BNB Plus Corp (BNBX) 2023 Q2 法說會逐字稿

Hello and welcome to the Applied DNA Sciences' fiscal second quarter 2023 financial results. All parties will be in listen-only mode. (Operator Instructions) Please note today's event is being recorded. And now I'd like to turn the conference over to Sanjay Hurry, Head of Investor Relations. Please, go ahead.

您好，歡迎閱讀 Applied DNA Sciences 2023 年第二季度財務業績。所有各方都將處於僅監聽模式。 （操作員說明）請注意今天的活動正在錄製中。現在我想將會議交給投資者關係主管桑傑·赫里 (Sanjay Hurry)。請繼續。

Thank you, Keith. Good afternoon, everyone, and welcome to Applied DNA's conference call to discuss our second quarter fiscal 2023 financial results. You can access the press release that was issued after market close today as well as a slide presentation accompanying this call on the Investor Relations section of our corporate website.

謝謝你，基思。大家下午好，歡迎參加 Applied DNA 的電話會議，討論我們 2023 財年第二季度的財務業績。您可以在我們公司網站的投資者關係部分訪問今天收盤後發布的新聞稿以及本次電話會議附帶的幻燈片演示。

Speaking on the call today are Dr. James Hayward, our Chairman, President and CEO, and Beth Jantzen, our CFO. Clay Shorrock, our Chief Legal Officer and Head of Business Development, will also be available to answer questions on the Q&A portion of this call.

今天在電話會議上發言的是我們的董事長、總裁兼首席執行官 James Hayward 博士和我們的首席財務官 Beth Jantzen。我們的首席法務官兼業務開發主管 Clay Shorrock 也將回答本次電話會議問答部分的問題。

Before we begin, please note that some of the information you will hear today during our discussion may consist of forward-looking statements. I refer you to slide 2 of the presentation and our Form 10-Q filed a short while ago for important risk factors that could cause the company's actual performance and results to differ materially from those expressed or implied in any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements or other information provided on this call as a result of new information or future results or developments. Please also note that we will be in attendance at the Maxim Group Virtual Healthcare Conference later this month -- I'm sorry, next month. To schedule some time with management, please contact your Maxim representative.

在我們開始之前，請注意，您今天在我們的討論中聽到的一些信息可能包含前瞻性陳述。我建議您參閱演示文稿的幻燈片 2 和我們不久前提交的 10-Q 表格，了解可能導致公司的實際業績和結果與任何前瞻性陳述中明示或暗示的內容存在重大差異的重要風險因素。我們不承擔因新信息或未來結果或發展而更新或修改本次電話會議中提供的任何前瞻性陳述或其他信息的義務。另請注意，我們將於本月晚些時候參加 Maxim Group 虛擬醫療保健會議 - 抱歉，是下個月。如需與管理層安排時間，請聯繫您的 Maxim 代表。

Now it's my pleasure to introduce our first speaker on today's call, Beth Jantzen. Please go ahead, Beth.

現在我很高興介紹今天電話會議的第一位發言人 Beth Jantzen。請繼續，貝絲。

Thank you, Sanjay. Good afternoon, everyone. Thank you for joining us on our fiscal second quarter investor call.

謝謝你，桑傑。大家下午好。感謝您參加我們第二財季投資者電話會議。

I will start this afternoon with an overview of our results for the quarter ended March 31, 2023. I will then turn the call over to Dr. James Hayward, our President and CEO, who will discuss business initiatives and anticipated milestones in the second half of the fiscal year and as we enter fiscal 2024. We will then open the line for questions from our analysts and institutional investors.

今天下午，我將概述截至 2023 年 3 月 31 日的季度業績。然後，我將把電話轉給我們的總裁兼首席執行官詹姆斯·海沃德 (James Hayward) 博士，他將討論下半年的業務計劃和預期里程碑隨著我們進入 2024 財年，我們將開通分析師和機構投資者提問熱線。

Before I begin my review and as a reminder, we report segment data in our 10-Q filing that reflects the results of operations for our three reporting segments. The executive management team uses these data to manage the company's performance on a segment basis, assess expected future cash flows and make more informed decisions about our three business segments going forward. We provide these data to investors as a measure of transparency into our management of these segments. Our three reporting segments are: therapeutic DNA production, identified as LineaRx, our majority owned biotherapeutics subsidiary; MDx or molecular diagnostic testing services, which is our ADCL clinical laboratory; and DNA tagging and security product, which is our supply chain traceability segment.

在我開始審查之前，作為提醒，我們在 10-Q 文件中報告了分部數據，這些數據反映了我們三個報告分部的運營結果。執行管理團隊使用這些數據來管理公司各個部門的業績，評估預期的未來現金流，並對我們三個業務部門的未來做出更明智的決策。我們向投資者提供這些數據，作為我們對這些細分市場管理透明度的衡量標準。我們的三個報告部門是：治療性 DNA 生產，稱為 LineaRx，我們擁有多數股權的生物治療子公司； MDx或分子診斷檢測服務，這是我們的ADCL臨床實驗室； DNA 標籤和安全產品，這是我們的供應鏈可追溯部分。

Our second quarter results were driven [chiefly] by ADCL and as COVID-19 testing service. We also recorded contributions from our therapeutic DNA production segment for the accelerated delivery of linearDNA under a large recurring order. Turning to our consolidated results for the quarter, total revenue was $4.4 million compared to $6.2 million in the prior fiscal period. The approximate $1.7 million decrease in total revenues reflects the decline in our COVID-19 testing revenue, reflective of an overall weaker environment for COVID-19 testing demand.

