Earnings call transcript: Cibus Inc Q1 2025 sees rising losses amid innovation push

Cibus Inc, a player in the agricultural gene-editing sector, reported a significant net loss for the first quarter of 2025 while advancing its innovation and product development initiatives. According to InvestingPro data, the company’s stock experienced a downturn, falling 6% to $2.35 during the regular session and another 2.98% to $2.28 in aftermarket trading, continuing a challenging period that has seen the stock decline over 86% in the past year. The company’s current market capitalization stands at approximately $86 million. The revenue for Q1 2025 was $1 million, marking a notable increase from the previous year, though the company continues to face challenges with rising expenses and net losses.

Key Takeaways

• Cibus reported a Q1 2025 revenue of $1 million, a substantial increase from the previous year.
• Net loss expanded significantly to $49.4 million, driven by increased SG&A expenses.
• The company’s stock fell by 6% during regular trading and an additional 2.98% in aftermarket trading.
• Cibus is progressing with its rice, canola, and soybean platforms, aiming for a 2027 commercial launch for certain products.
• The firm is focused on reducing its cash burn rate and optimizing operations.

Company Performance

Cibus Inc’s performance in Q1 2025 was marked by a notable increase in revenue, which rose to $1 million, up from $511,000 in the previous year. Despite this growth, the company faced a widening net loss, which increased to $49.4 million from $27 million. This was largely attributed to higher SG&A expenses, which rose due to a $3 million litigation accrual.

Financial Highlights

• Revenue: $1 million, up from $511,000 the previous year.
• Net loss: $49.4 million, up from $27 million.
• R&D expense: $11.8 million, slightly down from $12 million.
• SG&A expense: $9.9 million, up from $7 million.

Outlook & Guidance

Cibus has outlined ambitious plans for the future, with key milestones set for 2025. These include expanding relationships with rice seed companies, advancing field trials for canola and soybean platforms, and moving towards commercialization of biofragrance products. The company expects nominal revenues from these initiatives later in 2025.

Executive Commentary

CEO Peter Beetham emphasized the potential of Cibus’s gene-editing technologies, stating, "Our gene editing technologies and focus on productivity traits hold great promise for the future of farming." CFO Carlo Bruce highlighted the company’s business model, noting, "The beauty of this royalty business is that the inventory build is done by your partners, not by CBUS."

Risks and Challenges

• Rising expenses and net losses could pressure financial stability.
• The timeline for regulatory approvals and commercialization may face delays.
• Market competition in the gene-editing space could impact market share.
• Economic conditions and agricultural market trends could influence demand for Cibus’s products.

Despite the financial challenges, Cibus Inc remains committed to its innovation-driven strategy, aiming to capitalize on the growing market for gene-edited agricultural products.

Full transcript - Cibus Inc (CBUS) Q1 2025:

Conference Operator: Good afternoon and welcome to the CBIZ 1Q25 Earnings Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note today’s event is being recorded.

At this time, I’d like to turn the conference over to Carlo Bruce, Interim Chief Financial Officer. Sir, please go ahead.

Carlo Bruce, Interim Chief Financial Officer, CBIZ: Thank you and good afternoon. I would like to thank you for taking time to join us for CEBIS first quarter twenty twenty five financial results and business update conference call and webcast. Presenting with me today is Peter Beetham, Co Founder, Interim Chief Executive Officer, President and COO. Greg Gochel, our Chief Scientific Officer will also be on today’s call for participation during the Q and A session. Before we begin the call, I’d like to remind everyone that statements made on the call and webcast, including those regarding future financial results and future operational goals and industry prospects are forward looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.

