CollPlant Biotechnologies Ltd.

Q1 2023 Earnings Conference Call


spk03: Welcome to the Coal Plant Biotechnologies Investor Conference Call to discuss financial results for the first quarter of 2023 and corporate updates. I'd now like to turn the call over to your host, Dori Kurowski of LifeSci Advisors. Please go ahead.
spk01: Good morning. I would like to welcome everyone to Coal Plant Biotechnologies Financial Results Conference Call for the first quarter ending March 31st, 2023. and corporate business update. With us on the call today from Coal Plant are Yahil Tal, Chief Executive Officer, who will provide an overview of the company's programs and forthcoming updates, and Aron Rotem, Deputy CEO and Chief Financial Officer, who will provide a summary of Coal Plant's financial results for the first quarter ending March 31st, 2023. Before we get started, I would like to remind everyone that statements made on this conference call may include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in the risk factors section of Coal Plant's filings with the Securities and Exchange Commission. These filings can be found at or on Coal Plant's website at In addition, any forward-looking statements made on this call represent Coal Plant's views only as of today, May 24th, 2023, and should not be relied upon as representing the company's views as of any subsequent date. And Coal Plant Management specifically disclaims any obligation to update or revise any of these forward-looking statements. With that, let me turn the call over to Yehiel Tal, Chief Executive Officer of Coal Plant Biotechnologies. Please go ahead, sir.
spk02: Good morning, everyone. We are very pleased to have you join us today on Coal Plant Investor Conference call to discuss our first quarter 2023 financial results and corporate developments. Coal Plant is developing collagen technology and regenerative medicine products to improve and prolong lives. We are committed to becoming the leaders in regenerative medicine and supporting a more sustainable ecosystem that benefits all stakeholders, including patients, our shareholders, our employees, as well as providing innovation to the life science industry. At the heart of our business is our novel proprietary recombinant human collagen technology. Collagen is the building block for all human and mammalian tissues and serves as the primary scaffolding molecule in the body's connective tissues and organs. It is our goal to become a global leader in regenerative medicine by applying our non-animal derived recombinant human collagen or Rh collagen to novel medical anesthetics products. The hallmark of our technology, of course, is both its regenerative properties as well as that it is xeno-tissue-free. We are applying our technology to dermal filler product candidates for a long-term collaboration with our global pharmaceutical partner, AbbVie. The dermal filler candidates have the ability to shift the filler market since they would provide regenerative properties in addition to tissue filling. This program is our top focus, and it continues to move forward according to plan. CorePlan has the potential to receive additional milestones and option payments from AbbVie related to this program, as well as royalties on the dermal filler cells once this product candidate obtains approval. AbbVie continues to advance the filler program, and as stated previously, CorePlan expects that the first milestone could be achieved in 2023. Additionally, we continue to advance the development of state-of-the-art photocurable dermal and soft tissue filler. Our goal is to create an innovative filler product with three capabilities, lifting capacity, regeneration of new tissue, and contouring capabilities. As we are making these improvements to the filler products that exist today, we refer to this as a third generation filler. We believe that this filler has the potential to be highly competitive by providing both refined and natural looking aesthetic results, as well as uniquely regenerative long-term benefits. Furthermore, this technology could also be augmented to include facial and body contouring applications. Cortlandt has granted AbbVie the right of first negotiation to obtain a worldwide exclusive license to these product candidates. Now let's turn toward the regenerative breast implant program. At the beginning of this year, we announced positive results from the preclinical study evaluating our regenerative implants in a large animal model. We are very encouraged by these results, which demonstrated progressive stages of tissue regeneration after three months, as highlighted by the formation of maturing connective tissue and neovascular networks within the implants with no adverse events reported. This study forms the basis for our subsequent trial in the second large animal model, evaluating larger implants that we plan to initiate in the second half of this year. We are currently preparing the infrastructure to support this trial. No regenerative breast implant currently exists in the market, and these implants would be the first of their kind also