我們第二季度的業績[主要]是由 ADCL 和 COVID-19 測試服務推動的。我們還記錄了我們的治療性 DNA 生產部門在大型重複訂單下加速線性 DNA 交付的貢獻。轉向我們本季度的綜合業績，總收入為 440 萬美元，而上一財年的總收入為 620 萬美元。總收入減少約 170 萬美元，反映了我們的 COVID-19 檢測收入下降，反映了 COVID-19 檢測需求的整體疲軟環境。

Last Friday, we reported that CUNY, our largest COVID-19 testing customer terminated its COVID-19 testing contract effective no later than June 30, of this year. Our use of vendors and certain staff that support on-campus collection centers will be reduced commensurate with our wind-down plan. In the near term, our COVID-19 testing service will remain in scaled down operations to support our remaining testing contracts. Direct costs will be fully absorbed by these ongoing contracts.

上週五，我們報導稱，我們最大的 COVID-19 測試客戶 CUNY 終止了其 COVID-19 測試合同，該合同於今年 6 月 30 日生效。我們將根據我們的逐步關閉計劃減少對支持校園收集中心的供應商和某些員工的使用。短期內，我們的 COVID-19 檢測服務將繼續縮減運營規模，以支持我們剩餘的檢測合同。直接成本將由這些正在進行的合同完全吸收。

As Jim will discuss in his remarks, 80 sales staff will transition to pharma genomics testing upon approval of our assay by the New York State Department of Health and once we secure contracts for pharma genomic testing.

正如吉姆將在他的講話中討論的那樣，一旦紐約州衛生部批准我們的檢測並且一旦我們獲得藥物基因組測試合同，80 名銷售人員將過渡到藥物基因組測試。

Gross profit for the quarter was $1.8 million or 41% compared to $2.5 million or 40% in the prior fiscal period. Total operating expenses were consistent at approximately $4.5 million and $4.6 million across the second quarter in the prior fiscal period, respectively. Operating loss for Q2 was $2.7 million compared to an operating loss of $2.2 million in the prior fiscal period. Given the unrealized gain on the change in fair value of the warrants that are classified as a liability included in our net income line, we highlight operating income as better -- as best representing the company's operations.

該季度的毛利潤為 180 萬美元，即 41%，而上一財年的毛利潤為 250 萬美元，即 40%。上一財年第二季度的總運營支出分別約為 450 萬美元和 460 萬美元。第二季度的運營虧損為 270 萬美元，而上一財年的運營虧損為 220 萬美元。鑑於認股權證公允價值變動的未實現收益被歸類為包含在我們淨利潤線中的負債，我們強調營業收入更好，因為它最能代表公司的運營。

Excluding noncash expenses, consolidated adjusted EBITDA for Q2 was negative $2.1 million compared to negative $1.6 million and the fiscal year ago period.

不包括非現金支出，第二季度綜合調整後 EBITDA 為負 210 萬美元，而上一財年同期為負 160 萬美元。

Now turning to our balance sheet, cash and cash equivalents, excluding restricted cash totaled $12.3 million on March 31, compared to $12.9 million on December 31. As of March 31, accounts receivable stood at $2 million, which we expect to collect the majority of this amount in the current quarter. Year to date, our average monthly cash burn is $488,000 compared to $786,000 in the prior comparable period. Average monthly cash burn year to date does not include our restricted cash of $750,000 that was required by our new three-year lease agreement for our corporate headquarters.

現在轉向我們的資產負債表，3 月 31 日的現金和現金等價物（不包括限制性現金）總計 1,230 萬美元，而 12 月 31 日為 1,290 萬美元。截至 3 月 31 日，應收賬款為 200 萬美元，我們預計將收回大部分款項。本季度的這一金額。今年迄今為止，我們的平均每月現金消耗為 488,000 美元，而去年同期為 786,000 美元。今年迄今為止的平均每月現金消耗不包括我們公司總部新的三年租賃協議所需的 750,000 美元的限制性現金。

Based on our current cash flow forecast, we expect the impact of the CUNY termination to be reflected in our use of cash starting in our fiscal fourth quarter ending September 30. We are projecting our quarterly cash burn for Q4 to range between $650,000 and $1 million per month. This range is contingent on several factors that Jim's remarks will discuss in greater detail, including the timing of PGx testing start and service uptake; CertainT authentication platform sales for DNA tagging; order flow for linearDNA for IVT templates; CapEx necessary to establish a linearDNA in production capacity suitable for clinical use and to support ongoing platform development; and the cash consideration needed for a biotherapeutics acquisition that is being contemplated.

根據我們當前的現金流預測，我們預計 CUNY 終止的影響將反映在我們截至 9 月 30 日的第四財季開始的現金使用中。我們預計第四季度的季度現金消耗將在 65 萬美元到 100 萬美元之間每月。這個範圍取決於 Jim 的講話將更詳細討論的幾個因素，包括 PGx 測試開始和服務採用的時間； DNA標籤的CertainT認證平台銷售； IVT 模板的線性 DNA 訂購流程；建立適合臨床使用的線性 DNA 生產能力並支持持續的平台開發所需的資本支出；以及正在考慮的生物治療收購所需的現金考慮。

We believe that with our current cash balance reserves and a continued focus on cost management, we can absorb a short-term increase in cash burn as we mature [eight] contract opportunities. However, if any of the above revenue streams do not ramp up on our current forecasted timeline, it will have a negative impact on our cash position and financial resources. Our cash position on April 30, was approximately $11.1 million.

我們相信，憑藉我們當前的現金餘額儲備和對成本管理的持續關注，隨著[八]個合同機會的成熟，我們可以吸收短期增加的現金消耗。然而，如果上述任何收入來源沒有在我們當前的預測時間表內增加，它將對我們的現金狀況和財務資源產生負面影響。截至 4 月 30 日，我們的現金頭寸約為 1110 萬美元。

This concludes my prepared remarks. Thank you for joining us today. I will now turn the call over to Jim for his comments.