Please refer to CBIZ SEC filings for a list of associated risks. This conference call is being webcast. The webcast link along with our press release and corporate presentation are available on the Investor Relations section of cbius.com to assist you in your analysis of our business. And with that, I would now like to turn the call over to you, Peter.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Thanks, Carlo, and good afternoon, everyone. We believe the first quarter of twenty twenty five continues to demonstrate clear validation of our commercial strategy and the transformative potential of our RTDS technology platform. Our first quarter press releases have confirmed our ability to deliver time bound and predictable results. This, alongside what has been favorable regulatory decisions, is resonating across multiple fronts, expanding and attracting commercial interest from some of our current customers while also attracting many new prospective partners. CEBUS is uniquely positioned at an important inflection point in the agricultural industry.

Our proprietary RTDS gene editing process has established a new paradigm for trait development, one that is time bound and predictable, enabling us to edit a customer’s elite germplasm and return it with specific traits in under twelve months. This standardized platform is being recognized as a fundamental breakthrough that intersects with agriculture’s important plant breeding programs. These programs are the engine room of genetic innovation for the seed industry. We believe this is unlike anything agriculture has seen before, creating a dependable model for trait development and commercialization for gene editing that’s resonating strongly with our customers, partners, and more broadly across the whole industry. What’s particularly encouraging is how our time bound and predictable message is attracting significant new interest in development projects, especially in disease resistance traits.

We continue to show great progress with confirmed edits for different modes of action in the disease trait category that is unique and highly valuable for multiple crops in global markets. This validation from the market affirms our strategic direction and the value proposition of our technology as we focus on achieving our key milestones for 2025. Let me start with Rice. Throughout 2024, we established a strong foundation in our rice platform, securing agreements with four major rice seed companies representing approximately 40% of our estimated accessible rice acres across North And Latin America. The momentum continues to build as we advance toward commercialization.

This momentum is carried forward from last year’s field trials where we achieved a milestone with field trial results for stacked, gene edited, herbicide tolerance traits in rice. This year in March, we expanded this opportunity for additional stacked HT traits in rice where trials are planned for the 2025 season. Last year’s trials represent the first known trial using stacked gene edited herbicide tolerance traits in rice for improved weed management. A huge breakthrough that further differentiates our offering and stands to bring significant value to farmers. This is of particular importance given the global need for weed management solutions that enable rice farmers to manage these challenges more efficiently.

We are working hard to advance partnerships to do just that. A great example of our efforts is our strategic collaboration with RTG Seeds Corporation Limited and Allbar LLC to provide the herbicide clethodim as part of our weed management solution for US Rice Farmers using the h t three trait as a means to further our commercialization strategy. With our registrations lining up, we remain on track for our anticipated 2027 commercial launch. The momentum we’re seeing in Latin America is particularly exciting as these markets have historically lacked access to advanced weed management solutions in rice. This represents a transformative opportunity both for farmers in these regions and for CEVIS as an innovator that is helping deliver value added solutions to the market.

We also expect to initiate our first trait validation trials in Latin America later this year with delivery of initial traits to a Latin American customer anticipated by year end. The broader message here is clear. Our RISE commercialization strategy is progressing according to plan, with TRACE integrated into multiple customers’ germplasm that is adapted to diverse geographies. This represents a significant market opportunity for Sievers as we approach commercialization. So now turning to our disease resistance work.

Disease, in our case, sclerotinia or white mold. This program continues to be a standout area of our progress, building on our breakthrough achievements in 2024 where we successfully completed edits in canola for four different modes of action for sclerotinia resistance and observed positive field trial results for our second mode of action. We’ve continued to advance this critical platform. In March 2025, we announced positive greenhouse data for canola plants containing a third mode of action for scarotene resistance. This represents a significant milestone in our multilayered approach to create durable disease resistance, very similar to how antiviral cocktails create lasting protection against diseases in humans like HIV.

Our sclerotinia resistance trait in canola now offers multiple modes of action to provide durable resistance and enable farmers to improve yields and lower input costs by reducing their reliance on fungicides. This is particularly critical as sclerotinia or white mold is a fungal pathogen that causes significant disease in oilseed crops and most leggings, reducing canola yields by seven to 15% with individual plant level yield losses being as great as 50% per infection. We’re now preparing to conduct field trials for our third and fourth modes of action in canola in North America this summer, along with testing our first stacked disease resistance trait in controlled environment growth chambers. So let me now turn to the soybean platform. Our soybean platform reached a significant milestone in January when we successfully edited a soybean cell for our h t two trait, achieving editing rates to enable expanded platform development.

