Applied DNA Sciences(US:APDN)2024-02-09 18:32Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were approximately $891,000, a decline of $4.4 million compared to $5.3 million in the same period last year [5][6] - Gross profit was $231,000 or 26%, down from $2.4 million or 45% in the prior year, primarily due to a higher percentage of COVID-19 testing service revenue in the previous year [6][7] - Operating loss for the first quarter was $3.8 million compared to $1.2 million in the prior fiscal period [8] - Adjusted EBITDA deteriorated by $2.1 million to a negative $3.2 million compared to a negative $1.1 million in the prior fiscal year period [8] Business Line Data and Key Metrics Changes - Clinical laboratory service revenues decreased significantly, contributing approximately $4.2 million to the total revenue decline [5][6] - Service revenues increased by approximately $15,000 year-over-year, driven by demand for isotopic testing within the DNA Tagging and Security Products and Services segment [6] Market Data and Key Metrics Changes - The company is focusing on the biotherapeutics market, particularly in mRNA therapeutics, with approximately 425 mRNA therapies currently in development [15][17] - The establishment of a GMP capacity is crucial for supporting clinical-grade messenger RNA therapeutics, which is expected to come online in the first half of 2024 [15][16] Company Strategy and Development Direction - The primary objective is the commercialization of the Linea IVT and Linea DNA platforms, with a focus on capital allocation to support biotherapeutic goals [11] - The company aims to transition customers to scale-up agreements for Linea IVT templates and RNA polymerase manufactured under applicable GMPs [14][15] - The partnership with Kudo Bio aims to validate the commercial scale-up of the Linea IVT platform [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growing demand for mRNA therapeutics and the company's ability to meet this demand through its unique business model [15][24] - The establishment of a GMP footprint is seen as a significant step towards long-term shareholder value [26] Other Important Information - The company closed a registered direct public offering for gross proceeds of approximately $3.4 million, which will support the establishment of its GMP capacity [9][10] - Cash and cash equivalents totaled $3.4 million as of December 31, 2023, down from $7.2 million on September 30, 2023 [8][9] Q&A Session Summary Question: Can you talk about the CD123 CAR work at the Prague Hematology Institute? - Management highlighted the quality of the scientists involved and the approval process for GMP-grade materials [27] Question: What amount of product is needed for the clinical Phase I trial? - It was estimated that enough material would be needed to treat about 10 patients [29] Question: Can you provide details on Kudo Bio's scale and production? - Kudo Bio is a large player with international facilities and the capability for significant scale in mRNA manufacturing [34][35] Question: What is the customer distribution between the U.S. and international markets? - The majority of customers are currently U.S.-based, with expectations for increased international customer engagement [41][42] Question: What assumptions underlie the projected $15 million annual revenue for Linea IVT? - The projection is based on slightly greater than 100% utilization of the facility, with plans for accommodating increased customer demand [43][44] Question: How does the company benchmark against competitors in production speed? - The company is exceeding turnaround times compared to other enzymatic manufacturers in the scale-up process [48][49]