我準備好的發言到此結束。感謝您今天加入我們。我現在將把電話轉給吉姆徵求意見。

We'll Thank you, Beth, and good afternoon, everyone. Thank you for joining us on our quarterly investor call. In recent quarters, we've made steady progress on the execution of our business plan to manage the wind-down of COVID-19 testing to evolve our new revenue opportunities and to advance the development of our linearDNA platform for biotherapeutic applications.

我們會謝謝你，貝絲，大家下午好。感謝您參加我們的季度投資者電話會議。最近幾個季度，我們在執行業務計劃方面取得了穩步進展，以管理 COVID-19 測試的逐步結束，從而開發我們新的收入機會，並推動我們用於生物治療應用的線性 DNA 平台的開發。

Now my prepared remarks today will update you on our activities across each of our three business segments with a focus on the breadth of opportunities at ADCL and within our supply chain segments that are expected to contribute to our revenues within our fiscal and current calendar year. In the aggregate, we do not expect these near-term opportunities to replace COVID-19 revenues in their entirety. They are, however, revenue oriented with much of the development costs behind us. And consequently, these opportunities can facilitate ongoing strategic investment in linearDNA and support our consolidated operations, thereby helping in the management of our cash burn that Beth referred to.

現在，我今天準備的發言將向您介紹我們在三個業務部門中的每一個部門的活動的最新情況，重點是 ADCL 和我們的供應鏈部門內的廣泛機會，這些機會預計將在我們的財政年度和本日曆年度內為我們的收入做出貢獻。總的來說，我們預計這些近期機會不會完全取代 COVID-19 收入。然而，他們以收入為導向，我們承擔了大部分開發成本。因此，這些機會可以促進對 LinearDNA 的持續戰略投資，並支持我們的整合運營，從而幫助管理 Beth 提到的現金消耗問題。

Regarding our linearDNA platform which we believe is the cornerstone to our long-term growth and value creation for shareholders, we achieved several milestones this quarter. We produced and shipped the most DNA in the company's history in a fiscal quarter for a large diagnostics customer announced previously. To achieve this production level, we introduced new efficiency methods in the linearDNA platform that we believe will also be relevant to higher value biotherapeutic DNA production. This customer now has also ordered additional linearDNA constructs for other products also on a recurring basis.

我們相信我們的線性DNA平台是我們長期增長和為股東創造價值的基石，我們本季度實現了幾個里程碑。我們在一個財政季度為之前宣布的一家大型診斷客戶生產和運輸了公司歷史上最多的 DNA。為了達到這一生產水平，我們在線性DNA平台中引入了新的效率方法，我們相信這也將與更高價值的生物治療DNA生產相關。該客戶現在還定期為其他產品訂購額外的線性 DNA 構建體。

Now, we've been converting a large commercial customer to receiving production grade materials after multiple quarters of repeated research orders. We received a second order from one of our previous biotherapeutic customers now underway for fulfillment and orders were received from marquee names in the pharma and biopharma industry for evaluation scale of linear IVT templates that could blossom into larger orders. Three orders were completely fulfilled and another will be partially shipped in the current quarter.

現在，經過多個季度的重複研究訂單，我們已經將一家大型商業客戶轉變為接收生產級材料。我們收到了之前一位生物治療客戶的第二份訂單，目前正在履行中，並且收到了來自製藥和生物製藥行業知名品牌的訂單，用於評估線性 IVT 模板的規模，這些模板可能會發展成更大的訂單。三份訂單已完全履行，另一份訂單將在本季度部分發貨。

Finally, to the extent I am able at this time, I will offer momentarily some insight into the rationale for a potential acquisition that we believe will give us market advantage in the use of linearDNA IVT templates for messenger RNA production.

最後，在我目前能力範圍內，我將立即對潛在收購的理由提供一些見解，我們相信這將為我們在使用線性 DNA IVT 模板進行信使 RNA 生產方面帶來市場優勢。

Now, as Beth detailed, we expect to wind-down our largest COVID-19 testing contract no later than June 30. As she also noted, we will continue to service other customers whose testing requirements will fully absorb our COVID-19 operating costs.

現在，正如 Beth 詳細介紹的那樣，我們預計將在 6 月 30 日之前結束我們最大的 COVID-19 測試合同。正如她還指出的那樣，我們將繼續為其他客戶提供服務，他們的測試需求將完全承擔我們的 COVID-19 運營成本。

Now I want to complement our CUNY partners and our team for their dedication of the past 22 months. I know that together, we saved lives, and we made higher education safer during an extraordinarily challenging time for our country. COVID-19 testing, and CUNY proved that the single payer, enterprise scale service model works, laying the business strategy for ADCL's future in genomic testing. Now, lessons learned from enterprise-scale COVID-19 testing services are the basis for the development of our pharmaco genomics or PGx testing service that establishes a clear economic value to the customer and offers a very attractive return on investment to large customers and to us at scale.

現在，我想對我們的紐約市立大學合作夥伴和我們的團隊在過去 22 個月的奉獻表示讚賞。我知道，在我們國家面臨異常艱難的時期，我們共同拯救了生命，並使高等教育變得更加安全。 COVID-19 測試和紐約市立大學證明了單一付款人、企業規模服務模式的有效性，為 ADCL 未來在基因組測試領域奠定了業務戰略。現在，從企業規模的 COVID-19 檢測服務中吸取的經驗教訓是我們開發藥物基因組學或 PGx 檢測服務的基礎，該服務為客戶建立了明確的經濟價值，並為大客戶和我們提供了非常有吸引力的投資回報規模化。

Compared with COVID-19, our PGx testing service, which is branded as TR8 or TR8, we'll roll out at lower testing levels, but with a higher expected price and gross margin per test. There is an economic rationale for PGx's growing use, particularly for large, self-insured entities. Genetic screening and testing can help provide powerful information to inform health care decisions and improve patient outcomes. There is extensive evidence in the literature attesting to the return on investment for PGx. When you map the individual PGx benefits onto large populations, an enterprise can realize substantial dollars and cents in savings on healthcare costs while also increasing the well-being and performance of its population.

