Orgenesis(US:ORGS)2022-03-31 02:50Financial Data and Key Metrics Changes - Revenue for the year ended December 31, 2021, increased over 360% to $35.5 million compared to $7.7 million in 2020, driven by increased activity under service agreements with partners and customers [10][37] - Cost of services and R&D expenses decreased to $36.6 million from $84 million in 2020, a reduction of 56%, primarily due to decreased R&D investments after significant expenditures in 2020 [38] - Selling, general, and administrative expenses decreased to $14.7 million from $19 million in 2020, a decline of 22%, attributed to reduced corporate investment activities and business development expenditures [39] Business Line Data and Key Metrics Changes - The company reported strong year-over-year revenue growth due to increased service agreements and commitments from customers for future revenues exceeding $30 million for 2022 and over $50 million for 2023 [11][10] - The point of care platform is expected to lower costs and enhance distribution, with a focus on processing therapies close to hospital settings [15][20] Market Data and Key Metrics Changes - The company is expanding its global supply network across North America, Europe, Asia, and the Middle East, establishing point of care centers as central hubs for therapy validation and distribution [16][17] - The potential addressable market for KYSLECEL is estimated to exceed $500 million in the U.S. alone, with plans to adjust manufacturing processes for European GMP requirements [33] Company Strategy and Development Direction - The strategy focuses on decentralizing and standardizing the supply of cell and gene therapies, utilizing mobile processing units (OMPULs) to enhance capacity and reduce costs [20][18] - The company aims to qualify production processes at one OMPUL location before expanding to additional sites, leveraging a decade of experience in therapy development [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving breakeven in 2022, with expectations that revenue growth will cover R&D and SG&A expenses [45][40] - The company is focused on expanding its therapeutic pipeline and leveraging government grants to support growth, indicating a strong outlook for the business [41][35] Other Important Information - The company has received a $5 million grant from the State of Maryland to support the establishment of a new point of care center [23] - A joint venture with Theracell in Greece has been designated as a priority investment, receiving a grant of up to €32 million from the Greek government [24] Q&A Session Summary Question: Next steps for KYSLECEL program and potential sites in Europe - Management indicated ongoing discussions regarding regulatory approvals and the need for more sites in Europe, but no final numbers were available yet [44] Question: Revenue and operating expense expectations for 2022 - Management hopes to achieve breakeven, with most development work completed and remaining expenses covered by grants [45][46] Question: Accounts receivable details and expected collection - Accounts receivable comprises various partners and customers, with a good history of collectability and expectations for timely payments [62][64] Question: Future grant funding expectations - Management noted growing global interest in funding for cell and gene therapies, with potential for additional grants from various governments [68][70] Question: Revenue commitments for 2022 and 2023 - Revenue commitments from customers are expected to be in addition to the $35 million generated in 2021, indicating strong future revenue potential [76] Question: Potential for therapy-related revenues - Management highlighted the complexity of generating therapy-related revenues, with some products potentially entering the market under hospital exemptions [80] Question: Strategic options for raising capital - Management discussed various strategic options for financing, including potential partnerships and collaborations, while emphasizing the importance of long-term value for shareholders [86][90]