ImmunoPrecise Antibodies Ltd.

Good morning, ladies and gentlemen, and thank you for joining us today for Immunoprecise Antibodies Second Quarter Fiscal Year 2025 Earnings Call. We appreciate your time and interest in IPA. Today's call will be led by our CEO, Dr. Jennifer Bath, and 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 form 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. I will now turn the call over to IPA's president and CEO, Dr. Jennifer Bass.

Thank you, Regina, and good morning, everyone. Thank you for joining us today to review IPA's second quarter results for fiscal year 2025. Operationally, this quarter has been transformative for IPA as we continue to drive adoption in AI-driven antibody development, push innovations at our global operations, and firmly execute on a strategic plan to ensure sustained growth and increasing shareholder value. Our decision to relocate our headquarters from Victoria, British Columbia, to Austin, Texas, marks a significant step in IPA's growth strategy. Austin has emerged as a global hub for artificial intelligence, semiconductor innovation, and biotechnology. A unique convergence that aligns perfectly with our strategic goals. Austin's vibrant AI community and collaborative culture are driving breakthroughs in precision medicine and data-driven research, which directly supports our Lens AI platform and HIFS technology. The city's strong semiconductor industry provides a solid foundation for our AI-driven initiatives, while its rapidly growing biotech sector offers fertile ground for partnerships and innovation. The University of Texas at Austin further enriches this ecosystem, providing a steady stream of skilled talent and fostering collaborations that fuel innovation. With $1.5 billion in funding across 253 biotech startups, Austin is becoming a focal point for the life sciences advancement. By positioning IPA at the intersection of AI, semiconductor technology, and biotech in Austin, we're ensuring access to top tier talent, fostering strategic collaborations and solidifying our leadership in the evolving life sciences sector. This move is a cornerstone of our rebranding and repositioning strategy, aligning our operations with the long term growth opportunities and strengthening our presence in a critical market for life sciences. Before we proceed, I'd like to recognize Dr. Barry Springer, who is stepping off of our public company board of directors to begin his well-earned retirement. Dr. Springer's distinguished career and strategic guidance have been invaluable to IPA. We extend our heartfelt thanks for his contributions and we wish him all the best. We are excited to announce that we are actively pursuing the divestiture of our two European wetlands in Utrecht and in Oost, the Netherlands. A decision driven by our commitment to reduce increasing redundancies and focus on areas of the highest impact and growth. By consolidating operations, we not only reduce service redundancies, we aim to enhance efficiencies, streamline resource allocation, and prioritize investments in transformative initiatives such as the AI-driven drug discovery. The divestiture process is a key part of a larger rebranding and repositioning strategy expected to conclude by the end of this fiscal year. This decision allows us to redirect capital and operational bandwidth towards high growth areas, including the rapidly expanding Lens AI platform, as well as the continued expansion of our Canadian laboratory home to our renowned memory B-cell platforms. Not coincidentally, these efforts align with our recent headquarter relocation to Austin, reinforcing our focus strategy to expand our US footprint And we have identified unique, accretive investment opportunities that position IPA to leverage the dynamic AI and life sciences ecosystem in the U.S. while strengthening our operational presence. As part of our ongoing commitment to financial discipline, we implemented another round of cost-cutting measures this quarter to prioritize high-growth initiatives and maximize efficiencies. While no senior executives have collected a fiscal year 24 bonus, including guaranteed bonuses, and thus have received only base pay. In a key development under this initiative, I have voluntarily agreed to modification in my compensation structure as well. My guaranteed bonus has been eliminated, and my compensation will now be split into two components. Half will be included in the base salary. The performance-based bonus tied directly to achieving defined milestones will be reduced from 100% of the base salary to a maximum potential of 70% of the base salary. This adjustment reflects my commitment to aligning our executive compensation with the company's long-term goals. As an additional update, we have decided to conclude our partnership with Quantum IR based on stakeholder feedback. Moving forward, we will focus on building a more effective and responsive investor relations strategy to strengthen our communication with our investors. This quarter, we significantly enhanced our industry profile through two key events, the AI-driven Drug Discovery Summit USA and our inaugural Tech Day. At the AI-driven Drug Discovery Summit, Dr. Dirk van Hifte, our head of innovation and co-founder of Biostrand, participated in a fireside chat alongside Adam Root, vice president and head of protein sciences at Generate Biomedicines. Their discussion, titled Beyond Conventional Biologics, the Intersection of Machine Learning and Biological Engineering to Invent Novel Medicine, highlighted transformative approaches to drug discovery. At this event, Dirk emphasized the integration of BioStrand's patented HIFT universal fingerprint technology with wet lab experimentation, creating a seamless workflow for antibody discovery. He explained how BioStrand's technology helps organize and connect different types of biological information, making it easier to use and or to understand for drug discovery. Adam Scherr is in science and to generate biomedicine machine learning models for protein engineering, focusing on their ability to design novel protein-based therapeutics tailored to specific biological challenges. The synergy between IPA's HIP Technology and Generate Biomedicine's protein engineering exemplified how AI and biologics are converging to overcome longstanding challenges in the field. This conversation drew significant interest from attendees, reinforcing IPA's leadership and advancing precision drug discovery through innovative technologies. In addition to the fireside chat, we hosted a private technology meet and greet at the conference, bringing together key industry players and investors to showcase our latest innovations. Following these engagements, we hosted our tech day at the headquarters of IPA's partner, InterSystems, located in Cambridge, Massachusetts. This event marked a significant milestone as we unveiled five groundbreaking analytical applications that we believe have the potential to revolutionize antibody therapeutics. We demonstrated AI-driven tools spanning the entire spectrum of drug discovery, development, and optimization, including advanced 3D protein modeling, epitope mapping, epitope binning, immunogenicity testing, and molecular dynamics simulations. Through these applications, the Lens AI platform offers increased scalability and unprecedented speed accompanied by cost