Precigen Inc (PGEN) 2016 Q3 法說會逐字稿

Good afternoon. Welcome to the Intrexon third quarter 2016 earnings conference call. All participants will be in listen only mode.

(Operator Instructions)

Please note this event is being recorded. I would like to turn the conference over to Christopher Basta. Please go ahead.

Good afternoon. I am Chris Basta, Vice President of Investor Relations for Intrexon Corporation. Welcome to our third quarter 2016 earnings conference call. Joining me on the call today are Mr. Randal Kirk, Chairman and Chief Executive Officer; Mr. Geno Germano, President; and Mr. Joel Liffmann, Senior Vice President of Finance.

Slides that will be presented on the call today can be accessed on the events conference page under the investors section of our website, DNA.com. During this conference call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.

Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects, and other aspects of Intrexon's business are based on current expectations and are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Please read the Safe Harbor statement contained in the earnings press release, which was released earlier today, and is also available on our website under the investors link as well as Intrexon's most recent SEC filings, for a more complete description.

The press release references, and our discussion this afternoon may reference, certain non-GAAP financial measures including adjusted EBITDA, and adjusted EBITDA per share. Reconciliations to GAAP measures are contained in the earnings press release, as well as on the investors section on our website. Now, I would like to turn the call over to Geno Germano, Intrexon's President. Geno, the floor is yours.

Thanks very much, Chris. Good afternoon, everyone. Thank you for joining our third quarter 2016 earnings call. We certainly appreciate your support and interest in the Company. Earlier today we issued a press release with our third quarter earnings and we filed our 10-Q with the SEC. I hope you've had a chance to review the reported financial results.

During the quarter, our team of over 900 skilled and dedicated employees continued to deliver solid progress across our 30-plus collaborations, initiated two new exclusive channel collaborations, furthered the commercial activities of our subsidiaries and advanced several of our marketable products. I'll begin with an update of our subsidiaries and marketable products portfolio and then move on to a discussion of the collaborations before I hand the call over to Joel to discuss financials.

We'll start with Oxitec. We recently opened our large-scale mosquito production facility in Brazil, with capacity to produce 60 million Friendly Aedes mosquitos per week. A portion of this production capacity will support our ongoing deployment program in Piracicaba, Brazil, while the remaining capacity will be available to support additional territories as they come on board.

As you know, we're also deploying a vector control program in the Cayman Islands. Our monitoring of both programs is showing very positive results and we anticipate that these results will contribute additional evidence of the effectiveness of our product.

Notably, public support for our genetically engineered solution in these areas has been very favorable, and it tends to grow as residents realize the benefits of the product. Recent surveys show 69% of residents of Grand Cayman support the Friendly mosquito, and in Piracicaba where our Oxitec solution has been deployed the longest, 88% of citizens support its use.

We're pleased that the residents of Monroe County, Florida, yesterday voted to support the Florida Keys Mosquito Control District utilizing Oxitec's vector control in an effectiveness trial to fight against the Aedes aegypti mosquito. While we didn't win over every individual community in the Keys, we are pleased with the favorable county-wide vote and prepared to take the next steps to initiate a trial as soon as possible.

We remain encouraged by our engagements with government agencies and non-governmental organizations in multiple countries and municipalities and we continue to expect our ongoing negotiations to lead to broader adoption of Oxitec's solution in the near future.

Turning to Okanagan. Okanagan Specialty Fruits achieved its first ever commercial harvest of its non-browning Arctic Golden apple variety. Our congratulations go out to Neal Carter and his team on this important milestone. This fruit will be sold as fresh sliced apples in North American test markets in early 2017, in preparation for a larger scale launch next fall. This is an exciting new product. We've found retailers enthusiastic on bringing this to market.

Based on current planting contracts, between 2016 and 2018 we'll plant over 870,000 trees, that at maturity will produce over 30 million pounds of Arctic apples annually. Okanagan also received USDA approval for its third non-browning apple variety, the Arctic Fuji, during the quarter and efforts continue to apply this technology more broadly across additional apple varieties as well as additional fruits and vegetables.

Turning to Trans Ova. Trans Ova's investment in technology that will convert this service oriented business to a proprietary product-based business to drive its future growth in profitability continues, and we're making solid progress advancing this strategy. Exemplar Genetics research models, which are designed to enable superior translational research and better predictive efficacy in new treatments, were highlighted in two JCI publications during the third quarter, demonstrating their potential to help develop effective gene therapies for cystic fibrosis.

