lives. The initial as it happened within a 12 month framework and we expect the gene editing the H T. Three trade and multiple customer lines will all occur within this 12 month production target.
Speaker Change: Winter Oilseed rape.
Speaker Change: Multiple customer germ plasm, we completed the first field trials for our pod try to reduction trade.
Speaker Change: These trials were completed and the elite germplasm of several customers.
Speaker Change: You said this were completed in the greenhouse within a 12 month timeframe.
Speaker Change: In addition, we are.
Speaker Change: The first successful field trials with stack gene edited trade shows our H, one and H G III traits in rice.
Speaker Change: We expect to develop a family of stacked with herbicide tolerant traits for our customers and our rice.
Speaker Change: Ability to efficiently develop a family of stock trades as a key strength of the trade machine process.
Speaker Change: It is expected that our square 10 years resistant disease trades in canola will consist of multiple modes of action, which will be combined to form our square 10 years. This product is.
Speaker Change: As expected that we will offer multiple gene edited herbicide trades across the entire industry.
Speaker Change: We expect that these traits are scarred centers. This will have a similar scale opportunity with soybean we expect that our technology, we're able to obtain.
Speaker Change: Obtained the scale in a similar time bomb and predictable manner. This is what we mean by operationalized in the trade machine process.
Speaker Change: Our third cornerstone is our collaboration with major seed company customers with the goal to develop the license and commercialize these trades and their seats for trade fees were royalties.
Speaker Change: This is an important validation of our technology as a commercial platform.
Speaker Change: The development of gene editing as Heath Sampson the breeding programs for our seed company customers is a key part of the development of this new gene editing trade industry.
Speaker Change: This cornerstone is about the use of the treat machine process is the key engine for the commercialization of our trades across multiple crops multiple trades and multiple customer lines and efficient time bomb and predictable manner.
Speaker Change: This is the underlying framework and validation of our commercial process model for gene editing and agriculture.
Speaker Change: The speed of our trade machine process will enable materially faster commercialization timelines for need trades as well as updates for new trades once launched.
This momentum with existing customers with the goal of commercializing our trades and just sort of different customer germ plasm and different crops continued in the third quarter. We have now established collaborations with major seed companies in each of our core platforms.
Speaker Change: Chase, we have received the elite germplasm with each customer for a specific crop.
Speaker Change: These collaborations with seed companies are being made with a goal to develop license to commercialize a trade in their germ plasm trade for us.
Speaker Change: For soybean the goal right now is to develop the trade machine crop platform.
Speaker Change: Right.
Speaker Change: Our collaborations are made with the goal of developing a herbicide resistant trade in nerd germ plasm for Coors location.
Speaker Change: In the U S. We also signed an important agreement with all bought Archie D. C to continue our collaboration for supplying close them herbicide supports the expected launch of our custom tolerant.
Speaker Change: Grace trade, our H T three trade to our U S rice seed customers.
Speaker Change: Utilizing all baas red herbicide registration and crop protection expertise.
Speaker Change: This partnership is a key part of the ongoing commercialization of herbicide tolerant traits as an economic partnership between the seed company that chemical company and the trade company.
Speaker Change: Our ongoing field trials for our pod charter reduction fragrance color and where royal suite of rates.
Customer germplasm were also key elements of the commercialization of our pods chatter trade with seed company customers.
Speaker Change: Soybean our initial platform is being developed with G. M. Germ Plasm. This was established with a goal to develop a platform for the development and commercialization of selected trade since soybeans like our agency to trade and our trade prescribed tenure.
Speaker Change: Yeah, I'm going to work with our trade customers germ plasm as part of their commercialization program as a model for how this new gene editing industry operates.
Speaker Change: As we enter the last quarter. This year, we're excited about the technological and commercial base. We have built to establish the first commercial trade business.
Speaker Change: They're each cornerstones of our model, we are differentiating and establishing ourselves as an important element within the season trade industry and was able to drive value for our seed customers and the grower community.
Speaker Change: Yes, Peter would like to provide some more background.
Speaker Change: On our commercial activities and technological updates Peter thanks.