reductions and energy savings. More importantly, Lens AI outputs are comparable to, and in many cases, more precise than traditional technologies while being directly accessible to users. This represents a fundamental and tangible shift in advanced drug development. We see this milestone as the beginning of truly democratizing drug discovery. At Tech Day, we also presented our newest AI-driven discovery application integrated with our proprietary Rabbit B-Cell Select platform. This tool, called HIT Expansion, takes existing lead candidate molecules and identifies significantly more novel sequences, increasing shots on goal by dramatically expanding the pool of potential therapies. It allows us to rapidly run sophisticated applications against each of the expanded pool candidates very early on in the screening process, eliminating low potential leads to reduce later stage failure rates that cannot be detected by traditional technologies. We are excited to announce that IPA will also be rebranding this upcoming year to better reflect who we are and where we're headed. As we continue to drive innovation and drug discovery, our new brand will unify all of our entities under one strategic umbrella, emphasizing our fully integrated approach, science-powered, technology-driven, unified, and amplified. Our transformation reflects the future of limitless potential. This rebrand also signifies our commitment to transforming the way drug discovery processes are carried out. making them more seamless, efficient, and impactful. It's really more than a new brand. It's a reflection of our relentless drive to accelerate discovery and advance therapies toward clinical success faster and more efficiently. This quarter, we announced significant progress in our TATX112 program, which focuses on developing antibodies targeting the TREC-B protein associated with aggressive cancers. The program has successfully identified multiple antibodies capable of infiltrating and eliminating TREC-B expressing cells in in vitro ADC or antibody drug conjugate assays. Our TATX 112 program has reached a significant milestone demonstrating our ability to target and eliminate these TREC-B expressing cells, indicating its potential to treat TREC-B overexpressing tumors such as those found in neurological, gastrointestinal, respiratory, and ovarian cancers as well as others. Earlier this year, we entered into a material transfer agreement with Bioceus to combine our AI-driven antibody engineering with their proprietary technology to create novel therapies for hypoxic solid tumors. In a significant development since the MTA, Bioceus has been acquired by BioNTech, a global leader in immunotherapy. This acquisition not only highlights the value of biofeasible technology, but has also opened new avenues for collaboration with BioNTech. We are enthusiastic about the potential to work closely with BioNTech in advancing oncology-focused antibody therapeutics and exploring synergies between our AI-driven platforms and their cutting-edge oncology strategy. Immunoprecise Antibodies is pleased to announce a significant update on the OncoResponse Rabbit Anti-LILRB2 antibodies discovered using our proprietary D-Cell Select platform. These antibodies have successfully progressed through IND enabling and Phase 1-2 clinical trials. IPA is an undisputed leader in the rapidly advancing field of rabbit-based antibody discovery and development. which is gaining traction due to its high levels of antibody specificity and affinity. Our B-cell select platform has been instrumental in this achievement, enabling the rapid selection of highly specific and non-crash reactive antibodies directly from B-cells. Recent clinical data shows that the anti-LILRB2 treatment is well tolerated and exhibits early signs of efficacy in patients with solid cancers. Notably, these antibodies have advanced to further evaluation in patients previously treated with PD-L1 or PD-1 agents, providing a high-profile showcase for the emerging field of rabbit-based therapeutics. We are also proud to have partnered with the Mayo Clinic on the groundbreaking study published in Autophagy. As another testament to our industry-leading rabbit B-cell select platform, We developed antibodies targeting phosphorylated ubiquitin, a marker of mitochondrial damage critical to understanding neurodegenerative diseases like Parkinson's and Alzheimer's. We are excited to share progress in our collaboration with a leading semiconductor company to enhance the computational efficiency of our drug discovery pipelines. This partnership has been instrumental in driving advancements across multiple fronts, During this partnership, we are currently integrating optimized versions of AlphaFold2, AF Sample, and AF Massive into our Lens AI portal. These enhanced pipelines significantly improve the speed and cost effectiveness of these applications. The optimized versions provide a tenfold speed up and nearly a threefold cost savings compared to existing solutions, positioning our platform for greater scalability and efficiency. Another standout achievement of this collaboration is the reduction of epitope mapping timelines from days, which was already extremely fast, to mere hours. By leveraging the two companies' advanced computational methods, we've been able to maintain high accuracy while significantly lowering resource consumption. This milestone not only accelerates discovery, but also reinforces our platform's ability to deliver results with precision and reliability. Looking ahead, this collaboration is also exploring cost-efficient alternatives to traditional cloud platforms. These efforts will support sustainable growth as we continue to scale our AI capabilities and wet lab integration, ensuring Biostrand's innovative solutions remain accessible and impactful. In parallel, we've initiated conversations with another prominent semiconductor leader who has expressed strong interest in collaborating with us. These discussions aim to explore joint advancements in AI-driven drug discovery and computational efficiency, further strengthening our capabilities in precision medicine. Biostrand's dual revenue model combines application-based pricing through portal and API access, as well as data management subscription services. The current focus is on application-based services. BioStrand provides high-value analytical applications like immunogenicity analysis and epitope binning and mapping offered via portal or API access. Since our last earnings call, BioStrand has onboarded four new early access adopters, offering competitively priced services to attract a broad client base while maintaining gross margins of 80% to 85%. Lastly, data management capabilities are being built out and will be added in the future. Lens AI's data management service offers scalable solutions for seamless data integration and efficient data handling, targeting medium to high volume clients. This subscription model is expected to generate steady, predictable recurring revenue. Our partnership with AWS progresses as planned. We are currently conducting the foundational technical review which we will submit this December. A first marketplace offering is anticipated by March, followed by a progressive launch of analytical pipelines for consumption by AWS users. I'll now turn things over to Kristin Taylor for our financial updates this quarter.

