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spk01: Greetings, and welcome to the Coal Plant Biotechnologies Investor Conference Call to discuss financial results for the full year and fourth quarter of 2023 and corporate updates. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. Now I'll turn the call over to Dori Kurowski of LifeSci Advisors. Please go ahead.
spk00: I would like to welcome everyone to Coal Plant Biotechnology's Financial Results Conference Call to discuss the results for the full year and fourth quarter ended December 31st, 2023 and provide a 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 associated updates, and Aron Rotem, Deputy CEO and Chief Financial Officer, who will provide a summary of Coal Plan's financial results for the full year and fourth quarter ending December 31st, 2023. Both will be available to answer questions at the end of the call. 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 COLE Plan's filings with the Securities and Exchange Commission. These filings can be found at www.sec.gov or on COLE Plan's website at www.sec.gov. In addition, any forward-looking statements made on this call represent Coal Plant's views only as of today, April 4th, 2024, and should not be relied upon as representing the company's views as of any subsequent date. Coal Plant Management specifically disclaims any obligation to update or revise any of these forward-looking statements. Finally, Coal Plant Management will refer to certain financial measures not reported in accordance with GAAP on this call. You can find reconciliations of these non-GAAP financial measures to the GAAP financial measures in the earnings press release that Coal Plant published earlier today, and which is available on Coal Plant's website at ir.coalplant.com. Now, let me turn the call over to Gil Tal, Chief Executive Officer of Coal Plant Biotechnologies. Please go ahead, sir.
spk06: Good morning, everyone, and thank you for joining us today on Coal Plant Investor Conference Call to discuss our full year and fourth quarter 2023 financial results and corporate developments. As you know, the war that began last October very unfortunately continues. However, Coal Plant's main development programs and production plan thankfully continue to be minimally affected as a result of the war. The morale of our employees these days continues to be admirable according to these circumstances, and I want to take this opportunity to say that I am extremely thankful for our dynamic and resilient workforce. Coal Plant's mission is to discover, develop, and deliver collagen technology and regenerative medicine products to improve and prolong lives. We continue to carefully focus on our coal programs and our supportive partners to advance this mission with the goal of creating products that enable the regeneration of tissues and organs. We are extremely pleased with the momentum we gained last year and have maintained through the beginning of this year to advance our innovative programs in the fields of regenerative and aesthetic medicine. Allow me now to recap a summary of what we accomplished. On this slide is the thermal filler product candidate that we are partnering with AbbVie on, specifically its Allergan Division for development. Throughout 2023, we made significant progress with AbbVie to advance this candidate towards commercialization. In June of last year, we announced the achievement of an important milestone, either this collaboration, which triggered a $10 million payment from AbbVie to Copeland. Per Copeland's agreement with AbbVie, Copeland has the potential to receive additional milestones and option product payments, as well as receive meaningful royalties on product sales. In their full year and fourth quarter conference call, AbbVie stated that they expect meaningful growth in the aesthetics market, and that importantly, a ramping up is now anticipated after multiple quarters of decline in the US filler market. The dermal filler product candidate, which is our top focus, is now in the clinical phase of development and has the potential to create a paradigm shift in the dermal fillers market, since in addition to tissue filling, it is expected to impart regenerative properties to the skin tissue. In addition to our partner program with AbbVie, we have another version of a dermal filler under development. In the fourth quarter of 2023, we announced that a U.S. patent was granted related to our photocurable dermal filler product candidate being developed by Coldplant for the aesthetics market. This patent is related to the method of use of Coldplant's photocuring technology and serves as the basis of its photocurable dermal filler product candidate. We believe that the patent will strengthen our position in the aesthetics market for many years to come. Furthermore, we received a notice of allowance for a patent application which covers the use of this product candidate in Brazil. another important market in medical aesthetics valued at $741 million with a compound annual growth rate of 10.7%. It should be noted that Coldplant has granted its partner AbbVie the right of first negotiation to obtain a worldwide exclusive license to this product candidate. Now, I will discuss our other in-house development programs that are our core focus. Our next leading