ICCC - Earnings call transcript Q1 2022

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Operator

Good morning. This is Andrea from Chorus Call. I will be assisting with your conference call this morning. To get things started, let me ask Joe Diaz to open up the call.

Joe Diaz

Thank you, Andrea. to the welcome this and morning, everyone call on morning. Good Lytham is Joe name Partners. Diaz My with

to We are today Relations quarter to of unaudited the preface Investor results ended you Listeners thank ImmuCell. financial of risks today I for made all by that March the course this I a cause this include to statements XX, joining are would the discussion uncertainties us actual for caution management to differ those XXXX. and that subject the regarding that could materially consulting are discuss first reminded firm like forward-looking discussed statements for with call statements. forward-looking results during today. from

forward-looking periodic statements the statement regarding said, Brigham, night's the release the with will the ended with harbor these press SEC. for company's with or last and provided XXXX, open and XX, information the quarter with CEO that for available President the risks over other call XX-Q regarding after our under March of Michael? Form ImmuCell and is safe call Additional With which and questions. note Corporation, turn uncertainties we the filings cautionary to me your let Michael

Michael Brigham

and everyone. Joe, good Great. Thanks, morning,

information would here talk your details, item like available We issued take press the that all release let's to financial I last unaudited not about have that review some you, will time night stuff is to highlights. some get of the great to but Since results. we so I today, started. The to summarizes discuss line the

events considerably strides of reducing we acceleration Sales capture up are making in backlog. our amount up scale is Our and efforts to to capacity the order are the demand off. first paying the big in for production,

issued release As a know, our top line we results. XX, you covering sales preliminary press on April may

changes first of give believe announcements our product making the most been have optional which measure I previous timely critical reporting these XX% strong financial disclosure. for in period. that performance is up XXXX product the of the period early year. $X.X prior at in periods compared XX% the XXXX very have sales, the up month very investors period the That sales during Again, to to XX, XXXX operations period March no were a and quarter ended We look sales I XXXX. month the XX, million March to to respective is ended during prior comparison in of ended increase the XX XX month and March XX, a XX

benefits is namely of backlog to capacity Prior continue our in are product to This XXXX, as sales $XX.X of the promptly decisions cover line. production sales to without sales our So an and in our the happening about invest expenses newest First we strategic capture Defense late manage to orders. Defense we extension expand beginning annual was backlog. line million more marketing growth of Tri-Shield and product to the introduction of of First to order adequate a

introduction changed with of the Tri-Shield. However, our world

initiated million. objective production the from of which increase first production capacity. our into expansion, $XX.X annual capacity millions was kind equipment in estate, of and in energy This capacity The real puts increase urgency despite team million the phase manpower time production We capital take expenditures have significant was investing to been of $XX dollars all to our it. our and XXXX, of our investment during to does

of during million the with that being about We annualized first fourth quarter $XX.X about during $XX.X quarter and have XXXX of XXXX. the achieved just production output goal million

additional increase quarter March of the of decision order to XXXX we the XX, an I $XX.X during further backlog made capital to XX our Given right XX% this percentage during compared sales our The sales as first about quarter quarter an outstanding of initiate of that margin work the by that as feel of the planned. improved investment XXXX $XX the approximately XXst, second XXXX. first of as million of ended during gross capacity million production March confident end XXXX with to months annual year, continues a to to the XX% during

ended of the amortization compared XXXX. the to quarter or margin with is and before gross contrast with EBITDA higher measures context to period quarter gross XXXX. during a the was should and of six first XXXX. of improved of net in the XXXX, $XXX,XXX XX $XXX,XXX Our loss percentage non-GAAP ended XX, presented These month Earnings taxes, The margin XX% statement us XX.X% that the first $X,XXX,XXX the quarter depreciation our of to report the be cash XXXX, first level accordance during $XXX,XXX during flows during increased March GAAP. of during month during sales interest, considered first and XXXX of income XX, in net of period helped March in quarter