having beneficial regenerative properties. Importantly, just recently in April, we announced a joint development and commercialization agreement with Stratasys a world leader in additive manufacturing and a leader in 3D printing technology after pioneering this technology decades ago. With Stratasys, we are collaborating on the development of a solution to biofabricate human tissues and organs. This collaboration combines the Stratasys DLP 3D printer that is utilizing a unique programmable photopolymerization P3 technology, together with Copeland state-of-the-art Rh-collagen-based bio-inks and 3D bioprinting capabilities. The first of our collaborative projects will focus on the development of an industrial scale solution for Copeland's regenerative breast implants program. An effective solution for scale-up of these implants will be important to support clinical trials and commercialization. Here you can see an example of a breast implant that was printed with Stratasys DLP 3D printer utilizing its P3 technology in combination with ColdPlant's RH collagen-based inks. Under the agreement, both companies have also agreed to cross-promote each other's bioprinted products. We do have strategic collaborations for bioprinting with multiple parties, and as we have said in the past, Our strategy is to utilize different printing technologies to serve different indications, being so, for example, a product that would need to have use of multiple materials or for the printing of constructs with very small features, such as gut-on-a-chip or lung-on-a-chip tissue models. The bioprinting aspect of our business has applicability in multiple areas. Cold plant implants are designed to regenerate breast tissue without eliciting immune response, and therefore have the potential to become a revolutionary alternative to both aesthetic and reconstructive procedures, including post-mastectomy for cancer patients. According to the US Food and Drug Administration, approximately 350,000 Americans have reported adverse events involving breast implants between 2009 and 2019. Reports range from autoimmune symptoms to breast implant-associated anaplastic loud cell lymphoma, or BIA-ALCL. The additional safety and efficacy data that we will generate from this study will be used for the optimization of the regenerative implant and are important in support for future regulatory submissions and clinical studies. We look forward to reporting these results from the study next year. Shifting to our Got on a Chip program, this is an area where we have the opportunity to disrupt the options that have traditionally existed in life sciences. Here, we are developing a diagnostic tool for use in personalized medicine And we expect that this approach could be groundbreaking improvement over the existing use of animal models for drug development. In November last year, we signed a collaboration agreement with Tel Aviv University and Chiba Medical Center for our Got on the Chip program. I should add that we are fortunate that the university and the medical centers are closed to us only 10 miles away, so we get to collaborate with our partners face-to-face quite frequently, enabling strong relationships. Our agreement with both institutions is to co-develop a bioprinted human intestine model for drug discovery and personalized treatment of ulcerative colitis. The 3D bioprinted model is designed to emulate the human intestine tissue in order to allow medical professionals to identify drug targets and personalized therapeutic responses that can lead to improved patient outcomes. Should a GAT on a chip receive approval, Cortland has exclusive rights to commercialize the product. Now, let me turn to our commercial portfolio of BioInks. This platform was established in 2021 with the launch of CoLink 3D50. Following this, We launched CoLink 3D90, which offers increased mechanical properties, and CoLink 3D50L, our first bioink available in powder form to provide enhanced operational flexibility. The entire platform allows our biopharma and academia customers to streamline their process of new product development by utilizing an animal-free alternative that delivers improved biofunctionality, safety, and reproducibility. ColdPlant remains engaged in partnering discussions with several additional industry leaders interested in ColdPlant technology and expertise in 3D bioprinting to develop therapeutics and medical applications. We have also developed a proprietary aseptic process to mass produce sterile Rh collagen. The sterile collagens that we are now producing will be utilized in our pipeline product as well as by our partners. Furthermore, it can serve as an ideal substrate for stem cells, induced pluripotent stem cells, and all kinds of primary human cells since our collagen will not elicit immune response and will accelerate cell proliferation. Finally, this collagen will also address production processes where collagen as a major constituent should be stirred. Now, I will turn the call over to our Deputy CEO and Chief Financial Officer, Eran Rotem, to provide a recap of the financial results.
