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spk07: Greetings, ladies and gentlemen, and welcome to the Orgenesis Fiscal 2021 Year-End Conference Call. At this time, all participants have been placed on a listen-only mode, but we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waldman, from Investor Relations. Sir, the floor is yours.
spk00: Thank you, and good afternoon, everyone, and welcome to the Origenesis year-end business update conference call. On the call with us this afternoon are Varad Kaplan, Chief Executive Officer, and Neil Reisinger, Chief Financial Officer. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. This conference call contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended in Section 21E of the Securities and Exchange Act of 1934 as amended. These forward-looking statements involve substantial uncertainties and risks and are based upon our current expectations, estimates, and projections and reflect our beliefs and assumptions based upon information available to us as the date of this conference call. We caution listeners that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict. Our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of the number of factors, including but not limited to the risks and uncertainties discussed under the heading Risk Factors in Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2021, and our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements for any reason. I'd now like to turn the call over to our Genesys CEO, Ms. Varad Kaplan. Please go ahead, Varad.
spk01: Thank you, David, and thanks to everyone for joining us on the call today. This has been a transformational year for Genesys as we reported key achievements implementing our point-of-care platform, which we believe is the key to unlocking the potential, the full potential of the cell and gene therapy industry. We've also generated strong year-over-year revenue growth. Revenue for the full year of 2021 increased over 360% versus 2020 due to increased activity and service agreements with existing and new partners and customers. These revenues are a direct result of the process development, technology transfer setup, and the work we're doing for both our point-of-care systems and therapies. In addition, we have already received commitments from our customers for future revenues in excess of $30 million for 2022 and over $50 million for 2023. As a result, we have very good visibility heading into the new year. To put the company's growth in perspective, our revenue run rate is nearly on par with our former master cell CDMO operations at the time of its sale for over $300 million. We do believe that the new point-of-care platform is more cost-effective and scalable. Towards this end, our business is built around our three major pillars, our therapies, technologies, and the network. These pillars align the interests of the therapy development, the hospitals, and the patients in a way that has not been done before. To provide some historical context, centralized production, which is standard now across the industry, has resulted in high costs for cell and gene therapies, For example, CAR-T therapies can range in the hundreds of thousands of dollars per patient. These significant costs have significantly inhibited uptake by payers and very much limited availability for patients. Our goal is to lower the cost, streamline logistics, expand capacity, and enhance distribution through processing of therapies close to the hospital setting, which is expected to support pay uptake and make these therapies more broadly available to patients. We believe this is a crucial step that is necessary for cell therapies to become widely available. We continue to progress our point-of-care centers located at strategic locations, and we are investing our efforts in validating our point-of-care platform within each of such regions. Our global supply network now spans North America, Europe, Asia, and the Middle East, a compromise of point-of-care centers which serve as central hubs for the entire region. These centers are set up for validation of therapies and technologies, but they also provide the basis for the global supply and distribution platform. We continue to deliver the Ogenesis mobile processing units and labs or ampules across our point-of-care network globally with a goal to expand capacity and availability for a broad range of advanced cell and gene therapies. Unlike a traditional biotech, our approach is based on adapting the lab-based processes to customized, automation closed systems, and integrating the combined process in our ampoules. Ampoules are multipurpose mobile GMP facilities that can be rapidly deployed as a standard industrial site near the point of care or as close as needed. Utilizing our ampoule-based approach of production of personalized cell and gene therapies, we believe we can add new capacity within three to six months versus traditional clean rooms, which are 18 to 24 months. And the lack of capacity in the industry is even more evident and pressing than ever. In terms of expenses, our goal over time is to reduce the cost of these therapies to tens of thousands versus hundreds of thousands of dollars. We believe that the key to our success in our point-of-care business is standardization. The process is exactly the same regardless of where the product is produced. For this reason, we are establishing training protocols. We are using audited and consistent suppliers and vendors of materials involved in production and quality control. We are implementing validated automated solutions that minimize human error. And we are taking advantage of closed units to control infections. We believe our strategy of decentralizing and unitizing the supply of cell and gene therapies based on standardization of the manufacturing environment