Orgenesis Inc (ORGS) 2021 Q4 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the Orgenesis Fiscal 2021 Year-end Conference Call. (Operator Instructions)

It is now my pleasure to turn the floor over to your host, David Waldman from Investor Relations. Sir, the floor is yours.

Thank you, and good afternoon, everyone, and welcome to the Orgenesis Year-end Business Update Conference Call. On the call with us this afternoon are Vered Caplan, Chief Executive Officer; and Neil Reithinger, Chief Financial Officer. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020.

This conference call contains forward-looking statements, which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended. These forward-looking statements involve substantial uncertainties and risks and are based upon our current expectations, estimates and projections and reflect our beliefs and assumptions based upon information available to us as of the date of this conference call.

We caution listeners that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including, but not limited to, the risks and uncertainties discussed under the heading Risk Factors in Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2021, and our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements for any reason.

I'd now like to turn the call over to Orgenesis CEO, Ms. Vered Caplan. Please go ahead, Vered.

Thank you, David, and thanks to everyone for joining us on the call today. This has been a transformational year for Orgenesis as we reported key achievements implementing our point-of-care platform, which we believe is the key to unlocking the potential, the full potential of the cell and gene therapy industry.

We've also generated strong year-over-year revenue growth. Revenue for the full year of 2021 increased over 360% versus 2020 due to increased activity and service agreements with existing and new partners and customers. These revenues are direct results of the process development, technology plans for setup and the work we're doing for both our point-of-care systems and therapies.

In addition, we have already received commitments from our customers for future revenues in excess of $30 million for 2022 and $50 million -- over $50 million for 2023. As a result, we have a very good visibility heading into the new year.

To put the company's growth in perspective, our revenue on run rate is nearly on par with our former MaSTherCell CDMO operations at the time of its sale for over $300 million. We do believe that the new point-of-care platform is more cost-effective and scalable. Towards this end, our business is built around our 3 major pillars: our therapies; technologies; and the network. These pillars align the interest of the therapy development, the hospitals and the patients in a way that has not been done before.

To provide some historical context, centralized production, which is standard now across the industry has resulted in high costs of cell and gene therapies. For example, CAR-T therapies can range in the hundreds of thousands of dollars per patient. These significant costs have significantly inhibited uptake by payers and very much limited availability for patients.

Our goal is to lower the costs, streamline logistics, expand capacity and enhance distribution through processing of therapies close to the hospital setting, which is expected to support payer uptake and make these therapies more broadly available to patients. We believe this is a crucial step that is necessary for cell therapies to become widely available.

We continue to progress our point-of-care centers located at strategic locations, and we are investing our efforts and validating our point-of-care platform within each of such regions. Our global supply network now spans North America, Europe, Asia and the Middle East, [compromised] of point-of-care centers, which serve as central hubs for the entire region. These centers are set up for validation of therapies and technologies, but they also provide the basis for the global supply and distribution platform. We continue to deliver the Orgenesis Mobile Processing Units and Labs, or OMPULs, across our point-of-care network globally with the goal to expand capacity and availability for a broad range of advanced cell and gene therapies.

Unlike a traditional biotech, our approach is based on adapting the lab-based processes to customized automation closed systems and integrating the combined process in our OMPULs. OMPULs are multipurpose mobile GMP facilities that can be rapidly deployed as a standard industrial site near the point of care or as close as needed. Utilizing our OMPUL-based approach of production of personalized cell and gene therapies, we believe we can add new capacity within 3 to 6 months versus traditional clean rooms, which are 18 to 24 months. And the lack of capacity in the industry is even more evident and pressing than ever.

In terms of expenses, our goal over time is to reduce the cost of these therapies to tens of thousands versus hundreds of thousands of dollars. We believe that the key to our success in our point-of-care business is standardization. The process is exactly the same, regardless of where the product is produced. For this reason, we are establishing training protocols. We are using audited and consistent suppliers and vendors of materials involved in production and quality control. We are implementing validated automated solutions that minimize human error, and we are taking advantage of closed units to control infections.