spk05: Eran. Thank you, Ifeir. Good morning, everyone. I will now review our financial results for the three-month period ending March 31, 2023. This quarter, we saw a significant increase in revenues versus last year. For the first quarter ended March 31, 2023, GAAP revenues increased by $367,000 to $433,000 compared to $66,000 in the first quarter of 2022. Revenues from this quarter included income from sales of Colpland's BioInk and RH Collagen, and the increase of more than 600% resulted mainly from an increase in sales of our RH Collagen to Colpland's business partner. As we said previously, according to the agreement with AbbVie, Colpland has the potential to receive additional milestone payments based on product development milestones reached. And Corbin expects that the first of these milestones could be achieved in 2023. GAP cost of revenues for Q1 2023 was $325,000, compared to $31,000 in the third quarter of 2022. Cost of revenue includes mainly the cost of the company's RH collagen-based products. and royalties to the Israel Innovation Authority for the company's sales. GAAP gross profit for Q1 2023 was $108,000, an increase of $73,000 compared to gross profit of $35,000 in Q1 2022. The company kept approximately the same GAAP operating expenses level as of last year during this quarter. operating expenses in the first quarter of 2023 was $3.5 million, compared to $3.8 million for the first quarter of 2022. On a non-GAAP basis, the operating expenses for the first quarter of 2023 were $3.1 million, a 9% reduction compared to $3.4 million for the first quarter of 2022. Non-GAAP measures exclude certain non-cash expenses, Gap financial expenses net for the first quarter of 2023 totaled $196,000 compared to $92,000 in the first quarter of 2022. The increase in financial expenses net is mainly attributed to an increase in exchange rate expenses from cash and cash equivalents and a decrease in income interest received from companies' short-term cash deposits compared to the first quarter of 2022. Gap net loss for the first quarter of 2023 was $3.7 million, or $0.33 basic loss per share, compared to a net loss of $3.9 million, or $0.36 basic loss per share, for the first quarter of 2022. Non-gap net loss for the first quarter of 2023 was $3.3 million or $0.29 basic loss per share, compared to $3.5 million loss or $0.32 basic loss per share for the first quarter of 2022. We have maintained a strong cash position and have carefully contained co-op operating expenses during Q1. Cash, cash equivalents, and short-term deposits as of March 31, 2023 were $26.5 million. Cash used in operation activities during the first quarter of 2023 was $3.4 million compared to $3.2 million during the first quarter of 2022. Cash provided by financing activities during the first quarter of 2023 was $803,000, compared to $1.4 million provided by financing activities during the first quarter of 2022. The decrease is mainly attributed to more proceeds from the exercise of warrants into shares that occurred last year during the same period. This now concludes the financial summary. Operator, I believe that we can now open the call for questions.
spk03: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Ben Hainer with Alliance Global Partners. Please proceed with your question.
spk07: Good day, gentlemen. Thanks for taking the questions. First off, for me, just wanted to touch on the Stratasys Agreement. I'm not entirely sure on how or whether the Stratasys cringed implants are going to be the ones used in the second half, or second large animal studies, second half of this year. Can you provide some clarification on that?
spk02: Thank you, Ben, for the question. So, let me elaborate on the Stratasys collaboration further. So with Stratasys, we are collaborating in development of a solution to biofabricate human tissues and organs. And this collaboration will be based on the Stratasys DLP 3D bioprinter that is utilizing unique programmable photopolymerization T3 technology. and together with the companies BioINC. The first of our collaborative projects will focus on the development of an industrial scale solution for cold plant regenerative breast implant program. An effective solution for scale up of these implants will be very important to support the clinical trials and the commercialization. We are now already in a stage where we are able to print the implants of different sizes, including clinical size implants with the Stratasys printer, and we are still optimizing the process, but the plan is to leverage this printer in the large implant studies that we will do in the second half of this year and basically frame the implants in the study with this printer.
spk07: Okay, great. So the optimization will be complete before that occurs. And then, remind me, could the second large animal study, could that be used for the registration study to submit to the FDA?
spk02: That's a good question. Actually, the sequence is the following. We are going to have two studies this year. Both will be used for, first of all, optimization of the formulation. This is one thing. The second thing is for the optimization of the structure of the implant and the biodegradation kinetics. So these two studies that we will conduct this year, which will not be a long-term study, studies, will serve for these purposes. And with these results, at the beginning of next year, we plan to go ahead and launch a pivotal study, which will be, according to the plan, the ones that we will use in the submission of the package to the regulatory authorities.
spk07: Okay, great. And then just if you could tell me how meaningful the cross-promotion portion of the agreement with Stratasys is. I mean, it seems to me that having a turnkey sort of offering from Stratasys to bring to their customers would be fairly important. I'm just curious on how you see that playing out.