Peter: Thank you Laurie and good afternoon, everyone.
Peter: The last quarter and the first nine months of this year have highlighted our strong advances in gene editing globally for important.
Peter: An important crops.
Peter: As already mentioned our service team is focused on our product launches, we are streamlining our processes as we leverage efficiencies and synergies for a semi automated type development process.
Peter: We are ending the year well positioned to achieve several important milestones.
Peter: Before I summarize our bachelor's I want to highlight the critical importance that latest ship in the agricultural gene editing industry.
Peter: Just this past week in Iowa at the World Food Prize keynote address by Dr don't view.
Peter: Food and agriculture organization of either not as nations director General he identified some of the immediate challenges, we face with rising food and security.
Peter: And he clearly advocated for how important gene editing will be to solving these challenges.
Speaker Change: To close out that doesn't mean.
Speaker Change: Gene editing technology accelerates the bleeding Carsten.
Speaker Change: Yeah.
Speaker Change: It's faster than traditional breeding methods. It includes resistant to pests diseases and environmental stresses. This includes tolerance to high temperatures droughts floods and salinity among others.
Speaker Change: Well, let's see but it is abundantly clear that there is a global movement and a call to action.
Speaker Change: Gene editing to be incorporated into seed company breeding programs.
Speaker Change: David has been developing the fundamentals of gene editing from the ground up so over two decades.
Speaker Change: We are well positioned to capture this moment as we continue our transition to a commercial stage gene editing company.
Speaker Change: As we explained in our last quarterly update this past year has seen an expansion of our rice seed company.
Speaker Change: Test them at Bay.
Speaker Change: Today I'd like to use our rock platform as a case study to demonstrate what's possible.
Speaker Change: With gene editing in agriculture in house, Dave is leading this effort.
Ross is one of the world's most important food crops.
Speaker Change: But historically it has not benefited from the best nonselective herbicide tolerance traits due to the limitations of conventional grading and GMO technologies.
Speaker Change: This is but one example, where our gene editing capabilities come into play.
Speaker Change: Our platform journey began with recognizing a critical need.
Speaker Change: Well I saw was globally and especially in Latin America, we're struggling with weight management and in some cases spend over a $120 to eye care on herbicides and their application.
Speaker Change: Without effective weight management solutions, some of the sacrificing yields and grain quality leading to reduced profits.
Speaker Change: To address this we leverage that type of machine process to develop our herbicide tolerance traits H, one and H T three which allowed rice plants to survive herbicide application and provide the potential to reduce weight management costs significantly.
With these developed sites. We then moved edited plants into field trials to demonstrate the effectiveness of that right.
Speaker Change: You can see striking photos on our website showing treated right field trials with elite genetics of Ross without gene edited traits thrive after herbicide application well the unedited crops are devastated.
Speaker Change: Importantly, it's a bomb is.
Speaker Change: These trials have also shown excellent control of waves that are impacting yields and quality.
Speaker Change: And as Rory said next it has named the first ever development of stacked a gene edited herbicide tolerant traits in rice.
Speaker Change: We observed positive field trial results certainly during the <unk>.
Speaker Change: Most of enhance weight management options for families.
Speaker Change: These impressive results have led to commercial agreements with all major rice seed companies in North and South America.
Speaker Change: We've received germplasm from each customer and then now incorporating outright into their elite germplasm.
Speaker Change: In addition, we signed an agreement to continue add color, but I assume it's all a L. L. C. A T D C company supplying placing them herbicide to support services. The expected launch of its close to them, what we call ice tea three sites in the U S. Marking an important milestone in the commercial development of Ace <unk> three.
Speaker Change: In the U S.
Speaker Change: We are working with our U S and Latin American customers to launch these types in 2027 or 2028.
Speaker Change: We see an opportunity to potentially access approximately 9 million seeded rice anchors, which we estimate represents a massive market opportunity of approximately $200 million in potential annual royalties.
Speaker Change: We are now also looking to expand into Asia.
Speaker Change: This is an enormous long term opportunity starting in 'twenty.
