NASDAQ:APDN Applied DNA Sciences Q1 2025 Earnings Report $0.85 -0.01 (-1.73%) Closing price 04:00 PM EasternExtended Trading$0.85 +0.00 (+0.58%) As of 07:56 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Applied DNA Sciences EPS ResultsActual EPS-$28.00Consensus EPS -$16.00Beat/MissMissed by -$12.00One Year Ago EPSN/AApplied DNA Sciences Revenue ResultsActual RevenueN/AExpected Revenue$1.18 millionBeat/MissN/AYoY Revenue GrowthN/AApplied DNA Sciences Announcement DetailsQuarterQ1 2025Date2/13/2025TimeBefore Market OpensConference Call DateThursday, February 13, 2025Conference Call Time4:30PM ETUpcoming EarningsApplied DNA Sciences' Q2 2025 earnings is scheduled for Friday, May 9, 2025, with a conference call scheduled at 4:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q2 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Applied DNA Sciences Q1 2025 Earnings Call TranscriptProvided by QuartrFebruary 13, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Good day, and welcome to the Applied DNA Sciences First Quarter Fiscal twenty twenty five Financial Results. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Sanjay Hurry, Head of Investor Relations. Please go ahead. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:00:41Thank you, David. Good afternoon, and welcome to the Applied DNA's first quarter fiscal twenty twenty five financial results conference call, where we will discuss our financial and operational performance, business progress and growth opportunities. Joining me on the call today are James Hayward, our Chairman and CEO Judy Murrah, our recently appointed President Beth Jansen, our Chief Financial Officer and Clay Sharrock, our Chief Legal Officer and the newly appointed President of our LinearX subsidiary. Following management's remarks, we will open the line to questions from our analysts and institutional investors. You may access the press release that was issued after market closed today as well as the slide presentation accompanying this call on the Investor Relations section of our corporate website. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:01:28A replay of the audio portion of this call would be archived also on the IR section of the website. Before we get started, let me take this opportunity to remind you that our remarks today may include forward looking statements. I refer you to Slide three of the presentation and our Form 10 Q for important risk factors that could cause the company's actual performance and results to differ materially from those expressed or implied in any forward looking statements. We undertake no obligation to update or revise any forward looking statements or other information provided on this call as a result of new information or future results or developments. Now, it's my pleasure to introduce our first speaker on today's call, Beth Jansen. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:02:17Please go ahead, Beth. Beth JantzenChief Financial Officer at Applied DNA Sciences00:02:18Thank you, Sanjay, and good afternoon, everyone. First, let me set the agenda for our call today. I will provide a high level overview of the finances of the company. Next, Jim will briefly walk you through our important milestones achieved during fiscal year twenty twenty four. Then Clay will provide an update on the LRx business and its growth strategy. Beth JantzenChief Financial Officer at Applied DNA Sciences00:02:45And finally, Judy will provide you with an update on our operations. Prefacing my review of our financial results for the quarter and to put our performance into its necessary context, during the first quarter, we initiated a strategic restructuring intended to bolster our cash reserves and optimize our cost structure. This initiative was undertaken to reduce our cash burn rate and support the growth of our synthetic DNA manufacturing strategy via our Linear Rx subsidiary. Having laid much of the necessary groundwork to support this strategy in fiscal 'twenty four, the restructuring reflects our belief that Linear Rx offers the greatest potential to create sustainable value for our shareholders. Our October 2024 financing supports LinearRx during what we expect to be a year of execution in fiscal twenty twenty five. Beth JantzenChief Financial Officer at Applied DNA Sciences00:03:54A point reinforced last month with the certification of our GMP Site one facility, which Jim and Clay will elaborate on this point in their remarks. With our quarterly results press release today, we are announcing our exit from the DNA Tagging and Security Products and Services business segment. We anticipate the wind down to be completed by the end of the current quarter. As a result, we implemented a workforce reduction of approximately 20% of total headcount related primarily to employees in this segment. We will incur a one time charge of approximately $300,000 in the quarter ending March 31 related to this action. Beth JantzenChief Financial Officer at Applied DNA Sciences00:04:49Turning to our financial results for the first quarter and beginning with our statement of operations. Total revenues for the first quarter of fiscal 'twenty five were $1,200,000 compared with $891,000 for the same period of fiscal 