will ultimately become the solution for this industry. enabling lower-cost parallel processing and accelerated development, and ultimately providing a scalable long-term option to overcome the industry-wide capacity constraints. Our strategy is to qualify the production process of a therapy in one ampule at one point-of-care location, and then to add additional ampules under the same quality system and infrastructure. We have developed this approach based on a decade of experience in process development of such therapies, and we are working closely with researchers from leading academic institutes, as well as from biotech companies active in the space. We believe the ampoules are an important step to quickly expand our capacity, and we look forward to expanding both the quantity and location of our systems. In line with this strategy, I am extremely pleased to announce the recent unveiling of some of our new ampoules. Feedback from within the industry has been extremely positive. As an example, we placed our first ample in Spain at Hospital Infantil Universal Nino Jesus in Madrid that has been designed specifically to process tumor-infiltrating lymphocytes and mesenchymal stem cells. Moreover, we have expanded our collaboration with John Hopkins to establish a new point-of-care center, also known as the Maryland Center for Cell Therapy Manufacturing. Construction of the new point-of-care center will be funded in part by a $5 million grant from the state of Maryland. We expect that the new state of the art 7,000 square foot facility will enable local capacity for development of processing of clinical therapeutics at the point of care and will serve as a base for the arm pool expansion. Ogenesis has entered into collaboration agreement also with Tel Aviv Swarovski Medical Center to utilize its Israeli point of care center to support research and validation activities for advanced cell and gene therapy. We are also seeing growing government interest in our partners in our activity. As an example, our joint venture with SIRSEL in Greece has been designated as priority investment of strategic national importance. In addition, the JV has been approved to receive a grant of up to €32 million from the Greek government. We are subject to compliance with budgeting conditions and spread over the next few years, which we intend to use to advance the development of our cell therapies within the point-of-care setting. The funds are also intended to support the process development and manufacturing of the therapies at the clinical sites utilizing the ampules. We have invested in our point-of-care platform over the two years and are now realizing the revenue return on such investments. We intend to continue utilizing profits, government grants, and additional resources to expand capacity of the point-of-care centers, rolling out our ampules, incorporating new technology, and implementing our quality system. For example, the arm pool that is located at Wolfson Medical Center successfully completed all qualifications and is currently GMT compliant. Assuming the Ministry of Health approves the clinical study, we plan to process clinical grade batches for Phase I-II still study. Our partners and customers have aligned interest with our own and have been committed to support the validation, development, and clinical trials of advanced therapies utilizing our point-of-care platform within the respective market. As we have discussed in the past, we provide our partners and customers with development and supply services, whether it be for their own products or for our own out-licensed therapies. We believe this approach is highly scalable as it de-risks development through outside support from our partners. In this way, we believe we can advance our development of point-of-care therapies, which now span immune oncology, antiviral, metabolic, autoimmune diseases, tissue regeneration, and more. These therapies range from preclinical through to early commercial stage. Our strategy involves in-licensing therapies from leading research centers, hospitals, and biotech companies, and out-licensing such products to pharma and biotech companies in a consistent and standardized manner in all locations, while leveraging our point-of-care platform services to provide them with development and supply they need for such products. We do so in return for future royalties as well as exclusive service contracts for industrializing and supplying these cells and gene therapies. We believe we've built a robust therapeutic pipeline, leveraging grants and our outlying SYNC partners while benefiting from the service-related payments. This pipeline includes more than 16 core therapeutic technologies, some of which can be utilized for multiple indications, ranging from preclinical to early commercial stage. spanning into immune oncology, antiviral, metabolic autoimmune, tissue regeneration, and more. An example of our therapeutic pipeline includes metabolically optimized T-cells, a TILS product. By using an advanced process optimization technology licensed from Yedda Research and Development, Weizmann Institute of Science, we believe that we can decrease the duration of the manufacturing process and increase the potency of the TILS. In the early stage of cancer, some lymphocytes successfully attack and infiltrate the tumor microenvironment surrounding the tumor cells and mount an anti-tumor response. TIL therapy is a clinically validated personalized cancer treatment based on infusion of autologous TILs expanded ex vivo from tumors. Once expanded, the TILs are infused back into the patient where they attack the cancer cells with a high degree of specificity. An additional example is our unique CD19 CAR T therapy. This is an anti-CD19 chimeric antigen receptor known as CAR T cells. They are genetically engineered to express an