This achievement represents a critical step forward in our soybean strategy and positions us to continue pursuing both the h c two trait and white mold resistance in soybean, potentially accessing a substantial market estimated at 125,000,000 accessible acres with annual trait royalties per acre potentially in the range of $10 to $15 While we continue to work diligently toward a fully operational soybean platform, the success achieved early in the year validates our approach and technical capabilities. We expect to achieve h t two edits in soybean plants later this year, building upon our successful cell edits from earlier this year. The company continues to work diligently toward a fully operational soybean platform. Soybean gene editing of complex traits like white mold resistance remains an area of significant commercial interest, and we continue to advance discussions with current and prospective partners who recognize the value of our time bound and predictable approach to trait development, which now brings me to our sustainable ingredients program. Within our sustainable ingredients program, we’ve advanced our bio based fermentation, bio fragrance products, and now anticipate entering into commercialization agreements with consumer packaged goods partners this year.

This quarter, we successfully completed the first stage scale up of two Biofragrance products. This important advance affirms our expectation in realizing nominal revenues from this program later in 2025. In addition, our partner funded project with a large multinational CPG company also continues to progress well. This work leverages our core crop gene editing capabilities to develop sustainable low carbon ingredients, helping major global companies advance their sustainability objectives. So let’s turn to regulatory.

On the regulatory front, we achieved several historic milestones this quarter that strengthen our commercialization pathway. In February, the California Rights Commission’s Rights Certification Committee approved our field research proposal, marking the first authorization for planting gene edited rice in California. Additionally, on March, EU member states endorsed the EU Council’s negotiating mandate on the regulation of plants obtained by new genomic techniques or NGTs, enabling a three way or tri log discussions with the EU parliament, EU commission, and EU council to finalize legislation. In April 2025, the Ministry of Agriculture and Livestock in Ecuador determined that CBUS’s HT1 and HT3 rice traits are equivalent to those developed through conventional breeding. This was a really important determination for our RTDS technologies as Ecuador strictly prohibits the commercial planting of transgenic or GMO crops.

This determination confirms rice plants containing C. B. S. HT1 and HT3 traits may proceed with registration and commercialization in Ecuador in accordance with the provisions of organic law of agro biodiversity, seed, and promotion of sustainable agriculture and its regulations, known as LOASFAS. And just two weeks ago, we were excited to announce that the USDA APHIS has designated two of our disease resistance trait products under development for canola as not regulated.

This favorable designation confirms that our traits do not meet the definition of a regulated article, enabling us to proceed with product development without restrictions associated with regulated articles in The US. This USDA designation is especially significant as it further validates our RTDS technology platform that enables targeted genetic changes without integrating recombinant DNA. The US has long been a leader in regulatory modernization, and this designation represents yet another example of how regulatory frameworks have evolved and continue to evolve to support the promise of gene editing technologies. These regulatory developments across multiple geographies significantly strengthen the commercial opportunity for our trait pipeline and serve as important catalysts for our crop trait development business. So now let’s look ahead to 2025.

We have several important milestones we’re focused on while simultaneously optimizing our operation. Expansion of commercial relationships with rice seed companies across North And South America. The first trait validation trials in Latin America with delivery of initial traits to customers by year end. Field trials for spherotinia resistance in canola, the third and fourth modes of action, and trials of our first stacked disease resistance trait in controlled environment growth chambers. Initial field trial data for our h t two trait in canola, continued development toward an operational soybean platform, and advancement of our biofragrance work with expected nominal revenues later this year.