'twenty four. The year over year increase was a result of higher product revenues from our DNA tagging business segment and from an increase in our textiles isotopic testing services revenue. Our operating loss for the first quarter was $3,000,000 compared with $3,800,000 in the prior year period. This improvement in our operating loss is primarily attributable to a lower selling, general and administrative costs year over year related to lower stock based compensation expense and to a lesser extent from a decrease in consulting expenses resulting from the closure of the DNA tagging segment's European subsidiary. Beth JantzenChief Financial Officer at Applied DNA Sciences00:05:56Net loss for the first quarter was $2,700,000 compared with $1,100,000 in the prior year period. I remind shareholders that our net loss includes an unrealized gain on the change in the fair value of warrants classified as a liability, which has an inverse relationship with our stock price. For this reason, we highlight operating loss as best representing the company's operations. Adjusted EBITDA for the first quarter improved to a negative $2,900,000 compared with a negative $3,200,000 in the prior year period. Now turning to our balance sheet, cash and cash equivalents on December 31 totaled $9,300,000 which includes net proceeds of approximately $5,700,000 from our October offering and Series A warrant exercises of $509,000 This compares to cash and cash equivalents balance of $6,400,000 on 09/30/2024. Beth JantzenChief Financial Officer at Applied DNA Sciences00:07:09As of December 31, our accounts receivable stood at approximately $912,000 Our average monthly cash burn is just over $1,200,000 dollars fiscal year to date and essentially flat with the same period in the prior year. Our average monthly cash burn for the fourth quarter of fiscal twenty twenty four was $1,300,000 Cash and cash equivalents on 01/31/2025 was $8,200,000 This figure includes additional Series A warrant exercises totaling approximately $215,000 Our just filed 10 Q maintains a disclosure from our prior Form 10 ks of a substantial doubt of a going concern. Our ability to alleviate the going concern is dependent on our ability to further implement our business plan and generate revenues or raise capital. We sought shareholder approval for the exercisability of the warrants issued in the October 2024 financing on January 23 in a special meeting that was adjourned due to a lack of quorum. We will reconvene the meeting tomorrow at eleven a. Beth JantzenChief Financial Officer at Applied DNA Sciences00:08:32M. Eastern Time and we encourage all shareholders who own shares as of the record date of 11/25/2024, who have not yet voted their shares on the proposal to vote. As of the January 23 meeting, 80% of all shares that were voted did so in favor of the proposal. This concludes my prepared remarks. Thank you for joining us today. Beth JantzenChief Financial Officer at Applied DNA Sciences00:08:59I will now turn the call over to Jim for his comments. Jim? James HaywardChairman, President & CEO at Applied DNA Sciences00:09:04Thank you, Beth, and good afternoon, everyone. Thank you all for joining us on today's call. I want to begin by addressing our strategic restructuring. The restructuring reflects our full commitment to rebuilding shareholder value through an optimized cost structure, prudent financial management and a deeper focus on LineaRx. Post pandemic, emergent trends in biotherapeutics and interest among the investor community has centered chiefly on our LineaRx subsidiary and its ability to enzymatically produce DNA at scale to meet the growing demand for alternatives to plasmid DNA. James HaywardChairman, President & CEO at Applied DNA Sciences00:10:00In particular, in the last eighteen months, we've seen an acceleration in the pace of LineaRx's operational progress. Interest and feedback on our Linea DNA and Linea IVT platforms have exceeded even our most optimistic expectations. The biotherapeutics market is ready for what we have to offer. And as we'll talk about on this call, we are now ready to deliver. We recognize that while each of our business segments offered their own return on investment, but cumulative to these disparate ROIs blur our path to profitability. James HaywardChairman, President & CEO at Applied DNA Sciences00:11:00This drove our decision to exit our DNA tagging business segment and implement the work force reduction. Segment customers have been informed and certain of them will be supported for a period of time. Fiscal twenty twenty four had significant successes. We did not have the benefit of a fourth quarter investor call. Therefore, let me summarize certain key we achieved during the year, then Clay and I will address our strategy for fiscal twenty twenty five. James HaywardChairman, President & CEO at Applied DNA Sciences00:11:42So in fiscal twenty twenty four, we validated our Linea IVT platform. Data generated internally and with the CDMO partner were conclusive. Our platform demonstrates a reduction in problematic double stranded RNA contamination on a commercial scale and is cost neutral to legacy manufacturing platforms. Linea DNA also entered the clinic. We announced that the Institute