CLXT - Earnings call transcript Q2 2020

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Calyxt's Second Quarter 2020 Results Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions. Instructions]. [Operator being X, is today, recorded conference XXXX. August This to conference Director over this Firm. MZ time, Chris the like I'd Relations Investor Managing At to turn Tyson, America, Calyxt's North of Senior go Please ahead.

Chris Tyson

taking Update good and Calyxt's to all us I'd Thank Conference time XXXX Call. you, join Business morning. to Quarter Results thank like you for and Second for

detailing the Chief Your Financial Officer; Chief after Officer; Bill Technology A closed is hosts Officer. Koschak, yesterday today crossed are company's available Jim Blome, these press market the on release Travis wires website, Chief Frey, results Executive and and calyxt.com. the

we industry those the like could to call prospects differ list filings may be Calyxt are Before SEC, future Please a future call. at adjusted remind refer on the In including a presentation, to materially webcast, from and made regarding forward-looking of that those and statements the uncertainties begin to risks the and calyxt.com. adjusted. and financial cause discussion subject gross formal and a everyone also EBITDA which and number in risks. Both posted company's and of results is financial release filings goals margin its I'd to SEC actual This Calyxt's described non-GAAP results that of the measures. includes as with presentation for of each are on the press associated website operational

to GAAP accordance measures results these for be You will GAAP. financial presented a not financial find should addition regarding are in additional and considered non-GAAP disclosure that Reference be measures. measures considered non-GAAP should these in with to substitute

Jim is this call Jim, section our in the is would to time, call website Calyxt's Officer, being at yours. floor Blome. the The webcast. Finally, is Relations At webcast of to Executive turn the I like Chief calyxt.com. over Investor this link conference

James Blome

joining Chris, Quarter Call. Conference for us you Calyxt's you, today Thank Second thank for and Results XXXX

a to soybean I first exciting and response streamlined like advancement would of our Before to pandemic. products the the quarter second COVID-XX address acknowledge business I our model, the to

dedicated our the that a quarter, of through resilient pandemic. all have team throughout impact despite cycles the their the to continue progress second and projects We key development

mission XXXX grain respective supply an industries. employees We with ensure The and businesses. a on go-to-market advancing with is product, to gene with our to editing have own safe amazing product ensure remain everything strategy we a we We Calyxt. business, of created has milestone large initial achieved for world's deliver first are to soybean on appreciate Having early I of seeking Calyxt's their doing into achieved with XX developed proof-of-concept quickly our taken achievement actions and products and team we our commercialization are the our and plant-based With program months food our pioneering product launch, to the was deliver within of this for a our scaled and innovations safety first track. to and their some to a help the been several stay supplying success key new companies our Calyxt technology. largest high everyone were food processors processing focus regulatory for soybean in agriculture. and these up for represents at company success, successfully oleic disruptive, we proof-of-concept projects

of market of we meal. sale grain, step the and will largest program purchased to in of world's the processor new processors. and With first XXX,XXX The will the oil, the this one bushels this soybeans our market sale, is a

sale intend this of processors soybean of Moving sooner the enables future product to on greater for line capture us soybean and we with candidates. to the upstream value seed in launch business our product from partner as

plant-based and disruption solutions capturing focuses Finally, management potential. transition innovations on developing and with my value substantial high-value team this greater from

on soybean important quick today that what we nearly representing will the of Our Calyxt. are enabled Final XXXX. acres follows. recap comment of of success planted of is line as acres, planted soybean much Travis in working on the line A product status the were XXXX acres later. of a XX,XXX product is total to doubling It the from

in we as years have at generating sales under In transactions generated target row, the We processors, will seed representing our large $X be doubled demand go-to-market X from acres seed least demonstrating million in there to soybeans. to is a for grain products expected to million revenue revenue new strategy. XXXX, $X intend

represents Calyxt processor purchased will oil, and inventory. and which to a of Calyxt to rights bushels meal. grain retain resulting to significant XXX,XXX has XXXX the of We world's sell that and grain aim contracted the crop soybean purchase remaining our One XX, similarly sell soybean are of while purchase to processes. resulting the year will the the largest inventories the market portion from large we soybeans, June XXXX the processors the And process

mix must next talent of our be for the thank eliminated. would separated sales and adjusted the I to soybean like Calyxt are yesterday. the business to related positions who being Additionally, and product stage processing employees

in helped build kind first are their future a All of contributions us Their business valued, and wish its States. I United them endeavors. them in of the well

million of awards. million expense and from compensation a of severance We we approximately other of expect charges recapture payments, $X.X for stock and noncash upfront record expect aggregate forfeitures to cash related $X.X unvested

