CollPlant Biotechnologies Ltd. Q2 FY2023 earnings call

• Development programs: Achieved a milestone with AbbVie for their dermal filler product candidate, which triggered a $10 million payment; upcoming large animal study for regenerative breast implants to be initiated by year end; collaboration with Stratasys on 3D bioprinting for tissue and organ fabrication; gut-on-a-chip program in development with Tel Aviv University and Sheba Medical Center.
• ESG initiative: Hired a dedicated ESG manager in Q2 to lead and communicate ESG efforts aligned with the company's mission.

For the second quarter ended June 30, 2023, GAAP revenues were $10.2 million compared to $66,000 in the second quarter ended June 30, 2022, an increase of $10.1 million mainly due to a $10 million milestone payment from AbbVie. Cost of revenues for Q2 2023 was $615,000 vs $43,000 in Q2 2022. Gross profit in Q2 2023 was $9.6 million vs $23,000 in Q2 2022. GAAP operating expenses for Q2 2023 were $3.9 million, down 7% from $4.2 million in Q2 2022. GAAP net income for Q2 2023 was $5.8 million or $0.51 basic income per share compared to a net loss of $4.3 million in Q2 2022.

• Continue advancing the dermal filler program with AbbVie.
• Initiate a second large animal study for regenerative breast implants by year end.
• Announce next steps for the gut-on-a-chip program by the end of 2023.
• Expand the commercial portfolio of rhCollagen based BioInks.
• Form new collaborations with industry leaders to co-develop medical therapies using regenerative recombinant human collagen technology.

Statements made on the call may include forward-looking statements, and actual events or results could differ materially due to various risks, uncertainties, and other factors set forth in CollPlant’s SEC filings.

Q: On the breast implant program, what’s the regulatory pathway and what additional studies do you need to do before getting on to the regulatory pathway?

A: The regulatory pathway for the breast implant is likely a PMA pathway. An upcoming study on clinically relevant size implants will focus on safety, efficacy, verifying tissue quality, refining surgical protocol, formulation, and implant design.

Q: When do you think you can start the PMA process or can you start it as you are getting through your next animal study?

A: It's premature to determine the time for the PMA process as we need to interface with the FDA, discuss the regulatory pathway, and verify requirements; we first need to conclude the upcoming study.

Q: How do you plan to monetize the gut-on-a-chip program?

A: We will provide scaffolds, microfluidic chips, and matrix cells to a CRO, which will take patient biopsies, use the scaffolds, and do testing.

Q: For the dermal filler market, when does the study begin and what’s the timing and length of that study?

A: The product is led by AbbVie and Allergan; we can't disclose timelines, but the program is moving forward with the milestone achieved.

Q: Are there more clinical milestones or is regulatory the next one for the dermal filler product?

A: We expect additional $26 million in milestones for the dermal filler but can't specify the exact nature of upcoming milestones.

Q: Any initial returns on the cross promotion with Stratasys?

A: We're working with Stratasys' Origin One printer to develop the printing process for breast implants, printing 100 TC implants and optimizing the process; bulk sales of BioInk will come later when relevant printers are in the market.