Orgenesis Inc.

Greetings. Welcome to the Orgenesis 2022 year-end business update conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Waldman, Investor Relations. You may begin.

thank you good morning everyone and welcome to the orogenesis year-end business update conference call on the call with us this morning are varied kaplan chief executive officer and neil reisinger chief financial officer if you have any questions after the call 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, and 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 reflects 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, 2022. 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. 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 our call today. We are advancing the rollout of our Genesys mobile processing units and labs, also known as AMPLs. which are fully integrated all-in-one bioprocessing units that can be rapidly implemented as a standardized industrial cleanroom alternative at the point of care. Our revenue for the first quarter of 2022 increased by 98% to $13.6 million, compared to the same period last year. In addition, we reduced our operating loss by 91%, which reflects our cost-effective and scalable business model. Our revenue has shifted to be more production-based as we advance products from process development to GMP production. As we expand production, we hope to benefit from economies of scale with each point-of-care site servicing several ampoules. As we have discussed in the past, the key to success in our point-of-care business is standardization. The process is exactly the same regardless of where the product is produced. We believe our strategy of decentralizing the supply of cell and gene therapies based on standardization of the manufacturing production environment will ultimately become the solution for this industry, enabling lower cost, streamlined logistics, accelerated development, and providing a scalable long-term option to overcome the industry-wide capacity constraints. Utilizing our OMPR-based approach, we believe we are uniquely positioned to address the challenges of current centralized productions. OMPR shortened the implementation time of new capacity from 18-24 months to 3-6. 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. A recent news article in Genetic Engineering and Biotechnology News stated that high production costs are limiting patient access to cell and gene therapies. Additionally, an analysis by the Institute for Clinical and Economic Review suggests that the average cost of cell therapy treatment is $1 million. For this very reason, we believe our point-of-care process is a crucial step, that it is necessary for cell therapies to become widely available. As a result, we believe our model is uniquely positioned to address these challenges facing the industry, including capacity constraints and excessive costs. As we see this industry mature and more and more products enter the clinical stage, it becomes clearer that this industry must find solutions to reduce costs, both in the development stage as well as upon market approval. According to Cell and Gene, a publisher of industry research, through 2022 there were 27 FDA-approved Cell and Gene therapies. However, there are currently over 1,500 ongoing clinical trials for cell and gene therapies registered with clinicaltrials.gov. For this very reason, we would like to become an industry standard on which we can integrate new therapies in development, thus saving the costly need for each company to develop its own platform, incurring all the expenses and risks involved. We believe that utilizing an existing flexible platform Available at multiple standardized locations, we will enable therapeutic development companies to focus their efforts on clinical development. We continue to support our point-of-care centers, which are strategically located around the world and now span North America, Europe, Asia, and the Middle East, which serve as hubs for the entire region. We appreciate the dedicated work of our teams across the globe. that diligently work to implement our quality system and implement the GMP practices. We view our human resources as our greatest asset and hope to continue to attract wonderful scientists from every nationality. Our strategy is to qualify the production process 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 this space. We believe the arm pools are an important step to quickly expand our capacity, and we look forward to expanding both the quantity and location of our system. Since we have launched our point-of-care business, the feedback from the industry has been We are also seeing the regulatory agencies address the issue of de-sensorized production of cell and gene therapies, which we believe comes as a response to the industry's search for solutions in this space. The success of our point-of-care strategy has been enabled in part by the recent investment from Alamar Capital Partners, a premier private equity firm. into our point-of-care services subsidiary, MoreGenesis, LLC. It is important to reiterate that this transaction with Metamark valued our MoreGenesis subsidiary alone as a premium valuation of over $120 million, which represents a significant premium to the market cap of the entire company. This capital has allowed us to increase our capacity and advance our go-to-market strategy. as we aim to accelerate the deployment of our own pulse throughout our global point-of-care network with a goal to expand capacity across a broad range of advanced cell and gene therapies. We recently reached an important step in our collaboration with the University of California, Davis. Specifically, we signed an MOU with UC Davis to deploy our own pulse at UC Davis and other healthcare universities within the state of California. We believe that having them as a partner is strong validation and is likely to enhance our implementation as well as with other institutes as we expand our on-pill strategy across North America. It is important to know that our business goes beyond our point-of-care services in terms of our point-of-care therapeutic pipeline. We believe we developed a low-cost, capital-efficient business model to bring these therapies to market. In 2022, subsidiary Collegro Therapeutics supplied KyloCell to five medical institutes supplying total pancreatectomy islet auto transplant cases. Production from this one site enabled Collegro to achieve positive cash flow for operations in the fourth quarter of the year as a separate business unit. Additionally, Collegro passed an FDA inspection of this site as a registered tissue production establishment in February. Following this confirmation of the infrastructure design, production protocols, and building on increasing demand, we are now pursuing plans for site expansion in the U.S. and internationally. In the EU, Coligo is utilizing the expertise of our genesis to enable regional production capacity and leverage grants to drive clinical development. More broadly, 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 consistent and standardized manners in all locations. We provide these partners with development and supply services while benefiting from service-related payments. At the same time, we are leveraging government grants and other sources of non-dilutive funding from regional partners and others in order to advance such therapy. Using our point-of-care model, we believe these therapies can be advanced through clinical trials at the lower cost of traditional clinical trials by leveraging our network of academic institutes and healthcare systems around the world. Our partners, our customers, have aligned interests with our own and have committed to support the validation, development, and clinical trials of advanced therapies utilizing our point-of-care platform within the respective markets. As we have discussed in the past, we provide our partners and customers with development and supply services. Whether it is for our own products or for out-licensed therapies, we believe this approach is highly scalable and 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 disease, tissue regeneration, and more. As an example, we recently reached an important milestone in collaboration with Hospital Infantil Universito Nino Restos in Madrid, Spain, and Cure Therapeutics. Specifically, we announced positive preclinical results from intranasal administration of a stem cell-based oncolytic virus-bearing product that demonstrated over 50% tumor reduction in a murine glioblastoma model in air. This ability to deliver stem cells to the brain through the blood-brain barrier opens the possibility to a broad array of treatments that could potentially be less invasively administered. The production of that stem cell based oncolytic product involved utilizing a hospital-based sample. We look forward to expanding our collaboration with Curve Therapeutics. On one final note, we recognize these are challenging times, both in financial markets and for the companies developing the next generation of therapies. We believe that by offering a more cost-effective drug development pathway for these therapies, especially for companies trying to optimize cash utilization, we can offer new cost-efficient solutions that will unlock value not only for eugenicists but across the industry. So to wrap up, we believe the coming year could be transformative for Genesly. We believe we are building a sustainable revenue model that will allow us to support our global partners and customers while they advance products through the required regulatory steps. We expect to benefit from growth and reoccurring revenue stream based both on services and on future royalties. and in long-term contacts for industrializing and supplying these cell and gene therapies. With Metalmark's support, we look forward to accelerating the rollout of our point-of-care strategy and deployment of our ampoules. We share a vision of bringing breakthrough therapies to market in a cost-effective way that will ultimately benefit patients and hopefully save lives. We look forward to sharing more exciting developments to be announced in the weeks and months ahead we hope will drive value for shareholders for years to come. On that note, I'll now turn the call over to Neil Isengard, Chief Financial Officer.