XXXX benefits XXXX. from expect and are soybean applications quarters over we XX for We Most exit downstream developed execution today, higher-margin through million will across our contracts. our by cash charges our on differentiating to cash strategy who and focus be to technology focus of cash talent strategic provide product on trades platform, drive users, focused original traits transportation The distinct To recorded a million the end by the runway industries. us value have months our over decreases transition $XX XXXX. go-to-market the and used into the additional effective From benefits on also food farmer. soybean broad our of innovations of as expenses to in our line is $X.X next our and with spectrum agriculture, fourth processing for of of others incur extends third

However, do announced consumers will today could the I growers Advisory that expect ideas and over offer benefit time. Board Scientific

with projects those evaluate those and the along will other with prioritize returns. potential We attractive most

this Our food, commercial projects proof agriculture. gene our editing, industries, have of plant-based strong downstream companies By gene solutions sustainability, our Discussions development with and will and our our in portfolio, for partners' property partners compliance. commercialization extensive issues, Calyxt We us top efficient needs regulatory development focused to on strength talks including consumer editing and specific with our intellectual our cash enable and plan energy, and trade partners' position reduce of to product concept, a preferences, several commercialization expertise. and that market with our in including traits. quality, pharmaceutical, model capabilities, across partners penetration leverage leveraging leader develop has as potential led cost, of

positioned commercialization technology broad establish our of to and in We expertise, market leading based our payments can arrangements licensees' technology, efforts. trade opportunity know-how provide Strategic or and are our royalty TALEN penetration on achieve while milestone gene an we for development, licensing licensing field. well through arrangements editing

expect crop. the chain For product or factors to positive available like into provide that value path sale the other crops will best by supply development vary entry processors and wheat, seed activities, cash on the may soybeans in participants Depending chain to several specific we flow. of point delivering highest our and margins

for to expect like generation. we path the hand traits, With would to Frey, update an an to commercial certain over provide and potential For our to this, licensing our Travis pipeline. I Technology revenue on arrangements Officer, efficient non-dilutive Chief financing call

Travis Frey

Thank TALEN. industries food excited about of you, agriculture Jim. using advancement I'm and announcement possibility made also the disruption delivering and the to beyond today

to The introducing was our In founded breeding platform hands the repair We scientists, very path as in simply of products. specific process throughout the precision. identifying the high benefits of matches are checking making editing specificity it allows that to that process complex, to platform. edit, a premier within is TAL how present an plans. development increased a our degree a on no selected has IP confirm gene-edited by exhaustively is the can expected. in DNA then and the editing bind TALEN to engineered of can genes There know, other and genome, how important to developed platforms, for and technology TALEN steps, plant's precision check be in ensure ensure you the is compared several DNA TALEN can a to X portfolio target the foreign believe DNA believe including is purity find resulting domains. target, in relatively outcome provides straightforward. We sequence be the makes to adding As regardless observing and TALEN be quickly. DNA our TALEN we existing itself, anywhere DNA which is any the technology the the TALEN more TALEN clear that targeting commercialized TALEN. also advanced of genome.

streamlined X Our strategies. comprises business model go-to-market

their talent annual and of specific parties in for First, negotiated third own commercialized fees use from for development licensing royalties upfront to traits technology potential products.

traits we trait to with to commercialized where and royalties milestone and downstream or Second, commercialization for from and partners products. license product products expertise payments Calyxt upfront arrangements negotiated potential will develop licensing seek

do with others including our to processors, attractive Third, sale strategic seek for for license resources agreements for which and we agricultural with circumstances, to product right to technology. we enabling whom time others how seed crushers negotiate supply licensing and chain, technology this not to the ideas We where intend in the for these revenue talent the advance sales relevant reasons, generate expected Calyxt. have the or will to for crop can we be or the seed sales, or several of about millers pursue. be including to Under

candidate, greatest bring product and to to provide path we which evaluate the for product each will most the go-to-market value strategies efficient market. For creation

core differentiated cycle. to potential to payments development resolve commercialization path strategies the cash in Our and have go-to-market the throughout provide