As we pursue these strategic priorities, we’re laser focused on optimizing our operations and significantly reducing our cash burn rate in 2025. We’re taking a disciplined approach to resource allocation, prioritizing investments in near term commercial opportunities with developed and advanced traits, while ensuring we have the financial flexibility to execute on our strategic priorities and extend our runway. This balanced approach to growth and fiscal discipline positions us to maximize shareholder value as we approach key commercial milestones. Our gene editing technologies and focus on productivity traits hold great promise for the future of farming, enabling crops to be more adaptable to a changing environment and the changing demands of a global food supply chain. As demonstrated by our progress this quarter and over the past year, the opportunities for our gene edited traits aren’t in the distant future.

They’re materializing and expanding now. With our traits moving into customer germplasm, showing promising results in field trials and a more harmonized global regulatory environment emerging for gene edited traits, we are uniquely positioned within the agricultural gene editing industry to capture significant value for our shareholders. And with that, I’ll hand over the call to Carlo for a financial update. Carlo?

Carlo Bruce, Interim Chief Financial Officer, CBIZ: Thank you, Peter. Looking at our financials for the third quarter. Cash and cash equivalents were 23,600,000.0 as of 03/31/2025, Taking into account the 21,400,000.0 net proceeds received in 2025 from the registered direct offering in January, the impact of implemented cost saving initiatives and without giving effect to potential financing transactions that Seabiz is pursuing, Seabiz expects that existing cash and cash equivalents is sufficient to fund planned operating expenses and capital expenditure requirements into the third quarter of twenty twenty five. Moving to our income statement. Revenue for the first quarter of twenty twenty five was 1,000,000, an increase of 489,000 compared to the 545,000 in the year ago period due to increased activity in partner funded projects.

R and D expense was $11,800,000 for the first quarter of twenty twenty five compared to $12,000,000 in the year ago period. The decrease is primarily due to cost reduction initiatives. SG and A expense was 9,900,000.0 for the first quarter of twenty twenty five, compared to 7,000,000 in the year ago period. The increase is primarily due to a 3,000,000 litigation accrual, partially offset by a decrease related to cost reduction initiatives. Net loss was 49,400,000.0 for the first quarter of twenty twenty five compared to net loss of 27,000,000 in the year ago period.

The increase in net loss was primarily due to the 21,000,000 non cash neutral impairment that was recorded in the first quarter of twenty twenty five compared to no such charge in the prior year period. Net loss excluding this goodwill impairment was 28,400,000.0. For additional details about the financials for the first quarter of twenty twenty five, please refer to our press release and filings with the SEC. That concludes our financial discussion. Peter, now back to you for your closing remarks.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Thank you, Carlo. The first quarter of twenty twenty five has demonstrated clear validation of our commercial strategy and the transformative potential of our RTBS technology platform. As I’ve mentioned, our time bound and predictable approach to trait development is resonating strongly with customers and partners, attracting significant commercial interest across our rice, canola, and soybean platforms where we believe we will garner further development program support. This is with regulatory progress advancing globally, including the favorable USDA APHIS designation of our canola disease resistance traits just two weeks ago. Arrive traits moving into customer germplasm and our disease resistance program showing remarkable results with multiple modes of action.

We’re positioned at an important inflection point where Seed Genetics is now offering broad innovation in global seed markets. As we remain laser focused on optimizing operations and reducing cash burn in 2025 through 2026, we continue to advance our highest value commercial opportunities that will drive long term shareholder value. And with that, I thank you for your attention and interest. We look forward to updating you on our continued progress next quarter. This concludes our remarks.

Operator, could you open the call for questions? Thank you.

Conference Operator: Certainly. We’ll move first to Laurence Alexander with Jefferies. Your line is open.

Laurence Alexander, Analyst, Jefferies: Good afternoon. I guess three or four things if I may. First, can you just walk through the cash burn and the step up in the SG and A in Q1, kind of what your views on both of those and how to think about them for the balance of the year?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Thanks, Laurence. I’m going to hand that to Carlo to answer. Thank you.

Carlo Bruce, Interim Chief Financial Officer, CBIZ: Yeah. Thank you, Peter. So good question. The cash burn quarter one, as we have said in the previous presentations, following an executed rate last year, we went seriously down. So we are now around €4,400,000 gross.

