ImmunoPrecise Antibodies Ltd.

Good morning, ladies and gentlemen, and thank you for joining us today for Immunoprecise Antibodies first quarter fiscal year 2025 earnings call. We appreciate your time and interest in our company. Today's call will be led by our CEO, Dr. Jennifer Bath, and our CFO, Kristen Taylor. They will provide a review of our financial performance, strategic initiatives, and key operational highlights for the quarter. Please note that a copy of today's presentation along with our financial statements, will be available on our company website for your reference. We encourage you to review these materials to gain a deeper understanding of our performance and strategic direction. Once again, thank you for joining us today. We look forward to sharing our progress and discussing our future plans with you. Before we proceed, I would like to remind everyone that today's discussion will contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those anticipated due to various factors, including but not limited to changes in market conditions, regulatory changes, and other unforeseen business risks. Please note that these forward-looking statements are made as of today, and we undertake no obligation to update them as a result of new information or future events unless required by law. We strongly advise all participants to refer to our filings with the Securities and Exchange Commission, SEC, including our most recent Forum 20F and other periodic reports for a more detailed discussion of these risks and uncertainties and for a more complete understanding of the risks inherent in our business operations and the potential impact on our future performance. We appreciate your continued interest in immunoprecise antibodies. It is now my pleasure to turn today's call over to Dr. Jennifer Bath, CEO. Please go ahead.

Thank you, Regina, and good morning, everyone, and welcome to all of you. for joining us for this quarterly update. Our update this morning will be brief as we recently held a fiscal year-end earnings call. As always, we greatly appreciate your time and your interest in immunoprecise antibodies. Let me start with a brief overview and a reminder of our core strategy and business model. Pharmaceutical and biotech companies face increasing challenges in antibody drug development as they take on ever more complex targets and diseases. AI solutions, such as large language models, help accelerate lead identification, improve HIP quality, and reduce costs, enabling faster identification of high-affinity antibodies and reducing clinical trial timelines, giving companies a competitive edge in personalized medicine. Immunoprecise Antibodies, or IPA, offers an AI-driven platform to meet these needs. BioStrand's proprietary Lens AI applications, powered by HIP technology, speed up antibody discovery, development, and optimization, potentially reducing both timelines and costs. IPA integrates this proprietary AI technology with deep biotherapeutic expertise to deliver a holistic, data-driven approach to antibody development challenges with the capability of delivering higher specificity, better candidate selection, and a streamlined path to the clinic. Our strategy for Lens AI growth is built on a multi-platform business model that maximizes value creation across different time horizons. The first pillar focuses on generating consistent revenue through our fee-for-service drug discovery and development offerings, as well as data analytics services. These are powered by our proprietary HIP technology, which forms the backbone of our Lens AI platform. The second pillar leverages our innovations through strategic licensing agreements. which include potential milestone payments and royalties. This approach allows us to monetize our intellectual property, including our growing portfolio of therapeutic molecules, several of which now have been enhanced using our AI technology. By offering these AI-optimized candidates for licensing, we're not only showcasing the capabilities of our platform, but also positioning ourselves to participate in the long-term success of these potentially high-value assets. This strategy aligns our interests with those of our partners and creates multiple avenues for value creation in the competitive biopharmaceutical landscape. As we continue to expand LINZ AI's user base, this multi-platform strategy enables us to capitalize on our technological advantages while building a diverse portfolio of revenue streams. It drives current income while positioning us for sustained growth and value appreciation in the dynamic biopharmaceutical market. By balancing ongoing operations with future potential, we're creating a robust foundation for enduring shareholder value. Today, I will provide our fiscal year 2025 first quarter updates, outlining our progress within each strategy pillar as we work to expand the ways in which IPA addresses these drug development challenges. During the recent quarter, our fee-for-service drug discovery segment experienced a notable surge in the initiation of VHH antibody discovery programs. VHHs, or variable heavy chain antibodies derived from camelids like llama, are gaining significant traction due to their unique adaptability in developing CAR-T therapies and by and multi-specific antibody formats. As a leader in VHH antibody discovery, IPA utilizes both phage libraries and single B-cell technologies to deliver diverse VHH antibody panels tailored to our clients' needs. The B-cell select antibody discovery technology continues to be a primary revenue driver for IPA with 25 new B-cell select programs initiated during the final quarter of fiscal year 24 and this first quarter of fiscal year 25. This robust activity has significantly contributed to our revenue growth in Q1 and should continue to impact IPA in the coming quarters. At our IPA Europe Utrecht protein production site, A portion of the production hours in Q1 was dedicated to replenishing inventory of key revenue-generating off-the-shelf products. This strategic focus on inventory management ensures we meet ongoing market demand while maximizing revenue potential. In a recent press release, BioStrand announced a significant milestone, the development of highly specific antibodies entirely through computer simulations. directing therapy toward a challenging oncology target within the tumor microenvironment, also known as the TME. This program faced notable challenges as there was no prior knowledge of the target structure or biochemistry within the TME. Despite these obstacles, Biostrand succeeded where many laboratories had previously failed, demonstrating the power of its advanced AI-driven lens AI technology in overcoming complex, and well-known drug discovery hurdles. Building on this success, BioStrand will continue to advance its AI-driven antibody engineering solutions, further enhancing our capabilities in this area. Additionally, BioStrand is making strides in the AWS Marketplace onboarding of its applications. This global platform enables partners to leverage Amazon Web Services technologies, enhancing visibility and opening new avenues for growth and collaboration by engaging with top target accounts while delivering on high-quality AI-driven SaaS solutions. We are also preparing an update on our strategic column pipeline, which has incorporated AI enhancements and optimization. This collaboration utilized BioStrands technology to optimize column's assets, offering significant dual benefits for the company. First, it enhances the data packages supporting the asset value, and second, it strengthens Biostrand's AI-powered antibody optimization platform. This synergy not only improves the efficiency of antibody candidate development, but also enables us to showcase our Lens AI capabilities within the TALIM pipeline. By offering these AI-optimized candidates for licensing, we showcase the capabilities of our platform and align our interests with those of our partners. creating multiple avenues for value creation in the competitive biopharmaceutical landscape. I'll now turn things over to Kristen Taylor for our financial updates for the quarter.