Speaker Change: But even without including China could generate additional annual royalties of approximately $150 million.
Speaker Change: This was a case study demonstrates why and how is <unk> is leading the gene editing and agriculture.
Speaker Change: We are addressing critical pharma day, using the outside machine process to develop try as quickly and cost effectively addressing problems. They convince somebody even GMO technologies co themselves.
Speaker Change: Our ability to stay at multiple sites is expected to provide comprehensive solutions for farmers, while our non GMO approach is gaining regulatory acceptance globally I think mark its previously close to older technologies like Penn State Bot technology.
Speaker Change: The fact that we're attracting agency companies as partners.
Speaker Change: Our technology and approach the success, we're seeing in Ross highlights the commercial potential of that type.
Speaker Change: Development process across multiple crops we're.
Speaker Change: We're not just developing individual types, but pioneering a new paradigm in agricultural innovation.
Speaker Change: Now moving to canola and winter Oilseed rape lately as always had already highlighted we have made significant strides in both developed and advanced sites.
Speaker Change: As I mentioned.
Speaker Change: She had a reduction to you saw we've completed initial successful field trials for winter oilseed rape and the U K.
Speaker Change: And most specifically we have already completed planting of our expanded next set of European field trials.
Speaker Change: With results expected in the fall of 2025.
Speaker Change: We also continue to work closely with our North American customers for.
Speaker Change: For our initial commercial launch of <unk> in 'twenty 'twenty six.
Speaker Change: Work includes confirming K specifications for pizza and the other agronomic rotate characteristics.
Speaker Change: Our seed company customers for hybrid seed launch.
Speaker Change: While we are streamlining to focus our herbicide tolerance and Ross L. P. S thoughts right now soybean platform, we are maintaining our ability to continue progress in other areas.
Speaker Change: This includes ongoing progression of advanced trace which have started in canola, including initial editing greenhouse results in field trials.
Speaker Change: Well H two H T to try we confirm second generation edits and initial data showing similar with improved herbicide tolerance as compared to about first generation H T shirt.
Speaker Change: This advance traits potential multi crop applicability means that ice tea two could potentially be the first gene editing right to achieve 100 million acres of usually use representing one of our largest opportunities as we aim to.
Speaker Change: Royalties across multiple crops for the same site.
Speaker Change: In addition to I speak to and Canola, we have made substantial progress with house clearer to me a resistance right.
Speaker Change: Saving multiple important milestones yet to date, we have now done and it's in three modes of action.
Speaker Change: Let me take a moment to provide context of wide multiple modes of action that critical food crops to have disease resistance diseases like clarity yet also known as white mold can evolve quickly.
Speaker Change: And so the tenure has complex launch cycles, so providing crops with multiple ways to defend themselves against disease.
Speaker Change: There's the defenses that we call modes of action is critical to address the evolving disease and environments.
Speaker Change: The best resistance known as durable as systems, which is achieved using multiple modes of action. So I have to say it was a gene editing strategy has provided an opportunity to provide this durable was there still some multiple cooks.
Speaker Change: While our progress with our advanced strikes and can always exciting on it's on the advancements we have made inside like spirits senior resistance in the IC to align crucial groundwork for expansion into other crops, including specifically al and anticipated development of our soybean platform.
Speaker Change: Advanced platform one of the most challenging endeavour plot violet.
Speaker Change: It is expected to be operational by the end of 'twenty principle.
Speaker Change: We have already improved the editing efficiency.
Speaker Change: Soybean sales.
Anticipated completing additional editing and achieving regeneration capabilities within this timeframe, representing a key inflection point that will enable us to enter what we believe is the soybean market.
Speaker Change: Opportunity over 200 million adjustable items.
Speaker Change: The market size the soybean platform.
Speaker Change: As I said, that's one of the foundations for our sustainable ingredients business, where we continue to pursue a partner funded collaborations.
Speaker Change: These achievements across our cross platform and site pipeline showcase our ability to develop complex multi crop traits addressing significant global agricultural challenges.
Speaker Change: We're not just meeting our milestones we are pioneering a more sustainable and productive future for global agriculture.