So that was successfully planned and executed. What you see in quarter one in the SG and A is in accrual for litigation we took, and that’s why the number is higher compared to the quarter in previous periods. But when you really from a cash perspective, look at it, we went down.

Laurence Alexander, Analyst, Jefferies: Okay. Perfect. And then on the EU regulatory discussions, have your contacts in Europe given you any sense for what a reasonable time frame would be for the three way discussions to coalesce on a final text?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So thanks, Laurence. Let me expand on that a little bit because I think, as I mentioned, this was the result of the EU Council vote in in March is really, you know, a historic thing for gene editing industry in general. And we’re, you know, so excited about that because finally, gene editing is being recognized as what they call conventional like. So it’s essentially indistinguishable from what occurs in nature or from plant breeding programs. And as you go through this process, the parliament last year actually, you know, tabled the text, confirmed that the text wouldn’t change.

And then when they went through the amendments, it goes to the EU Council vote, which was positive in March. From that time now, they’ve entered into what they call the trilogue, which is three way discussions with parliament, the commission, and the council in the EU. And, you know, just as recent as, yesterday, we heard that they have scheduled many meetings between now and the June to, complete that trialogue. And what that means is they’re heading to a final text. Now that could be delayed, but it will happen, we believe, within six months.

And the beauty of that is, within the twelve months after that, you’ll have the secondary legislation, to move forward with gene edited products both for cultivation and trade in, with the EU, which, again, as we talked in in some of our earlier remarks around regulatory, is harmonizing around the world. So as you’ll see from our press release, there’s a number of, items, devoted to regulatory because we’re seeing, a great, harmonizing and therefore a clear path for us to go on commercialization. Does that

Laurence Alexander, Analyst, Jefferies: Great. And then sorry. Go ahead.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: No. Was just making sure that I answered your question effectively.

Laurence Alexander, Analyst, Jefferies: Yep. No. No. Great. And then just can you just walk through two last pieces?

One is for when your trait products hit commercial launch, what is the working capital or cash flow impacts ahead of booking kind of incoming cash flow from your customers? And secondly, for biofragrance, can you give some sense of the potential scale, how fast it could ramp, what the customers are telling you? And if they do get what they want and they’re enthusiastic about your result, your product, what the impact would be on your working capital needs and need to have the right sort of technical support and quality assurance staff to support them.

Carlo Bruce, Interim Chief Financial Officer, CBIZ: So let me start with the first part

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: of your question. So thank you, Lawrence. I think the, you know, as we as we go forward on, our traits, particularly in rice, we’re really excited about rice. It is one of our strategic priorities that we’ve been very much focused on over the last couple of years, and we’ve had great demand and success around, the two herbicide tolerant traits in rice, including, you know, a really favorable result from the Ecuador, regulatory just recently. So, you know, the handoff point, with materials once they’re edited in rice, we don’t we don’t effectively have a big hit on our cash at all.

We support our customers from, a stewardship standpoint, making sure that the traits are handled correctly, that there’s, some genotyping and some you know, eventually, we will allow them to come back to us in their breeding program to do some genotyping, but it’s not a big hit at all. So that’s the first part of your question. And then the second part was with regard to biofragrance. Biofragrance, what we’re hearing from, you know, prospective partners on this is there’s a great demand, and the ramp can be very quick because it’s a fermentation product. So as we’ve mentioned, we’ve got nominal revenues here in ’25, building in ’26.

You know, what’s interesting about this area is it really is companies looking for bio based products. So they’re very excited about the opportunity for us to provide fragrances that they have, you know, had to source through either,

Matthew Venizia, Analyst, AGP: you

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: know, a very expensive natural process or synthetics, and it’s mainly been synthetics. And so we see the ramp could go really quickly in this area over the twenty six to twenty eight years. Greg, have you got anything to add?