program is our regenerative breast implants. These implants that are comprised of our proprietary non-animal derived Rh collagen and other biomaterials are intended to promote tissue regeneration and the grade in synchronization with the development of natural breast tissue. In 2023, the global breast implant market size reached $2.6 billion U.S., and the market is expected to reach $4.1 billion by 2032, exhibiting a compound annual growth rate of 3.7% during 2024 to 2032. We have begun an additional large animal study with clinically relevant commercial size implants. This study's results are intended to be used for the design of a pivotal large animal study. This study follows the completion of our first large animal study, the results of which were announced in January 2023. This study demonstrated progressive stages of tissue regeneration After three months, as highlighted by the formation of maturing connective tissue and neovascular networks within the implant, with importantly, no adverse events reported. Since then, during 2023, Cotland also conducted additional large animal studies that were intended to further optimize the implant design and composition. In these studies, new tissue formation and no vascularization with no adverse tissue reactions were demonstrated confirming previous results. We look forward to reporting results from these animal studies in the fourth quarter of this year and the first quarter of 2025. We cannot stress enough the improvement that the regenerative breast implant could provide given the adverse events associated with currently available silicone implants. Use of the silicone implants carries an increased risk of developing breast implant-associated anaplastic loud-cell lymphoma, which is a type of a cancer. Every year in the U.S. alone, hundreds of thousands of people experience adverse events that range from autoimmune symptoms to these most serious side effects. Our breast implants are expected to regenerate breast tissue without eliciting immune response, and that may provide a revolutionary alternative for aesthetic and reconstructive procedures. The additional safety and efficacy data that we will generate from the recently initiated large animal study is intended to be used to optimize the development of our regenerative breast implants and combined with data from all previous studies, is expected to support future regulatory submissions and clinical studies. In April of last year, we announced a joint development and collaboration agreement with Stratasys to collaborate on the development of a printing solution to biofabricate human tissues and organs using Stratasys P3 technology-based bioprinter and ColdPlant's Rh-collagen-based bioinks. The first project under this agreement is to devise a process for industrial-scale bioprinting of ColdPlant's breast implants. Here is an example of a breast implant printed with our collaborators at Stratasys using ColdPlant's Rh-collagen-based bioinks. Now, I want to draw your attention to a decision that we recently made related to our Gut on a Chip program. In the spirit of being good stewards of our own capital and with our focus on the medical aesthetics arena and collaboration with AbbVie, we have decided to put our resources directed to this program on hold. I want to emphasize that this program is important to Cold Plant and that it is still very much a focus of ours. However, we made this decision for now, since we felt it wouldn't be responsible to continue after assessing the projected timeline to progress the tissue model. Anyway, once resources are secured at the appropriate time, we do plan to reinitiate this program. In 2023, we blustered our commitment to ESG, environmental, social, and governance initiatives by appointing a dedicated expert to lead our efforts. Following the endorsement of our company's sustainability roadmap for the upcoming year, we embarked on a series of bold initiatives aimed at significantly reducing coal plant's carbon footprint while harmonizing with our overarching sustainability objectives. Through meticulous analysis and prioritization of key topics, we have finalized the ESG strategy and goals, ensuring their integration into our corporate framework. In September of 2023, we proudly announced our participation in the United Nations Global Compact, a prominent initiative for sustainable and responsible corporate governance. By aligning ourselves with this esteemed platform, Corpland reaffirms its unwavering dedication to bioprinting sustainable practices, further solidifying our mission to revolutionize regenerative anesthetics medicine with sustainable alternatives. Furthermore, we are set to unveil our inaugural formalized ESG report for 2023 during the second quarter of this year. This report will showcase our bold commitment to environmental, social, and governance facets, including ambitious targets in climate action and energy and efficiency, comprehensive workforce, health and safety initiatives, and the integration of ESG considerations into our governance structure. This commitment underscores Copeland's unwavering dedication to responsible and sustainable business practices promising long-term value creation for our stakeholders. That concludes my initial remarks. 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.
