Kane Biotech Inc Ord

Good afternoon and thank you for standing by. Welcome to Kean Biotech's third quarter 2024 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be open to questions. If you have a question, please press star then 11 on your touchtone phone. If you would like to withdraw your question, please press star 11 again. This conference is being recorded today, December 3rd, 2024. I would now like to turn the conference call over to Ray Dupuy. Kane Biotech's Chief Financial Officer, please go ahead.

Thank you, operator. Good afternoon and welcome everyone to Kane Biotech's third quarter 2024 earnings conference call. We are delighted to have you join us today. This call will cover Kane's financial and operating results along with the discussion of some of our recent highlights and goals for the remainder of 2024 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 CAEN'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 meanings of security law which may not be based on historical fact, including, without limitation, statements containing the words believes, should, may, plan, will, estimate, predict, continue, anticipates 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 results of any revisions to any of the forward-looking statements contained herein to reflect future results, events, or developments. For the third quarter 2024 financial results, all the numbers that I will mention have been rounded and are therefore approximate. The 2023 comparative results exclude the STEM Animal Health subsidiary, which was sold during the second quarter of 2024. The following figures are all in Canadian dollars. Product sales for the three months ended September 30th, 2024 were 598,000 compared to 4,000 in the three months ended September 30th, 2023. During the quarter, During the third quarter, the company recorded $595,000 from its first commercial sales of revived antimicrobial wound gel to its U.S. distributor, Progenicare. Product services revenue for the three months into September 30, 2024, was $685,000 compared to nil in the three months into September 30, 2023. Product services revenue is derived from animal health manufacturing and quality control services that the company is providing for a limited time post-sale STEM. Total revenue for the three months ended September 30th, 2024 was $1,283,000 compared to $27,000 in the three months ended September 30th, 2023. Gross profit for the third quarter of 2024 was $559,000 compared to $23,000 for the third quarter of 2023. Total operating expenses for the three months ended September 30th, 2024 were $1,170,000, an increase of 18% compared to $995,000 for the three months ended September 30th, 2023. The increase is primarily due to higher employee compensation, consulting, travel, and investor relation expenses recorded in the current period. Net loss from continuing operations for the third quarter of 2023 was $679,000, a decrease of 45% compared to net loss from continuing operations of $1,244,000 for the quarter ended September 30th, 2023. Cash as of September 30th, 2024 was $544,000 compared to $749,000 as of December 31st, 2024. With that, I will now turn the call over to Mark.