Additionally, next week at the American Heart Association conference, new data from one of Exemplar's custom research models built for Myocardial will be presented. AquaBounty recently reported Canada's Federal Court of Appeals upheld the AquAdvantage Salmon approval, and the company is advancing its business plan and preparing for expanded production and product launch in the near future.

Unlike in agriculture, biotechnology has had little impact on the $150 billion aquaculture market to date. Industry estimates anticipate a 100% increase in farmed fish production by 2050, presenting a significant opportunity for engineered solutions that drive higher, cost-effective productions, such as AquAdvantage Salmon. Production of AquAdvantage Salmon in the land-based recirculating tanks avoids the excessive use of antibiotics and vaccines and exposure of our fish to ocean-based parasites that commonly affect fish grown in sea cages.

With the foregoing in mind, earlier this year, we helped AquaBounty to take several critical steps towards realizing its commercial potential. First, we've committed a further $25 million to invest in the company and its development plans. Second, their US listing, which they have filed for via a new Form-10 with the SEC will afford them to access the US capital markets as they expand operations.

Finally, we announced our intent to distribute a portion of our own holdings of AquaBounty stock to our shareholders, while retaining a greater than 50% ownership stake. This last step will serve the dual purpose of providing a stock dividend to our own shareholders and providing AquaBounty assistance to meet the NASDAQ listing requirements. While the listing process will take a number of weeks, we are pleased that the company has the resources it needs to build their unique business and look forward to the important eco-friendly impact AquaBounty will have on the significant aquaculture industry.

Now I would like to move to our platforms. And here's an overview of some select programs. We will start with oncology, where our collaborator Ziopharm continues to make progress moving multiple platforms forward. Ziopharm will be providing new data on their ongoing study of their lead clinical candidate, the Ad-RTS-IL-12 compound in recurrent glioblastoma. Data will be presented next week at the Society of Neuro-oncology Conference. The overall survival data to date, utilizing their viral therapy for the controlled delivery of IL-12 has been promising and will be shared with regulators in the near term to determine a most efficient path to registration and ultimately to patients.

Another clinical study using a combination of the Ad-RTS-IL-12 and a checkpoint inhibitor in glioblastoma is also planned. Ziopharm will also present new data at ASH, underlying their adoptive cell-based programs, including advancements we've made showing the potential for the non-viral Sleeping Beauty platform to improve the manufacture of genetically modified T-cells and its ability to redirect T-cell specificity to blood cancers and solid tumors using CARs and [TSRs]. (sic - TCRs)

On the clinical front, Ziopharm plans to file to I&Ds in adoptive cellular therapy. The first is for CD33 CAR, which is targeting myeloid malignancies, and refractory AML, for which patients have relatively few therapeutic options. The second is an I&D for an off-the-shelf approach using primary and K cells for AML. Finally, work continues on a preclinical CAR-T targets with the biopharmaceutical division of Merck KGAA, in conjunction with Ziopharm.

In our oral mucositis program, and oral mucositis is a condition that impacts an estimated 500,000 patients annually, our ActoBiotics technology is used to express a bio effector, known as Trefoil Factor 1, in a convenient oral rinsing solution. Our collaborator, Oragenics, plans to file an I&D update for AG013 for a phase2 trial for this significant unmet need in early 2017.

In infectious diseases, Oragenics announced selection of a second generation lantibiotic OG716, an orally active homolog, that has exhibited positive results in an animal model for treatment of Clostridium difficile, admitted plans to begin I&D enabling studies. In rare diseases, our first technology to enter the clinic is FCX-007, a gene therapy engineered for the alter orphan indication of Recessive Dystrophic Epidermolysis Bullosa, or RDEB. These patients have a mutation in the COL7A1 gene that results in the absence or deficiency in collagen VII leading to a debilitating genetic disorder that is often fatal. The first of six adult patients that will be treated in phase 1 portion of the trial is expected to be dosed by the end of 2016.

In ophthalmology, our pioneering controlled gene therapy for wet AMD continues to move forward. Our patient friendly approach to this chronic disease utilizes RheoSwitch technology to control the sector expression within the eye through an eye drop or an oral pill. We continue to plan for an I&D filing near the end of the year. Our current health pipeline encompasses over 20 different indications including the aforementioned programs and other therapeutic candidates.