We believe our strategy of decentralizing and unitizing the supply of cell and gene therapies based on standardization of the manufacturing environment will ultimately become the solution for this industry, enabling lower-cost parallel processing and accelerated development and ultimately providing a scalable long-term option to overcome the industry-wide capacity constraints.

Our strategy is to qualify the production process of the therapy in one OMPUL at one point-of-care location and then to add additional OMPULs under the same quality system and infrastructure. We have developed this approach based on a decade of experience in process development of such therapies, and we are working closely with researchers from leading academic institute as well as from biotech companies active in this space. We believe the OMPULs are an important step to quickly expand our capacity, and we look forward to expanding both the quantity and location of our systems.

In line with the strategy, I am extremely pleased to announce recent unveiling of some of our new OMPULs. Feedback from within the industry has been extremely positive. As an example, we placed our first OMPUL in Spain at Hospital Infantil Universitario Niño Jesús in Madrid that has been designed specifically to process tumor infiltrating lymphocytes and mesenchymal stem cells.

Moreover, we have expanded our collaboration with John Hopkins to establish a new point-of-care center, also known as the Maryland Center for Cell Therapy Manufacturing. Construction of the new point-of-care center will be funded in part by a $5 million grant from the state of Maryland. We expect that the new state-of-the-art 7,000 square foot facility will enable local capacity for development and processing of clinical therapeutics at the point of care and will serve as a base for the OMPUL expansion.

Orgenesis has entered into collaboration agreement also with Tel Aviv Sourasky Medical Center to utilize its Israeli point-of-care center to support research and validation activities for advanced cell and gene therapy.

We are also seeing growing government interest in our partners and in our activity. And as an example, our joint venture with Theracell in Greece has been designated as priority investment of strategic national importance. In addition, the JV has been approved to receive a grant of up to EUR 32 million from the Greek government, subject to compliance with budgetary conditions and spread over the next few years, which we intend to use to advance the development of our cell therapies within the point-of-care setting. The funds are also intended to support the process development and manufacturing of the therapies at the clinical sites, utilizing the OMPULs.

We have invested in our point-of-care platform over the 2 years and are now realizing the revenue return on such investments. We intend to continue utilizing profits, government grants and additional resources to expand capacity of the point-of-care centers rolling out our OMPULs, incorporating new technology and implementing our quality system. For example, the OMPUL that is located at Wolfson Medical Center successfully completed all qualifications and is currently GMP compliant. Assuming the Ministry of Health approves the clinical study, we plan to post a clinical grade batches for Phase I/II TILs study.

Our partners and customers have aligned interest with our own and have been committed to support the validation, development and clinical trials of advanced therapies, utilizing our point-of-care platform within the respective markets. As we have discussed in the past, we provide our partners and customers with development and supply services, whether it be for their own products, or for our own out-license therapies. We believe this approach is a highly scalable as it derisks development from outside [support] from our partners. In this way, we believe we can advance our development of point-of-care therapies, which now span immuno-oncology, antiviral, metabolic, autoimmune diseases, tissue regeneration and more. These therapies range from preclinical through to early commercial stage.

Our strategy involves in-license therapies from leading research centers, hospitals and biotech companies and out-licensing such products to pharma and biotech companies in a consistent and standardized manner in all locations, while leveraging our point-of-care platform services to provide them with development and supply they need for such products. We do so in return for future royalties as well as exclusive service contracts for industrializing and supplying these cell and gene therapies.

We believe we have built a robust therapeutic pipeline, leveraging grants in our out-licensing partners and while benefiting from the service-related payments. This pipeline includes more than 16 core therapeutic technologies, some of which can be utilized for multiple indications, ranging from preclinical to early commercial stage, spanning into immuno-oncology, antiviral, metabolic, autoimmune, tissue regeneration and more.

One -- an example of our therapeutic pipeline include metabolically optimized T cell, a TILs product, by using an advanced process optimization technology licensed from Yeda Research and Development, Weizmann Institute of Science, we believe that we can decrease the duration of the manufacturing process and increase the potency of the TILs. In the early stage of cancer, some lymphocytes successfully attack and infiltrate the tumor microenvironment surrounding the tumor cells and mount an antitumor response. TIL therapy is a clinically validated personalized cancer treatment based on infusion of autologous TILs expanded ex vivo from tumors. Once expanded, the TILs are infused back into the patient where they attack the cancer cells with a high degree of specificity.