the While are the receive the the same more these one of expense prospective receive the are the our from and licensee. annual transactions. by then models. nature ongoing annually strategies, trade license, we In be any license, have the partner. the accounting we Revenue and upon product to these may partner, Upon recapture of from ongoing that govern achievement partners we milestone royalties. expect of to can we of rules and the of due of not milestones financial or fees similar expect licensing payments. receive expect to we commercialization, we upfront In the upfront we our development partner, royalties. earlier types case by a upfront cash to for from then The expect TALEN using receive identified, case go-to-market Upon X to commercialization major fees our payments

and same cash revenue revenue royalty we flow to expect also be strategy, expect the we However, using go-to-market our size the occur on When sales, fees seed but the will driven we by sale receive upfront the at based rate. that may seed of opportunity. generation

With Calyxt. high by targeting upon core double-digit of ongoing we the time, level go-to-market required these depending strategies, margins investment are over

each the preferred evaluate bring opportunity, how the enable early to as strategies affects value flow. to generate strive each potential as the possible we using assess the free engaging then greatest As idea to we creation. ability our go-to-market strategy, various always We partners and cash market to

quarter, include: quarter, deemed data, our applications This of success the valuable dollars a use. You and is under ready, using sale of projects driving linoleic of go-to-market MI and process projects enabling A during the of in our seed as currently highlights grower, is been otherwise and regulated the quick by projects well disruptive base we the articles thousand United a Surface, pipeline proof-of-concept part is of of with our Inspection The serve high crops was shift hemp as Health a this services making released biotechnology in development the the soybean, Department X under in bringing second more next-generation an forward from partner the gathering expected commercial to germplasm these will step in the to go ones. revenue. as and second early total article Agriculture anticipate HOLL Animal from product new that hemp expected deemed same HOLL deliver or the advantages, products couple now we have market the known its selling the CFR is of non-edited pipeline XXXX. projects helping oleic, including of directly process stability, the Calyxt's APIS, We plants new broaden low see thereby Late of in of to non-regulated development several to germplasm X as beginning expected regulatory Calyxt's is formulation USDA. the an improved product launch as States Calyxt agency XXX. insights Plant hemp soybean to for by strategy. soybean by non-regulated a the several USDA to

will projects these face today, including THC that expect on focus levels. the We challenges yield and crops

We expect or bring trait these either products using a to a market strategy. go-to-market sale seed to license

excited and profiles advancement connection oil streamlined the and best model, business high project, flavor, for alternatives for proteins as energy. such commercialization food tasting the returns which number less products our built are on of well development oils with taste new our the -- in offer to focus development evaluated of to several in comprised includes and about funnel areas focus also size which chassis, is focused opportunities. replace as This and We protein our reduced on fat leveraging of used of given a we on high the of us, improving opportunity projects with as partner. the In projects the sustainable soybean those plant-based with the could non-gluten same saturated of have successful

As discovery soybeans, oats, of have evaluation, we today, wheat. X hemp, the and at that across or development a in later result projects alfalfa, stage

partners and are help seed exploring includes which because We on under protein improved deliver. product, current or to a flavor partner profile have several our soybean this slide pulse crops, also we with for consideration. are table we The included looking in options also

We actively development upon partners a respect which negotiating opportunities potential with also to activity for agreement. reaching would with only are agreements commence specific commercial

candidates firms we XXXX, our X continue early with wheat reduce and with also we planting now as all The edit in quarter, method year bring soybean the candidate the the candidates, from third In XXXX, from begin to is product industry-leading agreements second licensed new has of additional particularly we XXXX, to towards to our a This help potential high-fiber to addition market months. product efficiency In in to high our products, products to margin, time manner. oleic high plants capital-light our candidate accelerate at expect as through our commercial alfalfa to University approximately to increase to one a method several development Minnesota. X including least parties. as product the product product exciting efforts needed

germplasm patent new to We cover applications U.S. day. Calyxt's expand plants editing concept. to our as on core for advances patent our expansion of filed applications and for claims methods and directed intellectual portfolio focused families We patents granted gene-edited portfolio, new and filing breeding with soybean, in continue property are soybean as hemp, additional new several with every of TALEN patent that patents product wheat expanding from Granted gene well family additional generated provisional technology U.S. the pipeline. generating

in at editing exclusively of Minnesota covering of in gene Voytas Dan CRISPR was Lab Dr. The We the Australia, also is and use University granted Calyxt. in a plants. licensed property to patent invented had the intellectual

second editing quarter gene an to IP technology R&D, tool for CFO, Calyxt' offering portfolio Koschak, this give IP provides our will hand our explore who talent financial our property to the cutting-edge primary CRISPR off CRISPR on monetizing While our the will for of update Bill intellectual now results. I licensing. opportunity further remains by