與 COVID-19 相比，我們的 PGx 測試服務（品牌為 TR8 或 TR8），我們將以較低的測試水平推出，但每次測試的預期價格和毛利率較高。 PGx 的使用不斷增加是有經濟原因的，特別是對於大型自我保險實體。基因篩查和測試可以幫助提供強大的信息，為醫療保健決策提供信息並改善患者的治療結果。文獻中有大量證據證明 PGx 的投資回報。當您將個人 PGx 福利映射到大量人群時，企業可以節省大量的醫療保健成本，同時還可以提高其人群的福祉和績效。

We will employ a differentiated sales model that targets direct to large enterprise accounts. The elimination of third-party reimbursement ensures faster cash collections. And this is the same model that we used quite successfully within our large COVID-19 customers. Now, we submitted a validation package for our PGx assay in March to the New York State Department of Health, and we're awaiting its review as a laboratory developed test. Since genetic testing is a new permit category for our clinical lab, our PGx assay falls under the high complexity category for which one to two quarters is a standard review cycle.

我們將採用直接針對大企業客戶的差異化銷售模式。消除第三方報銷可確保更快的現金收款。這與我們在大型 COVID-19 客戶中非常成功地使用的模型相同。現在，我們於 3 月份向紐約州衛生部提交了 PGx 檢測的驗證包，我們正在等待其作為實驗室開發的測試進行審查。由於基因檢測是我們臨床實驗室的新許可類別，因此我們的 PGx 檢測屬於高複雜性類別，一到兩個季度是一個標準審查週期。

The New York State Department of Health is one of the most rigorous regulatory bodies in the entire country. And as such, their review is highly comprehensive, yet at the same time, that high regulatory burden acts as a barrier to entry for many labs. We believe that this will give us a significant competitive advantage upon test approval and make New York a greenfield opportunity for us.

紐約州衛生部是全國最嚴格的監管機構之一。因此，他們的審查非常全面，但與此同時，高昂的監管負擔成為許多實驗室的進入障礙。我們相信，這將為我們在測試批准後帶來顯著的競爭優勢，並使紐約成為我們的新機會。

Upon approval of our PGx testing service, we have the capacity to perform over 150 tests per day. And we're discussing partnerships and platform enhancements to support higher volumes. We are already engaging with enterprises likely to adopt our PGx testing service. And feedback to date has been very positive, although the lack of an approved assay gates our customer acquisition.

我們的 PGx 測試服務獲得批准後，我們每天有能力執行 150 多項測試。我們正在討論合作夥伴關係和平台增強，以支持更高的銷量。我們已經在與可能採用我們的 PGx 測試服務的企業進行接洽。儘管缺乏經過批准的檢測方法阻礙了我們獲得客戶，但迄今為止的反饋非常積極。

It is clear from our sales and marketing efforts that there is little in the way of competition in the state, which puts us in a thought leadership and market educator role. One of the key prospective customers is sponsoring our conference this fall on precision medicine and has asked us to speak about our testing service and to help develop their event. Our supply chain traceability segment also offers us the opportunity for COVID-19 replacement revenues. We continue to see momentum in new customer acquisitions for our CertainT authenticity platform. The CertainT platform encompasses multiple forensic testing tools, including isotopic testing, genotyping, DNA tagging and other methods that are valuable to importers of cotton goods in order to comply with the Uyghur Forced Labor Prevention Act or UFLPA and with other due diligence regulations globally.

從我們的銷售和營銷工作中可以清楚地看出，該州幾乎沒有競爭，這使我們發揮了思想領導和市場教育者的作用。一位主要的潛在客戶正在讚助我們今年秋天的精準醫學會議，並要求我們談論我們的測試服務並幫助開展他們的活動。我們的供應鏈可追溯性部分還為我們提供了獲得 COVID-19 替代收入的機會。我們繼續看到我們的certaint真實性平台新客戶獲取的勢頭。 certainT 平台包含多種法醫檢測工具，包括同位素檢測、基因分型、DNA 標記和其他對棉製品進口商有價值的方法，以遵守《維吾爾強迫勞動預防法》或 UFLPA 以及全球其他盡職調查法規。

Now, as a reminder, the Customs and Border Protection Agency recognizes two technology platforms for compliance under the UFLPA, isotopic testing and DNA technologies. We are the only company to offer an approach that integrates both technology platforms for compliance. Since the UFLPA went into effect last June, we've added many new sources verification customers. Source verification, expands our base of textile customers to whom we can upsell recurring, high dollar value and higher margin DNA tagging services, but even a low conversion rate of these customers to DNA tagging would result in a material increase in segment revenue. To that end, we are advancing discussions with source verification customers who view the deployment of DNA tagging as the next natural step in their compliance under the UFLPA. We are experiencing increased interest in DNA tagging especially from apparel manufacturers.

現在，提醒一下，海關和邊境保護局認可了 UFLPA 下的兩種合規技術平台：同位素測試和 DNA 技術。我們是唯一一家提供集成兩種技術平台以實現合規性的方法的公司。自 UFLPA 去年 6 月生效以來，我們增加了許多新的來源驗證客戶。來源驗證擴大了我們的紡織客戶群，我們可以向他們追加銷售經常性的、高美元價值和更高利潤的 DNA 標籤服務，但即使這些客戶對 DNA 標籤的轉化率較低，也會導致部門收入大幅增加。為此，我們正在與來源驗證客戶進行討論，這些客戶將 DNA 標記的部署視為其遵守 UFLPA 的下一個自然步驟。我們發現，尤其是服裝製造商對 DNA 標記的興趣日益濃厚。

Now we've completed a commercial pilot with an established North American apparel brand that utilize DNA tagging and isotopic testing in its global supply chain. This first apparel initiative, prime the supply chain, and we're actively working on follow-on tagging programs to keep the cotton flowing. Other opportunities to deliver tagged cotton to the market are also underway. We anticipate initiation of an additional supply chain in the fiscal fourth quarter.