Speaker Change: And with that I'll hand over to Colin for a financial update pallet.
Colin: Thank you Peter.
Colin: Looking at our financials for the third quarter.
Speaker Change: Cash and cash equivalents were $28 8 million as of September 32024.
Speaker Change: Taking into account the impact of cost saving initiatives once fully implemented which we estimate will reduce our monthly cash usage by approximately 20%.
Speaker Change: She was expected that existing cash and cash equivalents will fund planned operating expenses and capital expenditure requirements through the first quarter of 2025.
Speaker Change: Moving to our income statement.
Speaker Change: R&D expense was 13 million for the third quarter of 2024 compared to $70 5 million in the year ago period. The decrease of four 5 million was primarily due to lower noncash stock compensation expense and the strategic realignment and reduction in force and mountain view into.
Speaker Change: Fourth quarter of 2023.
Speaker Change: With deliberate decreases in personnel costs and supplies.
Speaker Change: SG&A expense was $7 7 million for the third quarter of 2024 compared to $8 8 million in the year ago period, a decrease of $1 1 million was primarily due to lower noncash stock compensation expense.
Speaker Change: Non cash items.
Speaker Change: $1 2 million for the third quarter of 2024 compared to 9 million last year.
Speaker Change: Decrease was primarily related to the fair value adjustment of the liability classified common warrants in the third quarter.
Speaker Change: Net loss was $201 5 million for the third.
Speaker Change: Quarter of 2024 compared to net loss of $34 5 million in the year ago period.
Speaker Change: The increase in net loss was due to the impairment of goodwill, resulting from our Fayetteville. Your assessment based on the decline of the stock price performed in the third quarter of 2024.
Speaker Change: Net loss, excluding goodwill was $20 million for the third quarter of 2017.
Speaker Change: Four compared to a net loss of 34 5 million in the year ago period, representing an improvement of $14 5 million year over year.
Speaker Change: For additional details about our financials for the third quarter of 'twenty 'twenty four please refer to our press release findings videos and see.
Speaker Change: That concludes our financial discussion, we will read back to you for your closing remarks.
Speaker Change: Thanks Carlo Peter for those updates as we've discussed the third quarter has been pivotal for <unk> a number of ways.
Speaker Change: The strides we're making in our rice combined with the advancements in our pipeline, particularly in canola and the groundwork were laying for soybeans really showcase the breadth and depth of our capabilities. We're not just developing individual trades. We're building a comprehensive trade development platform and its potential to transform multiple aspects.
Agriculture.
So thanks, so much for your attention and interest we're looking forward to updating you again next quarter as we continue to hit our milestones and advance our mission. This concludes our remarks, operator could you open the call up for questions.
Speaker Change: Absolutely.
We will now begin the question and answer session.
Speaker Change: If you'd like to ask a question. Please press Star then one on your telephone keypad.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Your question. Please press Star then two.
Speaker Change: Today's first question comes from Laurence Alexander of Jefferies. Please go ahead.
Laurence Alexander: Good afternoon can you maybe just to start can you just do a walk around the.
Laurence Alexander: Hey, legislative or or policy support for gene editing.
What's happened in Europe, you know kind of a discussion around right you know what the degree you know kind of clear yeah.
Laurence Alexander: It's the right policy in place in China do you think you need to be changed and just give a quick layer for land.
Speaker Change: Thanks, I totally appreciate that C b.
Speaker Change: And then in the Americas were pretty well set in the major countries, we're launching it in Europe.
Speaker Change: The legislation passed but they haven't been able to get something called a tripartite agreement and and the expectations are that presence every quarter and they're going to have a.
Speaker Change: Our new president and from Poland in January at all all talk is that the new President is ready to move on this for a hungry was present. This year. So we're seeing very confident Europe's going to move in in Asia, Peter do you want.
Speaker Change: It changes all the time, but I think China is allowing in some form Peter.
Peter: Yeah, let me add a little bit to that Laurence. Thank so much for the question you know the regulatory frameworks around the world are harmonizing Theres no doubt is just to confirm with what he said about the Americas, both North and South America are harmonizing a lot of the regulatory policies are.
