Release Date: September 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ImmunoPrecise Antibodies Ltd (IPA, Financial) reported a revenue of $5.3 million for the first quarter of fiscal 2025, showing a 12% increase over the first quarter of fiscal 2023.
- The company experienced double-digit growth rates at its antibody discovery labs in Victoria, Canada, and Oss, The Netherlands.
- IPA's fee-for-service drug discovery segment saw a notable surge in the initiation of VHH antibody discovery programs, contributing significantly to revenue growth.
- The B cell Select antibody discovery technology continues to be a primary revenue driver, with 25 new programs initiated in the recent quarter.
- BioStrand, a subsidiary of IPA, achieved a significant milestone by developing highly specific antibodies entirely through computer simulations, demonstrating the power of its advanced AI-driven LENSai technology.
Negative Points
- Revenues for the first quarter of fiscal 2025 decreased by 7.5% year over year.
- The custom protein manufacturing site in Utrecht, The Netherlands, saw a decline in custom protein projects, impacting overall revenue.
- Research and development expenses increased to $1.6 million from $0.9 million in the previous year, reflecting higher spending on the phased rollout of LENSai capabilities.
- General and administrative expenses rose to $4.2 million from $4 million in the previous year's first quarter, due to additional costs related to personnel and professional fees.
- The company reported a net loss of $4 million for the first quarter of fiscal 2025, compared to a loss of $3.4 million in the same period last year, indicating increased spending on development and commercialization.
Q & A Highlights
Q: Can you provide additional color on the performance of the Victoria and Utrecht facilities and the timeline for inventory building for off-the-shelf products?
A: The Victoria, Canada, and Oss, Netherlands locations experienced double-digit growth. The Utrecht site focused on rebuilding off-the-shelf product inventory, and we have already started seeing revenue generation from this stock in Q2. The timing of these efforts has been effective.
Q: If the off-the-shelf products had been sold during the first quarter, what would have been the incremental impact on the $5.3 million revenue reported?
A: Those products were not sold in Q1, but we saw a significant return on those product builds in August. The Utrecht site experiences more timing impacts due to the quick turnaround of both custom projects and off-the-shelf products.
Q: What do you mean by improving the Talem portfolio using LENSai technologies?
A: We are enhancing lead candidates within the Talem portfolio to increase their value and attractiveness to partners. This involves applying AI-driven improvements based on feedback from partners and our own assessments. Detailed updates will be shared in the next six to eight weeks.
Q: Have you gained any revenue from LENSai offerings in the first quarter or the current quarter?
A: Yes, we have seen revenue in both quarters. The weighted pipeline for fee-for-service work at BioStrand is currently the strongest it has been, indicating a positive outlook.
Q: Is IPA experiencing similar trends in client demand for discovery services as Charles River Labs, which reported reduced demand from biotech clients?
A: Unlike many peers, IPA has continued to experience strong demand for antibody discovery and development services, driven by our B Cell Select platform and expanded manufacturing capacity. Our strategic investments in AI, particularly with BioStrand and LENSai, are showing tangible results.
Q: Can you elaborate on IPA's licensing model and how it ties into the AI-driven platform and Talem pipeline?
A: Our licensing model balances short-term revenue generation and long-term value creation. Through our AI-driven LENSai platform and Talem pipeline, we enhance therapeutic molecules to make them more attractive to partners. This approach generates predictable revenue streams through upfront payments, milestone payments, and future royalties.
Q: How does IPA's licensing model impact the company's net present value (NPV) and market capitalization?
A: The licensing model, with its structured payments and royalties, directly impacts NPV by creating predictable future cash flows. Successfully securing deals and reaching milestones sends strong signals to the market about our growth potential and financial stability, positively influencing market capitalization.
Q: Do you have any comments on the macroeconomic environment and its potential impact on IPA?
A: The broader market conditions, including potential interest rate changes, are closely watched. There is optimism that companies like IPA, which have survived recent challenges, will benefit from improved market conditions. Conversations on Wall Street reflect a positive outlook for biotech and micro-cap companies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