An additional example is our unique CD19 CAR-T therapy. This is an anti-CD19 chimeric antigen receptor known as CAR-T cells. They are genetically engineered to express an artificial T cell receptor for cancer immunotherapy. CAR-T cells can be either derived from the patient's own TILs or from T cells from a healthy donor. Once [those cell isolated from a person] these T cells are genetically engineered to express a specific CAR, which programs them to target an antigen present on the surface of the tumor.

After CAR T cells are infused to the patients, they act as the living drug against cancer cells expressing the target antigen. We are developing a new anti-CD19 CAR-T therapy for treating patients with B-cell malignancies including acute lymphoblastic leukemia and Non-Hodgkin Lymphoma.

The cells of these patients express CD19 protein on the surface and this is targeted by the CAR-T cell. An additional example is Kyslecel, an autologous cell-based product approved in the United States, which is made from the patient's own pancreatic islet, to regulate blood sugar. Kyslecel is intended to preserve insulin secretory capacity in chronic or acute recurrent pancreatitis patients after total pancreatectomy. Kyslecel has demonstrated numerous benefits, including reduction in pain, improved quality of life, increased survival and cost savings to payers.

We estimate that the potential addressable market for Kyslecel to be in in excess of $500 million in the U.S. alone. We are also focusing on OMPUL-izing the process and adjusting the Kyslecel manufacturing process for European GMP requirements in anticipation of initiating the first clinical application in the European Union. We are in advance discussions with key islet transplantation and pancreas surgery centers to advance this platform as well as other strategic partners.

So to wrap up, we believe that the coming year could be a transformative year for Orgenesis. We are excited at the prospect of supplying clinical-grade MSCs, CAR-Ts and TILs-based products utilizing our point-of-care platform. We believe that providing data for various centers, validating the comparability of products supplied at various sites will provide cell and gene therapies a viable economic pathway to market. And that given the pipeline of cell and gene therapies, which we provide developing and processing services that we are well positioned to expand our market position, not only as a leader, but as a disruptor in the cell and gene therapy market.

We believe that we are building a sustainable revenue model that can support the growth of the industry in general and the growing capacity requirements of our partners and customers. We look forward to sharing more exciting developments to be announced in the weeks and months ahead.

On that note, I'll now turn the call over to Neil Reithinger, our Chief Financial Officer.

Thank you, Vered. Our revenues for the year ended December 31, 2021, increased more than fourfold to $35.5 million as compared to $7.7 million for the year ended December 31, 2020. The increase is mainly attributable to increased activity under master service agreements with our regional partners related to technology transfer, setup and validation of both our therapies and systems for clinical use in their respective territories.

Cost of services and other research and development expenses for the year ended December 31, 2021, were $36.6 million compared to $84 million for the year ended December 31, 2020, representing a decrease of 56%. The net decrease was mainly attributable to a decrease in the amount of $45 million in other research and development expenses during 2021. In 2020, we made significant investments in the development of several types of OMPULs accounted for in other research and development expenses, with the expectation of use and/or distribution through our point-of-care network of partners, collaborators and joint ventures.

The majority of our OMPUL development work was completed in 2021, and we expect that such OMPULs will be placed into service during 2022.

Selling, general and administrative expenses for the year ended December 31, 2021, were $14.7 million as compared to $19 million for the year ended December 31, 2020, representing a decrease of 22%. The decrease for the year ended December 31, 2020, is primarily attributable to a decrease in accounting and legal fees as a result of decreased corporate investment activities in 2021 compared to 2020 as well as the reduced business development expenditures in 2021. We expect the growth in revenue in 2022, including contracts already in hand, will cover R&D and SG&A expenses during 2022.

In terms of liquidity, we ended the year with cash and cash equivalents of approximately $5.5 million. As a result of the sale of the MaSTherCell subsidiary, we've used the proceeds of the sale to execute on our point-of-care strategy. We believe much of these upfront investments are behind us and expect that future growth in revenue will offset our cash burn.

