Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cibus Inc (CBUS, Financial) has successfully completed edits in their Sclerotinia resistant trait and initiated edits for a nutrient-use-efficiency trait, broadening their trait portfolio.
- The company has made significant progress in launching their herbicide tolerant trait platform in rice, signing agreements with major seed companies in the US and Latin America.
- Cibus Inc (CBUS) has expanded its developed rice platform and customer base, with successful field trials showing promising results for stacked gene edited traits.
- The company has achieved breakthroughs in canola, confirming edits for advanced traits such as Sclerotinia resistance and herbicide tolerance.
- Cibus Inc (CBUS) has made progress in regulatory approvals for gene editing, with recent approvals in Canada and the UK, enhancing their global market potential.
Negative Points
- The company reported a net loss of $28.5 million for the second quarter of 2024, an increase from the $20.5 million loss in the same period last year.
- R&D expenses increased to $13 million, primarily due to higher lab supplies, facility expenses, and employee headcount.
- There is a delay in the final regulatory approval in the EU, which could impact the company's expansion plans.
- SG&A expenses remain high at $9.3 million, with expectations of consistent spending levels in the upcoming quarters.
- The merger with Calyxt has led to increased royalty liability interest expenses, impacting the financial results.
Q & A Highlights
Q: Can you provide more details on the soybean market opportunity and the timing for monetization and milestones?
A: Rory Riggs, CEO, explained that they are close to achieving their single-cell conversion, expected in 2024, which will unlock significant opportunities. The soybean market is concentrated with 200 million acres, and major players are interested in working with Cibus on traits like Sclerotinia. They are already collaborating with GDM, a large Latin American company, and expect to start editing their crops by year-end. Additionally, there is a movement towards sustainable ingredients, and the soybean platform will be key to this, offering a substantial opportunity.
Q: Could you elaborate on the sustainable ingredients opportunity and any additional investments needed?
A: Peter Beetham, COO, stated that the sustainable ingredients initiative is funded by corporations like P&G. They see this as a significant category across consumer goods, with potential value similar to the rice market. The focus is on developing sustainable, low-carbon ingredients, starting with biofragrances and moving to oils. The soybean platform will be crucial for this, and they are already making products and validating processes.
Q: Are you planning to offer HT1 and HT3 traits in rice only as stacked traits, or separately as well?
A: Rory Riggs, CEO, explained that while stacked traits are the mainstay of the herbicide business, they will offer each trait individually and then develop stacked versions. They are working on four different herbicides to provide farmers with options for weed management, similar to the GMO crops approach.
Q: Will cost-saving initiatives affect the rate of editing and development work on new traits?
A: Peter Beetham, COO, assured that the focus remains on key platforms like weeds, disease, and Nutrient Use Efficiency (NUE). The initiatives will not hinder the growth and development of these areas, particularly the herbicide tolerance in rice and wheat.
Q: Can you discuss the mechanism of action for the Nutrient Use Efficiency (NUE) trait?
A: Peter Beetham, COO, explained that the NUE trait focuses on nutrient uptake in crops, not just nitrogen but the entire NPK fertilizer opportunity. The approach involves multiple edits to enhance nutrient use efficiency, primarily targeting the root system but also considering other plant aspects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
