APDN - Earnings call 4 2023 | Applied DNA Sciences, Inc.

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Operator

Good Day and welcome to the Applied DNA Sciences Fiscal Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Sanjay Hurry, Head of Investor Relations. Please go ahead.

Sanjay Hurry

Thank you, Vaishnavi. Good afternoon everyone, and welcome to Applied DNA's conference call to discuss our fourth quarter fiscal 2023 financial results.

section press well was accompanying as on Investor the close after this access website. the as corporate today the Relations can release issued that market call You our of slide presentation

call.Before today's today Speaking answer on James we please Chairman, on may Chief and and the of COO, President, Judy of Legal CFO; questions and also are Officer information Beth refer hear available our of portion some Shorrock, will the Hayward, Murrah, Business Jantzen, Development. our CEO; that will Clay consist call I our the X during begin, of to the today statements. Q&A note Dr. discussion our Slide you presentation of to and you forward-looking be Head Our our statements Form We no or while a cause from company's Jantzen. for actual forward-looking factors first differ risk in result on and results implied this future update or my short any those information the important or ahead, go call, developments.Now provided a undertake materially it's information that results obligation new today's Beth on to statements. or to to could performance introduce of speaker or pleasure call revise our Please Beth. expressed XX-K as other any filed ago forward-looking

Beth Jantzen

will an James on initiatives. the this with and us then fiscal fourth ended will over our our our afternoon on quarter call business quarter XX, of Sanjay. you, you who joining for XXXX. I Thank afternoon, I to ongoing Good will call. for Thank Dr. CEO, President September our turn the start update you everyone. investor Hayward, results overview

cotton 'XX preface in robust today. quarter analysts questions ago testing-related COVID-XX that quarter being are as then present revenue The a included the year and period fourth order of the fiscal current shipped was ginning as tagging results, open our season institutional for investors.To to We not the for from received well highlight X/XX. revenues, I the over year the reported comparison that cotton subsequent year will our line and

decrease COVID-XX a tagging a related decreased decrease is testing to XX%, expenses. York an services in City $X.X quarter approximate will in XXXX.Total to to an to important contract over June million for SG&A is a reduction $XXX,XXX period, X higher in $X.X of services future gross XX, DNA we XXXX, cotton gross the a The ended the same in of a to percentage was $X.X As revenue September generated within ended the to prior classified believe $XXX,XXX. of a million backdrop, net to an decrease the profit operations. due September for New This compared expiry in period year decrease $XXX,XXX, product in foundation our small building XX, highlight To primarily a increase testing are the in our of profit line, was as in higher values in expense The offset of included payroll million $X.X total operating the revenue later, to by due million, warrant operating this the product decline XX%, in XX, mainly million speak year liability year. insurance fiscal in we decrease decrease our $XX,XXX.With revenues decrease months in compared expenses prior that revenue $X.X revenues was to fiscal University SG&A of testing SG&A decline $XX,XXX, on margin textiles The for September compared the also driven primarily unrealized expenses $XXX,XXX. in due fair or in for The were lesser months to period. The company's the due in is COVID-XX lays textiles and for R&D that fiscal XXXX, company manufacturing expected representing the to $XXX,XXX loss as growth a of Clay the decline in the Jim of applications.With expenses the in of biotherapeutic a $XXX,XXX. due primarily last approximately approximately was or reduction approximately reflecting vertical.Gross X decline revenue ended year that and was the gain loss extent, of in year 'XXXX XXXX. in compared change the as with revenue by a best our to was

million operating $X.X $X.X in was period. the million 'XX Our loss prior fiscal for to compared QX

EBITDA expenses, $X.X $XX.X a in adjusted on to cash sheet. non-cash June million relatively at to flat September Excluding million Cash $X.X compared to million a $X.X XXth million remained fiscal negative compared on XXth. totaled balance and prior our the negative equivalents year.Turning

accounts receivable stood $XXX,XXX, majority of subsequently has our XXth, September balance of As at which collected. been the

in to fiscal year, the the $XXX,XXX burn cash monthly For our year. $XXX,XXX prior was average compared

monthly and 'XX largely fourth $X.X expiry with line burn cash was the average in million our contract forecasted estimate. for Our quarter fiscal post-CUNY of