artificial T cell receptor for cancer immunotherapy. CAR T cells can be either derived from the patient's own cells or from T cells from a healthy donor. Once isolated from a person, these T cells are genetically engineered to express a specific CAR. which programs them to target an antigen present on the surface of the tumor. After CAR-T cells are infused into the patient, they act as a living drug against cancer cells, expressing the target antigen. We are developing a new anti-CD9 CAR-T therapy for treating patients with B-cell malignancies, including acute lymphoblastic leukemia and non-Hodgkin lymphoma. The cells of these patients express CD19 protein on the surface, and this is targeted by the CAR-T cell. An additional example is KyloCell, an autologous cell-based product approved in the United States, which is made from the patient's own pancreatic islet that's to regulate blood sugar. KyloCell is intended to preserve insulin secretory capacity in chronic or acute recurrent pancreatitis patients after total pancreatectomy. KyloCell has demonstrated numerous benefits, including reduction in pain, improved quality of life, increased survival, and cost savings for payers. We estimate that the potential addressable market for KyloCell to be in an excess of $500 million in the U.S. alone. We are also focusing on amplifying the process and adjusting the KyloCell manufacturing process for European GMP requirements in anticipation of initiating the first clinical application in the European Union. We are in advanced discussions with key islet transplantation and pancreas surgery centers to advance this platform as well as other strategic partners. So to wrap up, we believe that the coming year could be a transformative year for Ogenesis. We are excited at the prospect of supplying clinical-grade MSCs, CAR-Ts, and TILs-based products utilizing our point-of-care platform. We believe that providing data from various centers, validating the comparability of products supplied at various sites, could provide cell and gene therapies a viable economic pathway to market, and that given the pipeline of cell and gene therapies for which we provide developing and processing services, that we are well-positioned to expand our market position, not only as a leader but as a disruptor in the cell and gene therapy market. We believe that we are building a sustainable revenue model that could support the growth of the industry in general and the growing capacity requirements of our partners and customers, We look forward to sharing more exciting developments to be announced in the weeks and months ahead. On that note, I'll now turn the call over to Neil Isinger, our Chief Financial Officer.
spk06: Thank you, Vera. Our revenues for the year ended December 31st, 2021 increased more than fourfold to $35.5 million as compared to $7.7 million for the year ended December 31st, 2021. The increase is mainly attributable to increased activity under master service agreements with our regional partners related to technology transfer, setup, and validation of both our therapies and systems for clinical use in their respective territories. Cost of services and other research and development expenses for the year ended December 31st, 2021 were $36.6 million compared to $84 million for the year ended December 31st, 2020, representing a decrease of 56%. The net decrease was mainly attributable to a decrease in the amount of $45 million in other research and development expenses during 2021. In 2020, we made significant investments in the development of several types of opioles accounted for in other research and development expenses with the expectation of use and or distribution through our point-of-care network of partners, collaborators, and joint ventures. The majority of our opiole development Work was completed in 2021, and we expect that such opiates will be placed into service during 2022. Selling general and administrative expenses for the year end December 31st, 2021 were $14.7 million as compared to $19 million for the year end of December 31st, 2020, representing a decrease of 22%. The decrease for the year ended December 31, 2020, is primarily attributable to a decrease in accounting and legal fees as a result of decreased corporate investment activities in 2021 compared to 2020, as well as the reduced business development expenditures in 2021. We expect the growth in revenue in 2022, including contracts already in hand, will cover R&D and SG&A expenses during 2022. In terms of liquidity, we ended the year with cash and cash equivalents of approximately $5.5 million. As a result of the sale of the MasterSell subsidiary, we've used the proceeds of the sale to execute on our point-of-care strategy. We believe much of these upfront investments are behind us and expect that future growth in revenue will offset our cash burn. We are also attempting to minimize our own investments through a cost-effective international partnering strategy and non-dilutive grant funding. We are seeing growing public and private interest in supporting local regional expansions and developments. We have been fortunate to receive government support from several countries, and we believe we will continue to benefit from such support to further grow our point of care platform. Operator will now open the call to questions. Thank you.
spk07: Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to enter the queue to ask a question at this time, you may press star one on your telephone keypad to enter the queue. Once again, ladies and gentlemen, please press star one on your telephone keypad at this time. If you would like to ask a question, please hold a moment while we poll for questions. And your first question is coming from Bruce Jackson. Bruce, your line is live. Please announce your affiliation and then pose your question.