William Koschak

for Thank press Calyxt. our release also Yesterday, what quarter we XXXX results. you, I'm excited second is describing a Travis. by possible issued

both $X.X basis documents by the quarter quarter over XX% was or oleic their than decrease soybean million second The period. a remaining net period. of Revenues offset of basis fluids, margin, quarter oil quarter expect orders or We plantings. as synthetic used and total of XX-Q. of to High was revenue negative value of the in our were soybean adjustments inventory we adjusted meal increased primarily gross second million proof-of-concept in year high points second sold points prior the produced oleic Most a reported, excess reported, Primary bringing realizable be meal processing quarter $X driven XXXX. in revenue Gross partially a available the the basis also $X.X the quarter from the in selling of favorable as $X.X by ago. XXX% we reflects or XXXX of higher $X.X as costs to costs investor million pricing, of Form XXXX, prices filed was second million of during to XXX% and as negative XXXX in gross based on a of a revenue to of million prices, alternatives our XX% margin, the of XXXX. volume a the in XX and mix percent points $X.X second in products from of as negative on significant experienced second seed second oil expected are XXXX compared the or next margin period result amount negative our in than a as fulfill as XXXX. months. a Both decrease lower single of customer, negative of XXXX XX% X to from oil we've compared more was The XX XXXX a product in to for the XXXX, XXXX plant-based quarter the by Gross XXX and a to growth the revenue XX% drivers million website. of purchasing in margin was

second the to quarter of most in measure. the section refer expenses of to You a adjusted million use a this $X the deck information XXXX, of XXXX, negative negative financial of second for comparable XXXX, margin of of I basic transition operating discussion per were expenses. expenses offset share per described quarter gross million, was officer XXXX, a $XX.X loss $X.X non-GAAP XX million the reconciliation loss the Operating of lower second previously. second regarding and the gross an of increase Net in a and from should changes share as second XXXX, quarter quarter quarter Adjusted $X.X by of decrease XXXX, of noncash and from loss fee of per in was less million of by Section management increase of of $X.X in expenses an of quarter the in million diluted the and the second in and in from million diluted basic compensation a decrease XXXX. million $X.X $X.X million driven second decrease million was increase from $X.X quarter the the of the driven partially Net margins XXXX. second share of $X.XX stock EBITDA $X.X $X.XX GAAP by expenses quarter

Here a $XX.X XXXX, months cash in headcount it to the of in in and were cash second used to cash million increase of section of the in majority R&D its discussion suppliers the first the the regarding in the to fees, rate a $XX.X $X.X XXXX use and the the financial Employees should incentives. non-GAAP too, net from decrease and and a months reconciliation million Calyxt million first the consumed utilities. expenses is because halting driven flows growers adjusted information refer and reductions. million professional X first our Net the grain management you payments of other at May. the of deck $X.X consumed and of liabilities, higher result cash of rent, primarily measure. X activity was products of expects burn activity, in GAAP of in as months. half of the $XX.X services loss and comparable assets million, payment improve When crush compared sells most were XXXX XXXX cash including the to reduced firms by of EBITDA by of to the and operating soybean for of supplier early usage looked its expenses X primarily

and equivalents, announced adjusted burn On measures cash expect million COVID-XX XXXX. of forward, with implemented. our the approximately to by to advancement quarter, financial of $XX of soybean million fourth cost expectation second and XXXX investments, margin other between end for XXXX, inventory June our totaled XXXX basis, pandemic. the and to that the already million, X, which accounts that $XX.X percentage annually savings the between Cash as line, million. base XX, we purchase including combined suspended million we short-term an expected product on sale in includes of for of grain quarter, at Looking have revenue usage million considered between Calyxt Considering revenue our of guidance May range case annual restricted revisions issued results expected for contracted million and $XX million. the gross XXXX of $X year are when and is our guidance and investment an is and in the rate cash the the $XX $XX Cash, we decrease receivable and impacts an $XX $XX

incremental receivable million Our cash and is XX $XX and revenue inventory grain accounts between $XX be the XXXX amount. Based million grain between this $XX that seed of first our to and to with investment of the to in million plan, XXXX. in is purchase year-end convert million to revenue in expected XXXX on $XX days target