During the third quarter, we expanded our portfolio with new exclusive channel collaborations targeting two new large indications with high unmet medical needs, chronic Lyonel sinusitis and celiac disease. Overall, we expect to have up to 11 clinical trials, or I&Ds, utilizing Intrexon technologies by mid-2017 with further programs behind those from our extensive and growing pipeline within health.

Turning now to the energy sector. In energy and chemical programs we have now generated several high-value hydrocarbon molecules through our natural gas bio-conversion platform. We have joint ventures in place for two of these molecules, and have initiated partnership discussions for a third.

We continue to make progress on our LEAP program targeting isobutanol as a gasoline additive, and remain on track for our year-end targets as our production yields have steadily improved since last quarter. Our pilot plan is performing well and offering insights that will translate directly to commercial plants. The joint venture for 1,4-BDO, or 1,4-Butanediol, achieved production of this valuable chemical during the third quarter and progress overall is tracking to plan.

In crop protection, we continue to make headway this quarter with Intrexon Crop Protection, or ICP. As a reminder, ICP offers precision pest control with limited environmental impact, potential for superior efficacy, and avoidance of insect resistance. Utilizing two proven platforms, the self-limiting insects from Oxitec, and our ActoBiotics platform. As previously disclosed, ICP has two collaborations with leading players in the agricultural industry, and both are progressing well.

And now I'd like to turn the call over to Joel Liffmann for a brief review of financials during the third quarter.

Thank you, Geno. Our third quarter and nine-month financial results reflect the progress across the Company that Geno just discussed. I would like to briefly call out several items.

Today we reported third quarter revenues of $49 million, a decrease of 7% sequentially and 8% from the same period last year. The sequential top line decline was driven mostly by drop in our product and service revenues from our Trans Ova subsidiary.

From a year over year perspective, the majority of the revenue decline is attributable to recognition in last year's third quarter of previously deferred revenue related to collaboration agreements for which we satisfied our obligations or were mutually terminated. So while we had a tough comparison with the year-ago quarter, deferred revenues have increased meaningfully this year and now exceed $320 million.

As Geno commented, we are making substantial investments in Trans Ova as well as Oxitec, AquaBounty, Intrexon Crop Protection, and Okanagan. All of these investments are expected to generate increased revenues in future periods. We also continue to invest in our technology platforms and other capabilities.

In our earnings release, we report adjusted EBITDA as previously defined. This measure will no longer be reported as such; however, we will continue to provide supplemental information regarding deferred revenues that will allow you to reconstruct this metric. Going forward, we will be reporting adjusted EBITDA as redefined, which for the third quarter was a loss of $3.7 million, and for the nine months was a loss of $20.8 million. As previously defined, adjusted EBITDA was a $5.6 million loss for the quarter and positive $107 million on a year-to-date basis.

I would also like to point out that we continue to execute very well on our capital efficient model. We measure our capital efficiency as the ratio of technology access fees, plus cost recovery in product and service revenues, divided by our cash operating costs. For the third quarter, this measure was 80% of cash operating expenses, and for the nine months, we've received total consideration equal to 150% of our consolidated cash operating expenses.

We ended the quarter with a strong cash position of $281 million. And we also hold equity securities and preferred stock in our ECC partners worth approximately $163 million. A great deal of more detail can be found in the 10-Q filed today.

I would like to wrap up with the observation that we are very pleased with our operating progress, our financial performance, and the financial strength afforded by our business model. I will now turn it back to Geno.

Thanks, Joel. So in summary, having covered several of the initiatives with our marketable product and several platforms in development, let me just summarize by saying that with over 30 collaborations, a portfolio of operating subsidiaries with, in our opinion, outstanding management teams and business prospects, we exited the third quarter of 2016 in a solid position to execute our strategies for the remainder of 2016 and beyond. Thank you.

Thank you. Operator, we'll now take questions.

(Operator Instructions)

The first question comes from Tom Shrader at Stifel.

Good afternoon. Thanks for taking the question. So you commented in the energy program that you're still on track for year end targets, is that still as strong a statement as a go/no-go decision or what are the year end targets? Can you give us a little sense of what you think you can do by year end? It's honestly the most common question I get.