First increasing production capacity, to Re-Tain. addition approval achieve changing other In goals our company to of FDA Defense

to the sections, of We pertaining complete of are technical the will anticipating our our would third significant during able early FDA. XXXX. FDA a in response This the whether new preapproval to FDA the sections we from -- technical observations of Controls inspection to time, section. response are This determine to be from quarter This Chemistry, the Re-Tain. last commence from and fourth called submission application. At XXXX specifically second responding same market of recent from a the is Manufacturing one the we quarter the by animal five technical launch will drug

milk. effective demonstrate with objective treatment can of animal So that welfare a meat dairy dairy the the treat treated milk to A be require market Re-Tain discard common antimicrobial animals and an in sick to allowing traditional the role treatment subclinical without in to today's the withheld removing is the meat labor time milk of thereafter, this not saleable be during drugs an for be polypeptide by in treating discarded on subclinical to and industry today alternative practice sick industry mastitis period Because memory of offer provides our development all withhold the productive play producing cows benefit and product economic to penalties. that the or intra still disincentive Nisin a is antibiotics. Re-Tain our requirements mastitis it are

create addition traditional concern. In is Re-Tain of to safety that and sustainability resistance, improved an is animal welfare, human not Nisin in the ongoing thought important enhances utilizing public because This by which used is food overuse is to health antibiotic antibiotics medicine.

So VP Re-Tain. beginnings look to I'm point, like Scientific you. is to Joe product I He To that with this in would and do these H.Crabb Development. that, ImmuCell. consultancy our excited to Defense now Dr. First Product Joseph initiatives. brings Officer at At the role a of introduce very is us turn serving Chief and of regards to to former back

guess you. joining just for I two thanks Joe. questions for So

back from was the calves? of USDA a XXXX. back that Defense to milk by scours first us approved with First to the prevention How purifying come please. idea in time, product Take newborn make antibodies you up did for

Joseph Crabb

mother's opportunity did the Joe it I up have Defense. Okay. little First and first Thanks their a with from infants not. not between almost first the I with Michael immunity in all infant ultimately to of starts the through to the placenta a the its Well, lot, milk placenta but primates, life placenta colostrum. days the the discussion. come everyone, In IgG believe to I I mean it appreciate idea, from the their antibody one differences wasn't of their but develop mom, receives all transfers the ruminants, ruminants of and product get of the Human and baby. the or across calf maternal or

mom work company, specific the And was Defense. technology, immunity to treat industry high bovine working the antibodies calves. feed value the of vaccine which calves, time purity working calf. a prevent primarily there other using she the to good and a 'XXs, of we developing contains several types with infant addition forward purification -- high-quality gallon gastrointestinal lot animal Right gastrointestinal while human that an words, for antibodies went illnesses. the of antibody And an of that by too very rights infants. one researching So Nebraska in never of Mead developing -- in it's work always viruses in the been the literature health to In I specific had Johnson, so that using retain we on First regarding far, the ImmuCell was anti-rotavirus of the in known And identified formula a that problems 'XXs, dairy on lot a of your because formulas be Norden, came bovine different And In calf. others calf. for to and began adding Norden the or for practice can established late XXXXs University the we provide vaccines cause around MeVis and at I background. colostrum, vaccinate board were into colostrum

that Our to this reasoning product of here in are a easily a dosage illness convenient have antibodies against the make we gastrointestinal could pathogens, we calves. strong these if form that good was might prevent

turned focused in colostrum we found main which that single offer So drawing method capsule. we antibodies. purification drying, pathogens dose purified focused antibody Also, efficacious antibodies technology otherwise the the a of we our way could on an levels novel subunit gentle out to most where and be antibody to we to multiple protective point against these vaccines, in orally delivered boost or that so also on could is developing freeze preserve the we the

beginning the was so And that the basically franchise. First Defense of

Michael Brigham

learn something history. reviewing Thanks Wow, you new speak. That's Joe, time every I interesting. that. really for great

Let Re-Tain. me switch to over

with you Defense. commercial much back drug experienced up as to with technology was scale? pharmaceutical us a did that XXXXs, at of we USDA make longer a what has did come the with what know, the the for it Re-Tain preparation FDA about the and Nisin purification First we interested And path how than you? to Nisin development Take So