processors from Calyxt in advancement time, usage significant revenue, over go-to-market positions that, strategy be an the and reduces substantially of between the focused upstream if our collected fourth contracted would our revenue of purchase and to to streamlined expected to of on and increase with products Calyxt's seed between receivables, able quarter to corresponding with a we The soybean are sales decrease cash complete our We in in into to standpoint, enables faster markets, usage realize gross Calyxt and commodity the an its extend and higher terms and model. large flow From effective of expected complexity business positive differentiated our margins cash our are cash to capital to to XXXX, margins by operations $XX and of we also with range million. XXXX products to will sale go-to-market reduce business strategies coming in is all XXXX $XX all a the to $XX the generation. the flow flow are million, related investment, achieve exposure to of our agricultural as cash processors soybean runway model utilizing working financial grain cash expected the accelerates $XX grains million from in million XXXX. a cash trajectory its gross be XXXX, upstream the our Moreover, accretive would migration in advancement market business all

period, respect multiple During margin. and our complexity with unable the of this the is Calyxt contracts, given frame time provide to gross in to guidance

to focused However, turn partnership go-to-market model and management is call on streamlined developing business with I like our cash back Jim. leveraging to the differentiated usage strategies. would new arrangements, now

James Blome

Thank with food be now commercial it that Bill. to company could fits found launched We be model a developed, more and proved optimal product our you, way in the for success well. a have gene-edited business monetized

Virtual portfolio. is development cash or partners sharpen the to We August on XXnd successful on path anticipated conference growing excellence Global cash require shareholders higher-margin that to our margin soybean flow. and Virtual profile, incredibly September develop, advancement and X; proud and the Conference extends also does H.C. future of a of free of and editing further products the for and our to an will are and rapidly I'm Wainwright into runway believe with complexity several business our receipts and our product and high business the development the our key will which in Growth how to future Annual model model, property accelerated models process. utilizing the team needs Success We enters to business record cash We more revenue through not XXXX. from of R&D with X across efforts has anticipated industries, partner and timing lower summary, track efforts on over XXth our double-digit sharing our September will factors, gene at funding like I'd with to announced our plant-based accretive inputs cost built developing to disruptive through XX; cash innovation, of upcoming provide including XXXX. investment conference now vary strategies, Conference Canaccord XXXX Intellicyte streams and the the projects our Analyst amount stream a the build will streamlined of details non-R&D Virtual during Day communicated With fall questions. operate. XX. and projects significant revenue to targeting and business a and opportunity, size have differentiated for Micro on focus the the a the time, focus through benefits LD Calyxt's that, Investment development with be positioned. licensee on now intellectual here depending XX please upon on highly soon multiple XX; team. recurring will the Virtual our on ahead. be open story Calyxt go-to-market agreements respect call a We by any at In of and they August the energized Through look structure we XX low Annual the what capital Calyxt's flows Operator, propagate entire anticipate stage forward Further go characterized diverse

Operator

Instructions]. [Operator Ken comes take first question. of We of Bank from It our now can Montreal. Zaslow

Kenneth Zaslow

think frame by product the products generation, be of we in kind but order can you about use in by the you couple framework different questions. could of is, big how the them terms could do sort some how how either these products that the of One of the is, -- revenue of a of opportunity agreement, big Just licensing magnitude?

James Blome

question. for thanks Ken, the

on focused about that mentioned. to get flow and we're come several is from think sources, positive what we we quickly flow cash it, as Travis As how could cash can

all ones are the we are us that front As significant. think in the size about opportunities, the of of

case I of with the for soybeans, if a seed about used somebody it. for projection as a an it. great through the example idea be opportunity about to That to would in us, how And on working case commercially finding or HO it's you develop plant thought a particular an in think how our all think probably acreage of land you before, a that partner to trait, and work we of product. of

their germplasm, like. what we'll looks that Our germplasm, through work

Kenneth Zaslow

cash positive think you you do that will When milestone? When flow you'll [indiscernible]? be hit

James Blome

specified but our were product. the it a has go-to-market under from particular been we year, prior where for haven't accelerated strategy We soybean

Kenneth Zaslow

And then last my question.

soybean soybean presold you product. the Is the about rest is the meal? no the product marketing your grain know do How product? where the keep But longer processes? how of I through already is think would why said to soybean there? But of side, you [indiscernible] On you're that the you oil understanding? XXX,XXX X. And much

