ImmunoPrecise Antibodies Ltd.

Good morning, and thank you for standing by. Welcome to Immunoprecise Antibodies Second Quarter Fiscal Year 2023 Earnings Conference Call. Also on the call with us today are Jennifer Bath, Chief Executive Officer, Brad McConn, Chief Financial Officer, Ilse Rodink, Chief Scientific Officer, and Barry Duplantis, Vice President of Client Relations. Before we get started, remember, some statements we make today may be considered forward-looking statements for the purposes of applicable United States and Canadian securities laws. IPA cautions that these forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. IPA undertakes no obligation to update these forward-looking statements except as required by law. On today's call, non-GAAP financial measures may be used to help investors and analysts understand IPA's business performance. We refer current and potential investors to the forward-looking information section of its management discussion and analysis issued today at www.cdar.com and on EDGAR at www.sec.gov. With that, I'll turn the call over to Dr. Bath.

Thank you, Dennis. Good morning, everyone. I'm glad that you were able to join us today. We're excited to share with you IPA's second quarter updates and our progress toward achieving our strategic goals for the fiscal year, including the steady growth of our revenue, driven by our expanding client relations team, as well as milestone achievements with our in-silico platforms from our newest subsidiary, BioStrand. With several goals in mind, the company recently announced its voluntary delisting from the TSX venture. These goals include creating a central market for its common shares on the NASDAQ, enhancing long-term liquidity and shareholder value, lowering administrative and legal costs, saving time, and harmonizing reporting requirements. Finally, we believe that delisting from this exchange makes it easier to reach institutional investors who are prohibited by compliance from investing in such exchanges. IPA is considering a shift in its corporate offices as a complement to its recent delisting from the TSX venture. While the exact potential location has not yet been selected for shareholder approval at a future special meeting of shareholders, Some of the key location characteristics being considered include a U.S. location with access to high-performing workforce with relatively low average wages, a region with expanding technology-based businesses that is complemented by numerous business incentives, and easy access to government officials, highly competitive cost of business operations, and a highly educated workforce. This quarter we look forward to keeping you informed of any developments relating to this particular update. As we approach the end of this calendar year, we are focusing on accelerated revenue growth and sales integration of our in silico capabilities. This year we're also reflecting on market conditions and our historical performance as we strive to maximize shareholder value in 2023. This graph compares IPAs year-to-date share price change to that of independently selected competitors, as reported by NASDAQ, with these figures as of Tuesday, December 13th. While we have maintained shareholder value in a difficult market, especially as compared to our peers, we are far from satisfied. With regard to shareholder value and corporate growth, we have set immense goals, and we are committed to working tirelessly until those are executed. We are not intimidated by the current market conditions, but rather energized and inspired by the opportunity to significantly outperform them. Elaborating on our most recent press release, the emergence of Meta, Meta's ESM Fold2, and DeepMind's AlphaFold AI-driven predictive platform recently opened the door to the world of structures and their impact on drug discovery. Irrespective of their precision, these platforms provided us with a novel visual representation of sequences and their uniqueness. Having fully integrated these two platforms into our end-to-end and silico discovery workflow, we have saved an appreciable amount of development time and cost. The timing of these platforms was fortuitous, having recently launched our structural HIPs which will help explore formal and explicit biologically relevant and hidden knowledge drawing upon our hip technology, which can not only connect sequence to structure and function, but also link those sequences to structure and structure to many types of textual information, such as scientific papers and also medical records. These multi-omic, multi-structural capabilities are unparalleled and have the potential to greatly speed up drug discovery. From a commercial perspective, we started integrating BioStrand's cutting-edge AI technology into our global fee-for-service offerings this quarter, creating unique in silico capabilities to expand our platforms for next-generation antibody discovery and development. These in silico services show quick turnaround times that result in faster revenue recognition, excellent profit margins, and a competitive edge thanks to our unmatched data outputs. One of the examples in the new in silico offerings is the recent client access to our in silico immunogenicity screening service, which enables clients to quickly and affordably predict which lead candidates may be immunogenic when administered to patients. It offers insights into which patients specifically based on their genetic background are most likely to experience an adverse event and determine which lead candidates are most likely to be safe in the majority of the population. In order to prevent unfavorable side effects, this information may also help drug sponsors decide which patient population should be selected in a clinical or commercial context for a particular therapy. This and other new AI services have not only been launched, but have also been chosen by select clients as extensions to their current programs and will soon be available for all to view on our updated website. With that, I will turn the call over to our Vice President of Client Relations, Dr. Barry Duplantis.

Thank you, Jennifer. This quarter, IPA grew its sales team in key geographic areas. I'm pleased to report that a new Director of Client Relations started with us shortly before the end of Q2. This new addition is covering CRO service sales in the San Francisco and Pacific Northwest region and brings with her years of experience serving clients from past antibody service sales and project management roles. In addition, IPA has received a signed commitment from an East Coast-based Senior Director of Client Relations set to join the team in early calendar year 2023. This individual has an impressive background in antibody discovery, while also possessing first-hand knowledge of client needs and expectations. The San Francisco and Boston regional markets have always offered significant market potential for IPA, and we look forward to the impact that these two key hires can bring IPA in the future. Last quarter, we spoke of a significant increase in Q over Q sales orders. Those sales orders have helped drive a 9.8% increase in revenue of Q2 over last year. They've also yielded record quarters at both IPA Canada and the Utrecht sites. The Canadian site also posted a single monthly revenue record reporting over $844,000 in October and we're optimistic for continued growth with strong revenue trends continuing through November. These results are primarily driven by a continued and growing interest in IPA's memory B-cell selection workflows, particularly IPA's rabbit B-cell platform, while the Utrecht site is beginning to take advantage of their increased capacity following a seamless move to their new facility, which Jennifer will expand on later. We've also recently announced that IPA's Biostrand subsidiary has signed a research collaboration and license agreement with the clinical stage biocompany Briacel. The research collaboration is based on Biostrand's ability to develop clinically relevant antibodies using its multifaceted in-silico HIFT-based platform. Due to the unique nature of Biostrand's therapeutic discovery potential, we're happy to announce this is the first non-fee-for-service-based discovery program run by a service-based IPA subsidiary. While the fee-for-service models have served IPA's traditional wet lab services very well, The fiscal benefits of using an in-silico discovery workflow, asset ownership retention until certain contractual requirements have been met, and the potential back-end value of the program make for an incredibly attractive business model available to Biostrand's technology. Lastly, we'd like to turn our attention to the growing market of Wnt proteins, where IPA Europe's Utrecht campus is occupying a rapidly growing niche with an exclusive product arrangement and IP protection. An organoid is an in vitro, three-dimensional replica of an organ that has been scaled down and simplified to display accurate microanatomy, and they are increasingly valuable model systems for human biology. Wnt surrogate is a protein that is required as an organoid growth factor. IPA has seen an uptick with our Wnt surrogate production and sales at our Utrecht site, which is consistent with our views that the organoids market is rapidly growing and demand for growth factors continues to increase. According to Avision's research reports, the global organoids market is valued at over $2 billion in 2021 and is predicted to reach well over $12 billion by 2030, at a CAGR of 21.58% during that timeframe. With UPE's move to the new accelerator building, the company is well equipped to meet the rapidly growing demand. I will now turn the quarterly updates over to Dr. Ilse Rodink for IPA's Chief Scientific Officer.