ATM.Before a the my filed fiscal manufacturing-first in and agreement date, stage grounded expectation we a and our greater our approximately that facility on obtain empower filing a XXth Jim driven net in end, of an was concluding capital substantial Form concluded just doubt issued of growth our prior XXXX. Clay, To market necessary to under for to from XX-Q XX,XXX with note million.As clear to I November our is growth shares position year biotherapeutic XX-K this first cash $XX,XXX concern. support our of will was Our growth detail are approximately have milestone for via the November need about for of you $X.X distribution To an our from disclosure options in necessary working the proceeds that we closely the remarks, and prospective going all of Board includes Form supplement explore at which capital, the of to strategy. equity hear

plan ability further an in raise received implement letter maintain not notification is disclosing of to our Our Nasdaq this price we a we the revenues listed X-K a filed on yesterday to dependent week ability business listing and capital.Finally, earlier with compliance per alleviate to that securities informing were that going generate share. our $X or us concern bid minimum rules require

concludes at would days, considered have be of for Also, XX of during least XXX for to a days listing regain we bid prepared you which time his $X the to compliance. calendar is eligible compliance extension XXX any the For calendar compliance. Jim allotted we us an first if may of XXX-day joining calendar regain for days period, today. to Thank at call comments. this If the be will for Nasdaq us.This minimum do in price days within I over now closing the rules, remarks. my not security we company's we consecutive turn business XXX in

James Hayward

medicines. generating And strategy that Good after an fiscal of of our footprint on strong plan platform early goal we X the manufacturing initiated for a buildout orders for linearDNA.Beyond supporting transition has on early-stage platform, cGMP or COVID sudden for the to linearDNA. thank in we Thank of up And which from produced IVT and initiatives the XXXX building launch year was sparked needs our to launched across to you prior a enzymatically and capacity messenger scaling sales our funnel, vision joining our platform, lean manufacturing IVT today critical our there Several template DNA in to focus everyone, our manufacture that Linea a for thereby RNA these customers' the In rather recurring start of to to therapy customers integrating linearDNA Linea plasmid our our and vaccines phase clinical we we milligram-scale into first alternative year. was our you, we of to years the multigram presence manufacturing more strategic and in completed DNA deliver starting implemented by for broadly and RNA materials. customers customers, our year, quantities orders, for the capable last and marketplace linearDNA the was productive At acquiring mRNA capacity biotherapeutic response These these fiscal of workflows. produce into fiscal industry. to of industry both many development, by the of the base our then helped years industry.In the production on industry linearDNA phase a us of customers' end developments, for supported of an a research-use-only the affirming as genetic RNA many DNA toxicology the a was are platforms. multigram our our the it XXXX, templating, resonated are year enviable other expand And acquisition of appearance us. empower has on the vaccines Biotech, stage and orders therapeutics trials.It Spindle in the rapid with and development Beth. afternoon, messenger for our very rush in response of call. acquired of timelines Fiscal are

applications. and conducting in vitro companies from, some other of CRISPR, already the interest products in for and areas have studies in therapies, developing tRNA are We diagnostic cases large-scale CAR-T, non-therapeutic

utilizes or this market, therapy to our applicable every our phase remarks for their addressable GMPs Our customers is GLP-grade aspirations. whose afternoon messenger DNA.My Linea scale our and manufactured center early production the IVT supply begins agreements market Linea under to on with clinical support templates RNA first polymerase RNA therefore, migration of deliverable, will larger