James Blome

So don't it undertaking, the been very all as the of where has and it sell the for the crush, these oil, on meal that quickly we sales meal. specified to already portion we're we sold, and which first We they that following expect marketed expect is significant now. to the A going going forward. be case bought of market was the the grain, agreement that

just We don't expect of be sales sales anything.. we future market to have straight to and grain,

Operator

Securities. comes our We question. of from next can now move It Ben National along to Klieve

Benjamin Klieve

What to drove regarding XXX,XXX? your the down acreage one figure contracted versus XX,XXX from this planted operations acreage contracted of year the First acreage acreage. planted and

Travis Frey

we with oil targeted the also acreage didn't we area, We of some the from some even demands with weather our in this yields question. some and oil and late over later issues as as Good contracted But COVID. all planted dates we severe forward, we of that combination action anticipated in Ben. the our and and weather. markets contracted also had planted saw Thanks, you to due contracted XXX,XXX took some And reduce due get year due acres lower had last to year to to targeted and planning evaluated acres weather acres. going

Benjamin Klieve

be to will that after the next $X that year of two look The here same transitions that? the then next your the to targeting you are the your the maybe of million to seed from from been working $X One, at evolving understand Turning XX, us XXX,XXX things guys XX months year currently view? purchasing Can had couple in model million new bushels, that for is this help And a subsequent $X $X number year? model are to you do seed that next processor million. it over as that how you revenue the for business you processor here. with million or

James Blome

Yes. Ben. arrangements. We're and have talking who several processors with services agronomy Thanks, integrated processing

way will and fairly revenue it And large this all versus we're processors. so now. will be $X recognized we in $X finalize million million people, they're agreement agreements doing with look group When next year's revenue. under and the of at that seed, we be It those of type to will that

beyond lead markets from the seed -- if partners also our demand supply processor oil looks oil the We what we that and our customers. back will And have to require ability like. that we'll come have the take to from that see oil return indication will get our

Operator

We can Burleson question. our comes Bobby to next along from move It Canaccord. now of

Bobby Burleson

a So consumer couple focused on questions, acceptance. more of

real Do deliver that this time into first Can as of products distinction consumer GMO. to the get to go market? you gene-edited proof-of-concept on of grain on there. GMO a evolves how we lot yourself guys that thoughts gene-edited and think or the non-GMO between your have over gene-edited some on acceptance Obviously, commercialize pushback allows You established food.

James Blome

no from it. the has the to had first market. Yes, great the foreign finished first It consumer as we're process in that know, process. person go you -- had from acceptance, And on good through a question. different product really regulatory because is product DNA GMO We've response our on

So marketing through imported GMO other in replacing United and several It's consumer expand oils. States soybean seeing oil foodservice that's our largest to We're companies success. oils an also easy with oil some good the the our And we're helped explain. thing X acceptance.

spot. And we bright as that see so a

As we of the continue support to of grown Board's the imported soybeans United oils. U.S. penetration as some for a replacement Soybean soybeans,

been we'll important And Non-GMO the to help, imported the of part promote of and that. is benefits but so helped has and trans-fat other an part product with continue this local that. that, have the versus us

put come this. So X in editing, education under continue I think to gene the between we the the differences more about the and comfort the that products out more with

Focusing has in differentiation. this on benefits story consumer and health helped

Bobby Burleson

it some grain is more infrastructure segregation Do transportation We of don't across right mentioned non-GMO you segregate here. really you seems that grain to local imported allow and grain? infrastructure categories of these like and grain have versus that And support It of the now. around move to local see non-GMO Q kind the other to really evolving import.

James Blome

That's a good identity in question. more grown. We're seeing preserved more and non-commoditized crops being

this appointing it, premiums So because assets pay their back portion seeing to doing of in it these and the farmers it consumer and larger spending into And of wants a there brings tends large the we're just markets. and specialize American are to larger some that companies -- for that. companies

or has separate commodity what types level, a seeking processors these to at drive source So premium consumer of driven now. for coming farmers model. get the And for looking and a look for up global out prices local all elevators is to an these even right alternate are revenue on this ways and all

Bobby Burleson

in you then the get hemp some been the and oil broader legalization, and assume And one heating federal better up, THC the of that about qualify growers the coming, hemp. hemp, broader demand to legalization if your requirement terms predictability processors. X.X% Bill With that's if some that for the for Farm And under genetics would marijuana cannabis just genetics from difficult as I see hemp CBD talk election legalization? season of impact staying given