現在，我們已經與一個成熟的北美服裝品牌完成了商業試點，該品牌在其全球供應鏈中利用 DNA 標記和同位素測試。這是第一個服裝舉措，為供應鏈提供了基礎，我們正在積極開展後續標籤計劃，以保持棉花流動。將貼有標籤的棉花推向市場的其他機會也正在進行中。我們預計在第四財季啟動額外的供應鏈。

Now transitioning through the bio-therapeutics' application of our PCR expertise, we are firmly committed to our LineaRx subsidiary and our linearDNA platform as fundamental building blocks to Applied DNA, sustainable growth and value creation story. Within the biotherapeutic industries' remarkable focus on genetic medicines, our initial priority is in vitro transcription or IVT and that is DNA templates for RNA production. The platform is marked advantages over plasmid DNA and other non PCR-based enzymatic DNA manufacturing platforms.

現在，通過 PCR 專業知識的生物治療應用進行轉型，我們堅定地致力於將我們的 LineaRx 子公司和我們的 LinearDNA 平台作為應用 DNA、可持續增長和價值創造故事的基本構建模塊。在生物治療行業對基因藥物的高度關注中，我們的首要任務是體外轉錄或 IVT，即用於 RNA 生產的 DNA 模板。該平台與質粒DNA和其他非基於PCR的酶促DNA製造平台相比具有顯著優勢。

And last summer, we launched our IVT templating service to raise awareness of linearDNA's unique advantages, to establish an ecosystem of partners, to enhance the value proposition of our services and advance the transition to linearDNA for therapy developers with active pipelines. Now momentum for linearDNA for IVT is building. We are receiving evaluation orders from marquee customers. And the feedback we have received is that linearDNA is very well suited to empower the manufacture of mRNA therapies. This then creates new pathways for additional potential order flow and demand for larger quantities of linearDNA.

去年夏天，我們推出了 IVT 模板服務，以提高人們對 LinearDNA 獨特優勢的認識，建立合作夥伴生態系統，增強我們服務的價值主張，並推動擁有活躍管道的治療開發商向 LinearDNA 過渡。現在 IVT 的線性 DNA 勢頭正在增強。我們正在收到來自大客戶的評估訂單。我們收到的反饋是，線性 DNA 非常適合用於 mRNA 療法的製造。這將為額外的潛在訂單流和對大量線性 DNA 的需求創造新的途徑。

With these early successes under our belt, we focused on optimizing our manufacturing workflows, and we've invested in larger commercial capabilities in recent quarters. We have already achieved certain key milestones, including increases in scale. The gating factor to our deeper penetration of the IVT template opportunity is the need to deliver a DNA that is suitable for mRNA for clinical use at a GMP facility or GMP quality. As we expand our base of evaluation customers, we're also building the capacity to deliver GMP quality linearDNA suitable for clinical IVT. This capacity will allow us to support existing customers from their research and development phase to the clinic while generating higher value and larger orders for linearDNA.

憑藉這些早期的成功，我們專注於優化製造工作流程，並在最近幾個季度投資了更大的商業能力。我們已經實現了某些關鍵里程碑，包括規模的擴大。我們深入滲透 IVT 模板機會的限制因素是需要提供適合 mRNA 的 DNA，以便在 GMP 設施或 GMP 質量下進行臨床使用。隨著我們擴大評估客戶群，我們也在建設提供適合臨床 IVT 的 GMP 質量線性 DNA 的能力。這種能力將使我們能夠為現有客戶從研發階段到臨床階段提供支持，同時為線性DNA產生更高的價值和更大的訂單。

We're on track for this capacity to come online by the end of calendar '23 with an initial forecasted manufacturing capacity of about 50 grams of linearDNA per year. And to put this in perspective for you, this is enough IVT template to produce over 250 million vaccine doses. As our go-to-market strategy for linearDNA matures to support more clinical demand, we are actively recruiting partners who share our vision for a fully enzymatic high-speed IVT template production workflow. Our partnering interests lie at the front end of the workflow and with the next-generation DNA synthesis companies that can make higher quality brand new DNA sequences quickly and cost-effectively, a fully synthetic IVT workflow, we believe can outperform plasmid DNA for IVT across all the relevant metrics, while delivering market leading turnaround times.

我們有望在 2023 年年底之前實現這一產能，初步預測每年的線性 DNA 生產能力約為 50 克。為了讓您了解這一點，這個 IVT 模板足以生產超過 2.5 億劑疫苗。隨著我們的線性 DNA 上市策略日趨成熟以支持更多的臨床需求，我們正在積極招募與我們擁有相同願景的合作夥伴，即全酶高速 IVT 模板生產工作流程。我們的合作興趣在於工作流程的前端，與下一代 DNA 合成公司合作，這些公司可以快速且經濟高效地製造更高質量的全新 DNA 序列，完全合成的 IVT 工作流程，我們相信可以在 IVT 方面優於質粒 DNA所有相關指標，同時提供市場領先的周轉時間。

Now this may be especially important in view of the exciting work flows for individualized patient-specific immunotherapies against aggressive cancers, as has been demonstrated by Merck and Madonna for melanoma or just announced today by BioNTech for a resected pancreatic cancer.