spk02: Eran? Thank you, Yechiel. Good morning, everyone. I will now review our financial results for the three months and the full year period ending December 31st, 2023. GAP revenues for Q4 2023 were $299,000 and included mainly income from sales of our RH Collagen products an increase of $241,000 compared to the $58,000 in Q4 2022. Gap revenues for the year ended December 31st, 2023, were $11 million and included mainly revenues from AbbVie, Paul Plant's business partner. Revenues increased by $10.7 million compared to $299,000 in the same period last year, The increase is mainly related to the achievement of milestones with respect to the AbbVie Agreement, which triggered a $10 million payment to Copeland, and, in addition, an increase in income from sales of Copeland's Rh collagen products. As we previously said, according to Copeland's agreement with AbbVie, Copeland is also eligible to receive up to an additional $226 million in milestone payments for the dermal filler product, as well as royalty payments and fees for the manufacture and supply of the RH collagen once the dermal filler product will be in the commercial phase. GAP cost of revenues for the fourth quarter of 2023 was $773,000, compared to $62,000 in Q4 2022. Cost of revenues includes mainly the cost of the company's RH collagen-based products, royalties to the Israel Innovation Authority, or the IIA, for the company's sales, and inventory write-offs. Gap cost of revenues for the full year ended December 31, 2023, was $2 million, compared to $400,000 in the full year ended December 31, 2022. The increase in the amount of approximately $1.6 million is mainly comprised of $320,000 in royalty expenses to the IIA, mainly related to the milestone payment received from Alvin, $711,000 relating to the sales of bioinks, Vergenix Floebel gel, and RH collagen sales, and approximately half a million dollars related to the inventory write-offs. GAP operating expenses for Q4 2023 were $4.6 million, compared to $4.7 million in Q4 2022. Operating expenses include GNA expenses and R&D expenses that are related to supporting the company's development efforts in different programs, including the regenerative breast implants and GAT on a chip programs. The decrease of approximately $100,000 is mainly related to G&A expenses. On a non-GAAP basis, operating expenses for Q4 2023 were $4 million, compared to $4.2 million for Q4 2022. Non-GAAP measures exclude certain non-cash expenses. GAAP operating expenses for the full year period ended December 31, 2023, were $16.5 million, compared to $17 million for the year 2022. The decrease of approximately half a million dollars includes $745,000 decrease in G&A, mainly comprised of $224,000 decrease in employee salaries expenses, and $364,000 decrease in share-based compensation expenses, and $140,000 income from insurance indemnification, all of that deducted with an increase of $229,000 in R&D expenses. On a non-GAAP basis, the operating expenses for the year 2023 were $14.5 million. compared to $15.2 million in the year ended December 31st, 2022. GAAP financial income net for the fourth quarter of 2023 totaled $379,000 compared to $275,000 in the fourth quarter of 2022. GAAP financial income net for the year ended December 31st, 2023 was $493,000 compared to $172,000 in the year 2022. The increase is attributed to an increase in interest rates and interest received from the company's short-term cash deposit. Gap net loss for Q4 2023 was $4.7 million, or $0.41 basic loss per share. compared to a net loss of $4.4 million or $0.39 basic loss per share for Q4 2022. Non-GAAP net loss for Q4 2023 was $3.9 million or $0.35 loss per share, similar to the loss the company recognized in the fourth quarter of 2022. Gap net loss for the year ended December 31, 2023, was $7 million, or $0.62 basic loss per share, compared to a net loss of $16.7 million, or $1.53 basic loss per share, for the year ended December 31, 2022. Non-GAAP net loss for the year ended December 31, 2023 was $5.2 million, or $0.45 basic loss per share, compared to $15.2 million loss, or $1.37 basic loss per share, for the year ended December 31, 2022. In this period of continued weakness in the global capital markets, the war situation in Israel, and uncertainties in general, we continue to carefully maintain Colquhant's war plan while keeping goals for the progress of the main programs. Cash and cash equivalents as of December 31, 2023, were $26.7 million. We believe this cash balance represents, as of today, April 4, a company cash runway that will satisfy our operational requirements at least until the end of 2025, based on our currently contemplated operations and plans. Cash used in operating activities during the fourth quarter of 2023 was $2.3 million, compared to a cash used in operating activities of $3.3 million during the fourth quarter of 2022. Cash used in operating activities during the year ended December 31st, 2023 was $2.8 million compared to $13.7 million during the year ended December 31st, 2022. There was no cash provided by financing activities during the fourth quarter of 2023 compared to $400,000 cash provided by financing activities during the fourth quarter of 2022. Cash provided by financing activities during the year ended December 31st, 2023 was $1.1 million compared to $1.9 million during the year ended December 31st, 2022. Cash provided by financing activities is mainly attributed to proceeds from the exercise of options and warrants into shares. This now concludes the financial summary. Operator, I believe that we can now open the call for questions.
spk01: Thank you. We will now be conducting a question and answer session. If you are with us on the phone lines and would 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 would 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.
spk04: Thank you.
spk01: Our first question comes from the line of Swayam Pakula, Ramakant, with HC Wainwright. Please proceed with your question.
spk03: Thank you. Good afternoon, Yahil and Iran. A couple of quick questions. The first one being on the breast implant study in the large animals. For the timing of the data publication, you said late this year, which is fourth quarter, or early next year, first quarter. So what's... What needs to get done and, you know, why you're unsure about the timing?
spk06: Yeah, great. Thank you, RK, for the question. You know, we have a series of studies that is currently being held with the purpose to optimize different components of the implant, including the formulation, including the design, eliminating fatigue points, things like that. And of course, degradation kinetics, which is very, very important. So we design our studies accordingly, and we have a battery of studies in large animals that is intended to provide us on the time axis all the information needed so when we come to the second quarter, of next year, we will be in a position to launch a GLP Pivotal Animal Study, which its results will serve us for the purpose of the meetings with the FDA later on to determine the regulatory pathway for the product. So this is why we have here basically two time points, the fourth quarter of this year where we will have the first group of information from some of the studies, and then Q1, which will provide the rest of the information.