Yes. Well, we've established our own internal targets for advancement of the program that reflect a challenging and aggressive progression of the technology. And we are making progress towards the targets that we set for the end of the year that will trigger the next step in the planning process for commercialization of the ultimate product. We're not disclosing the actual yield numbers that we're using internally to measure our progress, only confirming that we are on track with those targets.

Okay. In the November 19, there is a meeting of the Florida Keys mosquito control board. Do you expect that's the meeting that will actually decide whether you have the right to go or is that still unclear?

Hi, Tom, RJ here. As you would expect, we are in communication with the mosquito control board there. They were our partners in the INET that was filed. So we enjoy a very discursive relation, a very courteous and very cooperative relationship.

We've been speaking with them as recently as today. So stay tuned. But I can tell you that for our part, we are looking forward to moving this program into the field in the United States and we're really excited about this opportunity.

Okay. Thanks for the questions.

The next question is from Jason Butler of JMP Securities.

Thanks for taking the questions. The first is on the crop protection programs. Could you maybe lay out for us a little bit what we could expect to hear from the collaborations you have ongoing and the progress you might see over the next twelve months?

And then my second question is a broader question on the impact of the election and now with the republicans holding all three branches of government how you expect the political sentiment to either change or not change in terms of both genetically-modified mosquitoes or foods? Thanks.

Sure. With regard to ICP, I think you just mentioned it. We have never disclosed the identities of the two partners. But there will be a very fullsome disclosure, that which was required by the SEC, when we file our Form 10 in connection with ICP. So stay tuned for that. That's upcoming.

With respect to your second question, politics, I don't know if it's really appropriate for us to comment on that today. I'll tell you the most -- the election -- the portion of the election that I was most excited about yesterday, of course, was that our mosquitos were greenlighted in Monroe County, Florida.

I will -- let me just observe, I mean, I will give you this much. We've talked with most members of the Congress over the last year. We've had extensive discussions with most members of the House of Representatives, most United States senators, many governors, many agency heads, many of the scientists in several federal agencies and so forth.

And in general, we have seen that these relationships have been very, very positive. We see a lot of support for our technology and frankly, I think what you are really getting at is, are we likely to see a lot of more rapid progress of engineered biology? I think the answer to that is, yes. You will see more rapid progress, but the reason I want to just preface that by mentioning the talks we've been having for a long while is because I think we were going to see rapid progress anyway.

Yes, I would only comment that we are in the innovation business and everything that we do is really about moving the needle forward and creating products that can go beyond conventional solutions for such a wide variety of different problems or opportunities that exists in all the markets that were involved in across our five different sectors. So to the extent that we continue to do our job and bring forward products that make a difference and have value and meet needs in the marketplace will ultimately continue to be successful.

Think about the data that Geno gave you, Jason, a few minutes ago pertaining to the public enthusiasm and the public support for OX513A, where it's been deployed. There is a clear relationship between the length of time of deployment and we're seeing this globally now, the length of time of the deployment and the amount of public support enjoyed.

One number Geno left out, because it's just a brand new number we got today is according to our latest data in Piracicaba approval actually is at or very, very near 100%. So that's where we've been deploying for the longest time. I think the data that we talked about in Cayman, that was really a poll taken about shortly after we began releasing mosquitoes and that was 69%. If you contrast that to the approval that we received yesterday in Monroe County, Florida, which was 50% something, 58% or whatever it was; something like that.

So we're seeing really around the world increasing public acceptance for engineered biology that confers tangible advantage to society and to consumers. And that's really what Geno was just saying, we are going to stay focused on that. And I think by staying focused on that we can expect more rapid developmental timeline.

Okay, great. Thanks for taking the questions.

(Operator Instructions)

The next question is from Derik de Bruin at Bank of America Merrill Lynch.

Thanks for taking the question. This is actually Mike Ryskin on for Derik. Following up on something that, I think one of the first questions that was asked and something you obviously focused on a lot, the proposed field trial in Florida Keys. I know you're still waiting following the vote results, just waiting for the mosquito control board result, as you said.

But could you just paint us the two pictures in terms of your strategy based on the outcomes of that vote, and when you'd be able to start the treatments, what time points you'd be checking and sort of how you're progressing, if it gets approved and also if it doesn't get the passing vote, what's your backup plan there?