spk02: Yeah, okay, so the cross-promotion is working in different ways. One way is basically that we will, for example, if we enter the collaboration with a third party, which will require us to develop a product, we will definitely prefer to do this development work and later on the commercialization with the Stratasys printer. This would be the first choice for us. And vice versa, if Stratasys will go to sell their printers to users in the market, either academia or commercial companies, then they will promote our biological inks. So this is the basic nature of the collaboration. And there might be also another situation where we will jointly co-develop a product for a third party collaborator.
spk07: Okay, great. That's helpful. And then when should we expect to hear more about the third generation photocurable soft tissue filler? My recollection was that you had submitted some data to AbbVie.
spk06: Just curious on that.
spk02: Yeah, so first of all, regarding AbbVie, basically The Dermal Filler Program, we've obviously progressing according to the plan. And as I said earlier, we expect, you know, the milestone achievement for the first product that we are working together, milestone payment this year in 2023. The Photocurable Filler is another product which is currently under development. We call it a third generation because there is a sequence of products in the market. The current Golden standard is the organic acid product. The second generation is a regenerative implant, which is a dermal filler implant, which is combining collagen and HA. And then the third generation is one which is the phototurable. That's why it's called the third generation. And as I said earlier, this is an option product, and should AVI decide to trigger these options, then, of course, they can do that.
spk07: Okay, got it. And then lastly for me, I think, well, I guess I don't recall you mentioning body contouring applications for the photocurable product. Could you talk a little bit more about those and maybe the obvious applications that you see there?
spk02: Oh, sure. Sure. So this product can be, it's basically a technology platform that can be expanded to different areas in contouring, first of all facial contouring, and then later on body contouring. There are different uses for it. The nice thing about the product is that you can control the stiffness of the implant by the illumination process. We also developed a unique light source that is basically able to penetrate through the tissue, through the soft tissue, enrich the implant, and basically cross-linking, do the final cross-linking process. So we can achieve controlled stiffness of the implant, and this enables us to expand the use to a variety of contouring indications, which are either body or facial contouring.
spk06: OK.
spk07: I guess outside the facial, what would be an example application? I mean, if I don't like the crease in my armpit, do I get that filled? Or what are the more non-facial applications?
spk02: First of all, it's facial shaping. For example, somebody has a recess in the nose, for example. So you can basically fill in this recess and regenerate the tissue in this place while there is the recess. So this is just one example. The second one, you know, on the cheeks. So, you know, to change the shape. And the nice thing is that the physician can, with the fingers, to sculpt the tissue and basically give it the shape which is desired and then photocure it so it will look on the same shape afterwards.
spk06: Okay, got it. Well, thanks for taking the questions, gentlemen. This is definitely helpful. Thank you. Thank you, Ben.
spk03: Our next question is from Shrema Pakula, Ramathka, with H.C. Wainwright. Please proceed with your question.
spk04: Thank you. I have a couple of questions. The first one is on the research program, the Gut on the Chip program. Yes. with your relationship with the universities there, you know, what are you planning to show, you know, at least in 23 to see if you can get outside partnerships, you know, so that you can make this a commercializable product?
spk02: Sure. Thank you for the question, RK. You know, we have developed a roadmap for this product. First of all, in terms of the collaboration, we are like the system integrators in the process. We have Tel Aviv universities that are more related to the development of the chip itself with the nanoelectronics parts. And the Sheba Hospital is bringing their, you know, they are contributing by bringing the organoids from the patients and basically providing the clinical support. We have a gastroenterologist, which is an expert in this field that is part of the team. So what we are doing is basically we are doing a process where we start, first of all, with developing of a healthy tissue model and then we induce the colitis on this model. And eventually, the idea here is that by the end of 24, we will have a proof of concept of this model. The partners might be different partners. It might be for drug discovery. These are the big pharma companies. But our main goal or main target is to take it to personalized medicine which is the much bigger market opportunity. And in this case, we believe that in the future, there will be service providers that will basically get from us a printed chip, which is mimicking the tissue structure. And then they'll take biopsy from the patient, extract the cells, see the scaffolds, the chip with the cells, the patient cells, and basically after some incubation time to do the screening of the drug or optimize the dose of a certain drug or check different drugs and eventually come up with the most ideal solution for the patient. And later on, after the colitis, we plan to expand the use to metabolism and also to colon cancer. So this is the plan. So going back to your original question, By the end of 2024, we want to have a demonstration of a working model of this gut-on-a-chip tissue model.