Peter: It is happening in Asia, as well, Oh, where we're continuing to see positive movement in China are.
And gene editing is seen as indistinguishable from what it cuz in traditional trading programs.
Peter: Which is really important and I think the other side of it that really also mentioned just to confirm that Europe. Yeah. Early next year, we see a change in the EU Council presidency and from all accounts, that's going to be a very positive movement in that process and legislation.
Peter: Completion in Europe, which is exciting for all of us.
Peter: And then the only add to that is that for rice, which is our first big launch all the countries. We're launching in right away or are all approved for us.
Peter: And we're pretty excited about that.
Speaker Change: Great and then can you just remind on a timeline for kind of when you should be seeing kind of rice commercial revenues.
Speaker Change: All flow through the P&L and maybe just I guess rice soya would be the two I'm. Most curious about what you know today, but also to what extent the gene editing platform is becoming something where partners might give you see to put their modifications into cid rather than your own trades.
Speaker Change: And when would that start to show up as a revenue opportunity.
Speaker Change: Oh, that's great and it's working on two points I'll go to Peter Peter Rice.
Peter Rice: Just put a new deck on the website, which gives you the expected launch dates for each of our trades and unexpected market. So that's how we decided this quarter to make it public and rice.
Peter Rice: The deal we did with.
Speaker Change: And so that means that what we said in our talk was that two of our traits in soybean and amazing that it's they're going to the greenhouse and we fully expect to have the results from that as it within 12 months of the others, which is pretty cool that's helpful. Peter.
Speaker Change: The way, we do it through a single cell methods and get it back to the customer quickly really changes the paradigm with Wayne Youre doing those field work together and validate and get the lungs, hopefully that's I've done a little bit broader but hopefully that's helped to answer that question.
Speaker Change: Maybe just if I can just ask one last one then is just to what extent if you look at the total field trial validation.
Speaker Change: Licensing cost that a crop would entail to somebody from development to commercial pay out to the farmer.
Speaker Change: You know it sounds as if there's you could you give a sense for roughly how much that cost of being shouldered by your partners.
Speaker Change: Or is it like a 50 50 places its 70 30 or are they putting it all on you because you still have to prove yourselves could you just give a sense for like how the total cost party slash.
or like how the total cost pie is being split.
Speaker Change: We've been pretty open that that for the first edits that we've been doing it for their customers and then the follow on and Theyre all kind of the whole point of this is you might have five or six lines in rice you want done in soybeans. They have so many different areas and then it'll they'll pay for each other at that point and so we put it in there and prove we can do it and everybody is expecting.
Speaker Change: We've been pretty open that that for the first edits that we've been doing it for the customers and the follow-on edits you know, they're all going to
Speaker Change: The whole point of this is, you may have five or six lines of rice you want done, or soybean, they have so many different areas, and they'll pay for each other at that point. And so we put it in there and prove we can do it, and everybody's expecting, and all of our discussions have been, to have it be a profitable business where we're changing our time and cost to be able to get this trade in their crops.
Speaker Change: All of our discussions have been to have it be a profitable business, where we're changing their time and cost to be able to get this trade it in their crops.
Speaker Change: That's helpful.
Speaker Change: So that's that's the coal but are they doing that now or is that the goal.
They're helpful.
Speaker Change: So that's the goal, but are they doing that now or is that the goal?
Speaker Change: They're doing it there then they're not talking about right now we're in right. So these are the first ones in rice, the rest will be the good experiments with that Sunrise.
Speaker Change: they're doing it they're not doing it now right now we're in rice so these are the first ones in rice so rice will be the good experiments with that so in rice by 2026 we should see it flip to being a profitable cost-sharing business
Speaker Change: By 2026, we should see it flipped to being a profitable car sharing business.
Speaker Change: What's the right way to think about it.
Speaker Change: Great way to think about it and it just means that the other thing part of the business will be will pay for itself and that's not doesn't come from the royalties you got from the trade itself, you're totally right our expectation as deep as it being part of this business will be a for profit enterprise and allow you to really.