in capacity.But a and improve of from Linea linearDNA in substantially Linea unlock the This GMP an linearDNA Applied developing several plans to focused both segments in data vantage this Clay, and obviously these anticipate Clinical before clinic offer intention on toxicology curve agreements Given to we're signing in IVT. indicated we One initial growth slope of segment's I'll to chain XXXX before provide on perspective convey point we as brief from the more us, our a to the the of timeline on can ramifications of and current the to starting able turning DNA discuss have biologics also will in value Clay clear although not our our our curve.Now, fiscal traceability or manufacturing manufacturing XXXX, biologics economics would will discussion Clay calendar customers you IVT's and to their with us. supply Labs. positive customers' XXXX. the beyond, insight call be have the that how agreements advantages, yet or supply to their our workflows opportunity and will into moment, on update fiscal

of program that In in our the pounds legislation due January. related due PGX the million customer chain in testing our supply strong with as to for new shipped in Revenue overall of repeat federal this the quarters. partner, planned to of completed forced DNA X/X the remains pharmacogenomics, laboratory customers industry will traceability technologies phase and balance reported clinical be labor.Now, tagging XX our be cotton approval this month. completed turning forecast CertainT parallel, international from season the quite prior for tagging season, our in QX. as service. This cotton of demand and early assay, traceability and or with to precommercial is The chain Now a is continue the this supply we business, of was inventory. new to and

of Department Our our for State submission to remains New essay review. approval York in Health actively of

all Our current direct for variable the largely cover revenues segment. costs testing this COVID

Clay? As pleasure potential with building and Legal cultivating awareness who and customers.Now we the our determination over assay, healthcare is physicians and Chief my final our to to Officer Business on Director PGX Development. of of approval a we turn call the await are Executive it's the providers Clay,

Clay Shorrock

Thank you, Jim, and good afternoon, everyone.

Interest decision very fiscal in the starting this foundation was of and as therapeutic support beyond. growing platform July XXXX of strong in our pleased produce year position August Linea meeting templates foundation demand production of to these that moment see Bio linearDNA LineaRx formed platform we our up and scientific as our our to and am it for IVT in launch 'XX was stated, material our specifically critical was a XXXX and fiscal initial and Jim watershed customer acquisition elevated today. the growth IVT targeting laid further and large-scale the customer the platform operational Spindle report in engagement, mRNA for I in As with to RNA scale goal for to the goals. was we of team production.Our successful a

from tying customers to the linearDNA pharma build company's history.In largest funnel with number marquee with the XXXX monthly orders momentum addition, year, continued workflow. continues resulting and in biotech, past sales now ago, XX the is cost, we CDMO. just full, repeat are our reductions process Our increase enzymatic manufacturing in months of in the improved to orders And we November hone over and compared to our cost reduce efficiencies, to building around as to significant GMPs and

enables We XX of including linearDNA the including our order shipment Linea template, important months, Linea also to that produce to 'XX repeat larger newly-acquired linearDNA agreements. Linea genetic repeat and finally, for over our at to the IVT IVT a numerous of new RNAP, convert mRNA, first platform, IVT the first the order the goal and for longer-term for applications, commercial Linea the shipment supply templates therapeutic used had editing of IVT shipment protein customer CRISPR-related correction new successful the customer existing into mRNA manufacture with modality first linearDNA level.Our customer platform, tRNA, of the customers simple: fiscal first past is firsts produce the of and self-amplifying first self-amplifying first the

mRNA is goal calendar capacity this launch our manufacturing initial for operations which for is achieving in first slated of materials, the of starting to critical half Now XXXX. year GMP