spk06: Fantastic.
spk04: And then on those, on the inks, on the bio-inks that you're talking about, that you want to come up with in the commercial portfolio, you know, So with the one which is in the market now, the 3D50L, what are you learning in terms of people using it, and how do you see that growing in terms of revenues, not only this product, but also the later products that you're looking at, the 3D50 and the 3D90?
spk02: Yeah, so first of all, let me say something about the strategy. We are now in a stage of positioning our technology of the bio-inks as a gold standard in the industry. In order to do that, we are creating building blocks for bio-inks. So, you know, for each indication, you need to use a proprietary customized biological ink formulation And for this reason, we give the researchers today, most of the users are in the academia, of course, or in the companies in the development stage of a certain indication. We give them like a menu of building blocks that they can check and basically select the proper components and assemble their own bioink. So we get so far... very good feedback from our customers in the academia. They are using it in a variety of printing technologies. And basically, the users are different. Some of them are on soft tissue applications. Some of them, hard tissue. Some of them are doing drug discovery. And we see a ramp also in the sales of this product.
spk06: Okay. Very good. That's all I have for you folks. Thank you. Thank you. Okay.
spk03: I believe that is our last question from our live audience participants. So now I'll turn it back to Mr. Rotem for any questions that came in online.
spk05: Thank you. So I have currently two questions. So I'll address them. The first one is coming from Mr. Levy, and the increase in revenues. We see that revenues are up versus last year. Can you elaborate why? Who was the customer, and what do you expect the trend will be? Okay, so the revenues in the first quarter, including income from the sales of the company, is RH collagen. It's a significant ramp-up from last year, and the majority of the sales are from one of the strategic business partners of Coltland. Note that in 2022, Coltland did not receive any milestone payment, and we do expect to receive the first of these milestones in 2023. And I cannot disclose the name of the customer, but it's a strategic partner that is responsible for the majority of the sales. The second question is coming from Mr. Doron. The question is, what will trigger the right of first negotiation for the filler application product, which AbbVie has? has been granted by the company. Is there a time expiration for this right? So this question is referring to what Yechiel described earlier as the third generation of a dermal filler, the one that is a photocurable one that is doing a contouring. And as said by Mr. Doron, it has the right of first negotiation. There is a mechanism in the agreement that includes the timeline. Unfortunately, we cannot disclose more than that about what exactly. What we are doing along, as you can see, along the last year, we are updating the market and the public regarding the progress in the development. During the last 12 months, we announce some news from preclinical studies and eventually we will have to, you know, we will reach the point where we will have news about exercising that kind of right or not. So at this point we are in progress in the development as mentioned.
spk06: Um...
spk05: That concludes our questions from the audience. I will now turn the call back to Yechiel Tal, ColdPlant's CEO, for any closing remarks.
spk02: Yechiel? Thank you, Eran. As I have stated, we at ColdPlant aspire to become leaders in regenerative medicine, helping people live longer and better, and creating improvements in science through our regenerative technology. Our goal is to create better alternatives and options for the future such as an unlimited supply of spare parts of the human body, including life-saving organs, medical treatment tailored for the individual characteristics of each patient, and drug developed without the need for animal testing. As mentioned, Our vision is to enable a world with unlimited organ supply, regenerative tissue products, and novel drugs and diagnostics that do not rely on animals. We are confident that our collaboration with the worldwide pharmaceutical leader as well as other numerous collaborations and partnership agreements has validated our technology and its multiple areas of applicability. In closing, I want to reiterate our upcoming goals for 2023. Continue to advance development of paradigm-shifting regenerative dermal and soft tissue fillers with AbbVie, expecting first milestone achievement in 2023. Initiate study in large animals with commercial-sized implants to regenerate additional safety data and in support of commercialization. advanced development of a dot-on-a-chip tissue model, drug discovery, and personalized treatment of ulcerative colitis, continue to expand our commercial portfolio of bioink, of R-H collagen-based bioinks, form new collaborations with industry leaders to co-develop therapeutics and medical applications, and I would like We thank you, everyone, for joining us on today's conference call.
spk03: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

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