spk05: Hi, Bruce Jackson, the benchmark company. Thank you for taking my questions. I just wanted to follow up on the comments Can you tell us a little bit more about what the next steps are in that program, how many sites you might partner with in Europe, and when the ampoules might be placed?
spk01: Yeah, of course. So we have actually expanded our activity to more sites in the U.S. And in Europe, it's really a matter of regulatory. It's still in discussion of how many sites we'll start for, you know, clinical approval. But I think there is a need in Europe for this, and we've had initial discussions. So I don't know. I don't have a final answer kind of how many sites we'll have for the clinical trials, though, because it's still in planning phase.
spk05: Okay. Fair enough. And then if I could just get back to the revenue and the operating expense commentary for 2022. So the revenue is going to pretty much offset the R&D and the just generally all in, what are your burn rate expectations for 2022? And are we talking about approaching breakeven or might there still be a small net burn for the year?
spk01: So I think we'll... Well, that's kind of my hope, that we will be break-even, because that's kind of how we base our budget. Remember, we've finished most of the development work and whatever's left is covered by grants, actually. So I don't think we'll have a lot of R&D unless, you know, some kind of strategic change, which we're not planning. So, I mean, I think we should be okay with break-even. You know, we kind of will really... generating revenue and expensing you know the operational expenses to generate that revenue so i think we have our platform kind of ready to go and we may even get some royalties from some of the out licensing which will be great so that'll be nice so um that's it i think we've we've spent two years working very hard to get this up and going uh this year we've already you know hit the ground running and it's going well. And we already have kind of commitments from existing and new customers. And, you know, we're still in the, haven't even finished the first quarter. So I'm optimistic that we'll be doing well.
spk05: All right. Congratulations on all the progress and thank you for taking my questions.
spk01: My pleasure. Thanks.
spk07: Thank you. Your next question is coming from Kelvin Seto. Kelvin, your line is live. Please announce your affiliation and pose your question.
spk03: Hi, this is Kelvin from DanX Capital. Hey, Varad. It's nice to talk to you again, and congratulations on the great results. So I just have a few questions. I think this is the first time I'm seeing Ogenesis putting out $500 million as a potential addressable market for Calisio. So I'd like to find out more about, do we have any current plans to ramp up sales or do we just have to wait a bit longer?
spk01: So, you know, I think one of the things that, as I said, we've been working a lot on expanding the market and, you know, the European market, Asian markets are different from the US. So I actually think they have quite a nice potential. And the U.S. itself, as I said, as we're focusing on expanding our capacity there, I do hope we will expand. I mean, we've really, I think we're working with some of the best centers and we're getting a lot of positive feedback. So we also are looking at, you know, interesting ways to actually expand the indications we can use this technology for and just kind of strategically looking at this product. So I do think we have a lot of potential we can build on it, not only this, which is a niche market, but really underserved with no good solutions. I mean, there are some centers that try to do islet kind of preservation after they do pancreatectomies, but really it's not the same level, right? Here you have an actual product that's very well defined, and I think our patients, the clinicians we work with can testify to the fact that this is a very good product. So I think it's all about kind of expanding indications and expanding outreach, which we've also worked hard on, and I think we will build the food for that.
spk03: All right, great. Thanks. The second question I have is you know right now we are going through a phase of environment where I think it's harder to raise money and I was looking at a latest balance sheet so we are very low on cash right now and I'm just wondering you know is this cash sufficient enough for us to you know run our operations for next year or do we have to raise a bit of money?
spk01: So, you know, our expenses are really declining, and we've also received a lot of grant funding, so that covers a lot. And at the same time, we have outlicensed some of our therapies, technologies to pharma and biotech companies, and so that also generates some revenue. So, as I said, we do expect to be more or less cash flow break-evened, And historically, even when we've needed capital, our current shareholders have been very supportive. But we also look at strategic options, which I think we have plenty of, just looking at our pipeline and our activities.
spk03: All right, thanks. So one last remark. I think while I consider myself a very patient investor, I think all of us can agree that the stock went nowhere since 2016, you know, despite much progress have made. I think it's just a huge injustice to the progress made by our genesis. So since we are entering the break-even for next year, I hope we can ramp up on the investor relations sharing because the valuation gap between where we are right now and previously with MasterCell is really quite wide.