It's the right way to think about it.
Speaker Change: Great way to think about it, and it just means that the editing part of the business will pay for itself, and that doesn't count for the royalties you get for the trade itself. You're totally right. Our expectation is the editing part of this business will be a for-profit enterprise and allow you to really...
Speaker Change: Well, even do things earlier on right.
Speaker Change: We've got them, so well down that used to be able to really.
Speaker Change: even do things earlier on, right? We've gotten it so well down that you should be able to really, you know, we'd like for people to think of us as an extension of their operations and to be able to speed up and make their things more efficient from cost and time.
Speaker Change: Have you heard of things, we'd like for people to think of US as an extension of their operations and to be able to speed up and make things more efficient from cost out in time.
Speaker Change: Got it okay, great. Thank you.
Speaker Change: Thank you.
Got it. Okay, great. Thank you.
Speaker Change: And our next question today comes from Austin Moore Canaccord. Please go ahead.
Thank you.
Speaker Change: And our next question today comes from Austin Moore at Kinecord. Please go ahead.
Speaker Change: Hi, good evening.
Speaker Change: And Lori just my my first question here can you talk about the timelines and analytical process involved in evaluating the winter U K field trial results in a greenhouse results first quarantine or is this just kind of a third mode of action.
Speaker Change: Hi, good evening Peter and Rory. Just my first question here, can you talk about the timelines and analytical process involved in evaluating the winter UK field trial results and the greenhouse results for sclerotina resistance in the third mode of action?
That's an excellent question and it's clearly one for Peter Peter.
That's an excellent question. It's clearly one for Peter. Peter?
[laughter]. Thanks, Thanks, Roy Thanks Austin.
Peter Rice: Thanks. Thanks, Rory. Thanks, Austin. Look, you know, let me start with Claretinia, and then I'll go to the other trialing. But the Claretinia, you know, we are...
Peter Rice: Let me start with their tenure and then I'll go to yeah, the trialing, but there's clarity and yet.
Peter Rice: We are.
Peter Rice: Beyond excited about the the fact that we can bring different modes of action.
Peter Rice: beyond excited about the fact that we can bring different modes of action.
Peter Rice: This is as I mentioned in my remarks that you know durable resistance is all about having multiple modes of action. So I'll field testing has spent we spent quite a bit of time validating exactly how do we how do we evaluate the different edits in the different modes of.
You know, this is, as I mentioned in the remarks,
Peter Rice: that, you know, durable resistance is all about having multiple modes of action. So our field testing has spent, you know, we've spent quite a bit of time validating exactly how we evaluate the difference.
Peter Rice: So this past year.
and the different modes of action. So this past year,
Peter Rice: We're you know we're excited to see.
Peter Rice: Really good clarity of infection I think farmers were excited about that that's a three hour trialing that purposes that was great. So we can see the differentiation between the edited and non edited versions of all.
We're, you know, we're excited to see.
Peter Rice: So we can see the differentiation between the edited and non-edited.
Peter Rice: Motive action to we're also saying.
Peter Rice: mode of action 2. We're also seeing the mode of action 3 for us is going to be greenhouse results in the fourth quarter of this year. So that's where we are with the sclerotinia.
Peter Rice: The mode of action story for us is going to be greenhouse results in the fourth quarter of this year. So.
Peter Rice: That's where we are with the 17 yet.
Peter Rice: The when it comes to the work we're doing in the U K.
Peter Rice: When it comes to the work that we're doing in the UK,
Peter Rice: Again.
Peter Rice: We're working closely with that customer.
Again, we're working closely with our customer.
Peter Rice: And partners in in in Europe, and in the U K, we've done them. After the first season of trials and the peers are tests, you know had some really positive results, which was fantastic. So you know one of the things about the winter oilseed right because it was cold in Europe is as a quick turnaround so it's.
Peter Rice: and partners in Europe. And in the UK, we've done our first season of trials and the PSR tests had some really positive results, which was fantastic. So, one of the things about the winter oilseed rape, as it's called in Europe.