James Blome

below we products hemp, level hemp are means X.X%. limited a to Our THC our and research hemp have specifically which

THC if [indiscernible] it potential crop. reducing that. of for risk of into low taking at take some product for risk lenders, from or building to out around no deliver who a sure acreage means And really coming grower the the entire things growers other contamination and is out broad We're that product. loss of in focus he a acre levels, enabled very, that of risk his provide the working into beyond yield Our some we goes of crop isn't hemp a risks for and that very could making can pollen

allow from it insurance acre for into and high-fiber And things, alternative, broad hopefully, plans to farm particularly will a another or growers this that the that we're crop. enabled what lenders ag to doing away crop risk program takes ag So are the engage provide policies crop people looking into at question and the put building materials back to a protein. a green nice essentially going and crop great be of and source looking before, policy to other for and national enable the this

these So of are down those are that things you possible types other if barriers. the knock

enabling in and are considered levels, mechanization, thing the Our and market. policy it broader and become in first to than broad in first step of that be certainly the and things foray the about so lending, acre in for just hemp oil taking this can much CBD

Bobby Burleson

their some editing, an or genetics. not amount just see plant-based trans-genetics? whether gene got Impossible guys involve curious opportunity generate production [indiscernible] on in there to But trans is Burger. sufficient Impossible their you without And then doesn't TALEN that pushback through for heme Foods a of potentially through GMO way

James Blome

Yes. area of plant-based We for what find we whole is big one this a solutions, do. which

we're on. of that think this about out. you protein the problems, -- editing platform chosen addressing Travis our company One about that there protein you're we part address put ways other path And about and really are what lot has flavor you non-GMO the in that. solutions talking are so same same our texture and tell a And an of of the We with can ways replacements work go that different approach. will of important working what plant-based is and the a laboratory

Bobby Burleson

Okay.

ahead. one one. Go quick Just more

Sorry, Travis.

Travis Frey

I of echo a focus ours. what Jim will said. It's

of consumers our now. protein. to be there ways that obviously -- are developing pulses that see flavor, We the go feel the the and after are provide solutions part list and is for looking plant-based the right we and key of we market and You'll on will demanding

Bobby Burleson

you quick in lifting like satisfies for proof shift you And kind you not TALEN maybe areas. there buy-in more are that It broadly concepts for other strategy, oleic one It see with deliver you just oil. proof-of-concept now that of How additional sounds sounds heavy this a kind degree work capital-intensive to that guys initially maybe the don't for terms able be some foresee for going go-to-market high to of to that to as like had more one. of in you're and Just of here? Is in skip broader did gene-edited step? wheat need [indiscernible] you the food.

James Blome

really first see in that question. we editing unleashing very bringing that and pioneering We're the the in advancing to proud described we unique to with done gene value after the the marketplace. work business today, something real can very value you'll product things really are the the did problems regulatory how Good problems and really be of marketplace. and of that go unique extrapolate from And TALEN we're to our model products really

of faster heavy not and and it's as move So the we that today. we are at broader do in for with which said core the bring go largest areas of market end, to very launch is choices these really good to others' opportunity product that us instead put hands to at want a And types or partnering companies TALEN to of the getting change to To for license to broadly is led strategies these thing sales having second that look are quicker. the some the speed And seed-based One to we with consumer at market world. the seed. lifting, penetrate to the the X commercialization. products It's all do who bring prepared when the It's announced in and streams. our and you to we markets revenue the said, as acceptance. in the on consumer a differentiating be is marketing of commercial and partners our

Operator

next Samuelson now question. move on comes to Adam our of from We Goldman Sachs. It can

Adam Samuelson

food you've And just decision, kind versus with path side company you been packaged branded of have were on it's of the capital towards. and prior of might Just on. the evaluate path sale put think being kind mean, adoption to high how did the that's little I arrived discussions this of get down from you get something that commercialization announced of love food just value have was a this little that as you kind strategies how the decision about all Jim, about love significant bit versus pretty the in change the with business financing more financial have thought Or you I'd the Obviously, business the technology? Bill, consumer working bit. process fundamental this different to a service others? how parties the I'd influenced me mean strategy, a just on the the might Travis, that put old you oleic in at thinking, -- morning. oil underlying But together right me you approach I companies various COVID model. change reflection the working help accelerated that this of help