So I think the backup plan was pretty obvious, because as has been publicly disclosed, several other Florida communities have actually, well, I think first they went to the Department of Health and Human Services, and then directed them to us. In any event, there's several Florida communities that have asked us if they could stand in lieu of Monroe County in case the vote had not gone the way we hoped it would. And so now, we're still in discussions with these other Florida communities, but they -- I'd like to say they're public domain, but I'm not sure which ones are public domain. So I don't want to name them today, but anyway very significant, very well-known Florida communities.

And we're going to see to what extent we can accommodate them anyway, but obviously, we owe a duty of loyalty, I feel, to the mosquito control district in Monroe County. And so that's going to be our top priority.

All right, thank you. And then a quick follow-up if I can, on the Okanagan apple, Arctic apple and the other apple varieties that been approved. You've mentioned that in early 2017 you're planning to get some local market, test markets, with the fresh sliced apples. And then based on those results you'll have further commercialization in 2017. Could you talk about the strategy there, how significant the scale will be and how broad the ramp-up will be there?

Yes. I didn't -- we didn't mean to imply that there is a binary test out there that we don't know the answer to. People love this apple. I have not met a single individual who has tried this apple, who doesn't absolutely rave over it. I was honored to be able to speak at the World Food Prize about a month or so ago. And I can tell you this apple was a huge hit. It was tweeted by Robert Fraley, who is the Chief Technology Officer of Monsanto and a very favorable commentary, because we arranged for him to try the apple and so forth.

When you see this apple and you compare it to the apple that you know today, there is just no question in our minds that you are looking at the future. This should genuinely eclipse the existing apple. So it's a huge opportunity. It's going to grow geometrically.

Now, what we alluded to, what Geno commented on, was our focus group testing, market research and so forth. That's really to determine pricing packaging, and issues related to the actual merchandising of the product.

Right, and I can tell you that having just actually done a review with the team at Okanagan, that we've had more interest from retailers in participating in the test marketing than we have apples to distribute to them. So it's a great sign of their enthusiasm for participating with this product and in adopting the product as we were able to produce more and more volume over time.

All right. Thank you very much.

The next question is from Tycho Peterson at JPMorgan.

Hello, guys, just following up on the question on Okanagan. Can you share your perspectives on pricing relative to regular Golden apples in the market today? What are you -- what are the retailers saying to you in your conversations with them? Are they expecting a discount while you drive adoption, and then eventually pair it to your premium pricing? Is that the way you're thinking about it?

Yes, hi - not Tycho, right?

Yes, yes.

Yes. Pre-sliced apples already sell at a premium to whole apples, so we're going to enjoy a premium, okay. But as we just mentioned a few moments ago, we're going to be doing market research in order to determine the correct pricing level.

Got it, okay. And then --

Let me just mention though, our overall expectation is this should receive a premium to other pre-sliced apples. The question in our mind is what is the appropriate amount of that premium?

Got it. And is that also the right way to think about the GM salmon that you have the Canadian court approval?

No. I'm going to keep myself from self-promoting, but I recommend you go to YouTube, actually did -- we kind did let it out there about a month ago, right, at the World Food Prize thing. Search my name in YouTube, and you'll see me talk about of how our commercialization plan a bit around this fish.

We're planning on spending the production -- a portion of the production advantage that the AquAdvantage Salmon possesses in order to grow it close to markets, okay. So that we can provide a superior product to -- bear in mind, 95% of this salmon is consumed in the United States. It's grown in sea cages principally in Norway and Chile. So these fish as, Geno just mentioned, these fish typically have a lot of antibiotics in them. They have a lot of marine pathogens, marine parasites.

And we think that this is really an opportunity to establish the future of aquaculture as a terrestrial based system, which is how we produce our other food by the way, marine extraction. Marine extraction is obviously, by definition, the least sustainable food business on the planet. So we are going to spend a portion of the production advantage in order to produce a superior product, one that will be fresher, that will be consumer preferred, that will be antibiotic free, that will be pathogen free, that will be free of sea lice and so forth. And again, we will submit this product at that time to market research to determine what the price will be.