spk03: Thank you. Thanks for that. And then regarding the collaboration with AbbVie, since the study is going into clinic, Would you get a milestone payment now, or would it be once it is successful?
spk05: Thanks, RK.
spk02: So, yeah, we, as you know, we achieved one milestone last year, which triggered a $10 million payment, and the We, what we can say about the next payments, as we said before, that they are associated with certain developments and clinical trials and regulatory approvals. So, and commercial milestones. So, this is what we are allowed to say by our partners. And at this stage, we are unable to share more information about it.
spk03: Okay. No issues at all. Thanks. Thanks for taking the question.
spk02: Thank you, RK. Thank you. I think we have one more, a few more, two more questions from the public, the other participants. One question is quite similar to what you just said, what we can say about the collaboration, about the collaboration with AbbVie. So, of course, yes, this is Our most important collaboration is with AbbVie. We are, as we all know, we are developing, AbbVie is developing, and we are part of it, a dermal filler product. It is a combination of AbbVie's technology, which is using also cold plants, RH collagen. And besides what we said so far, this is what we are allowed to say. We cannot share information. when is the other milestones are coming, and what we can say is that we are in the development, it's in a clinical phase, in the clinical studies, and this is where we are at.
spk05: Another question that we have,
spk02: is do you think there is a potential for a new expansion to new markets like addressing ozempic face, which is the condition that causes a hollowed face and lower muscle tone from taking ozempic?
spk06: Yes, definitely there is a potential. We basically have two different platform technologies. The first one is the injectables, including the photocurable filler, which enables to, in addition to the skin lifting and the regeneration of new tissue, also to do contouring of the skin. This product, which is administrated Same as a regular dermal filler and later on there is a light source that illuminates from the outside and basically The product will cross link in situ under the skin This product can definitely address Indications like zempic face. We also see a big opportunity in 3d a bio printed facial implants like for example for the chin and the nose, the cheeks, which is basically leveraging all the technologies that we developed for the breast implants. So we have either the injectables in one hand with the photocuring option, and then on the other hand we have the 3D bioprinted breast soft tissue implants.
spk05: Okay.
spk02: The last question that we have is so we're trying to get a feel for how big the biofabrication market for human tissues and organs is. How do you think about this market opportunity?
spk06: Yeah. Pretty bioprinting of tissues and organs holds a huge market opportunity if we look on the market we can identify clearly five different segments and I will tell these segments in the order of time to market so in complexity so the first one is if in a drug discovery and personalized medicine The second one is scaffolds. The third one is tissues. The fourth one is endocrine glands. And the fifth one is life-saving organs. And if we look on each one of these segments, we can break it down to different indications. For example, talking about tissues, the breast implant that we are developing is under this category. We can also bring under this category heart valves. which are 3D bioprinted. And if we just look at the market potential of these two indications, it's a multi-billion dollar market opportunity to each one of them. We can take another example of scaffolds for spinal fusion, which can be bioprinted. And the scaffolds for spinal fusion, the market potential annually today in the U.S. alone is about $1 billion market opportunity. So if we add some of them together, it's tens of billions of dollars per annum in terms of potential. And Cold Plant basically is having a strategy that drug discovery and personalized medicine, scaffolds and tissues, we are aiming to develop products in these segments in-house. And endocrine glands, which may be, for example, pancreas, thyroid glands, things like that, This is something that we will seek for a partner, and same is for life-saving organs. So the bottom line is that there is a huge market opportunity.
spk02: Thank you. So this was the last question, and that concludes our questions from the audience. We'll now turn the call back to Yechiel Tal, Coal Plant's Chief Executive Officer, for any closing remarks. Yechiel?
spk06: Thank you, Rod. Our vision is to be the leaders in regenerative medicine, helping people live longer and better through our innovative collagen technology. Consequently, our goal is to create better alternatives and options for the future, such as novel products for regenerative aesthetic medicine applications, an unlimited supply of spare parts for the human body, including life-saving organs, and drugs developed without the need for animal testing. In closing, I want to reiterate our upcoming goals for this year. For the remainder of 2024, we plan to focus on advancing the development of a paradigm-shifting regenerative dermal and soft tissue filler program with AbbVie, expand our large animal studies with commercial-sized breast implants to generate additional safety and efficacy data to support our future clinical studies and commercialization of this program, and continue to form collaborations with industry leaders for utilizing our Rh-collagen and Bio-Ink technologies, and continue discussions with related continue discussions related to our existing programs and products. Thank you, everyone, for your time this morning and for joining us for today's conference call. I will leave you with this closing slide featuring our very important and valued Coal Plant team members.
spk04: Thank you. That concludes today's conference call, and you may now all disconnect.
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