We are also attempting to minimize our own investments through a cost-effective international partnering strategy and nondilutive grant funding. We are seeing growing public and private interest in supporting local regional expansion and developments. We have been fortunate to receive government support from several countries, and we believe we will continue to benefit from such support to further grow our point-of-care platform.

Operator, we'll now open the call to questions.

(Operator Instructions) And your first question is coming from Bruce Jackson.

Bruce Jackson, The Benchmark Company. I just wanted to follow up on like the Kyslecel comments. Can you tell us a little bit more about what the next steps are in that program? How many sites you might partner with in Europe and when the OMPULs might be placed?

Yes, of course. So we have actually expanded our activity to more sites in the U.S. And in Europe, it's really a matter of regulatory. It's still in discussion of how many sites we'll start for clinical approval, but I think there is a need in Europe for this, and we've had initial discussions. So I don't know. I don't have a final answer kind of how many sites we'll have for the clinical trials there because it's still in planning phase.

Okay. Fair enough. And then if I could just get back to the revenue and the operating expense commentary for 2022. So the revenue is going to pretty much offset the R&D and the (inaudible). Just generally, all in, what are your burn rate expectations for '22? And are we talking about approaching breakeven or might there still be a small net burn for the year?

So I think we'll -- well, that's kind of my hope that we will be breakeven because that's kind of how we base our budget. Remember, we finished most of the development work, and whatever is left is covered by grants, actually. So I don't think we'll have a lot of R&D unless some kind of strategic change, which we're not planning. So I mean I think we should be okay with breakeven. We kind of -- we're really generating revenue and expensing the operational expenses to generate that revenue.

So I think we have our platform kind of ready to go. And we may even get some royalties from some of the out licensing, which will be great. So that will be nice. So that's it. I think we've spent 2 years working very hard to get this up and going. This year, we've already hit the ground running, and it's going well. And we already have kind of commitments from existing and new customers, and we still haven't even finished the first quarter. So I'm optimistic that we'll be doing well.

All right. Congratulations on all of the progress.

My pleasure. Thanks.

Your next question is coming from Kelvin Seetoh.

This is Kelvin from 10x Capital. Vered, it's nice to talk to you again, and congratulations on the great results. So I just have a few questions. I think this is the first time I'm seeing Orgenesis putting out $500 million as a potential addressable market for Kyslecel. So I'd like to find out more about do we have any current plans to ramp up sales? Or do we just have to wait a bit longer?

So I think one of the things that, as I said, we've been working a lot on expanding the market. And the European market, Asian markets are different from the U.S. So I actually think they have quite a nice potential. In the U.S. itself, as I said as well, focusing on expanding our capacities there, I do hope we will expand. I mean we've really -- I think we're working with some of the best centers, and we're getting a lot of positive feedback. So we also are looking at interesting ways to actually expand the indications we can use this technology for, and just kind of strategically looking at this product.

So I do think we have a lot of potential. We can build on it, not only this, which is a niche market, but really underserved with no good solutions. I mean there are some centers that try to do islet kind of preservation after they do pancreatectomy. But really, it's not the same level, right? Here, you have an actual product that's very well defined. And I think our patients and clinicians we work with can testify to the fact that this is a very good product.

So I think it's all about kind of expanding indications and expanding outreach, which we've also worked hard on, and I think we will [build-to-suit] there.

All right. Great. The second question I have is, right now, we are going through a phase of environment where I think it's harder to raise money. And I was looking at the latest balance sheet. So we are very low on cash right now. And I'm just wondering, is this cash sufficient enough for us to run our operations for next year? Or do we have to raise a bit of money?

So our expenses are really declining. And we've also received a lot of grant funding. So that covers a lot. And at the same time, we have out-licensed, some of our therapies, technologies to pharma and biotech companies. And so that also generates some revenue.

So as I said, we do expect to be more or less cash flow breakeven. And historically, even when we've needed capital, our current shareholders have been very supportive. But we also look at strategic options, which I think we have plenty of, just looking at our pipeline and our activities.