現在，考慮到針對侵襲性癌症的個體化患者特異性免疫療法令人興奮的工作流程，這一點可能尤其重要，正如默克和麥當娜針對黑色素瘤所證明的那樣，或者 BioNTech 今天剛剛宣布的針對切除胰腺癌的結果。

Business development activities are ramping up concurrent with our investments in our commercial capabilities, highlighted by our presence at several mRNA conferences throughout the coming summer where we will be showcasing linearDNA's advantages.

業務開發活動與我們對商業能力的投資同時進行，這一點突出體現在我們將在即將到來的夏季參加多個 mRNA 會議，在會上我們將展示 LinearDNA 的優勢。

Finally, I'd like to discuss a unique and potentially transformative opportunity for LineaRx that we have identified in the messenger RNA market. We've looked at the mRNA manufacturing value chain, of which IVT templates represent less than 5% of the total cost and frankly, we desire more. We have identified and we are moving toward an acquisition target that gives us access to a more significant portion of the mRNA manufacturing value chain, thus significantly increasing our potential total addressable market.

最後，我想討論一下我們在信使 RNA 市場中發現的 LineaRx 的一個獨特且潛在的變革機會。我們研究了 mRNA 製造價值鏈，其中 IVT 模板佔總成本不到 5%，坦率地說，我們希望更多。我們已經確定並正在朝著一個收購目標邁進，該目標使我們能夠進入 mRNA 製造價值鏈的更重要部分，從而顯著增加我們潛在的總目標市場。

Our analysis over the past several months makes a compelling case that the combination of linearDNA and the targets assets can impact up to 25% or more of the mRNA value chain. To be clear, we currently have no desire to manufacture messenger RNA at scale. But instead, we're looking to enhance the unique advantages of linearDNA IVT templates to improve other aspects of messenger RNA manufacturing by our customers. We feel this is a one-plus-one-equals-three business opportunity that supercharges our offering by unlocking several unique and important benefits relating to the manufacture of messenger RNA that can only be empowered by the combination of our linearDNA and our targets assets.

我們過去幾個月的分析令人信服地證明，線性 DNA 和目標資產的結合可以影響 mRNA 價值鏈的 25% 或更多。需要明確的是，我們目前無意大規模生產信使 RNA。但相反，我們希望增強線性 DNA IVT 模板的獨特優勢，以改善我們客戶的信使 RNA 製造的其他方面。我們認為這是一個一加一等於三的商業機會，它通過釋放與信使 RNA 製造相關的幾個獨特而重要的優勢來增強我們的產品，而這些優勢只能通過我們的線性 DNA 和我們的目標資產的結合來實現。

The [trends] action value being contemplated will be commensurate with the target's early stage of development. We hope to close on the acquisition in the current quarter and will allow more details to offer at that time. Before opening the call to questions, let me briefly recap some key points I've made today. We are preparing for a wind-down for COVID-19 testing revenues. We have developed new revenue opportunities at ADCL and our DNA tagging segment that should come online in the next several quarters. These revenue opportunities are unlikely to offset the loss of COVID testing revenues fully. However, they will be at higher margin, and we'll help to manage our cash burn.

正在考慮的[趨勢]行動價值將與目標的早期發展階段相稱。我們希望在本季度完成收購，屆時將提供更多細節。在開始提問之前，讓我簡要回顧一下我今天提出的一些要點。我們正在準備逐步減少 COVID-19 檢測收入。我們在 ADCL 和 DNA 標記部門開發了新的收入機會，預計將在未來幾個季度上線。這些收入機會不太可能完全抵消新冠病毒檢測收入的損失。然而，他們的利潤率會更高，我們將幫助管理我們的現金消耗。

Our cash balance allows us to absorb the short-term increase in cash burn while continuing to execute on key priorities. The biotherapeutic industry is responding very well to linearDNA and our offering through DNA IVT templates. This gives us the confidence to continue to commit further resources. We have identified and are moving toward an acquisition that we believe can deliver a significant returns to us, to prospective mRNA customers and to our shareholders.

我們的現金餘額使我們能夠吸收短期增加的現金消耗，同時繼續執行關鍵優先事項。生物治療行業對線性 DNA 和我們通過 DNA IVT 模板提供的產品反應良好。這使我們有信心繼續投入更多資源。我們已經確定並正在著手進行一項收購，我們相信這項收購可以為我們、潛在的 mRNA 客戶和我們的股東帶來可觀的回報。

And then finally, I simply could not be more proud of our team in delivering across all facets of our growth strategy. As the pandemic era comes to close, we are proud of the positive impact we've had on our communities and we will truly miss the synergistic relationships we have developed with our customers and our partners, and we are appreciative of the lessons learned that has armed us with new capabilities as we move forward to this next chapter.

最後，我對我們的團隊在實現增長戰略的各個方面的表現感到非常自豪。隨著大流行時代的結束，我們為我們對社區產生的積極影響感到自豪，我們將真正懷念我們與客戶和合作夥伴建立的協同關係，我們感謝從當我們邁向下一章時，為我們提供新的能力。

This concludes my prepared remarks. Operator, can you please open the call to questions?

我準備好的發言到此結束。接線員，您能打開提問電話嗎？

Yes. Thank you. (Operator Instructions).

是的。謝謝。 （操作員說明）。

Jason McCarthy, Maxim Group.

傑森·麥卡錫，馬克西姆集團。

Hi, Jim.

嗨，吉姆。

Thanks for taking the question. Sounds like a lot of progress. I kind of want to stay with the biotherapeutic side or portion of your business. Can you talk a little bit about some of the manufacturing bottlenecks that the COVID vaccine mRNA company face? There was in the news quite a bit a couple of months ago, 10%, 20%, 30% cost savings by flipping to a linear approach might be more ideal and maybe more something like your IVT platform can have success?