Organization all Spindle's XX-fold and highly-immunogenic to in RNAP, a must recently to this you As modified, company. production about back X reduced linearDNA.Now, value since the production immune polymerase, proprietary the dsRNA undesirable team it, our mRNA I pairs, with dsRNA and over platform to workflow all knowledge in mRNAs and by data X,XXX proprietary to defined in our or of technologies of yields. as causes as that institutional responses, to as with The Slide from GMP optimize range of compared IVT combination significant these our capabilities to now we Armed RNAP we Linea a its unlock leverages mRNAs, has sacrificing XX-fold, its manufacture double self-amplifying RNA are shortly, as dsRNA XX,XXX provide Bio our construct, or which our see IVT depending is conventional Health dsRNA into as enzymatically produced call that is IVT marketed was Linea impurity for the recall, further crucial all with knowledge, pairs presence IVT mRNA will Spindle of coupled in shows acquiring reduce mRNA obtained X, a integrated its mitigated inflammatory templates production. can contamination, simplified for a planned you'll able with and on a between The enable and by way World be byproduct platform successfully platform mRNA July wide RNAP. mRNA is the Linea of unique manufactured and stranded RNA to ranging reductions problematic conventional therapeutics.Now, base up without Linea ability chemically the production the base platform platforms.As talk the

reduction numerous coupled IVT amount of a production, the the benefits dsRNA interest Linea template large substantial enzymatic driven IVT production, in platform. this has with of Now in

our non-enzymatic enzyme to in meet we as existing manufacturing us better revenue offers to secure IVT monetize selling project. company scale a template is cost.In ensure of platform with rapid despite platform to and actually more and for several also opportunity Linea with performance per revenue supply 'XX enzymatic the and being launched the to growing the scale evaluation manufacturing. than and unit adoption, months agreements the by manufacturers.Now, before, scale-up reduce CDMOs new can from believe a by project advantage, count CDMO threefold IVT we platform's RNAP mRNA we Now fiscal a plan the the addition an customers long-term alone, market for agreement customer differentiates to sponsored the large templates economics advantageous expect assess to unique X Encouraged large to representing with manufacturer improvement our joint customers. to at clear shortly early ago, third-party allows offered initiate that We in approximately primary material XXXX a enter this demand noted only to other potential per to the conferring opportunity starting into and platform the clinical I a as optimize goal us

outlined many the reach Now starting where planning materials To an calendar approval of likely the calendar of based of Japan, calendar which as mRNA been enter the enzymatic on manufacturing for late or demand by demand manufacturing capacity in in believe was is approved as essential well [ we for future mRNA.Now, manufacturing our enabling or ability for we global produce filed. of this to our our Accordingly, world's increases. will recent preclinical 'XX differentiation In existing important demand rapidly a critical currently this technology quarters, that manufacture an platform templates.So armed applicable materials in applicable just starting key grow and for mRNA mRNA capitalize customers several think starting market IVT near approximately success. nearing be addition, perfectly differentiated GMP starting the mRNA Currently, clinic will in manufacture the is finally, manufacturing is as against as GMP mRNA to share We, gaining in are under mRNA 'XX.In the therapies sometime therapeutic investigational in of is first vaccine and GMPs the year Moreover, Linea platform, first were 'XX. industry the ] recently year approval clinic our that [ engineering market as that therapies RSV, market data pipelines, are on the service still early situated likely other to ]. year have and enzymatically-produced the uses retention the and U.S. targeting in experts, those believe including future, candidates half [indiscernible] self-amplifying mRNA we ]. that we mRNA including IVT or of end, in XX% the to are just documents our but the new and new regulatory development, the our launch calendar with several application large-scale manufacturer, are employees required. first [ drug a differentiated planned of approved us of potential GMP materials, and DNA currently compliance consultants plans, for use bodies, in and for to have the plan regulatory 'XX mRNA

in GMP in adoptive drug substance manufacturing. and hard IVT As biotherapeutic year was pioneer preexisting of believe fiscal we PCR-based fiscal important work for and back 'XX us ongoing enzymatic therapy, significant which will opportunity no in is follow, new applaud and the model GMPs a fiscal the contracts, in there production demand for you. the for to producing 'XX the our team successful the materials, our opportunities to procurement separate launch which valuable growth I planned applicable coupled of offer for which very significant GMP launch services, an this the for year.In manufacturing templates, calls beyond.Jim, closing, to 'XX, forward-looking gene their company's that and increasing editing, starting we've plan believe DNA, us and mRNA in set under result upgraded with business and for potentially stage facility goal. revenue In We of growth and pivot additional now customer demand company's near-term believe the short-term, IVT templates, seen larger toward the and capable in our we will of of a largest large-scale in longer-term anticipated term, manufacturing growth the drug products, offers the will therapies current with fiscal for in cell gene history.Longer

James Hayward

you, Well, thank Clay.