Right. So one last remark. I think while I consider myself a very patient investor, I think all of us can agree that the stock went nowhere since 2016, despite much progress have made. I think it's just a huge injustice to the progress made by Orgenesis. So since we are entering the breakeven for next year, I hope we can ramp up on the investor relations sharing because the valuation gap between where we are right now and previously with MaSTherCell is really quite wide.

Well, I certainly think we'll be putting a lot of effort into that.

The next question today is coming from Bjorn Ng.

Bjorn from 10x Capital. Nice to speak to both of you again. So I've been following Orgenesis for a while, and it's great to see the company strategy slowly panning out. So I have 2 questions. My first question is regarding the accounts receivable of about $15 million. I wanted to ask if you could share some colors on what does it comprises of? And when should we expect to receive this amount?

So actually, I think -- Neil, you can answer, but I think most of it or at least some of it has been already received, right?

That's correct. When you say what it's comprised of, yes, that is a mix of all of our different partners and customers. So basically, as we've indicated before, our terms are 90 days from invoice state, okay? And that invoice state typically happens most of the time at the end of each month. So it's really 90 days at the end of the month in which the services are incurred or the invoice is generated, okay?

So we have had a very good history of collectability of accounts receivable. So far, at this point, we expect to continue that trend. We have some past dues, which are less than about $3 million, which we'll probably have -- be collecting here in the short term. So we see no indication that that's going to change because of what we've seen in the past. So -- and we haven't changed the terms. The terms have been the same for -- since the beginning. So yes, so as far as what it's comprised of, that's the same partners and customers we've had that we've reported on before, the mix has not changed. Okay.

And maybe I'll just add to that. I think this year will also be important in terms of transition on that issue. Because typically, as you go through the life cycle of these therapies, you have the initial period is process development, which you traditionally give longer time for payment. Also because many of our customers and the revenues we're collecting, they also get paid back from grants and other things they need to show. So we give them the time they need to do that.

And -- but one of the reasons, this year, I'm really looking forward to is -- and I remember we had the same kind of process in MaSTherCell. This transition, when you're actually moving from -- when you're just doing like the process development, and we've already started some batch production, and you're actually really relying your revenue more and more on batch production and utilization.

So the way these contracts work that actually you have a lot more kind of visibility on them going forward because typically, customers, they pay per utilization per clean room. In our case, it's per OMPUL. And on to that, you add the price per batch. So the whole payment structure starts shifting. And I think we'll gradually see this till the end of the year, we still have process development for new projects, of course. But I think we'll see many of these projects actually transition to a place where the payment schedules become very different.

Great. That's very helpful. So I just have one more question. I just want to touch on the grant of EUR 32 million for -- and I think it shows how the Greek government is very supportive of both Kyslecel and Orgenesis. Could you share some color if you are expecting some other grants elsewhere as well?

So we haven't made this public, but I think what -- so I can't go into detail, I apologize. But I do think if you look at grant funding in general, I mean, just look at what State of California, they've actually allocated tremendous amount of funding just for this purpose of making cell and gene therapies available, right? So you see this -- look at the grant we got in Maryland, right? So I think there's a growing realization all over the world.

And I mean, really, I've seen this in countries all over the world, will they understand, something has to be done? You can't continue having therapies that are costing so much. And just patients need them, right? So -- and I think we see this addressing this issue even on the regulatory side, right? The European Union or putting together new guidelines to support decentralized supply of these therapies.

So I think we will continue to put our efforts. I think we have also good relationships with the governments we've received grants from in the past because we've achieved the work we tried to do and we received the funding for. So I really think that's an important component. And I think it just kind of highlights how much everybody realizes that this industry needs a solution. And it's actually an issue of public importance to make these therapies available to patients.

Got it. Vered, so I just want to share that I've always respect the mission that you and your team are on. You guys are doing something great for the world. And I just hope that looking ahead where we can be financially strong and generate profitability. So Orgenesis can continue to do what you have been doing for everyone without that [targeting] the shareholders too much. And at the end of the day, I guess, I speak for everyone here that we all want Orgenesis to do well. So thank you, Vered and Neil for the hard work.

Thank you very much, Bjorn. Really appreciate that.

Your next question is coming from [Neil Fegans].