Joseph Crabb

market. human Sure. antibodies to at ImmuCell, because made in billion these such It's NIH. transition lot health health with Mastitis working since mastitis the US strategic successful Thanks, in late through bacteria then after health grants focus travelers' applications In funded of cryptosporidium, clostridium I in 'XXs, and was and decision the every a a on only interested that largest losses SBIR and from be was approximately to of the lot. focus animal year. market worth animal responsible years the on to applications difficile potential $X several here, as our for Well, of became animal we treatments. obvious it's the of diarrhea, as bovine products. so

and AMBI of discussions with and company teat MSU some the Cornell later ultimately was After literature to Nisin a at were of the time Applied NXX. through of pioneering able Microbiology, who and already called Nisin based it Looking Phil health became of in Sears, pre-milking started And an who rights work wipe at by the then some purchasing the the animal their the their off to and technology. secure on AMBI, work we Out. we became Wipe called product market, was

FDA that purification we the on iodine Nisin so, pure was grade were But Re-Tain. cost reasoning develop able never gained for Nisin, secure against experience a many, And industry being Well, a compete through a form as the product as many path we years long to intramammary a an felt this we in and developed the we technology i.e., that really manufacturing in because mastitis already cruder proof clearer to would discard, applications Nisin this Nisin. pretty Our for and being the product, in experience of for and its the concept We down some a food Nisin. develop used pathogens much we products based market. other thankfully, of that use product preservative, and XX% with having were that in with here history was the as to food difference could much with have safe standard mastitis zero Out up were which Nisin But good And it intramammaries, ultimately, on totally true. also since of teat was leverage ended food. useful That Nisin, novel chlorhexidine a Re-Tain wipe, drug going primarily a ended doing by between on up up ended pharmaceutical Wipe pathway the basis we the critical could of Re-Tain. is establish based which antibiotics. a are we method and the milk able the not

So we're launch the coming going add meet Is to hopefully, anything months, able that, else in Michael? and the goal the to to I product. can there be

Michael Brigham

the join to glad so call. just I'm Well,

and I minutes, interest I've in You've of captured investors. that or a good traveled to that. XX a road to was summary our and and hear like hope that so you benefit it concise years boy, was few with really

So do really thanks for I sharing that, it. appreciate Joe.

a a this press night. little to on and encourage and XX-Q Form last So least look let's I I it posted our very of have our corporate here report results. watch filed May portion. night. as objectives, and at as conclude believe bit presentation presentation the clock and that release strategy to conference summary review financial at our the update you call, deck the please Also, quarterly we last business provides our site just our was good slide Web a current well

and of the our site see presentation. the Web section just Investors on So click corporate

be will happy take So said, your to with that questions. I

Let's lines. operator open you, Andrew. the have the up Thank

Operator

Lipman, Private John from come will question first our And a Investor. Instructions] [Operator

Unidentified Analyst

couple of you, questions Michael. A for

gone XX-K for a you've day, and company be sales the the XXXX company in of revenue might about talk Re-Tain? approved, great your on to into potential for that very blockbuster product. with other The has amount sales if here another million you and this money potentially a a us a is laid lot Nisin $X like real $X lot through of reading you of Could small spent a getting of come those Re-Tain us where what that how opportunity seems It million time XXXX. and has kind derive top revenues for and very projected story for that for to potentially, investment this of Joe maybe big Just here. out of

Michael Brigham

controlled So the a for this launch. we use strategy is launch term

launch with to there's ways a like There's reps deal let out just warehouses this product put first XX two the great hockey go. Re-Tain. out farm. the prioritizing with do strategy product with So to focusing the the deliver and product. risk it customers with the showing see months, great experiences could take customer Defense, of We controlled not revenue to distribution of but we opted essentially really We've while First a novel like of for this that to stick a say, the in, group first and that

can getting we've milk dosed used to carefully the tank, So faulted and to correctly, it's Nisin administered right make it's sure that of cheese these like it's a very tank hot correctly, the is avoid industry appropriately that managed a like we risk cows, or some risks.

-- requires a patience market capacity really mass I sales to too to or a get really we -- think bit it's prepping million, although, of year while the built in production grab team the it The distribution that of trying the into XX little risky. well. first capacity through launch is up I so, think

first in These recent bigger [Wüstenberg]. year. long at the seen and team benefit of the product going Dr. of and of quicker, are perhaps Bobby secure hires the who the and the launch guys a the Dr. manages Kathy You've [Indiscernible] to launch expense and control help are term

a I say this two, where launched and And maximum the the appropriately the but and long million we three product of the is benefit enough, is smart capacity bit XX need I’ll to four. and over plant we it it. So get for day think to that used coming expand forward look of out term is not of appropriately years today's trade-off we and benefit a

together. path that Did that your can question we down step answer So John? there, help

