Release Date: August 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CollPlant Biotechnologies Ltd (CLGN, Financial) has made significant progress with its novel breast implant program, including the production of commercial-size implants using proprietary rhCollagen-based bioinks.
- The company is addressing a large market opportunity, with the global breast implant market estimated at $3 billion and projected to grow to $6.5 billion by 2033.
- Positive preclinical study results for the breast implants showed evidence of well-developed connective tissue and no adverse tissue reactions.
- CollPlant's collaboration with AbbVie on a dermal filler product has reached clinical phase, with potential for additional milestone payments and meaningful product royalties.
- The company has released its first environmental, social, and governance (ESG) report, demonstrating a commitment to sustainability and responsible business practices.
Negative Points
- GAAP revenues for Q2 2024 were significantly lower at $249,000 compared to $10.2 million in Q2 2023, primarily due to a $10 million milestone payment from AbbVie in 2023.
- GAAP gross loss for Q2 2024 was $287,000, compared to a gross profit of $9.6 million in Q2 2023.
- GAAP net loss for Q2 2024 was $4.2 million, or $0.37 per share, compared to a net income of $5.8 million, or $0.51 per share, in Q2 2023.
- Operating expenses increased to $4.1 million in Q2 2024 from $3.9 million in Q2 2023, mainly due to higher employee salaries and share-based compensation expenses.
- The company did not disclose specific timelines for the next milestones in its collaboration with AbbVie, creating uncertainty about future revenue streams.
Q & A Highlights
Q: What are the key differences between the latest breast implant and the dermal fillers being developed with AbbVie?
A: Yehiel Tal, CEO: The breast implants are 3D bioprinted scaffolds made of collagen and other biomaterials, designed to recruit cells and regenerate natural tissue over time. In contrast, dermal fillers are typically used for skin lifting and require repeat injections. The implants aim for long-term tissue regeneration, while fillers are for temporary volume enhancement.
Q: What are the key findings you are looking for in the current preclinical breast implant study?
A: Yehiel Tal, CEO: We are optimizing formulations, design, and checking performance, safety, and efficacy. Key findings include tissue regeneration, implant degradation kinetics, and absence of adverse tissue reactions. Results from ongoing studies will be reported by year-end 2024 and Q1 2025.
Q: What are the next steps in the AbbVie collaboration, and can we expect additional milestones soon?
A: Eran Rotem, Deputy CEO & CFO: The dermal filler product is in the clinical phase. While we cannot disclose specific timelines, we expect to receive up to $26 million in milestones by commercialization, plus meaningful royalties and collagen sales to AbbVie.
Q: Beyond the collagen scaffold, what other growth factors are part of the scaffold itself?
A: Yehiel Tal, CEO: We avoid using growth factors due to regulatory complexities. The scaffold, made of collagen and other biomaterials, attracts cells from surrounding tissue to regenerate fat tissue while degrading over 6-12 months, ensuring the newly grown tissue takes over load-bearing responsibilities.
Q: How predictive are the animal models for human applications, and how confident are you in their accuracy?
A: Yehiel Tal, CEO: We have developed predictive large animal models and a new computational biomechanics discipline to simulate scaffold behavior and degradation in the human body. This comprehensive preclinical package should satisfy FDA requirements.
Q: Are you in discussions with major implant makers for potential collaborations?
A: Yehiel Tal, CEO: Yes, we are in talks with major players but are not yet committed. We aim to advance the product as far as possible to secure the best business deal.
Q: Can you elaborate on the environmental, social, and governance (ESG) initiatives mentioned in the call?
A: Yehiel Tal, CEO: Our first sustainability report outlines our strategy for environmental sustainability, health and safety, and corporate governance. Key actions include enhancing plant-based production, reducing emissions, and delivering safe medical solutions.
Q: What are CollPlant's upcoming goals for the remainder of 2024 and early 2025?
A: Yehiel Tal, CEO: We aim to advance the dermal filler program with AbbVie, generate additional safety and efficacy data for the breast implants, form new collaborations for our rhCollagen and bioink technologies, and continue discussions for potential partnerships.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