Peter Rice: In three or four weeks, we had to make some decisions and it was very easy when we saw our partners genetics with the edits b are performing at a very strong level of parts at a reduction that we were able to replant does and we'll have another school season of testing you.
Peter Rice: there's a quick turnaround. So within three or four weeks we had to make some decisions and it was very easy when we saw our partners genetics with the edits.
Peter Rice: be performing at a very strong level of pod shatter reduction that we were able to replant those and we'll have another full season of testing.
Speaker Change: You need to continue to have more testing to validate Detroit.
Peter Rice: You need to continue to have more testing to validate the traits and so customers can get to see it in their own genetics. It's an exciting moment for us.
Speaker Change: And so customers can get to see it in their own genetics, it's an exciting moment for us.
Speaker Change: That's helpful and just a follow up are the are there any updates on sustainable ingredients in fragrances in the timeline there.
Speaker Change: That's helpful. And just to follow up, are there any updates on sustainable ingredients and fragrances in the timeline there?
Speaker Change: I can try Peter you go is we're very encouraged.
Speaker Change: I can type it in. We're very encouraged. It's going to be extended in the next year, and we've made really good progress. Our expectation is that with the
Speaker Change: Send it into next year and we've made really good progress on our expectations is that that we would be.
Speaker Change: Finishing of the soybean platform that we'll start to see at <unk>.
Speaker Change: ...finishing of the Soybean platform that we'll start to see results that we can announce within a year and next year. So we're really excited about where it's going. We're doing a really good job on the edits required for these things and the work.
Speaker Change: Now we can announce within by year end next year. So that's why we're really excited about where it's going and doing a really good job on yeah, just required for these things and and and and the work.
Speaker Change: So it would be done so we can throw at you in soybeans.
Speaker Change: We need soybean done so we can show it to you in soybean.
Speaker Change: That's excellent all Patrick sitting over here.
Speaker Change: Okay.
Excellent. All passed. Thank you.
Thank you and our final question today comes from Matthew Benzene with Alliance Global Partners. Please go ahead.
Speaker Change: Thank you. And our final question today comes from Matthew Benzia with Alliance Global Partners. Please go ahead.
Speaker Change: Hey, guys. Thank you for taking my questions.
Speaker Change: Firstly I just wanted to ask about your 12 month germplasm to greenhouse and weather.
Matthew Benzia: Hey, guys. Thank you for taking my questions. Firstly, I just wanted to ask about your 12-month germplasm to greenhouse and whether...
Matthew Benzia: And the evidence for that coming in H teach you in canola, whether that confirmed your three to five year estimate.
For germplasm receipts of final product.
Speaker Change: And to that point, if you could speak a little bit to the benefits and drawbacks of I know you mentioned it briefly protoplasts regeneration as Demoed for industrial I think the gene editing process.
Speaker Change: Okay.
Speaker Change: Curt do you want to go.
Speaker Change: Yeah. Thanks, Thanks, Matt I I T.
Speaker Change: That's.
Speaker Change: Again, yeah.
Speaker Change: If you think back because the the last nine months and what we've achieved it is combined mind one of the real breakthroughs that we've had as a company we've talked about it I've tried machine in and beginning that operational.
Speaker Change:
Speaker Change: Some of the key technical breakthroughs do you think about a the huge improvements in editing efficiency, Oh that creates precision without production and and you know the what that means is that for customers.
Speaker Change: It gets the <unk> back in their hands quickly and so that's the speed to market. It also allows you to get multiple genetics back to different customers.
Speaker Change: So that efficiency being time bound.
Speaker Change: And predictable.
Speaker Change: Really as contrast to what I mentioned before about you know traditional breeding and GMO technologies.
Speaker Change: And so the ability to deliver that back to customers allows you to think through I know when you think that that time period of three to five years it really.
Speaker Change: Allows you.
Speaker Change: With the customer to get to those launches very quickly I know we've waited till it came back weed management H D. Two in North America by 2028.
Speaker Change: Yeah. That's that's fantastic when you think about the process, where we can start with customer genetics and get it to them and that sort of timeframe.