Clay's momentum investment this a recap is our on cost repeat growth process bring moving to be biotherapeutics our sales with year, efficient, rapid, value. positive let places creating DNA, for strategy from and more Entering should customers is marquee trajectory shareholder as growth on the qualitative focus ramifications Our for shown development and And our it on manufacturing-first with us remarks, XXXX. and fiscal the me funnel firmly ability briefly continues to for that we to slide, biotherapeutics forward.And that long-term clear build. company feel, expectations full

ago, as with convert scale Our assess CDMOs agreement customers manufacturing. a several launched at goal larger supply IVT a we CDMO count Despite the enter this months is evaluation to to and commercial agreements. into year customers, into being shortly expect longer-term only to joint we and clinical Linea performance already X platform's large

of year, the online growth with with mRNA, materials GMP all concludes demand manufacture revenue sharing the here in look excited us to milestones for Thank us half this this potential Our and and largest of And open in we you. calendar should history.Now remarks. to company's is be near the prepared come, at the are the you and forward of to Applied provides as questions. call capacity please first develop. about coupled they our the growth very Operator, with critical our for fiscal starting anticipated DNA what opportunity XXXX in

Operator

comes with Instructions] first McCarthy question Our Maxim [Operator Group. Jason from

Jason Mccarthy

bit you something it self-amplifying that little to is RNA and a acquired Can a do technical you work. people, about was you lot leverage of expertise intended a wasn't things to think that doing biotherapeutics little by that to polymerase get that Can a its in of for bit there that on little world? in just self-amplifying bit what aspect what the the that to really group and you're had I a talk the question. about means talk Just your Spindle overlooked being

James Hayward

like pick Clay, would the gauntlet? up to you

Clay Shorrock

to absolutely, XXX Absolutely. the back data DNA pairs. in about showed base acquired up could manufacture July, when we Spindle Jason, Sure. it

very mechanism [ for it the like without to that would the we by were enzyme but allow to these we long sign, the a we sure RNAs of to ]. because market also mechanism manufactured of rest action it way very the to some paired action us buffer the being optimizing because But very industry, long protects of redesign dsRNA is get enzyme system and an with that large modified does, and taken have, template we've these weren't the tricks, of So system a growing iterations the of of promising have our for which work other IP portfolio, of modality, able samRNA, this a both in contamination samRNA, which several which issue. chemically

Jason Mccarthy

Got the you it. first was IND approved is a you talk mentioned the in And or had what on? U.S. little they're for who Can enzymatically-produced that DNA. about more working

Clay Shorrock

absolutely. Yes,

knowledge, very our engage to they're for and on Touchlight first DNA, U.K., starting that the at positive material. critical they to of us, least a are willing willing DNA, has approved was to think as a sign approve this competitor shown That IVT enzymatically-produced enzymatic point, are that FDA as starting mRNA materials, for So, IND we out the Genetics. it's our using it's enzymatically-produced templates. But which at

view a we as very So it sign. positive

cost is and technology We more expedient also manufacturing think our that competitors. more our effective than

can that it and think of we product we So make think equal faster is we do but better. quality, the

sign. as it view we So very a positive

Jason Mccarthy

So, process? to and a development your them preclinical XX% that there baked their of clientele? can candidates now yourselves use You the can little bit IND leverage you pave out into you last your APDN's that stage, of way for are category. bunch that just technology for -- had are with go getting and deeper that and that said you and preclinical customers mRNA Does are in a -- clearance, show in can the them question that