Got it. And then, one final one here on Oxitec for me, at the Piracicaba facility, I think you said in the past that you have the maximum capacity there of 60 million mosquitoes per week. Where exactly are you today in terms of just the utilization of that facility and how are you conversions going with the Brazilian government in terms of using that facility as a central site from which you can supply perhaps other towns nearby?

Yes, we have not -- I don't believe publicly disclosed how much surplus capacity we have in our facility in Piracicaba. But we have indicated its nameplate, which is 3 billion mosquitoes per year. We are definitely in dialogue with numerous agencies, federal, provincial, and municipal throughout Brazil. And our expectation is that all of the capacity of this facility will be in use within a very reasonable period of time.

Yes, and I will just add that currently there would be substantial opportunity for utilization of excess capacity, capacity that we're not utilized in Piracicaba, it's meaningful. And secondly, keep in mind that the eradication process involves a utilization of high concentration mosquitoes for a period of time to knock down the populations and then a maintenance-level that's smaller.

So when you go to a maintenance level, then you have more capacity at the plant to apply to other locations. So it's not a simple answer, I guess, but there is certainly plenty of room for us to expand throughout Brazil and we are in discussions with a number of different municipalities.

Got it. I appreciate the color, guys. Thanks.

The next question is from Ryan MacDonald of Wunderlich Securities.

Hello, everyone. Yes, so just a quick clarification in relation Oxitec with the panel meeting on November 19. Is that meeting only to decide whether or not to approve a trial in Key Haven, or are they also exploring other areas of Monroe County as well given the fact that there was two referendums in the vote yesterday?

The latter.

The latter, okay, got it. And then moving to the products and services business, you mentioned in your commentary about that you're working towards transforming the Trans Ova business from a services business to a proprietary products business. Can you talk about what the puts and takes are, and what sort of transformation, or what's involved in that transformation, and is this something that will impact the business in terms of being a headwind to the business into 2017?

It's not a headwind, it's an opportunity. So let me just mention, we've talked about this on maybe every call, but at least most calls in the past. We acquired Trans Ova, because this is by far the number one team, the number one capability for the production of bovine embryos, which are delivered in frozen condition. It can be delivered anywhere in the world.

So the short answer to the question, how can you export dairy industry to India, China, Middle East, and Africa, really superior genetics -- with really superior genetics? The answer is FedEx. And the reason we know that answer is, because we do it every day out of Trans Ova.

The acquisition was really to give us the team that has the greatest amount of domain expertise in this field. So that we can work with them really in two areas, one is to push out the boundaries of what is known in the field of bovine reproductive biology. And the second one is the application, which Intrexon is quite good at, the application of high throughput systems, really industrial engineering around a biologic process.

And the combination of these, we expect it's going to significantly reduce -- the target is to significantly reduce our COGS on frozen bovine embryos. We think that accomplishing that really gives us two scenarios. One is we have a very -- we have a high degree of confidence in achieving and the other one is more aspirational I will say.

The one we have a high degree of confidence in achieving is this is going to be a great business. And it's going to be a great biotechnology business, because we think this can be the leading platform to transmit superior genetics in the bovine species anywhere in the world.

The more aspirational goal, if you think about it, is that if we can get the COGS and we believe this is possible, we have not achieved this yet. If we can get the COGS on these embryos down to a certain point, then we could compete not only in the genetics business, but genuinely compete in the business of bovine reproduction, i.e., compete for share with AI and other methods, combine [bulls], if I have you, other means of achieving bovine reproduction, which is very important.

And bear in mind, the US dairy -- the worldwide dairy industry is around $180 billion, the worldwide beef industry is another $180 billion. If we can achieve a significant share, even modest share frankly, of the bovine reproduction revenue, that would be definitely worth pursuing.

So, again, we feel very confident of the first scenario. The second one is more aspirational. It's going to take more work to really get the COGS down to that point, but we think that that maybe achievable.

Got it. Thank you. The next question is from Keith Markey at Griffin Securities.

Hi, Keith.

Hi, thank you for taking my question. I just had one. I was just wondering if you might be able to give us a little bit of an update about the salmon field testing that's being done in South America and where it goes from the testing to actual provincial (inaudible).

I'm sorry. Are you talking about the ex-US, ex-Canada filings on the AquAdvantage Salmon?

Exactly, yes.

