Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cibus Inc (CBUS, Financial) has successfully transitioned from an R&D-based business to the first commercial gene editing company in the industry.
- The company has developed a 'trait machine' process that significantly reduces the time required for trait development, achieving results in less than 12 months.
- Cibus Inc (CBUS) has established collaborations with major seed companies, enhancing its commercial potential and validating its technology.
- The company has made significant progress in developing herbicide-resistant traits in rice and pod shatter reduction traits in canola, with successful field trials.
- Cibus Inc (CBUS) is well-positioned to capture market opportunities in rice and canola, with potential annual royalties estimated at $200 million and $150 million, respectively.
Negative Points
- Cibus Inc (CBUS) reported a net loss of $201.5 million for the third quarter of 2024, primarily due to the impairment of goodwill.
- The company's cash and cash equivalents are expected to fund operations only through the first quarter of 2025, indicating potential liquidity concerns.
- There is uncertainty regarding the regulatory environment for gene editing in Europe and Asia, which could impact future market opportunities.
- The commercialization of traits in the U.S. and Europe is expected to take longer due to regulatory processes, delaying potential revenue streams.
- Cibus Inc (CBUS) is still in the early stages of proving its business model, with initial edits being done at the company's expense before transitioning to a cost-sharing model with partners.
Q & A Highlights
Q: Can you provide an update on the legislative or policy support for gene editing, particularly in Europe and China?
A: In the Americas, we're well-positioned with major countries. In Europe, legislation has passed, but a tripartite agreement is pending, expected to progress with Poland's presidency in January. In Asia, particularly China, regulatory frameworks are harmonizing, viewing gene editing as indistinguishable from traditional breeding, which is promising for our industry.
Q: When should we expect to see commercial revenues from rice and soybean, and how is the gene editing platform evolving with partners?
A: For rice, we anticipate launches in Latin America by 2026 and in the U.S. by 2027-2028. Our recent agreement with Abar for herbicide registration is crucial for this timeline. In soybeans, we are progressing with partners like GDM, and expect to see results within 12 months of edits, indicating a promising revenue opportunity.
Q: How differentiated is your solution, and are customers willing to invest in field trials to scale up?
A: Our process is unique as we return germ plasm with traits integrated, unlike traditional breeding. Customers are interested in collaborating on new ideas, and our efficient timelines are appealing. We expect the editing part of our business to be profitable, with partners paying for subsequent edits.
Q: Can you discuss the timelines and processes for evaluating field trial results in the UK and greenhouse results for disease resistance?
A: For disease resistance, we are seeing positive results in field trials, with greenhouse results for the third mode of action expected in Q4. In the UK, our winter oilseed rape trials showed strong pod shatter reduction, allowing us to replant quickly for further validation.
Q: Are there any updates on sustainable ingredients and fragrances, and their timelines?
A: We are encouraged by progress and expect to announce results by the end of next year, particularly with the completion of our soybean platform, which is crucial for showcasing our capabilities in sustainable ingredients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