spk01: Well, I certainly think we'll be putting a lot of effort into that.
spk07: All right. Thank you.
spk01: Thank you.
spk07: Thank you. The next question today is coming from . , your line is live. Please announce your affiliation and then pose your question.
spk02: Hey Vera and Neil, Bjorn from 10X Capital. Nice to speak with both of you again. So I've been following Ogenesis for a while and it's great to see the company strategy slowly panning out. So I have two questions. My first question is regarding our accounts receivable of about $15 million. I wanted to ask if you could share some colors on what does it comprise of and when should we expect to receive this amount?
spk01: So, actually, I think, Neil, you can answer, but I think most of it or at least some of it has been already received, right?
spk06: That's correct. When you say what it's comprised of, yeah, that is a mix of all of our different partners and customers. So, basically, as we've indicated before, our terms are 90 days from invoice date okay and that invoice date typically happens uh most of the time at the end of each month so it's really 90 days at the end of the month in which the in which the services are incurred or the invoice is generated okay so we have had a very good history of collectability of accounts receivable so far at this point we expect to continue that trend we have some past dues which were which are less than about 3 million which will probably have be collecting here in the short term so we see no indication that that's going to change because of what we've seen in the past so and we haven't changed the terms the terms have been the same for uh for since the beginning so yeah so as far as what it's comprised of that's the same partners and customers we've had that we've reported on before the mix has not changed okay
spk01: And maybe I'll just add to that that I think this year will also be important in terms of transition on that issue because typically, you know, as you go through the life cycle of these therapies, you have, you know, the initial period is process development, which is traditionally given longer time for payment. Also because many of our customers and the revenues we're collecting, they also get paid back from grants and other things they need to show. So we give them the time they need to do that. But one of the reasons this year I'm really looking forward to it is – and I remember we had the same kind of process in MasterCell. This transition when you're actually – moving from when you're just doing like the process development, and we've already started some batch production, and you're actually really relying your revenue more and more on batch production and utilization. So the way these contracts work, that actually you have a lot more kind of visibility on them going forward because typically customers, they pay per utilization per clean room. In our case, it's per ampoule. And onto that, you add the price per batch. So the whole payment structure starts shifting. And I think we'll gradually see this till the end of the year. We still have process development for new projects, of course. But I think we'll see many of these projects actually transition to a place where the payment schedules become very different.
spk02: Great, that's very helpful. So I just have one more question. I just want to touch on the grant of 32 million euros and I think it shows how the Greek government is very supportive of both TerraCell and Ogenesis. Could you share some colors if you are expecting some other grants elsewhere as well?
spk01: So we haven't made this public, but I think what, so I can't go into detail, I apologize, but I do think if you look at grant funding in general, I mean, just look at what State of California, they've actually allocated a tremendous amount of funding just for this purpose of making cell and gene therapies available, right? So you see this, look at the grant we got in Maryland, right? So I think there's a growing realization all over the world, and I mean, really, I've seen this in countries all over the world, where they understand something has to be done. You can't continue having therapies that are costing so much and just patients need them, right? And I think we see this addressing this issue, even on the regulatory side, right? The European Union are putting together new guidelines to support decentralized supply of these therapies. So I think we will continue to put our efforts. I think we have also good relationships with the governments we've received grants from in the past because, you know, we've achieved the work we tried to do and we received the funding for. So I really think that's an important component, and I think it just kind of highlights how much everybody realizes this industry needs a solution, and it's actually... an issue of public importance to make these therapies available to patients.
spk02: Got it. Thanks, Merit. So I just want to share that I always respect the mission that you and your team are on. You guys are doing something great for the world. And I just hope that looking ahead, we can be financially strong and generate profitability so all Genesis can continue the good work that you have been doing for everyone without dilating the shareholders too much. And at the end of the day, I guess I speak for everyone here that we all want all genesis to do well. So thank you, Vera and Neil, for the hard work, and have a great day ahead.
spk01: Thank you very much for your words. I really appreciate that.
spk07: Thank you. Your next question is coming from Neil Feagin. Neil, your line is live. Please pose your question.
spk04: Hi, Vera. Thanks for taking my calls this morning.