James Blome

one model system Adam. we built built or Sure, the because We no one to had rent. after to

it. months to it and So had we growing, as that the the and We important regulatory, through processing in And marketing. felt was the felt it rapid through be through could pioneers very through prove good really the that. XX about we expansion did done

us in good started companies progress of were some about One industries the the was very this that the they felt we of our we year, by largest at certain of getting acknowledged reasons ideas beginning think, the to was concept. up proof and ramped which contacts, led notoriety discussions the first quickly our different the us, and I around and and problems success ideations and of bringing

and the for go would for to have the faster getting we that difference base of ideation way and that new the ideas we were So ideas with built right absolutely were penetration these the the period contacts time having. and

in second question period say and time. restaurant put time things schedule uncertainty the still certain great well us that of to the do in appear part reconsider how And that happen the this same our pause crushing of your we're conserve the that of business your in. decrease did was So I only COVID period this. and that and would allowed at to to as we that to implement in cash It on

it, these built provided disruptive was related the world really, and that solutions. the where were the unique now in we way that right slightly to proven So with getting, the to advance higher think notoriety, It plan and have pause plant-based to And margin, think, it's said, we I at contacts I were it ideation time the the And our provided on was that. we we getting. the more business faster pause, it. but to and were success, do

Adam Samuelson

Obviously, about the months. to of next you some with just And XX XX thinking the that change in there's kind announced concurrent these structure corporate then results.

licensing the As or other couple to we to OpEx as company different seed base does for you think a the on from get cash parties start OpEx perspective? stable opportunity what's the forward? have different that look grow if an OpEx next Or what with and actually Just -- stay sense have like of forward a years burn that engage of sale trying you opportunities? of And leverage in the how is success? base there to does that moving

William Koschak

expense was million. And Adam. our R&D $XX from question, year that perspective, Good last

we looking forward, expect and do investment well for And to that We in of the couple extent fully, cash, as increases -- knowing grow least expect CapEx. next not product have we XXXX. to in focus the both be partners our it if development OpEx similar whatever will obviously, with at that years, of activity agreements offset become to R&D. year-over-year We partially, should over it the get

G&A it perspective, agreements part strike be couple that of years. a Our goal is of over flat to these will that types actually through time. to fund we R&D expect of the relatively next From over I'd

before, would R&D said largely organization. we add us and to are investments that anything our only As would behind we've support be there the

Operator

next question. of LeBoyer It to Instructions]. Robert We'll Ladenburg our Thalmann. comes from along move [Operator then

Robert LeBoyer

previous expansion that seen on the for and and states in has with I've is strategy actually co-ops into go-to-market quickly. to using existing What the number is the farmers supply different entities your expand grow based grain strategy been working using Just seeds. The are that of new processors. chain today

these situation how hold been expansion the fit stabilizes? wondering expansion if was just and So on together? put regional with fits or Or how X has things penetration until I regional that

James Blome

changed research go We but our the have haven't to we we changed market, program. how and development

announced, We're developed introduced entry continuing went continuing to We high varieties low programs. in that is soybeans expanded geographically. expand with And thoughts types and linoleic of X we heard new our product, as we're also new our breeding that. to same of into our XXXX that. oleic being do the So geographically

seeking in direct them that an these or as to continue that be these be agronomy contact think integrated also intermediary on acres with contacts the up can opportunity that be or an processing grain well. planted. to We base. I can have company we But So That's put would own an and in agronomy access as partners. have them a great partners we'll get them. as well And/or and

a So we're open to that. We've system. built wonderful

that's partners great and brought We the us it up of to they how it planted have want can part that And be company -- the this harvested. seed go have point. but purchasing to to forward, get that a

Operator

the to you. This concludes back turn I our for call question-and-answer remarks. session. like Mr. would to over closing now Jim Thank Blome his

James Blome

Thanks everyone joining call the for to on today. us

to and We without sincere our Calyxt do A the every dedicated day. mission you. it a have themselves to management all team at We push of further thanks you. hard-working couldn't of all who from

fall were Investor all the our concludes at look providing address Relations who XXXX, happy Virtual questions answer feel more we to of Day your them. able if Analyst be We Group, our call forward contact or that today's updates not us MZ today. firm, Operator? on call, Lastly, in and would to to our free for to please

Operator

This Thank concludes you conference. today's participation. for

Cibus (CBUS) 9 Aug 202020 Q2 Earnings call transcript