Thank you, Jennifer. I'll provide a brief overview of our financial results for the first quarter of our fiscal 2025 before touching on our financial position as of the end of the period, which was July 31st, 2024. As a reminder, all numbers I reference are in Canadian dollars, unless otherwise noted. For the first quarter of our fiscal 2025, we generated revenues of 5.3 million, representing a 7.5% decrease year-over-year and a 12% increase over the first quarter of fiscal 2023. We achieved continued above-market growth of 16% and 19% at our two antibody Discovery Labs in Victoria, Canada, and Oost the Netherlands, respectively. At our third site, which is our custom protein manufacturing and product location in Utrecht, the Netherlands, we saw a decline in the custom protein projects, which included timing impacts against the site's previous year's strong first quarter. As part of this timing, the site also focused on building product inventory for the second quarter product sales. As we do with all of our segments, we continue to monitor this segment of our business as we expand our AI-enhanced antibody drug discovery services. Now on to our operating expenses. Our research and development expenses for the first quarter were $1.6 million versus $0.9 million in the previous year. This increase in R&D reflects increased spend supporting the phased rollout of our Lens AI capabilities, which are being used today as another proprietary platform in generating our fee-for-service drug discovery revenue. Year-to-date sales and marketing expenses are down year-over-year at $0.7 million versus $1.1 million, which includes the impact of cost savings from our synergistic sales efforts across our comprehensive AI-enhanced antibody drug discovery and development services. And general and administrative expenses for the quarter were $4.2 million versus the previous year's first quarter expense of $4 million, with cost efficiencies offset by additional costs related to personnel and professional fees. Overall, we reported a net loss of $4 million for the first quarter of fiscal 25 or $0.15 per share versus our first quarter of fiscal 24 that resulted in a loss of $3.4 million or $0.14 per share, reflecting overall increased spend on development and commercialization of Lends AI. Now on to our liquidity. We ended the first quarter of fiscal 25 with cash of $4 million. This cash balance reflects our cash use by operations, including R&D spend of $2.2 million. This use of funds was offset by $3 million of net financing completed during that first quarter. This included $0.5 million from utilizing our ATM facility, along with drawing down on the first tranche of the previously announced convertible venture for the remainder. The sale and issue of the second tranche of USD $1 million closed on August 16, 2024. We continue to monitor our cash from operations, as well as cost of capital versus return on R&D investments. With our AI-enabled antibody drug discovery revenue, plus the R&D efficiency of Lens AI, we have the flexibility to slow down or speed up our R&D spend as we work to best meet our customers' and our partners' needs. Thank you, and we will now open for questions.