spk01: I'm happy to.
spk04: So I just wanted to clarify a couple of things. The revenue commitments from customers that you stated in your prepared remarks for 2022 and 2023, is that revenue still what you would consider to be all services revenue? And is it accretive? Is it in addition to the $35 million or so that you generated from services revenue in 2021?
spk01: Oh, yeah. It's the next year. It's further to what we made in 21. We now, look, and one of the things, and it was just a beautiful article kind of published, I don't remember the name, but it's kind of comparing cell and gene therapy space to the rainforest space. which I think is very true because it's almost like a symbiotic relationship between the therapy developers and the industry kind of suppliers and the service providers as ourselves. Because if you're going into a clinical trial or if you have a therapy where you're expanding and you're building up capacity, your dependency on your service provider is very high Saying it's not easy is an understatement. If somebody is preparing you for production and then starts producing, and even before that, shifting to another service provider is a tremendous challenge. That relationship is very sticky. One of the things that therapy companies, biotech companies in this space really need to have is It's a commitment kind of both ways, right? It's important for them. It's almost essential for them to make sure they have reserved capacity for the ongoing activity. It's part of their value because it's not easy. If, for instance, suddenly the supplier kind of disappears and they have a huge problem, it's almost beginning again, right? So I think the fact that we have these commitments from our existing customers and also into some additional customers. That is because we have been successful in these first stages of amplifying the products and have already done some batch qualification. And, you know, from now on, we will grow with them, they will grow with us. And, you know, typically, like any company, in the beginning we don't work with huge partners or companies. But they are also growing. And we've seen this in the past as well. You begin with a smaller company, and as you build up your reputation, these small companies grow with you. They become bigger companies. They become more successful. And you also attract bigger players. So that's kind of what we're seeing. We're seeing they want to make sure they have the capacity they have the supply they need for their future plans for the next two years. And typically in this industry, contacts are around 24 months, 18 months.
spk04: Okay. And kind of as a follow-on to that, are we within sight of starting to generate what I call therapy revenue, revenue actually derived from treating patients? Yes. is there any visibility to when, you know, actually therapy-related revenues might begin late this year, early next year, or any guidance you can give on that?
spk01: You know, and I want to, you know, that's a tough question to ask me, okay, and I'll explain why. Because, you know, we do have KyloCell, which I really hope the revenues will expand. But remember there's two pathways for these therapies. So some of our therapies and some of the therapies we supply for, they are doing clinical trials. But remember there's a parallel regulatory pathway that exists, which is the hospital exemption. And I think I've explained this, but it's really an interesting model where in some cases hospitals take upon themselves the responsibility to provide a therapy for a patient. So this is not at the size and the scope of, because each hospital needs to get approval for that, but that's actually kind of marketed product, okay? It's done not under the regulatory framework of kind of a BLA or an IND, but it's done under a regulatory framework of a hospital exemption. This does not exist in the U.S., but is very common and becoming more common in Europe and in Asia. So I... it's difficult for me to say when exactly that will happen and if we'll manage to get into that this year or the next, but that is a much shorter pathway, okay, in terms of just regulatory approval. And one of the most important kind of indications for that is to have a well-regulated GMP process and supply. It's not, the demands are not lesser, it's just in terms of quality assurance and GMP level of production, but the demands are more based on clinical kind of responsibility of the hospital and not a clinical trial. So we do have some products that do fall into those categories, and I don't know if we'll manage to get into that this year or the next, but I'm very hopeful we will. Okay. So I hope that answers.
spk04: Yeah. No, no. Listen, I realize that this isn't an exact science at this point. Two more real quick ones, Vared. You mentioned that you've already outlicensed some of your therapies to biotech and pharma companies. You don't need to repeat it. But have these been announced, or are these out-licensing agreements you've entered into that aren't in the public domain yet?
spk01: So we haven't given a lot of details on them, just kind of general, but that's our strategy, right? I mean, our strategy is not to develop the therapies ourselves. It's just that's the situation in this industry. And just to give an example why, because... A lot of these therapies are developed by small biotech and hospitals, and in some cases have actually treated patients, right, under a hospital exemption. But now they want this therapy to move forward. So when they come to us and ask us, you know, can you make this therapy for us? We say, yeah, we can provide user services. But if you give us a license, we can also expand the market reach, and then we license out to other companies.