Unidentified Analyst

on controlled then me. launch profitability in make works -- it to the the to market, the understand business. it product sounds sounds like Yes, into a like it great customers and that feed sure how to Question

less with costs You're for now showing development Re-Tain.

staff business, staff or can up comfortable you're to sales? with with to that current staff launch any have franchise, the sales of Re-Tain tempering $XX sales CapEx going your up the support million you us to hit we're do and expectations Do on -- you the any lot about or launch you infrastructure while approved, large add plus scaling also Re-Tain higher potential. Defense today? if business the pretty to see you that have -- of you to the a growth need talk that able support in being you're to As Do and you and First scaling

Michael Brigham

more John, it this make really that's helps Yes, controlled a because sense strategy. follow-up great launch of

fortunate we have we're helps so with growth we're patience the there, of need create to Defense, First to this it First, that control launch seeing some do Re-Tain.

history, First So CapEx do and to yes, Q is any projects time complete got in I always staffing know on with the we my first what we're project this specific the cost which surprises. increasing. in is disclosing cash. The ImmuCell, laid really growth enough We've defined. We available scrambling versus in out ImmuCell's not need is well that's don't see Defense, then cash. of those unique experience headroom to by the and

like event, feel but that the huge. it's that's Q. I then the in And first well staffing So defined increase, Re-Tain, on not like will

seeing So it's we'll going as can today But a to XX be just to the very under budgeted staffing. XX, and not and see of what again, 'XX, fund the available is CapEx in And cash is explosion I up it. we're people. into quickly huge about staff a known XX.

some personnel would people is new in and modest definitely but I good So we shape. on CapEx say need

Unidentified Analyst

the are or to to something how know dairy in be to already using they people product it industry apply the farmers use that in going one Re-Tain, Re-Tain, well, and are two you to thing to answers questions. the us educate -- could just and to talk last I Can need we to appreciate the parts. back Michael, about the is do aware how and you -- the On that teach the just -- or applied?

Michael Brigham

It's a standard intramammary infusion.

just mastitis treatments the on that is the a through So teat like two other opening market. infused it's the liquid

need do intramammary they no what market nothing customer and new. the is today. as far This with the will as So tubes on training application, the current

Unidentified Analyst

K, seems Could here? entry, to lot would picked attract just fantastic. cash. it last then up. us probably us the assume barriers talk attention And I a to The to been IP have a others? sauce talk my in about It just one, you like Could has it's about of Defense special patents, stellar. I and from you not generating but that's the got the been the it growth here must has you've First

Michael Brigham

history. discuss Well, great the Joe opportunity question, that's a given having the to

that old. of lot very is a So technology

patented. is it of none So

in from Portland So proprietary we as the in Joe rely use here to process It's the expanding we're exclusively do what It's they on Joe a a described, the gram X and you of to what to process, the we mentioned technology particulars dose. program, then what the in management. freeze ship what vaccines of X lot purify production small, do down farm the the drying, our as as get or around even manage purification, the of manufacturing we're essentially property the intellectual say, the to vaccine collection and can is hyperimmuniation back how far those level, program antibodies deliverable to and tricky. the doubling just is At unique the around to here, team and the more. process farm which vaccine some and the Maine we them

a blockbuster see company. you patent So there's in it's process know-how we're not typical not drug, kind typical but that pharma a might pharma a and of

Operator

will Partners. next from from Lytham Joe our question Diaz And Instructions] [Operator come

Joe Diaz

going What's capacity regard questioner and of years plan with your the are will that here Defense growing next production increasing you continue off makes forward in that, previous market Leveraging couple sense? your to of capacity. First grow, and to confident the and

Michael Brigham

sales it's under sales. and can predict I'm there. really further none me that capacity. that's very backlog and team of really difficult the us on It's customer. live XXX% team. more hard more focused on confident on or future will condition certainly, this of support difficult to the market future The Well, I'm our

gets like need going that I I as That referred planned productively and XX, through equipment we what mentioned yes, XX.X hurdles of so the year, transition this critical USDA year end second real we by all just -- to that more referred finished company that two find installation, more asking is continues by here current from lost And estate. We half go short there it's off to no of asking to XX of phases may the a operation. CapEx everything to finish to allocate to during sales to XX of started new supply. just that's it the in have some it its the we big new to period of that from in to So retain team as and scarce It's team to, in place. approved sort sales the us this I and of online. million to that recover place. more product the validation those and just customers is expansion put the get go

Joe Diaz

Michael, it's Crabb difference not an both the that of give antimicrobial you Dr. that bit polypeptide us Nisin mentioned background on and between a the is little Could two? a you antibiotic.