Yes, okay. Thank you, Keith. We've not really have liberty to discuss those. But it is true and thanks for mentioning them. It is true that obviously we believe this is a worldwide business opportunity, and we do have some additional filings that have gone in in some other countries and with more on the way.

Okay. Thank you.

I would now like to turn the conference back over for closing remarks.

Okay. As usual, I have no idea what I'm about to say. I think that Geno and Joel have really covered everything that needs to be said today programmatically, and that we can disclose in reality. So let me just mention my favorite topic, which is I think a part that our investors really seldom get to see. And but yet, it's the point of my greatest pride associated with this Company, and it is the quality of this team.

We happened to be at location today, I rather not disclose it, but we're in a location today which happens to be the very same location, in fact, I'm actually staying in the same suite in which I had discussed our big moment 7.5 years ago and decided to spend the rest of my business career focused on creating one of the coolest and most awesome companies on the planet, Intrexon.

And so I feel like it was just a moment of reflection to realize how far we've come and how close we are to really achieving that vision. So it's thrilling to me to work with such a wonderful team. We continue to add such great talent. We've evolved, and ultimately, look, as most of you know, I'm not a biologist, I'm a country lawyer and had a little bit of luck in some life-science company.

So I'll say ultimately every business and its success is mostly determined by how good is the team, how good are the people. And so if I could tell anything to my fellow shareholders, it is about that. I will say on that metric, I'm very, very satisfied, very, very excited. We've made very significant appointments at executive level. Some of them are here in the room with me now.

And almost every day, I think it is actually every day, I love to read, it's often the high -- really the high point of my day. I love to read these e-mails that come from our HR group, because they show the backgrounds of the scientists -- the new scientists that are being added at any of our labs around the world.

And I'm just blown away often by these reports just to see who's joining now, and what their background is, what their -- we learned recently, we have a member of our team happens to -- he had already joined us, and we didn't know the subject of his doctoral dissertation was Zika. And I never knew that, and so we're definitely doing lateral move for that individual.

Anyway it's just wonderfully exciting, if you would like to see some objective reporting about that, let me mention, because I was just thrilled when I saw this. I think about 10 days ago, Scientific American had an article that reported on a report that came out of the United States Patent and Trademark Office that was showing three highly innovative companies based on their patent filings with the Patent and Trademark Office, I believe over the last five years. And based on these patent filings what the purpose of what the report was doing is trying to figure out, I don't know who asked the PTO to do this, but really trying to figure out what does the organization of innovation look like? What is the innovation network within three highly innovative companies, and so it contrasted Facebook to Intrexon and Tesla. And what you see in the other two cases, especially Tesla, for example, it's pretty much there's this huge nucleus of scientists, and this is again, just going by patent filing. But it's a pretty good property, if you think about how important it is to have the true inventors on the patent, right. You could actually lose a patent for messing that part up.

So it's really important that the people who really did the work, who really made the inventions and so forth to be featured. Intrexon was featured, because our pattern, and its graphed there in the Scientific American article, our pattern is very different. What the pattern shows is a large number of small teams that are filing patents related to their work in completely in an orthogonal way to the other teams that are filing patents pertaining to their work.

And when we -- of course we know all the details behind these patents. So when we did a little research on that, to see that -- we have teams of five people, there's one recent that comes to mind, a team of five people that has just basically been singularly focused on a given project, when you think about the success they've had recently. The Scientific American article, actually a one thing I didn't like is they mentioned that seemingly that Intrexon's teams work in seclusion. And I thought well, gee, if they work in seclusion, how do you think the patents get filed?

So it's not true that they work in seclusion. We do know what they are doing. But what it told me is that the scientists in this Company get credit for the work they do.

What it showed me is that the organizational model that we developed and first thought of 7.5 years ago in the town we're currently located, actually works. It works well. It works well enough for us to be compared favorably to two of the other more innovative companies in the United States. And it was very much a matter of pride for us.

Looking forward, I could not be more excited. As I mentioned in the press release, I think we're going to have a very strong close for this year. Everyone here knows the importance of being a good fourth quarter quarterback.

We know at the beginning of this year we set some very lofty goals, and we know that we have not yet achieved all of them. So I just want everybody to know we're very focused on those. We're very -- and then beyond that, we're very, very excited about 2017. It looks and feels to us that this Company is really -- has really become and is in the process of becoming everything we hoped for. Thanks.

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