Vered, so I just wanted to clarify a couple of things. The revenue commitments from customers that you stated in your prepared remarks for 2022 and 2023, is that revenue still what you would consider to be all services revenue? And is it accretive? Is it in addition to the $35 million or so that you generated from services revenue in 2021?

Yes. It's the next year's. It's what -- it's further to what we made in '21. We now -- look, one of the things, and there was just a beautiful article kind of published. I don't know the name, but it -- and they kind of comparing cell and gene therapy space to the rainforest, which I think is very true because it's almost like a symbiotic relationship between the therapy developers and the industry kind of suppliers and the service providers as ourselves, okay?

Because if you're going into a clinical trial or if you have a therapy where you're expanding and you're building up capacity, your dependency on your service provider is very high. It's not -- saying it's not easy is an understatement, okay? If somebody is preparing you for production and then starts producing and even before that, shifting to another service provider is a tremendous challenge. So that relationship is very sticky.

So one of the things that therapy companies, biotech companies in this space really need to have is -- it's a commitment kind of both ways, right? They -- it's important for them. It's almost essential for them to make sure they have reserved capacity for the ongoing activity. It's part of the value because it's not easy. If, for instance, someone -- suddenly, the supplier kind of disappears and they have a huge problem. It's almost beginning again, right?

So I think the fact that we have these commitments from our existing customers and also into some additional customers, that is because we have been successful in the first stages of OMPUL-izing the products and have already done some batch qualification. And from now on, they will -- we will go with them, they will go with us.

And typically, like any company in the beginning, we don't work with huge partners or companies, but they are also growing. And we've seen this in the past as well. You begin with a smaller company, and as you build up your reputation, these small companies grow with you. They become bigger companies, they become more successful. And you also attract bigger players.

So that's kind of what we're seeing. We're seeing they want to make sure they have the capacity, they have the supply they need for their future plans for the next 2 years. And typically, in this industry, contracts are around 24 months, 18 months.

Okay. And kind of as a follow-on to that, when -- are we within sight of starting to generate what I call therapy revenue, revenue actually derived from treating patients? Is there any visibility to win actually therapy-related revenues might begin late this year, early next year or any guidance you can give on that?

And I want to -- that's a -- it's a tough question to ask me, okay? And I'll explain why. Because we do have Kyslecel, which I really hope the revenues will expand, but remember there is 2 pathways for these therapies, okay? So some our therapies and some of the therapies we supply for, okay, they are doing clinical trials. But remember there's a parallel regulatory pathway (technical difficulty) this, which is the hospital exemption. And I think I've explained this, but it's really an interesting model where in some cases, hospitals take upon themselves the responsibility to provide a therapy for a patient.

So this is not at the size and the scope of -- because each hospital needs to get approval for that. But that's actually kind of marketed products, okay? It's done not under the regulatory framework of kind of a BLA or an IND, but it's done under a regulatory framework of a hospital exemption. This does not exist in the U.S., but is very common and becoming more common in Europe and in Asia.

So I -- it's difficult for me to say when exactly that will happen and if we manage to get into that this year or the next, but that is a much shorter pathway, okay, in terms of just regulatory approval. And one of the most important kind of indications for that is to have a well-regulated GMP process and supply. It's not -- the demands are not less. It's just in terms of quality assurance and GMP level of production, but the demands are more based on clinical kind of responsibility of the hospital and on a clinical trial.

So we do have some products that do fall into those categories. And I don't know if we'll manage to get into that this year or the next. But I'm very hopeful we will, okay? So I hope that answers.

Yes. No, no. Listen, I realize that this isn't an exact science at this point. Two more real quick ones, Vered. You mentioned that you've already out-licensed some of your therapies to biotech and pharma companies. You don't need to repeat it, but have these been announced? Or are these out-licensing agreements you've entered into that aren't in the public domain yet?

So we haven't given a lot of details on them, just kind of general, but that's our strategy, right? I mean we -- our strategy is not to develop the therapies ourselves. It's just that's a situation in this industry. And just to give an example why -- because a lot of these therapies are developed by small biotech and hospitals, and in some cases, have actually treated patients, right, under hospital exemption. But now they want this therapy to move forward.