Speaker Change: And one of the things that Peter one of the things that makes it so exciting as I.
Speaker Change: The team didn't realize how accurate and precise and time bound they thought their work was going to be and so for many of these trade. So if you get it right and we're gonna show greenhouse results that can be within a year and so the time frame it sort of confirmed the three to five years within our reach and also gives the idea of how fast you can do especially if you're working with customers.
Speaker Change: That's why we're so excited about this.
Great. Thank you and then just a follow up in that same vein.
Speaker Change: Can you just compare and contrast, protoplasts regeneration mm two other forms and modes of regeneration that other competitors are using and how the trade machine differentiates itself from a process like what's going on at pair wise.
Speaker Change: So Peter as you guys have pulled this off to you yeah.
Peter Rice: Sorry, Matt I think you had that embedded in your first question and I apologize I didn't get to it.
Speaker Change: No no worries.
Speaker Change: The protoplasts system.
Speaker Change: You've heard thrill remarks, and then rather than a quarterly reporting about multiple edits and multiple genes in multiple crops and that's a lot of multiples [laughter], but it's.
Speaker Change: When you have a single cell the ability if you have a single cell message you can deliver you'll reagents to make it make the edits.
Speaker Change: It allows you a lot of flexibility to actually do these very complex tenets that we need for the trial.
Speaker Change: <unk> like disease resistance.
Speaker Change: And so it really does differentiate because it's one that you can do that.
Speaker Change: The complexity within a single cell and al what's been great about the work we've done here and say this is the efficiency of once you do that of getting back to a fully regenerated plant and a really quick timeframe.
Speaker Change:
We've applied that to canola.
Speaker Change: With lots of different right now and it was also done it in so many different genetics and so now we're now transitioning that to Ross we've done it in Ross before were building the soybean platform, but it really differentiates it from what other people are doing by not going through a single sole method.
Matthew Benzia: And it's bad timelines are longer because of that.
Speaker Change: There's a differentiation is that they have to go through a segregation step genetically to get rid of some of the reagents that they've inserted into their genomes in their seats and we don't do that so not only is it faster and more efficient and you were able to do.
Matthew Benzia: More complex trials, the regulatory analysis of that and the framework around the world.
Matthew Benzia: We have a clearer path.
Matthew Benzia: Hopefully that's.
Matthew Benzia: And it's a good question Blake.
Matthew Benzia: Very helpful. Thank you Peter and then just finally is there going to be a company should we expect the company in the same vein at all about that we would expect to come in to establish their decided labeling for the Latin America region or is that not necessary with alcohol and at this point.
Matthew Benzia: Peter.
Matthew Benzia: When you go Peter.
Speaker Change: We Matt that's exactly right. We will have yeah, we've got a strong relationship with Oba.
Speaker Change: And the I'm sorry for their global company. So we can go forward with our other countries with Oba.
Speaker Change: First we agree with is with the U S. And then we have a.
Speaker Change: Agreements in place, where we know we can extend that.
Speaker Change: Perfect.
Speaker Change: Alright. Thank you guys. So Latin America is does not have the fed does not have the same EPA I think.
Speaker Change: [laughter].
Speaker Change: Hum.
Speaker Change: Thanks for those questions I appreciate it.
Speaker Change: Yeah.
Speaker Change: Thank you and this concludes our question and answer session I'd like to turn the conference back over to Mr. Riggs for closing remarks.
Speaker Change: I, thank everybody for listening as you can tell.
Speaker Change: We're really excited about where we've gotten to and we have a lot of milestones to get through this point and were hitting our milestones, it's pretty cool, but some of these things like the efficiency accuracy in time for summer. So I don't think we were able to what we're going to be able to quantify it as much as it is now so we think there's a very good quarter and really look for having even a bigger announcement was.
Speaker Change: Next quarter.
Speaker Change: Sure. Thanks.
Speaker Change: Thank you. This concludes today's conference call. We thank you all for attending today's presentation.
Speaker Change: Now disconnect your lines and have a wonderful evening.
Speaker Change: Yeah.
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Speaker Change: Yes.
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