感謝您提出問題。聽起來進步很大。我有點想繼續從事生物治療業務或部分業務。您能談談新冠疫苗 mRNA 公司面臨的一些生產瓶頸嗎？幾個月前有很多新聞報導，通過轉向線性方法可以節省 10%、20%、30% 的成本可能更理想，也許像您的 IVT 平台這樣的東西可以取得成功？

Sure. We definitely believe that our linearDNA offers cost savings and simplicity to mRNA manufacturers. But what's becoming clear, Jason, you I'm sure, will appreciate the BioNTech announcement today.

當然。我們堅信，我們的線性 DNA 可以為 mRNA 製造商節省成本並簡化操作。但傑森，我確信你會欣賞今天 BioNTech 的公告，這一點正在變得清晰。

Is that with the dawn of science like pharmaco genomics and the ability to sequence the neoantigens in cancers, the opportunities for personalized medicine are growing at a very rapid rate. AI is only going to help that as well. And when it comes to personalized medicine, speed is going to be of the essence. So incorporating a fully synthetic path that doesn't have us relying on plasmids at all for the initial template before PCR and allows us a very rapid turnaround, time that will be the secret, we believe both to bulk manufacture -- look at how rapidly the COVID vaccines were rolled out, and to personalize manufacture, which is really exciting opportunity for the patient.

隨著藥物基因組學等科學的出現以及對癌症中新抗原進行測序的能力，個性化醫療的機會正在以非常快的速度增長。人工智能也只會對此有所幫助。當談到個性化醫療時，速度至關重要。因此，採用完全合成的路徑，使我們在 PCR 之前根本不依賴質粒作為初始模板，並允許我們非常快速的周轉，時間將是秘密，我們相信批量生產 - 看看有多快新冠疫苗的推出以及個性化生產，這對患者來說確實是令人興奮的機會。

Okay. So as far as your new or newer biopharma customers that are exploring, IVT templates, and I don't believe you could tell us who they are, but can you tell us what categories they're looking at? Are they looking at vaccines are they're looking at immune therapy for cancer because the thought was, in oncology, it's going to be very challenging the use of mRNA? Obviously, Moderna and BioNTech are proving that to not be the case and that could open up a tremendously much larger opportunity.

好的。就您正在探索的新生物製藥客戶而言，IVT 模板，我不相信您能告訴我們他們是誰，但您能告訴我們他們正在關注哪些類別嗎？他們正在研究疫苗嗎？他們正在研究癌症免疫療法嗎？因為他們的想法是，在腫瘤學中，使用 mRNA 會非常具有挑戰性？顯然，Moderna 和 BioNTech 正在證明事實並非如此，這可能會帶來更大的機會。

Yes, absolutely. I think it could be.

是的，一點沒錯。我想可能是這樣。

Can you help me with your question again, Jason, what?

你能再幫我回答一下你的問題嗎，傑森，什麼？

Can you tell us what category the biopharma customers are shopping for IVT? What are they looking at, a vaccine or oncology or whatever.

您能否告訴我們生物製藥客戶購買 IVT 的類別是什麼？他們在看什麼，疫苗或腫瘤學或其他什麼。

Sure. So some are vaccines. Some are immunotherapies like the BioNTech approach, some are customized targets. And, I think honestly, in future, the range of products is going to be very diverse from very large PCR products to reasonably small ones. That diversity requires a tremendous know-how for PCR. And we believe, we lead the industry in that regard.

當然。所以有些是疫苗。有些是免疫療法，如 BioNTech 方法，有些是定制靶標。而且，老實說，我認為未來的產品範圍將會非常多樣化，從非常大的 PCR 產品到相當小的產品。這種多樣性需要豐富的 PCR 專業知識。我們相信，我們在這方面處於行業領先地位。

Got it. And last question, can you give us a little bit more clarity on the acquisition in terms of what types of assets that they could have and how they pair with IVT or is that something we're going to have to wait for until it's a little bit further along?

知道了。最後一個問題，您能否讓我們更清楚地了解一下此次收購，包括他們可以擁有哪些類型的資產以及它們如何與 IVT 配對，或者我們是否必須等待，直到它有點還進一步嗎？

Well, you have to wait just a little bit, I think, but I focused some of my commentary on the importance of speed. I think the importance of cost of goods will also be essential. There are over 4,000 nucleic acid drugs in development and cost is going to be important. I don't think that the industry of nucleic acid therapeutics will be in a position to repeat the history of monoclonal antibodies with extraordinary prices for their early to market products. We're now on the heels of vaccines, which typically can't be very high priced. And I think that by competing both in speed and efficiency and being able to compete on price. We have the chance of taking a good share of the market.

好吧，我想你必須稍等一下，但我的一些評論集中在速度的重要性上。我認為商品成本的重要性也至關重要。有超過 4,000 種核酸藥物正在開發中，成本將變得很重要。我不認為核酸治療行業能夠重複單克隆抗體的歷史，其早期上市產品的價格非常高。我們現在緊隨疫苗的腳步，而疫苗的價格通常不會很高。我認為，通過在速度和效率上進行競爭，並能夠在價格上進行競爭。我們有機會佔據很大的市場份額。

Got it. Thank you very much, Jim.

知道了。非常感謝你，吉姆。

Okay. Thank you, Jason.

好的。謝謝你，傑森。

Yi Chen, H.C. Wainwright.

陳毅, H.C.溫賴特。

Hello, Yi.

你好，易。

Hi, I am sorry. Thank you for taking my questions. My first question is, could you clarify whether ADCL is a current performing any non-COVID tests?