Greg Gochel, Chief Scientific Officer, CBIZ: Yeah. Just to add, our approach with the biofragrances is unique to us. And we’ve demonstrated with the first two molecules the success and the interest in this platform, and we’re accepting that that’s going to generate future interests from a variety of customers.

Carlo Bruce, Interim Chief Financial Officer, CBIZ: And if I may weigh in just a few seconds, Laurence, I I come from seed companies, and the beauty of this of this business, of this royalty business is that the inventory build is done by your partners, by the seed companies and not by Seabiz. And I love that piece. So that working capital requirement is not with us, it’s with them.

Laurence Alexander, Analyst, Jefferies: Okay, great. Okay. Thank you very much.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Thanks, Lawrence.

Conference Operator: We’ll move next to Austin Moeller with Canaccord. Your line is open.

Austin Moeller, Analyst, Canaccord: Hi, good afternoon. What do you expect to see during fourth mode of action field trials in Canola in the second quarter, and what would be a favorable result in your view?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So thanks, Austin. Of course, I’m gonna let Greg answer this one. Thank you.

Greg Gochel, Chief Scientific Officer, CBIZ: Yeah. Thanks, Austin, and and good afternoon. We’re the our approach with with sclerotinia resistance, specifically with multiple modes of action is to address multiple ways that the pathogen is interacting with the plant. And so the fourth mode of action specifically addresses one of the ways that the pathogen interacts with the plant. And our expectation is, one, that field trials success in the field trials demonstrate that control material is infected by the pathogen and that the edited material is more resistant than what we see in that control material, that would lead us then to going the next step in terms of combining that mode of action with other modes of action that are showing similar efficacy.

At this point, what we’ve discussed for mode of action two, but also encouraging results that we’ve seen in controlled environments for mode of action three already.

Austin Moeller, Analyst, Canaccord: Okay. And just to follow-up on the sustainable ingredients opportunity with the large goods customer. Are you able to indicate whether you expect the revenues to start from that either in ’twenty five or ’twenty six, or has that changed from what you had said in the prior quarter?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Thanks, Austin. No. The we continue to see, you know, media milestones. The scale up went well, on the sustainable greens with the bio based fermentation fragrance, And we do see, things on track, for ’25 later this year, nominally, and then orders in q four sort of heading into ’26. So we’re still on track on that.

In fact, everything has gone very well on that process. I I think the you know, what what’s exciting about this area is that, you know, I cannot stress the framework around where we’re working in the industry of gene editing right now because of the regulatory framework, and people, recognizing, products from that seen so favorably, you know, sustainable ingredients. You know, our other activity is in crop based products in sustainable ingredients, and that is a huge opportunity for us. And it continues to grow. We continue to get a lot of interest, inbound interest from companies.

And this goes back to some of my earlier comments and the fact that we’re we’ve been able to develop systems for editing in in crops like rice and canola, and, you know, when we’re bringing soybean on stream, that is time bound and predictable. You know, it really has triggered, a lot of interest because being able to return edited plants back to prospective customers within twelve months really changes the whole paradigm of what you do, and how you integrate that into plant breeding programs. So, you know, when you think about some novel sustainable ingredients, our productivity traits that we’re we’re we’re developing with the herbicide tolerance as well as our disease work, you know, you can see we we’ve made a lot of progress very quickly with our canola work in the mode of actions that Greg just explained, with regard to disease resistance. So, you know, I’ve expanded a little bit there to to to give you, a good idea of why sustainable ingredients we see is a big part of our future business.

Austin Moeller, Analyst, Canaccord: Excellent. Thanks for the the deep dive there. I appreciate it.

Conference Operator: We’ll take our next question from Sameer Joshi with H. C. Wainwright. Your line is open.