Thank you, Jennifer. I'll provide a brief overview of our financial results for the second quarter of our fiscal 2025 before touching on our financial position as of the end of the period. which was October 31st, 2024. As a reminder, all numbers I reference are in Canadian dollars unless otherwise noted. For the second quarter of our fiscal 2025, we generated revenues of 6.1 million versus 6.1 million in the previous year. While flat year over year, this represents a 16% increase over revenues in the first quarter of fiscal 2025 with strong growth achieved quarter over quarter at each of our wet lab sites. BioStrand, our AI-driven platform, achieved $397,000 of revenue in the second quarter, marking its highest quarterly revenue achievement to date, along with life-to-date revenue of $917,000. As we continue to roll out the fee-for-service analytical capabilities of Lens AI to our clients, not only are we supporting drug discovery and development with more efficient and effective tools, but also achieving much higher gross margins than what is recognized from traditional wet lab methods. Now on to our operating expenses. Our research and development expenses for the second quarter of fiscal 2025 were 1.2 million versus 0.8 million for the second quarter of fiscal 24. Year-to-date R&D expenses were 2.8 million versus 1.8 million in the previous year. While this represents a substantial percentage increase The dollar value highlights our capital-efficient investment strategy as we expand our proprietary platform, Lens AI. Our sales and marketing expenses for the second quarter of fiscal 2025 were $1.2 million versus $0.9 million in the previous year. Year-to-date sales and marketing expenses are flat year-over-year at $2 million versus the previous year. We continue to benefit from cross-selling efforts across both our wet labs and Lens AI platforms as we support the expansion of our comprehensive AI-enhanced antibody drug discovery and development services. General and administrative expenses from the second quarter were $3.3 million, also flat against the previous year. Year-to-date G&A was $7.4 million versus $7.3 million, as we actively managed our expenses to offset inflationary pressures. As Jennifer discussed, We continue to initiate cost-saving efforts so we can focus our spend on growing our business and proprietary technologies. Over the past 18 months, we made difficult decisions, including laying off or not filling open positions for almost 50% of the corporate overhead positions and delaying select expansion investments as we monitor market trends. We are also looking at additional non-dilutive state and local incentive programs to offset the costs and support the ramp-up of our enhanced Lens AI tech offerings. We have successfully utilized this type of funding over the years and continue to use non-dilutive funding to support our R&D in Canada and Europe. Overall, we reported a net loss of 2.6 million for the second quarter of fiscal 2025 or 0.9 per share versus our second quarter of fiscal 2024 that resulted in a loss of 2.4 million or 10 cents per share. As for our cash position and liquidity, we ended the second quarter of fiscal 2025 with cash of $3.6 million versus our year-end cash balance of $3.5 million. Our October 31, 2024 ending cash balance reflects our cash used by operations, including R&D spend, for the first six months of the year of $4.1 million. This use of funds was offset by $4.8 million from net financing activity. which reflects capital raises net of lease payments. On the Yorkville debentures, the second tranche of 1.3 million, which closed on August 16th, 2024, was extinguished through conversion as of December 9th, 2024. We continue to work with Yorkville on the conversion of the remaining tranche to minimize potential share price disruptions. We also believe that exploring a potential sale of our two European wet labs will further support cost cutting through streamlining overlapping capabilities while generating upfront cash. As our operations evolve, we see value in consolidating operations while we continue to focus on growing our technology and assets. Building and commercializing Lens AI has been an investment, but as we receive feedback from early adopters and see the gross margin gains on early revenue, it strengthens our commitment to this strategy. Thank you, and we will now turn back to Regina.