你好，對不起。感謝您回答我的問題。我的第一個問題是，您能否澄清 ADCL 目前是否正在執行任何非新冠檢測？

We have developed a number of non-COVID tests, but commercially we have limited ourselves to this institutional business model, which we think is very novel. But as a consequence, it limits us in our variety. We will not have the variety of assays that a diagnostic company that bill third parties will have. But nor will we have the headaches and delays of billing third parties. We've seen lots of diagnostic companies on their knees because of their inability to negotiate prices with these third-party customers. We think our business has been much simpler. I'm sure Beth would attest to that as well. Having large institutions paying us monthly bills and it's very simple, but that also means our offering has to be suitable for that marketplace, which is not unlimited in terms of its offering. But things like wellness assays and the ability to predict potential morbidities will be doable on a large scale with a single payer.

我們開發了許多非新冠檢測，但在商業上我們將自己局限於這種機構商業模式，我們認為這是非常新穎的。但結果是，它限制了我們的多樣性。我們不會像向第三方收費的診斷公司那樣提供多種檢測方法。但我們也不會遇到向第三方計費的麻煩和延誤。我們已經看到許多診斷公司因為無法與這些第三方客戶協商價格而陷入困境。我們認為我們的業務變得更加簡單。我相信貝絲也會證明這一點。讓大型機構每月向我們支付賬單，這非常簡單，但這也意味著我們的產品必須適合該市場，而該市場的產品並不是無限的。但諸如健康檢測和預測潛在發病率之類的事情將可以通過單一付款人大規模實現。

Okay. Regarding the PGx assay, could you give us some additional color on what level of revenue can we look forward to once it receives approval from that New York State Department of Health?

好的。關於 PGx 檢測，您能否給我們一些額外的信息，說明一旦獲得紐約州衛生部的批准，我們可以期待什麼水平的收入？

Yes, that's kind of hard to predict. We could be having cash top-line run rates similar to what we enjoyed at the peak of our COVID testing by doing only 150 PGx assays a day. Now, we're talking to multiple cohorts right now for commercial relationships, all of them -- not one of them has less than 50,000 members in their cohort. So being able to recruit from a cohort of that size means -- with a little imagination you could imagine those numbers well exceeding 150 per day and generating much more significant revenue than we're currently suggesting.

是的，這有點難以預測。通過每天僅進行 150 次 PGx 檢測，我們的現金頂線運行率可能與我們在新冠病毒測試高峰期所享受的類似。現在，我們正在與多個群體討論商業關係，所有這些群體中沒有一個群體的成員少於 50,000 人。因此，能夠從如此規模的群體中招募人才意味著——只要發揮一點想像力，您就可以想像這些數字遠遠超過每天 150 人，並且產生的收入比我們目前建議的要多得多。

However that will require two kinds of selling. Firstly, we have to sell to the institution and agree to their contract, agree to their sponsorship, but assays like PGx are not mandatory the way COVID testing was. So we have to also educate the members of the cohort and to an extent we have to educate the members of the medical community. So, we'll have to see just how steep the slope is of our acquisition of customers, but we think they'll be highly localized within the cohorts we sign, and our hope is that the barrier to recruiting them won't be very high. And certainly high interest, we've solicited in our kind of pre-selling while we await approval from New York State. We think we'll be successful in that regard.

然而，這需要兩種銷售方式。首先，我們必須向該機構出售產品並同意他們的合同，同意他們的讚助，但像 PGx 這樣的檢測並不像新冠檢測那樣是強制性的。因此，我們還必須教育隊列成員，並在一定程度上教育醫學界的成員。因此，我們必須看看我們獲取客戶的斜率有多陡，但我們認為他們在我們簽約的群體中將高度本地化，我們希望招募他們的障礙不會太大高的。當然，我們在等待紐約州批准的同時，也已經徵求了我們的預售興趣。我們認為我們會在這方面取得成功。

It's helpful. My last question is are the biotech customers waiting for the cGMP certification of the linearDNA production to big amounts purchase of the IVT templates?

這很有幫助。我的最後一個問題是生物技術客戶是否正在等待線性DNA生產的cGMP認證才能大量購買IVT模板？

Yes, they are using -- their initial evaluations are at the bench and so they're really research quality. But it's not long before therapies -- nucleic acid therapies go from cell models to simple animal models. And then from animal models, the stretch to the clinic is not that far, especially since there are so many of these nucleic acid therapeutics. And the concerns over safety and toxicity will diminish as the whole category makes progress. So I think the march to market will be faster than most people expect. So we have to be there with cGMP, and we have to do it quickly, which is why it has so much of our attention.

是的，他們正在使用——他們的初步評估是在實驗室進行的，所以它們確實具有研究質量。但不久之後，核酸療法就從細胞模型轉向了簡單的動物模型。然後從動物模型來看，到臨床的延伸並沒有那麼遠，特別是因為有如此多的核酸療法。隨著整個類別的進步，對安全性和毒性的擔憂將會減少。因此，我認為進入市場的速度將比大多數人預期的要快。因此，我們必須遵守 cGMP，而且必須快速完成，這就是它引起我們如此多關注的原因。

Thank you, James.

謝謝你，詹姆斯。

You're welcome. Thank you, Yi.

不客氣。謝謝你，易。

Thank you. And this concludes our question-and-answer session. I would like to return the call to Dr. James Hayward for any closing comments.

謝謝。我們的問答環節到此結束。我想給詹姆斯·海沃德博士回電，徵求結束意見。

Well, thank you, operator, and thank you all for joining on our call today. I hope, like us, you feel that this is an exciting time for us, and we look forward to a rapidly evolving future, and we'll speak to you again next quarter. Thanks very much.

好的，謝謝接線員，也感謝大家今天加入我們的電話會議。我希望您和我們一樣感到這對我們來說是一個激動人心的時刻，我們期待著快速發展的未來，我們將在下個季度再次與您交談。非常感謝。

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開線路。