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spk00: Good day, and thank you for standing by. Welcome to Cain Biotech Q4 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentations, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, to Nicole Sandy, Investor Relations Advisor for Kean. Please go ahead. Thank you.
spk03: Good afternoon and welcome, everyone, to Kean Biotech's quarterly earnings conference call. We are delighted to have you join us today. This call will cover Kean's financial and operating results for the fourth quarter and year-ended December 31, 2021. along with a discussion of some of our recent highlights and goals for 2022 and beyond. Following our prepared remarks, we will open the conference call to a question and answer session. Our call today will be led by Kean's Chief Executive Officer, Mark Edwards. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call contain certain forward-looking information and statements within the meaning of securities law which may not be based on historical fact, including, without limitation, statements containing the words, believes, should, may, plan, will, estimate, predict, continue, anticipate, potential, intends, expects, or other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, events, or developments to be materially different from any future results, events, or developments expressed or implied by such forward-looking statements. Such factors include, among others, the company's stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market the company's products, the ability to protect its intellectual property, and dependence upon collaborative partners. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made as of the date hereof, and the company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events, or developments. I will now hand the call over to Chief Financial Officer Ray Dupuis. Please go ahead, Ray.
spk01: Thank you, Nicole. Before I turn the call over to Mark for an update on our commercial activities, I would like to provide a brief update on our fourth quarter and full year 2021 financial results. To streamline things, all the numbers that I will mention have been rounded and are therefore approximate. The following figures are all in Canadian dollars. For the three months ended December 31st, 2021, the company recorded total revenues of $412,000. a 60% increase compared to $257,000 for the same period in 2020. This increase is primarily attributable to increased pet retail sales. Gross profit for the fourth quarter 2021 was $187,000, an increase of 82% compared to $103,000 for the three months ended December 31, 2020. Fourth quarter 2021 operating expenses were $1.5 million, an increase of 28% compared with $1.2 million for the three-month end of December 31, 2020. This increase is largely attributable to increased research expenditures related to the company's dispersant bee human wound care program. The company recorded a fourth quarter 2021 loss of $1.3 million or $0.01 per share compared with a loss of $946,000 or $0.01 per share for the same three-month period in 2020. Moving to the results for the full year ended December 31st, 2021, the company recorded total revenues of 1.6 million, a 20% increase compared to 1.3 million in 2020. This increase is primarily attributable to increased pet retail sales and a lower proportion of sales discounts recorded in the current period, partially offset by the permanent US store closures in Q4 2020 of one of the company's major pet retailers. Gross profit for the full year 2021 was $568,000, an increase of 8% compared to $527,000 for 2020. Full year 2021 operating expenses were $5.4 million compared to $4.8 million in 2020. This increase is largely achievable to a $627,000 increase in non-cash compensation expense recorded in the current period. Excluding this non-cash expense, total operating expenses increased by 1% in 2021 over 2020. The company recorded a 2021 loss of $4.8 million or $0.04 per share compared to a loss of $3.8 million or $0.03 per share in 2020. At December 31st, 2021, the company had cash of $1.2 million compared to $1 million as of December 31st, 2020. With that, I will now turn the call over to Mark.
spk02: Thank you, Ray. 2021 was a defining year as Kean's technology platforms were proven out in multiple markets. We continue to make great progress in our shift from an R&D to a product development and commercialization company. I'll take you through our three business verticals, starting with dermatology. We launched our DermaKB line of scalp care products to consumers in very, very late 2020, but early 2021, following a large and compelling consumer trial. If I may take a minute to quantify that once more, we shipped over 4,500 samples of shampoo to people who completed a lengthy questionnaire, and over 1,400, or 31%, completed a second questionnaire post-trial. Over 80% of respondents saw an average improvement of over 30% of their symptoms, such as dandruff, itchiness, irritation, and so on. All this from a three-ounce ball of shampoo. These are very big numbers for a consumer trial, and the results are very compelling by any account, especially when you consider no one was compensated. Our Durban KB line leverages our patented CoActive Plus antibiofilm technology. We're finally beginning to see some growth in the fourth quarter of 2021, which we're attributing to three main things. First, increased consumer awareness and education about how biofilms might be an important culprit in their various skin conditions or scalp conditions. Secondly, we added a starter kit, a SKU, which contains a small bottle of shampoo, a small bottle of detoxifier, and a shampoo bar to our lineup. And this starter kit's getting more and more updates. And finally, we expanded our online retail platform to include Amazon.ca and Amazon.com. Dermacave's scalp care products gained traction in Q4, with sales doubling Q3, and this sales growth we know already continues within the first quarter of 2022. Our objective remains to prove the need for and efficacy of our scalp care products as we work towards a licensing agreement, And certainly sales traction helps in a big way to get that done. In animal health, our standard animal health commercialization vehicle under the direction of Kevin Cole, the CEO, achieved several milestones in 2021. We announced early in the year that the efficacy trials for STEM's animal health pet oral care water additive had met their primary endpoints. which is another great validation of Kane's technology. There have been some administrative delays in obtaining our veterinary efficacy certification, but we remain confident we've done everything required. We're looking forward to announcing this in the coming weeks. Kevin also focused on profitable growth, continued expansion and diversification of our retail network, which delivered some good growth in the fourth quarter. In 2021, Stem began shipping orders of Blue Stem products to PetSmart Canada, Canada's largest specialty pet retailer of services. Bluestem Oral Care products are distributed to all 150 stores and available on petsmart.ca online store. We've also expanded the reach of our pet oral care line in the veterinary market globally. We received the milestone payment from Decra Brazil in anticipation of the commercial launch in South America this year. And we also expect Animal Care to launch their line of products in Europe later this year. So very good progress on that front as well. Now, combined with the strength of our Q4 results, STEM has exited 2021 in a position of strength and momentum that will drive growth and revenue in 2022 and beyond. We have a great line of our products, great partners, strong leadership in STEM. It's exciting to see and I'm looking forward to replicating this model in our other verticals. Finally, in wound care, this week, Kane was pleased to announce that we had successfully completed extensive safety and biocompatibility studies for dispersant B wound gel in preparation for our human clinical trials set to begin later this year. Again, the results are very compelling, as we showed not only that dispersant B wound gel was safe, but the in vivo studies showed accelerated healing in both infected and non-infected wounds compared to the control. We also recently announced a new collaboration agreement for research in prosthetic joint infections, commonly referred to as PGI, expanding our dispersant B applications. Bacterial biofilms on prosthesis limit conventional antibiotic treatments of biofilm-based infections, and PGIs are one of the most serious complication of joint replacement surgery. 2021 also saw the kickoff of our CoActive Plus wound gel program. We've begun the preclinical work required to follow FDA 510 later this year and are hopeful we will have our first FDA approved product by late 2022. We continue to make good progress in our search for a wound care partner, a wound care commercialization partner, with growing interest as we progress towards FDA approval, and we'll keep shareholders abreast of what's going on there. So that will wrap up my prepared remarks for today. Speaker, I don't see anybody in the Q&A session. So I think we're going to simply thank everybody for joining the call today, for listening in. and we're looking forward to some more good news like we had this week to come in the coming weeks. So exciting times at Kean, and thank you for listening in. Have a great day.
spk00: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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