Orgenesis Inc.

Good morning, ladies and gentlemen, and welcome to the Orgenesis third quarter 2022 business update call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. David Waldman, Investor Relations. David, the floor is yours.

Thank you. Good morning, everyone, and welcome to Orgenesis's third quarter 2022 business update conference call. On the call with us this morning are Varick 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 current expectations, estimates, and projections and reflect our beliefs and assumptions based upon information available to us at 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 a 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 in our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason. Now I'd like to turn the call over to our Genesis CEO, Ms. Verid Kaplan. Please go ahead, Verid.

Thank you, David, and thanks to everyone for joining us on our call today. We've made significant progress in advancing the rollout of our point of care platform, and we are very pleased to report another quarter of solid revenues, $8 million, and are progressing in our expansion in the U.S. We have invested much effort in terms of our capital raising activities in order to protect shareholders and preserve our capital structure. With that background, I'm very happy to report that we completed the recent financing of our point-of-care services business through our recently formed point-of-care services subsidiary, More Genesis LLC. I think it's important to note that this transaction valued this one subsidiary alone at a pre-money valuation of $125 million, which represents a significant premium to the market cap of our entire company. For those of you who may have been skeptical of our new business model, we believe this investment from Edelmar Capital, a premier private equity firm founded to independently manage the Morgan Stanley Capital Partner Funds, is a significant validation of our business model. They conducted extensive due diligence prior to this investment, which I believe has benefited the company. We believe this investment provides the necessary funding to accelerate the rollout of our point-of-care services business while minimizing dilution to existing stockholders given the current state of the public markets. I'd also like to point out that this is a similar strategy to the one we pursued with MasterCell. For those of you who have been involved with Ogenesis for some time, you'll recall we bought in a U.S. private equity firm as a strategic investor into our CDMO business. Ultimately, we sold this business for over $300 million to the benefit of all parties involved. We're pursuing a similar strategy through this private equity investment. The major difference here is that our revenues are already on par with where we were when we sold MasterCell. We believe that our point-of-care services business will generate substantially more value for the company and that we are providing a unique service for this expanding industry. Our point-of-care platform addresses many of the key challenges facing the industry, including capacity constraints, excessive cost, As a result, we believe our model is uniquely positioned to address industry challenges through a highly innovative decentralized model, which lowers costs, streamlines logistics, and expands capacity. Since launching our point-of-care business, the feedback from the industry has been positive, and now with Metalmark's support, we believe that we have the resources to accelerate this business. As we have discussed in the past, there are a number of advantages to our point-of-care systems, Such as short setup times, they have a small footprint, and they lower the cost of production through automated operations, streamlined logistics, and parallel processing. In addition, we designed them in a scalable and modular format, so we can add capacity as the needs of the hospital or biotech companies expand. OMPL shortens the implementation time of new capacity from 18-24 months as clean rooms require to approximately 3-6 months. We believe our strategy of decentralizing and unitizing the supply of cell and gene therapies based on standardization of the manufacturing environment could ultimately become the solution for this industry, lowering the cost of the therapies through on-site processing and make these therapies more broadly available to patients. Our goal over time is to reduce the cost of these therapies to tens of thousands versus hundreds of thousands of dollars. We believe this is a crucial step that is necessary for cell therapies to become widely available. Our global supply network now spans North America, Europe, Asia, and the Middle East, compromised with point-of-care centers which serve as hubs for the entire region. We now have ampules deployed in Europe and the Middle East and a set of point-of-care centers and strategic hubs in the U.S. As previously discussed, we expanded our collaboration with Johns 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. Our process development services are already active on site. We could not envision a better partner than Johns Hopkins as one of our first strategic collaborations. We believe that having them as a partner is strong validation and is likely to enhance the sales process with other institutions as we expand across North America. All that being said, it's important to note that our business goes beyond point-of-care services. In terms of our point-of-care therapeutic pipeline, we have developed a low-cost, capital-efficient business model to bring these therapies to market. we now have a dozen distinct therapeutic programs within our pipeline in various stages of development. These therapies span a broad array of indications from immune oncology, antiviral, metabolic, and autoimmune diseases, and more. By designing these therapies from the ground up using our point-of-care model, we believe these therapies can be advanced through clinical trials at a lower cost than traditional clinical developments. by leveraging our network of academic institutions and health care systems around the world. Through this network, we are establishing key strategic partnership and licensing agreements to fund the development of activities. And while our partners are responsible for funding development and clinical trial, we get paid for performing services. As these programs move into commercialization phase, we would benefit from revenue sharing and royalty agreements with our partners. In addition, we have a strong track record of securing non-dilutive grant funding to further accelerate the development of these programs. We believe that our ability to secure grant funding makes these therapies even more attractive for potential partners and licenses. We then work with us through all stages of the development lifecycle. We can basically provide them a plug-and-play roadmap, including manufacturing, clinical, and regulatory, as well as other services. Also, through these partnerships and prudent cash management, we have dramatically reduced our SG&A by 49% and our net loss by 86% for the third quarter of this year over the same period last year. As a result, we achieved nearly break-even income from operation for the third quarter of 2022. At the heart of our business model, Our goal is to provide life-changing treatments to a large number of patients at reduced cost within the point-of-care setting. We've also built a robust therapeutic pipeline, leveraging the government grants and other sources of non-diluted funding from regional partners and others, while outlicensing therapies to regional distribution partners and benefiting from service-related payments. We are more than ever enthusiastic about the outlook of the business as we have built a scalable, recurring revenue business model. We believe our model is uniquely positioned to support the growth of the industry and the growing capacity requirements of our partners and customers. I would like to thank all of our loyal shareholders that have stuck with us and believe our best days lie ahead. 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 Isengard, our Chief Financial Officer.