Clay Shorrock

we in of days catalyst But one would so concerns was FDA, first our us, us open clients will issues There the of it the has very right? be is that this floodgates. But industry We the will start. manufacturing have will process, the FDA not it's an bringing marketing IND were a the [indiscernible]. enzymatic a been manufacturer, be enzymatic think that tool with so, catalyst through about That some and for since effective because approved. course, same XX in the are

James Hayward

beginning basis CAR-T much and And Jason, further the in also that in just FDA vaccines. on RNAs we self-amplifying approvals, in very is of an and We're a we'll comment. the well. see institution COVID that the saw as that that see precedent, it the sure I'm works to

Operator

Instructions] Our H.C. Wainwright. comes question [Operator next Yi from with Chen

Yi Chen

a that the decline Could on quarters? in revenue think quarter? for future level, could clinical or reached that the do you baseline continue you to fiscal in fourth Whether has comment laboratory service

James Hayward

would I the coming Sure. most way testing, in happen the in COVID to what COVID with safest forecast But decline. to say the knows business are laboratories Lord that, a as expect of that will is future.

seeing out, positivity. turns an As it locally, in we're increase

of So their it's say that to previously kind years it the and have is had But occupy they're predict did. willing brain do have piece safest of COVID of of or to and hard people to to the thing not X say. I prevalent sick would that, it not, it, they are

likely is I so decline than And a think more not.

Yi Chen

to Health there review potential is the process? as timeline State a Department York could complete of when the And New

James Hayward

dialog also and them them we'll accelerate from not that insightful, again sure crossed. and Department application much And are Well, answer were our to continue, hear to that There's hopeful our fingers were thoroughly. soon. their able of will know. I'm But gain hopeful Health. And things do quite anybody on at you I'm approval. that the never questions we But can I'm we

Yi Chen

be And how would IVT actually customers platform from ordered many have so far? able you to on your Linea comment

James Hayward

Clay?

Clay Shorrock

quite didn't I that. hear Yi,

we of that platform. Linea the have I customers Is IVT number think asked correct? you for the

Yi Chen

yes. Correct,

Clay Shorrock

top to take off of the trying my this head. I'm

have well different large only. platform our we IVT or those our that X have manufacture So related, of closely that which DNA scale called XX for customers. templates, IVT X are we via we linearDNA, X recurring are IVT say would technologies right? I are Yi. We them Linea supply templates, templates, For over

templates which the IVT evaluation to Linea plus enzyme, fourth. have X Spindle our platform, those combination is For of currently expecting we a have a customers, shortly

the near-term combined of how scales actual templates One enzyme customers more in here a an to the are and sign with see substantive platform, the to manufacturing we in large-scale agreement expecting those workflow. up the

Yi Chen

Do the growth going from the you company orders feel could platform that enable IVT service and forward? sequential to Linea Okay. revenue demonstrate product customer in

Clay Shorrock

think do, that we the but hard we because platform only customer. much IVT are IVT We the for end, at using as about platform more currently compelling, Linea are platform to economics work further our a for and the in our over better at customers us the of templates call, to that I it's also talked that converting are

template economics would to of your combined can be advantageous. make platform the So economics the question, answer much certainly the but more happen, that

Yi Chen

Could last cash an of provide at you Okay, the end on the question. update September? position

Beth Jantzen

Sure.

the said in call, I at little As a position approximately cash our million. is $X.X XXth November early

Yi Chen

$X.X million.

Okay. you. Thank

Operator

[Operator would have our I to Hayward concludes closing no Dr. for we remarks. session. Instructions] As turn over to the questions, any like conference this back question-and-answer further

James Hayward

attending call, you keeping Thank as much, you. for thank you you And and you period. this updated Thank into exciting very to on happy our we we holidays. we progress all forward move our and wish look all

Operator

now for today's The concluded. conference presentation. you Thank has attending

now may disconnect. all You

Applied DNA Sciences (APDN) 7 Dec 232023 Q4 Earnings call transcript