Sameer Joshi, Analyst, H.C. Wainwright: Hey, good afternoon, guys. Thanks for taking my questions. Just some of questions on the same topics that have been discussed by other callers. On the sustainable ingredients space, is there apart from customer testing, is there any other regulatory or other kind of testing that is required before you can start selling, or it’s just because it’s the molecule is the same, the customer is the only one who is going to test it?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So thanks for the question, Samir. What what we’ve been able to do over the last, you know, couple of years is really work pretty closely with prospective customers. And so they understand, the active ingredient of the product already. You know, what what we’ve been excited by is the ability to scale quickly and maintain that, quality. And so, your to answer specifically to your question, that over the next few months, that will be tested within, you know, the hands of customers, and they will look to see where the demand is.

We know primarily that, there is great demand and then the supply of managing that. And I think the the exciting part about this for us too at Seamus is, you know, we are a royalty based, company, with regards to the business model. This does fit with the same business model, but does diversify things because this allows us to get some development programs, that to expand in this area. And, you know, what we’ve been able to do is, work on a fermentation product that is that is scalable, but it is also, easily to, work through other opportunities. So we’ve started with two.

There are, you know, over a dozen more opportunities in this space. And so, you know, diversifying our you know, both the with development programs and royalties allows us to sort of really broaden our portfolio.

Sameer Joshi, Analyst, H.C. Wainwright: Understood. On the on the European front, once the trialogue is done and all the regulations are in place, do you anticipate repeating any of the trials for that region, or they will be for for different some of the different crops there? But just wanted to see if the same crops are to be used on or same traits are to be used on the same crops. You can just transfer The US, pests onto there?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So, Sameer, it’s a a really good question. As we’ve shared before, we’ve been running trials in The UK already. The, one thing that is hot off the press just yesterday was that The UK actually passed their secondary legislation. So, that’ll make our trialing easier because, we’ll be putting in applications to broaden that, later this year. The beauty of doing it in The UK is that we can use, trialing, and this will be our second year trialing in The UK, with materials that are adapted for the European market conditions, but also the environmental conditions.

So Yeah. You know, we’ve already sort of got a a leapfrog on that with regards to a couple of years in The UK. And this this is fairly standard. A lot of seed companies based in Europe, often use, The UK as a site for, trialing. We believe, you know, that based on the EU’s decision now that we could also start trialing next year in the EU.

There have been trials already in Italy with rice that’s been edited. So we’re moving pretty quickly in that area as well.

Sameer Joshi, Analyst, H.C. Wainwright: Sounds good. It looks like you have already sort of a little bit of a head start there. That’s good to know. On the cost reduction front, I know the, like the R and D costs have been reduced a bit. And apart from this one time costs, your costs are expected to be lower this year.

What kind of run rate are you expecting for the rest of the three quarters in terms of cash burn?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So let let me start out. Thanks, Samir, because it’s an important question. We we can always are working on on, making sure that we resource the right programs and and look at our cost reductions. You know, I think we’ve done well over the last couple of years where we’ve, you know, essentially just last October, we’ve reduced it by 20%. We’d like to to further that.

We’re seeing synergies within our organization and some consolidation of facilities activity, and I think that is going to help in the future. But that’s something we’re very much focused on, and I’ll let Carlo expand on that.

Laurence Alexander, Analyst, Jefferies: Yeah. To be specific on the burn for this year, so I always like to

Carlo Bruce, Interim Chief Financial Officer, CBIZ: talk about the net burn. So and and what you see in quarter one is what you can almost project for later in the year. So there we talk about burn a net burn of around 4,000,000 and and opportunities to reduce that would sit in increased partner success. But that’s where we are today.

Sameer Joshi, Analyst, H.C. Wainwright: Understood. Thanks for that color. Thanks for taking my questions.

Conference Operator: We’ll take our last question from Matthew Venizia with AGP. Your line is open.

Matthew Venizia, Analyst, AGP: Hey, guys. Thanks for taking my questions. So, to get into the regulatory approvals a little bit, you had the one come in from Ecuador. I was wondering if there are other Latin American countries that are rice producers. Do do they have similar regulatory frameworks to Ecuador where it’s kind of like an MI regulated situation?