Michael Brigham

the call, Yes, big for is to glad word I'm that's to ask Joe to please, speak on Joe. going a Joe I'm that, me.

Joseph Crabb

to to polypeptide be try proteins Nisin Nisin A down happens traditional a like A amino Nisin and polypeptide are somewhat is in to small antibiotics small too, acids. is The then not the are a XX large. molecules most do very the I'll they like smaller are very a native much, is but acids environment. beta-lactams tend polypeptide. a polypeptides, protein. amino than protein relatively much simplified. break

Nisin in of against it's of protein, mastitis. because eventually the is its that work will So one milk, it down. attributes the it a of then like does break kind But

a problem. one That's issue. So it's not

class different is resistance, traditional molecules the The it's of a antimicrobials. of other the Nisin use not does antimicrobial the development than of because cause completely issue

is a actually modified in of bacterium kills hole of directly. and of a But to stop Nisin's interestingly with action of it a and mechanism stop is biosynthesis a work, certain beta-lactams that different It The of by which polypeptide aspect pokes your penicillin in doesn't a bacterium because growth bacteria. Nisin, the the being is like growth Nisin the interesting the wall. third cell their interfering way,

So cells, growing or kill can while Nisin can kill only resting antibiotics traditional cells growing cells.

traditional couple a Nisin of differences there's So antibiotics. and between

Michael Brigham

Thanks, always I common the Joe. there's and science pretty way speak. take complex you some appreciate some

Joe Diaz

other as Nisin. One relates to question it

that used any the that will in Nisin used Re-Tain naturally be preservative. mentioned it's in it's occurring You different? a the as environment, food s

Joseph Crabb

difference is to only its The purified of level pharmaceutical purity.

So to example, having niche. bacteria environment. other by and competition. in for Nisin establish the produced bacteriocins They're produced a of of bacteriocins their are They as mechanism produce sort normal bacterial

they're then fungus. in the produced yes, by So by in a like the produced of Nisin naturally naturally bacteria the many beta-lactams environment essentially, environment. but degrade is a they are also like yes, produced -- so And -- of the all

by pharmaceutical our to something a is produced level, seen. same, up but bacteria, the we a type that's purification not which So of the of certain take Nisin Nisin is it that's

pure milk you the Nisin. preparations rest if actually for at, preparations The X.X% that foods, So buy is are dairy grade look Nisin things like those food solids. example, to you can preserve

essentially Nisin Our grade. is XX% pharmaceutical pure

Michael Brigham

is saying approval no So FDA the to this be X.X that to to We you're for considered there's Joe, that XX the FDA? infusion what way at intramammory get by that level. had would approve

Joseph Crabb

the of Yes. XX% over pure. -- response has inflammatory have pharmaceutical a other other I interesting to impurities. if you a is aspect crude that generally need you the preparation infuse would Nisin because into massive of all you it's the be considered other the But mean

a of caused does it animal. on by the doing the impurity. be get effect does red, study at is where you animal caused mastitis? hot, the you get process it -- on All approval safety the the drug product those Does the outer of target can of things have look swell, part infusing So

this. have on very incumbent for high product a it's to So purity us

Michael Brigham

Right. Makes sense. Thank you.

here. guess call, other I'd Are I questions coming. -- just Joe. think we see that's say turned really let's So no that out to I'll Joe, over I I wrap think I this

Joe Diaz

other no are queue. the questioners There in

again wrap the with ahead quarter's today. talking being We that after case, go to over forward look to the time next So let's results. quarter. up and taking appreciate everybody you We'll go this

it We in early August. expect that will sometime be

great So again. a Stay and safe have talk weekend. day. we'll a you to great Have

Operator

The conference now has presentation, for and attending Thank today's disconnect. you concluded. may now you

ImmuCell (ICCC) 13 May 222022 Q1 Earnings call transcript