Orgenesis Inc.

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.

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.

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.