And then I have a couple more on top of that.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: That’s a great question, Matt. So thank you. You know, Ecuador is specifically, a country that had, you know, said they do not accept strictly prohibits was the words for transgenic or GMO crops. So for us, it was, one of the important, Latin American countries to make sure that they understood what our products were and that they would be accepted as gene edited and or as conventional breeding. A lot of the other Latin American countries actually have looked to Ecuador, as sort of a a lightning rod for understanding, the best way to go forward.

So I think, you know, that has, clearly opened up a really positive approach to the regulatory. And, you know, many of the other countries have already gone down that path. So Ecuador is the one that we wanted to make sure was clear.

Greg Gochel, Chief Scientific Officer, CBIZ: Yeah. And just to add to that, Matthew, so you you have a number of other countries in in South America who already look at gene edited products as conventional breeding. So for our canola business, for instance, we’ve been producing seed in the off season in Chile. But you also have sort of the same sort of confirmation in countries like Colombia, Brazil, and others.

Matthew Venizia, Analyst, AGP: Got it. Thank you. And then in terms of your rice products, I just wanted to ask if there’s like existent use of clethodim by rice farmers in the Latin American geography or if it’s kind of going to be like a de novo launch of the herbicide tolerance trait with the herbicide to farmers?

Greg Gochel, Chief Scientific Officer, CBIZ: Excellent question, Matthew. So for tolerance to clostridium, clostridium is an approved herbicide in South America, and this trait enables resistance to that herbicide. And clostridium is a grass herbicide, and the biggest challenges for rice growers are red rice or weedy rice that’s very related to to to the regular conventional rice, but also other grass weeds that are challenging, especially in South America where where where you’re in a very tropical environment. Gotcha.

Matthew Venizia, Analyst, AGP: So it’s an improved herbicide. And is there, like, usage data right now for, I guess, or maybe sales data that Alba has of how well clostridium does in the market currently?

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: Let me jump in there too, and then I’ll let Greg expand. But I think you know, plethidom on unedited rice will kill it. So it’s used it’s used in other crops right now. And I you know, OBA, they have have done a number of registrations, in other geographies. But I think that where we’re, the the Latin American, partners, we will be working with them going through the variety registration, as well as the chemical registrations over the next twelve months.

Greg Gochel, Chief Scientific Officer, CBIZ: Yeah. And, Matthew, just to add a little just to add a little bit. So as Peter said, you’re using clostridone to manage grass weeds, not in rice today, but with the trait that we’re moving forward that that provides an additional tool for rice farmers to use in the South American markets and and globally, in fact.

Matthew Venizia, Analyst, AGP: Got it. Alright. Thank you guys for taking my questions.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: My pleasure.

Conference Operator: Does conclude the Q and A portion of today’s call. I’d now like to turn it back to management for any additional or closing remarks.

Peter Beetham, Co-Founder, Interim CEO, President and COO, CBIZ: So thank you, everybody, for today. I I want to just stress that, we do see this as an inflection point for the company. So many things have been moving in the right direction for us as a company on both the ability to provide edited, products back to customers in a time bound and predictable way. We we also have that in the understanding that the regulatory agencies around the world are recognizing what we do and the outcomes of what we have from our procedures are seen as indistinguishable from what occurs in nature and intersect with plant breeding programs with the seed company partners that we’ve been working with for a number of years. So with those two key items, we’re very proud to, present opportunities in this marketplace.

And as I said before, I think this whole industry is really recognizing the power of gene editing. And so providing traits that allow you as a farmer to be more productive, you know, on every acre to use less inputs, less chemistry is really good for the environment and for the impact on climate, but it’s also, most importantly, for the farmer, allows them to be more profitable. And this and at this stage and time, I think it’s really important that farmers can access seeds that we provide, through our partners to be more profitable. So the other last thing I’d like to say, and in closing, is also just how proud I am of the team. Now we’re very fortunate at CBUS.

We have a team that has been together for many years. So many of us have been involved in building to where we are today, and I couldn’t be prouder of working for and presenting this on behalf of that team. So thank you very much.

Conference Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time, and have a wonderful evening.

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