spk04: Okay. And would some of these companies that you have outlicensed to, if they were in the public domain, would they be companies that the biotech community, the pharma community might recognize?
spk01: I don't know. I think regionally, look, this is a very new industry, okay? You've got some big pharma giants that have come in and, you know, made a stand. I And the interesting thing is that I think most major pharma companies are going into this space, and you see more and more adoption on the part of this space. It's like nobody wants to be left behind, and they all want to play in the scene, and they're all struggling with a very new kind of technology. So you have a handful of big players, but what you see a lot in this industry is regional players that are very well-known regionally, okay? I think like any new industry, what we will see, and we've even seen it with some of our existing customers, you'll see kind of these mergers and consolidations of these little companies being swallowed up by the bigger ones and the bigger ones. So that, I think, is what is happening in the industry at the moment.
spk04: Okay. And, Virad, one final, if I might. I think a lot of us in the financial community, whenever we – hear talk of potentially needing additional capital. We have tunnel vision and we only think of equity offerings. You mentioned that there's the possibility of something more strategic. Would you like to expand on that just a little bit, even though it's hypothetical and could that include a larger biotech or pharma company or one of our collaborative partners?
spk01: actually taking an equity interest in or genesis so as i said i mean we we really rely a lot on our shareholders and the supports and you know we're so appreciative always of the patience and this is you know this is not a short-term game and i think you know and and we've actually expediting I think, you know, remember with MasterCell, I think it took us five years to get to this level of revenue. With this new model, it's taken us two years. So I think we are expediting the cycle to generate value, right? And this is part of what we want to do both for ourselves and for our customers, right? Our partners. So when we look at strategically, there's many strategic options we could look at. We could look at a strategic option involving one of our therapies, which reaches a certain level of maturity, and then we're not only doing maybe an out-licensing for co-development or for services, but really a buyout of such a therapy, which would be wonderful, right? But we need to mature to that stage. And we also have a lot of technologies that we've developed in-house that can serve many other purposes. industries or industry segments so we only also have that option and we also have different models of services of co-development so I think you know as a company we have so many options for strategic collaborations but I do think and here I really try to remain very loyal to the shareholders and not kind of you know to really try to push these assets to a place where they will get the real value they deserved And I think that's been our effort all along to maintain that balance between our needs and between maximizing value of the assets we can share with others.
spk06: And if I may add to that to answer your question is when we talk about strategic, we're really looking at as well the mentality, the part behind what the financing is as an investor, not just, you know, what's the liquidity of the stock today, right? So although forms of financing can even be debt, and you think, well, equity is always a form of financing that maybe everybody's most mindful of. Debt is something that we don't, you have to be careful what the devil in the details. You think it might be better. Most times it's not. You know, it depends strategically. You know, it's like, what's the structure, right? So when we say strategic, it's really the matter of who that investor is, what do they want to do with us? What is their mentality mainly for long-term rather than short-term? So while there could be equity that would be part of that could be, you know, as part of a collaboration strategically, it could be something where it's an investment we're looking for. And what we've always done, as you can see, because we have, you know, many different financing forms that are available to us out there. What is the long-term mindset? Okay. So that's what we mean as well. Let me say that too. Okay.
spk01: Well, that's really protective of the existing shareholders and, you know,
spk04: maintain okay you know a good structure no well i i think that's helpful because it helps us understand that you you you're not simply looking at one one avenue uh you know to to raise capital if it was needed and obviously with the share price where it is it's it's it wouldn't be viewed favorably at this point in time but you know My closing comment, it's remarkable to get to the point that you're talking about breakeven with only, you know, 25 million shares outstanding for a biotech company. I mean, that's quite remarkable. So, listen, thanks for the time. It was very helpful.
spk01: Thank you. Thank you for following us closely and always, you know, being supportive.
spk07: Thank you. And there are no further questions in queue at this time. I would now like to turn the floor back to Valerie Kaplan for any closing remarks. Thank you.
spk01: I'd like to thank everyone for participating in our year-end business update conference call. We are very excited about the outlook for the business and appreciate the strong support of our shareholders. We look forward to providing further updates as we plan to advance our therapeutic pipeline, expand our services, and deploy our ampoules wherever needed. So thank you very much.
spk07: Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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