Orgenesis(US:ORGS)2022-11-14 02:29Financial Data and Key Metrics Changes - Company reported revenues of $8 million for Q3 2022, a decrease from $8.7 million in Q3 2021, primarily due to a decline in point-of-care (POC) development services [20] - Cost of revenues for development services and R&D decreased to $4.7 million from $10 million, a 53% reduction [21] - SG&A expenses were reduced by 49% to $3.1 million compared to $6.1 million in the same period last year [21] - Operating loss for Q3 2022 was $7 million, down from $7.7 million in Q3 2021, while net loss decreased by 86% to $1.4 million from $10.1 million [22] Business Line Data and Key Metrics Changes - Revenue from cell processing contributed $2.4 million in Q3 2022, marking the beginning of revenue recognition from this segment [20] - The company has developed a low-cost, capital-efficient business model with a pipeline of a dozen distinct therapeutic programs in various stages of development [14] Market Data and Key Metrics Changes - The global supply network now spans North America, Europe, Asia, and the Middle East, with point-of-care centers established as strategic hubs [12] - Expansion of collaboration with Johns Hopkins to establish a new point-of-care center, funded in part by a $5 million grant from the state of Maryland [13] Company Strategy and Development Direction - The company aims to reduce the cost of therapies to tens of thousands of dollars, making them more widely available [12] - A decentralized model is being pursued to address industry challenges, including capacity constraints and excessive costs [10] - The recent investment from Metalmark Capital is expected to accelerate the rollout of point-of-care services while minimizing dilution to existing shareholders [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business outlook, highlighting the scalable recurring revenue model and the potential for growth in the industry [18] - The investment from Metalmark is seen as a validation of the business model and a means to expand operations, particularly in the U.S. market [26][38] Other Important Information - The company has successfully reduced SG&A expenses by 49% and net loss by 86% compared to the same period last year, achieving nearly breakeven income from operations for Q3 2022 [16] - The company has a strong track record of securing non-dilutive grant funding to support the development of its therapeutic programs [16] Q&A Session Summary Question: Examples of past capital constraints and how new capital will help growth - Management indicated that capital constraints were related to CapEx for setting up new point-of-care sites and hiring staff, and the new capital will enable expansion, especially in the U.S. [25][26] Question: Current number of active OMPULs - Management refrained from providing a specific number but emphasized the importance of capacity utilization over the number of OMPULs [27][29] Question: Highlights from the therapeutic pipeline - Most therapeutic programs are in preclinical or various clinical stages, with progress being made, and potential for revenue generation in the coming year [30] Question: Achievements in cost management - Management attributed the improved financial results to past investments and the maturation of the business, with the new capital expected to facilitate further growth [36] Question: Profitability expectations with new capital infusion - Management indicated a focus on meeting demand while maintaining a growth trajectory, with a goal to avoid losses [38] Question: Growth of cell processing revenue and its significance - Cell processing revenue is recognized as a recurring portion of the business, with expectations for further growth as the company expands its capabilities [39]