Thank you, Ray, and thank you to our investors for being present on today's call. So I think the numbers are really starting to reflect all our hard work at Kean, but not fully, yes. I think Kean has had an incredible year, and there's lots more great news to come. This capital raise will, sorry, Just to highlight a few of the achievements we've had. So our first commercial sale of Revive antimicrobial wound gel to Progenicare Global, which led to these great results in Q3. Progenicare have gotten Revive in with almost all the major distributors and most of the big DMEs there basically take the prescription and get the product to the patients, get revived to the patients. Now we need to increase the number of doctors prescribing our great product. We had our licensing agreement with Omnibioceutical Innovations for our DermaKB line of scalp care products. Jane and Nicola will be great partners for DermaKB. but also for some of the FB Dermatology products as we bring them into the dermocosmetic slash metaspa market. We received our ISO 1345-2016 MD-SAP quality certification, which honestly is a result of years of hard work by the team, and opened the door for Health Canada approval, which I'll get back to you a little later in my remarks. This is a big deal for cane. MDSAP is absolutely not an easy certification to get. And it not only opens the door to Health Canada, but also to Australia, New Zealand, Brazil, and eventually Japan. Then we got the FDA's approval to increase the dosage allowance for a revived antimicrobial wound gel. This opens the door for US sales of our Revive spray gel. The spray will quickly become our flagship SKU until we get this person B to Marcus. Spraying a gel in a gel form isn't easy, and by working with our Swedish partner Rena, we've been able to file for patent protection on the spray, which is potentially huge for cane. Then we announced that we had received some NRC IRAP funding to support, to expand our revived antimicrobial wound gel, providing funding for our wound gel family. So providing funding for a revived spray, helping us develop a sterile version of our gel to be used in the OR in an effort by hospitals to prevent surgical site infections. And we're also working on a revived cleanser. Then we announced our distribution agreements with Rezan Medical Training and Qatar Datamation Systems for Revive antimicrobial wound gel. And we should see some expansion on those agreements that are following a trip that Robert Huizing, our chairman, and myself took to the Middle East. We've got participation in the NRC IRAP multinational corporate collaboration product. Now, this is guidance as well as $75,000 of funding from NRC-IRAP for the development of our dispersant B wound gel. Now, we got this funding because we've been able to secure support from one of the largest wound care companies in the world for our dispersant B gel. And really, as we move forward with this product, we're getting more and more attention. from some of the biggest wound care companies in the world, and keeping a close eye on what we're doing here. Then, probably one of our biggest milestones ever was the agreement to acquire FB Dermatology. Now, again, it's a huge milestone for Kane. It'll provide us with revenue, greater commercial reach, and some great technologies which include Lumaheal, LumaHeal is for the treatment of chronic wounds. It has a CE mark with the EU MDR for the treatment of chronic wounds, as I said, but also as a class 2 de novo device from the US FDA for surgical scar reduction. We intend to quickly apply to Health Canada for approval as a wound treatment device. in an effort to conduct clinical trials in Canada, which hopefully will lead to U.S. approval for LumiHeal as a wound care treatment. Cloresca, which also has the EUC mark, stimulates the skin's own repair system in a harmless, non-destructive, and painless manner, and is used for skin rejuvenation and the treatment of acne and rosacea. And then Lumixa, which we're hoping to bring to the medical aesthetics, medical spa Marcus, activates the biological process and regeneration mechanisms of the skin. And we intend to work with OmniBioCeuticals to bring that to Marcus. Then we got our Health Canada approval for Revive Antimicrobial Wound Gel. Again, very exciting. We've got a number of distribution agreements in the works for Canada. And through NIHB, the non-insured health beneficiaries in Canada, we believe we can start selling our product to... That our product, not only can we start selling it, but will also be reimbursed for First Nations and Inuit... people uh and then another another big milestone was the biostem technologies acquisition of progenicare um making making biostem technologies our u.s distribution partner for revive antimicrobial wound gel i i don't want to say too much here we're working closely to uh um to to finalize that transition between or as they work to close the deal We're working hard to confirm all the terms, but really, Biostem Technologies is a much larger organization than Progenicare, growing very, very fast. It is my understanding that there's no overlap between our Revive antimicrobial wound gel and other products in the Biostem Technologies bag. We are expecting this to accelerate distribution of our products, and we're finalizing the details, but I believe this will be very good for Kane. Now, going forward, investors can expect, before the end of the year, at least a couple new distribution agreements outside of Canada, and hopefully a couple distribution agreements in Canada as well. The first commercial sale of our Revive antimicrobial wound gel, I actually shared a video this past weekend on LinkedIn. The product has been packaged as we speak and is going through the various release process. And then we should also expect OTC approval for our Revive antimicrobial wound gel by Health Canada. Going forward, and then also the launch of our dispersant B, before the end of the year, the launch of our dispersant B acne proof of concept trial at the University of Miami. Now, as I said, it's a proof of concept trial to confirm that the fantastic in vitro results we've seen for dispersant B on acne are reproducible in the real world. Now, following this trial, we can then decide what the best regulatory path is to pursue and which will guide the commercial route we'll undertake for dispersant B. So this is not a clinical trial where we're seeking approval for the product, but really just trying to confirm the efficacy of our product in vitro. In the new year, I think we'll see the closing of our transaction for the acquisition of FB dermatology. We should have the kickoff of our dispersant B wound care clinical trial, the commercial launch of our surgical gel, many more distribution agreements and regulatory approvals for our revive antimicrobial wound gel and antimicrobial wound gel spray, and We're also working very, very hard to secure funding for a revived antimicrobial wound gel in order to demonstrate our clinical superiority. For example, one of the routes we're going to be pursuing, EmTech, who are already providing funding for our dispersant B wound gel, in their 2025 pre-announcement, have two focus areas where we believe our revived spray could really set itself apart. The first one is burns. So that's really when we developed the spray, burns was one of the target markets. But also they're looking for a prophylactic to prevent infection and battlefield wounds from traumatic penetrating injuries in far forward austere environments. So basically, 40% of soldiers that are injured on the battlefield will develop a chronic wound despite the U.S. military's ability to get an injured soldier to an aseptic hospital within an hour of their injury. And they attribute that problem to biofilm. So we believe that by being able to spray on or gel to a... a battlefield wound right at the point of injury, we can significantly reduce the number of cases of chronic wounds that are developing. So a lot of great things that have come forward previously this year, a lot of great things that will happen before the end of the year and going into the new year. Now this morning we announced a $3 million private placement. I believe this is a great opportunity for investors and we've had a lot of interest in the raise and believe that we'll be able to wrap this up very, very quickly. So that'll conclude my remarks for today. Operator, are there... Let's take a minute and see if there are any questions.

Thank you. And as a reminder, to ask a question, you need to press star 1-1 on your telephone and wait for a name to be announced. To withdraw a question, please press star 1-1 again. Please stand by while we compile the Q&A roster. One moment for our first question.

Once again, that's star 1-1 for questions, star 1-1. I'm not showing any questions at this time.

I'd like to turn the call back over to Mark Edwards for any closing remarks. We do have one question. I'm sorry.

One moment for our first question. Our first question will come from the line of Steve Simons from A. Your line is open.

Did you say Lexameth does not need any kind of approval to sell?

on this part of your call there. Sorry, Steve.

That was a little scratchy. I believe you asked me if dispersant B doesn't need any regulatory approval to sell?

No, Lexima. Lexima.

Lumixa. Lumixa. Yeah, we think that, sorry about that. We think that, yeah, we could, we can, yeah, we believe that there's no regulatory hurdles for Lumixa.

Thank you. One more quick moment for any other questions.

That's star 11 for questions. Okay, no questions. I'll turn it back over to Mark Edwards for any closing remarks.

So just to follow up on that, we are looking at making some minor formulation adjustments for Lumixa and might try and leverage some of the components in our revived gel, which we're trying to evaluate if that could improve the the efficacy of the Lumix product and also potentially make it even more appealing in the US market. So thank you everyone for tuning in. I meant to mention as I started that we actually would normally do this on on the thursday given the uh last thursday was uh u.s thanksgiving we felt it was best to uh push this off to uh to the following tuesday so um thank you all for for tuning in and uh please don't hesitate to to reach out if you have any other questions or comments thank you very much have a great day thank you for your participation in today's conference

This does conclude the program. You may now disconnect. Everyone have a great day.