So when they come to us and ask us, can you make this therapy for us? We say, yes, we can provide user services. But if you give us the license, we can also expand the market reach and then we license out to other companies.

Okay. And would some of these companies that you have out-licensed to, if they were in the public domain, would they be companies that the biotech community, the pharma community might recognize?

I don't know. I think regionally -- look, this is a very new industry, okay? You've got some big pharma giants that have come in and made a stand, and the interesting thing is that I think most major pharma companies are going into this space. And you see more and more adoption on the part of this space. It's like nobody wants to be left behind and they all want to play in the scene. And they're all struggling with a very new kind of technology.

So you have a handful of big players. But what you see a lot in this industry is regional players that are very, very well-known regionally, okay? I think like any new industry, what we will see, and we've even seen it with some of our existing customers. You'll see kind of these mergers and consolidations of these little companies being swallowed up by the bigger ones and the bigger ones. So that, I think, is what is happening in the industry at the moment.

Okay. And Vered, one final, if I might. I think a lot of us in the financial community, whenever we hear talk of potentially needing additional capital, we have tunnel vision and we only think of equity offerings. You mentioned that there's the possibility of something more strategic. Would you like to expand on that just a little bit, even though it's hypothetical? And could that include a larger biotech or pharma company or one of our collaborative partners actually taking an equity interest in Orgenesis?

So as I said, I mean, we really rely a lot on our shareholders and the support and we're so appreciative always of the patients, and this is not a short-term game. And I think -- and we're actually expediting, I think, remember, with MaSTherCell, I think it took us 5 years to get to this level of revenue. With this new model, it's taken us 2 years. So I think we are expediting the cycle to generate value, right? And this is part of what we want to do, both for ourselves and for our customers, right, our partners.

So when we look at it strategically, there's many strategic options we could look at. We could look at a strategic option involving one of our therapies, which reaches a certain level of maturity. And then we're not only doing in maybe out-licensing for co-development or for services, but really a buyout of such a therapy, which would be wonderful, right, but we need to mature to that stage. And we also have a lot of technologies that we've developed in-house that can serve many other industries or industry segments. So we only -- also have that option. And we also have different models -- of services, of co-development.

So I think as a company, we have so many options for strategic collaborations. But I do think -- and here, I really try to remain very loyal to the shareholders and not kind of -- to really try to push these assets to a place where they will get the real value they deserve. And I think that's been our effort all along to maintain that balance between our needs and between maximizing value of the assets we can share with others.

And if I may add to that too, to answer your question, is when we talk about strategic, we're really looking at it as well the mentality, the part -- behind what the financing is, as an investor, not just what's the liquidity of the stock today, right? So although forms of financing can even be debt and you think, well, equity is always a form of financing that maybe everybody is most mindful of. Debt is something that we don't -- we have to be careful what's the devil in the details. You think it might be better. Most times, it's not. It depends strategically, it's like what's the structure, right?

So when we say strategic, it's really just a matter of who that investor is, what do they want to do with us, what is their mentality mainly for long term rather than short term? So while there could be equity that would be part of that, could be as part of a collaboration strategically, it could be something where it's an investment. We are looking for and what we've always done, and you can see because we have it. Many different financing forms that are available to us out there. What is the long-term mindset, okay? So that's what we mean is when we say that, too.

We try to be protective of the existing shareholders and maintain a good structure.

No. Well, I think that's helpful because it helps us understand that you're not simply looking at one avenue to raise capital if it was needed. And obviously, with the share price where it is, it wouldn't be viewed favorably at this point in time. But my closing comment, it's remarkable to get to the point that you're talking about breakeven with only 25 million shares outstanding for a biotech company. I mean that's quite remarkable. So listen, thanks for the time. It was very helpful.

Thank you. Thank you for following us closely and always being supportive.

And there are no further questions in queue at this time. I would now like to turn the floor back to Vered Caplan for any closing remarks.

Thank you. I'd like to thank everyone for participating in our year-end business update conference call. We are very excited about the outlook for the business and appreciate the strong support of our shareholders. We look forward to providing further updates as we plan to advance our therapeutic pipeline, expand our services and deploy our OMPULs wherever needed. Thank you very much.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.