of Hematology and Blood Transfusion or IHBT in Prague received approval for and initiated a Phase one trial of a first in human CAR T clinical trial. James HaywardChairman, President & CEO at Applied DNA Sciences00:12:39IHBT's therapy utilizes LINEAR DNA as a critical component of its CAR T therapy to enable a rapidly manufacturable viral vector free workflow for the treatment of relapsed and or refractory acute myeloid leukemia. This approval highlights the first instance of regulatory consent of Linea DNA's use in a clinical setting, a key milestone. LineaRx's customer acquisition In fiscal twenty twenty four, we engaged over 25 customer projects and we expect multiple projects to enter the clinic in calendar twenty twenty five. Furthermore, in advance of our GMP certification, multiple customers validated us as a GMP supplier. As part of our strategic restructuring, the Board promoted Judy Marra to President, where she will oversee a continued drive toward operational excellence Judy. James HaywardChairman, President & CEO at Applied DNA Sciences00:14:12In a moment, Judy will discuss her role in greater detail. Similarly, the Board has given the additional responsibility of President of LineaRx to Clay Shirak. Congratulations Clay. In addition to his corporate officer duties in recent years, Clay has led global sales and business strategy for LinearRx and has cultivated a marquee list of customers. Applied DNA Clinical Labs secured New York State Department of Health LDT approval for TraitPGX, our pharmacogenomics assay that forms the basis for our PGx testing service. James HaywardChairman, President & CEO at Applied DNA Sciences00:15:08And we secured an expansion in use for our mPOXX assay. And we are now licensed to accept samples from all 50 states. Finally, last month, our GMP Site 1 was certified operational as an ISO seven space with ISO five workspaces. With this site, we've demonstrated a low CapEx approach to enzymatic DNA production at scale, empowering our entry into long term GMP supplier agreements. Now let me turn the call over to Clay to offer some specific insights into LineaRx's plans for fiscal twenty twenty five. James HaywardChairman, President & CEO at Applied DNA Sciences00:16:06Clay? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:16:11Well, thank you, Jim. First, I want to thank the Applied DNA Board of Directors and management team for the opportunity to lead LinearX as we approach what I believe is an inflection point in a trajectory. For those of you who are new to our story, I've been with Applied DNA since 2016, sitting in various legal and business roles. My background is in biology and intellectual property and I have fifteen years of legal and business experience. I have a passion for building companies and I believe with the plan we have in place, LineaRx will be a growth engine for Applied DNA. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:16:49Now, since the COVID-nineteen pandemic, the growth trajectory for enzymatically produced DNA has rapidly increased. As Jim mentioned, with over 25 active projects in fiscal twenty twenty four, we see a strong market demand for our Linea DNA and Linea IVT platforms. With our initial DMP site now online, we are focused on monetizing this demand. To this end, our commercial emphasis is threefold. First, to sell our DMP capacity for IVT templates. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:17:21Second, to develop additional LinearRx products and capabilities and third, to leverage our platform scalability with minimal CapEx to derisk growth and reach breakeven. So first, as a quick primer, mRNA is made from a DNA starting material called an in vitro transcription or IVT template. It's these IVT template materials that we are ready to produce in our GMP facility. The mRNA market continues to grow with almost 500 therapies in the global pipelines. We believe each of these therapies represent a manufacturing opportunity to produce IVT templates at our new GMP facility. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:18:03Based on our current customer interactions, the initial revenue opportunity for LineaRx for IVT templates used in the production of Phase one clinical trial materials varies. It ranges from about $50,000 to $1,000,000 per opportunity for IVT templates alone or about $150,000 to $3,000,000 per opportunity for IVT templates sold with corresponding Linea RNApp under the Linea IVT platform. These opportunities grow rapidly as the projects progress through the clinical phases and eventually into commercial supply. It suggests this exciting backdrop that we entered 2025 with a robust sales pipeline for GMP IVT templates. We are currently in the final stages of project development with a Boston based mRNA therapeutic developer for potential GMV supply. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:18:54If development is successfully completed, we anticipate GMV manufacturing for this customer in the MayJune timeframe. In addition, we continue to work on closing GMV manufacturing contracts with several CDMOs and therapeutic developers that have undergone successful evaluations of our technology and are targeting the clinic in the next twelve months. To help further extend our sales funnel, during our restructuring, we created a new multi person sales team within the DRX. This organization will be led by a Vice President level employee for which we seek to hire an industry key opinion leader. We plan to have these position staffed by the end of the current quarter. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:19:37In addition, we have increased our attendance at trade shows and are in the process of overhauling the LineaRx website and marketing materials. Finally, we are in the late stages of development of a new and proprietary enzyme and buffer system to increase the manufacturing yields and sequence modality of our linearly DNA. In addition to being a valuable sales tool as a proprietary technology, we believe this new enzyme, once launched, will provide us with a distinct advantage over enzymatic DNA producers, while at the same time potentially improve our margin profile through lower cost of goods and higher DNA yields. Now, history shows us that rarely does a single product make for a successful business and we're no different. So as such, we have developed LRx to be a multi product business. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:20:28While IVT templates have been our initial focus, LRx built a diverse revenue base in fiscal twenty twenty four. To support additional growth in non IVT template segments, we are currently engaged in the development of several new forms of Linea DNA. Due to then, we are announcing today the availability of a new type of Linea DNA we call Linea Donor DNA for use as a donor DNA in CRISPR gene editing applications. Linear donor DNA is a high fidelity, double stranded, once ended form of DNA optimized for use in CRISPR mediated homology directed repair or HDR applications, which are commonly used in a wide range of gene editing modalities. We believe the enzymatic we believe that enzymatically produced linear donor DNA has numerous advantages over plasmid, donor DNA and like IVT templates, the market is primed for a large scale cell free alternative. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:21:28Linear donor DNA is available now for research use only with targeted GMP availability later in this calendar year. In addition, we are actively upgrading our GMP capabilities to allow for the manufacture of Linea DNA drug substance and drug product. These upgrades will allow Linea DNA to be used in a wide range of high value clinical applications in genetic medicine ranging from CAR T manufacturing to personalized DNA vaccines. Turning finally to our growth strategy. Our ability to manufacture at scale is now proven and our additional GMP our initial TMP facility is operational. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:22:09We are now sharpening our focus on using our platform's low CapEx requirements to achieve growth and invested profitability. As opposed to GMP plasmid based DNA manufacturing that require large environmentally controlled spaces and expensive instrumentation, the Linea DNA platform uses benchtop instruments with minimal space requirements. Our initial GMP facility was designed to use modular cleanroom designs and have an end to end manufacturing workflow in less than 1,000 square feet of environmentally controlled space. Our benchtop instrumentation is cost effective. And since we manufacture in smaller volumes than plasma DNA, our purification instruments are smaller and less expensive. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:22:53In addition, PCR has fewer raw materials and potential contaminants than plasma DNA workflows, which leads to lower incoming and batch release QC costs. We believe these unique attributes of our platform enable our ability to rapidly scale our GMP manufacturing using a simple copy and paste approach for a fraction of the CapEx that would be required for legacy DNA manufacturing technologies. This results in two near term benefits. First, using our simple copy and paste approach, we can scale and deal real time with our production contracts. I'll make other CDMOs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:23:31We don't face to build it and hopefully they will come to LA, where it's necessary to build a large complex and capital intensive facility before commercial contracts are signed. Instead, because we can rapidly build additional manufacturing capacity via the construction of small identical modular clean rooms, we can align CapEx spend to closely mimic our commercial contract timing, thereby reducing our balance sheet risk. Second, we believe that our target CapEx investment needed to achieve DNA production capacity necessary to support our profitability is significantly less than other legacy technologies, particularly in the biologic space. Based on our current cost of modular cleaner construction and instrumentation, each of our cleaner costs less than $1,000,000 yet each has a potential revenue opportunity of $10,000,000 to $30,000,000 per year depending on the applicable mix of products. This, we believe, coupled with a strong margin profile for our products, allows the company to breakeven on a fraction of the capital investment that has historically been required for the biologic CDMOs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:24:49In conclusion, we believe the operational launch of our GMP facility is a pivotal juncture for this company, representing the final piece of the multiyear business strategy to commercialize our expertise in PCRV's production of DNA into new markets with higher margin programs. We look forward to where the future holds. Now, Judy, over to you. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:25:11Thank you, Clay, and good afternoon, everyone. It's my pleasure to speak with you today. Let me use this occasion to first thank Jim, my fellow officers and our Board of Directors for the opportunity to continue to lead Applied DNA operations with now a broader charter as President of the company. From Jim's and Clay's comments, it should be clear that we are a highly innovative company, sitting at the precipice of tremendous market opportunity. I'm eager now to expand my efforts and further unlock value for all of our stakeholders. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:25:48My immediate and ongoing focus will be centered on overseeing the company's operations, driving operational excellence, and enabling the company in setting and achieving its key business objectives. How well we orchestrate sales opportunity closure, product mix, quality, delivery volumes and schedules to ensure top notch customer success. These will determine much of our future success. Also in my new role, I will work with the team in orchestrating deliberate resource allocation towards growth initiatives, while at the same time we drive and maintain spending discipline and a quality culture. With GMP execution as a cornerstone, we delivered and we have a deep bench in how to manage going forward. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:26:44We are not starting from scratch. We've operated under ISO 9,001 for ten plus years. We've managed our clinical lab operations at scale and to the high bar of a demanding New York State Department of Health, the FDA and in direct contact with healthcare providers and their patients. Leveraging this experience, GMP is also predicated on a quality culture, a quality that must permeate every individual, every function and our pursuit in every opportunity. Our customer base resides globally. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:27:24They have no mismanufacturing schedules. And these force us as a mission critical supplier to adhere to higher level FDA, European Medicine Authority and Asian regulatory body requirements. We do have the building blocks in place today. To our knowledge, we have today the largest manufacturing capacity for GMP grade PCR produced DNA in North America implemented under budget. This in addition to continuing our supply of RUO and GLP grade materials for IVT templates and genetic medicine and we also offer large scale supply for the IVD market. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:28:11We have an initial projected annual IVT template capacity of over 10 grams, a quantity we actually have delivered annually across several product categories in GLP grade. For context, 10 grams is sufficient product capacity for our customers to produce up to 30,000,000 doses of mRNA vaccines. We complement all of this manufacturing capability with a full suite of analytical instruments, stability chambers and programs to offer our customers and an operative quality system from incoming materials to outbound product. Moving to our clinical lab, in the face of the considerable undertaking that has been GMP, our pharmacogenomics testing service, TRATE PGx, at Applied DNA Clinical Labs has admittedly been managed at a steady state. Looking forward, we are assessing our markets and our capabilities to evaluate elements that could potentially establish further value in our New York State certified laboratory asset, which is a very rare commodity. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:29:27Under evaluation are such things as more promising target segments for PGx, the qualification for insurance reimbursement and the validation of additional diagnostic assays. In closing, our goals are significant. Our resources are finite. To that end, we will remain prudent in managing our financial structures and allocations through this restructuring and thereafter to capture the market that we know is out there. We will stay closely tuned to our business operations and market dynamics, ready to modify and refine our business strategy as context may change. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:30:13I strongly believe that we have the infrastructure, the people and the determination to execute across all aspects of the company to unlock value for shareholders. Thank you. And I will now turn the call back over to Jim for concluding remarks. James HaywardChairman, President & CEO at Applied DNA Sciences00:30:31Thank you, Jeannie. Before opening the call to questions, I want to reinforce some key takeaways from our collective remarks. The market is very receptive to our platforms. Our GMP1 site is in place and we can now deliver product ranging from evaluation and RUO to clinical grade. And we have a blueprint for further expansion of SiteOne as warranted by customer demand. James HaywardChairman, President & CEO at Applied DNA Sciences00:31:10We have an excellent stable of DNA customers to convert into recurring orders and those order sizes will increase as these therapies graduate through the late preclinical and clinical phases of their development. We are targeting additional new DNA markets and bolstering our product offering. And we recognize that the path to rebuilding shareholder value will come from a combination of disciplined OpEx and growth through enzymatic DNA production. Well, thank you all for your time and attention this afternoon. Operator, please open the call to questions. Operator00:32:00We will now begin the question and answer session. Our first question comes from Yi Chen with H. C. Wainwright. Please go ahead. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:32:27Good afternoon. This is Eduardo on for Yi from H. C. Wainwright. I was wondering if you could provide any color on the new Linea products, kind of interested to know how you quantify the opportunity there for these CRISPR therapies versus maybe the kind of conventional IVT or even the existing CAR T therapies that you guys are developing products for? James HaywardChairman, President & CEO at Applied DNA Sciences00:32:50Clay, that's for you. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:32:52Sure, absolutely. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:32:54Nice to meet you, Eduardo. So, yes, so we think that there's a lot of parallels between the IVT template and the donor DNA market. In part, PCR is very good at making blunt ended DNA. And so we looked at the market and saw where there's market opportunities for large scale blunt ended DNA. One of them is IVT templates, the other is ECR donor DNA. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:33:19So that's the logic there. We can use our existing workflow, node modifications to our manufacturing workflow to make those donor DNA. So it's an amplification of the kind of existing manufacturing line. In terms of market opportunity, obviously CRISPR and CRISPR based therapeutics are less mature than mRNA in some ways. In some ways, they're not. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:33:42But we do believe it is a very large market, especially in kind of the cell and gene therapy as CAR Ts start to move more to the gene editing space versus the viral vector like lentivirus based manufacturing workflows. And that's something we're very excited about. We also think in vivo gene editing has a future, but I think near term we're really focused on kind of those CAR T like workflows and ex vivo gene editing. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:34:11Great. That's really helpful. Then kind of, I was also hoping if I could get any color on where the revenue increases were coming from, if they were primarily new customer acquisitions or primarily from increased kind of scaling and manufacturing of existing customers? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:34:31Beth, do you want to tackle that or something? Beth JantzenChief Financial Officer at Applied DNA Sciences00:34:33So for Q1, the two increases came from product revenue. The primary reason for that was a shipment of DNA tagging for the marking of cotton, one of our customers' contracts we've had for a while. And the other bump in revenue this quarter came from increased volumes in our isotopic testing services business. James HaywardChairman, President & CEO at Applied DNA Sciences00:34:59Clay, is there anything you'd like to add? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:35:04I would add to the shipment of DNA tag end to a cotton tagging customer is a contract we are currently retaining post restructuring. We're able to manufacture that with the same workflows that we have for the Glynia Rx. So it just makes sense to keep that contract. But no, Jim, that's all I have to add. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:35:30Great. Thanks so much. And then if I could just have maybe one more kind of in that line of the you mentioned the AML therapy, and I'm curious what the timeline and kind of I know it's Phase one, I think you mentioned first in human, the timeline and revenue recognition dynamics that we should expect for that? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:35:51Yes. The timeline for that trial, so it is in The Czech Republic. I think Phase one is probably about eighteen months. It's an interesting therapy and that is a non viral CAR T. It uses a transposon system to actually make the CARs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:36:07So we are excited for that. We don't know in terms of revenue opportunity how large it's going to scale because it's a hospital based trial. It's not run by a commercial entity. But the important part there was twofold. One, we were able to get through the regulatory approval process quite easily. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:36:26And two, we were chosen over a plasmid competitor because we were faster, but also it eased the regulatory process for the customer. So those are two of the mainly takeaways from that. Jim, I don't know if there's a large revenue opportunity in that trial necessarily, but it was critically important validation in Europe. James HaywardChairman, President & CEO at Applied DNA Sciences00:36:50Right. I think it demonstrates to a broader industry base the entire CAR T industry provide a faster path, which in many cases is urgently required. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:37:23Wonderful. Thanks so much for that and exciting developments. Congrats on the quarter. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:37:28Thank you. Thank you. Operator00:37:46This concludes our question and answer session. I would like to turn the conference back over to Doctor. Hayward for any closing remarks. James HaywardChairman, President & CEO at Applied DNA Sciences00:37:56Well, thank you. And thank you, everyone, for joining us on today's call. Operator, you can now conclude the call. Operator00:38:08The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.Read moreParticipantsExecutivesSanjay HurryExecutive Director of Investor Relations & Corporate CommunicationsBeth JantzenChief Financial OfficerJames HaywardChairman, President & CEOClay ShorrockChief Legal Officer & Executive Director of Business DevelopmentJudith MurrahPresident & Chief Operating OfficerAnalystsEduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLCPowered by Conference Call Audio Live Call not available Earnings Conference CallApplied DNA Sciences Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Applied DNA Sciences Earnings HeadlinesApplied DNA’s LineaRx ‘ready to support’ reshoring of drug developmentApril 22 at 4:02 AM | markets.businessinsider.comApplied DNA regains compliance with Nasdaq minimum bid price ruleApril 9, 2025 | markets.businessinsider.comTrump Orders 'National Digital Asset Stockpile'‘Digital Asset Reserve’ for THIS Coin??? Get all the details before this story gains even more tractionApril 25, 2025 | Crypto 101 Media (Ad)Applied DNA positions TR8 PGx testing as pre-emptive for therapeutic safetyApril 2, 2025 | markets.businessinsider.comWhy Applied DNA Sciences (APDN) Stock Is RisingApril 2, 2025 | benzinga.comApplied DNA Sciences submits validation package to NYSDOH for bird flu testMarch 27, 2025 | markets.businessinsider.comSee More Applied DNA Sciences Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Applied DNA Sciences? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Applied DNA Sciences and other key companies, straight to your email. Email Address About Applied DNA SciencesApplied DNA Sciences (NASDAQ:APDN), a biotechnology company, develops and commercializes technologies to produce and detect deoxyribonucleic acid (DNA) in the Americas, Europe, Asia, and internationally. It operates through three segments: Therapeutic DNA Production Services; MDx Testing Services; and DNA Tagging and Security Products and Services. The Therapeutic DNA Production Services segment develops and commercializes the LinearDNA platform, which enables a cell-free manufacture of high-fidelity synthetic DNA sequences for use in nucleic acid-based therapeutics. The MDx Testing Services segment provides clinical molecular diagnostics (MDx) testing and clinical laboratory testing services; COVID-19 testing services, including test scheduling, sample collection, and automated results reporting for higher education institutions, private clients, and businesses under the safeCircle trademark; polymerase chain reaction (PCR) for production and detection of DNA and RNA; and MDx test kits and related supplies, as well as Isotopic analysis testing services. The DNA Tagging and Security Products and Services segment offers SigNature Molecular Tags, which provides a methodology to authenticate goods within large and complex supply chains for materials, such as cotton, nutraceuticals, and other products; SigNify portable DNA readers and SigNify consumable reagent test kits; and fiberTyping, which uses PCR-based DNA detection to detect a product's naturally occurring DNA sequences for the purposes of product provenance authentication and supply chain security. The company was formerly known as Datalink Systems, Inc. and changed its name to Applied DNA Sciences, Inc. in 2002. 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PresentationSkip to Participants Operator00:00:00Good day, and welcome to the Applied DNA Sciences First Quarter Fiscal twenty twenty five Financial Results. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Sanjay Hurry, Head of Investor Relations. Please go ahead. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:00:41Thank you, David. Good afternoon, and welcome to the Applied DNA's first quarter fiscal twenty twenty five financial results conference call, where we will discuss our financial and operational performance, business progress and growth opportunities. Joining me on the call today are James Hayward, our Chairman and CEO Judy Murrah, our recently appointed President Beth Jansen, our Chief Financial Officer and Clay Sharrock, our Chief Legal Officer and the newly appointed President of our LinearX subsidiary. Following management's remarks, we will open the line to questions from our analysts and institutional investors. You may access the press release that was issued after market closed today as well as the slide presentation accompanying this call on the Investor Relations section of our corporate website. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:01:28A replay of the audio portion of this call would be archived also on the IR section of the website. Before we get started, let me take this opportunity to remind you that our remarks today may include forward looking statements. I refer you to Slide three of the presentation and our Form 10 Q for important risk factors that could cause the company's actual performance and results to differ materially from those expressed or implied in any forward looking statements. We undertake no obligation to update or revise any forward looking statements or other information provided on this call as a result of new information or future results or developments. Now, it's my pleasure to introduce our first speaker on today's call, Beth Jansen. Sanjay HurryExecutive Director of Investor Relations & Corporate Communications at Applied DNA Sciences00:02:17Please go ahead, Beth. Beth JantzenChief Financial Officer at Applied DNA Sciences00:02:18Thank you, Sanjay, and good afternoon, everyone. First, let me set the agenda for our call today. I will provide a high level overview of the finances of the company. Next, Jim will briefly walk you through our important milestones achieved during fiscal year twenty twenty four. Then Clay will provide an update on the LRx business and its growth strategy. Beth JantzenChief Financial Officer at Applied DNA Sciences00:02:45And finally, Judy will provide you with an update on our operations. Prefacing my review of our financial results for the quarter and to put our performance into its necessary context, during the first quarter, we initiated a strategic restructuring intended to bolster our cash reserves and optimize our cost structure. This initiative was undertaken to reduce our cash burn rate and support the growth of our synthetic DNA manufacturing strategy via our Linear Rx subsidiary. Having laid much of the necessary groundwork to support this strategy in fiscal 'twenty four, the restructuring reflects our belief that Linear Rx offers the greatest potential to create sustainable value for our shareholders. Our October 2024 financing supports LinearRx during what we expect to be a year of execution in fiscal twenty twenty five. Beth JantzenChief Financial Officer at Applied DNA Sciences00:03:54A point reinforced last month with the certification of our GMP Site one facility, which Jim and Clay will elaborate on this point in their remarks. With our quarterly results press release today, we are announcing our exit from the DNA Tagging and Security Products and Services business segment. We anticipate the wind down to be completed by the end of the current quarter. As a result, we implemented a workforce reduction of approximately 20% of total headcount related primarily to employees in this segment. We will incur a one time charge of approximately $300,000 in the quarter ending March 31 related to this action. Beth JantzenChief Financial Officer at Applied DNA Sciences00:04:49Turning to our financial results for the first quarter and beginning with our statement of operations. Total revenues for the first quarter of fiscal 'twenty five were $1,200,000 compared with $891,000 for the same period of fiscal 'twenty four. The year over year increase was a result of higher product revenues from our DNA tagging business segment and from an increase in our textiles isotopic testing services revenue. Our operating loss for the first quarter was $3,000,000 compared with $3,800,000 in the prior year period. This improvement in our operating loss is primarily attributable to a lower selling, general and administrative costs year over year related to lower stock based compensation expense and to a lesser extent from a decrease in consulting expenses resulting from the closure of the DNA tagging segment's European subsidiary. Beth JantzenChief Financial Officer at Applied DNA Sciences00:05:56Net loss for the first quarter was $2,700,000 compared with $1,100,000 in the prior year period. I remind shareholders that our net loss includes an unrealized gain on the change in the fair value of warrants classified as a liability, which has an inverse relationship with our stock price. For this reason, we highlight operating loss as best representing the company's operations. Adjusted EBITDA for the first quarter improved to a negative $2,900,000 compared with a negative $3,200,000 in the prior year period. Now turning to our balance sheet, cash and cash equivalents on December 31 totaled $9,300,000 which includes net proceeds of approximately $5,700,000 from our October offering and Series A warrant exercises of $509,000 This compares to cash and cash equivalents balance of $6,400,000 on 09/30/2024. Beth JantzenChief Financial Officer at Applied DNA Sciences00:07:09As of December 31, our accounts receivable stood at approximately $912,000 Our average monthly cash burn is just over $1,200,000 dollars fiscal year to date and essentially flat with the same period in the prior year. Our average monthly cash burn for the fourth quarter of fiscal twenty twenty four was $1,300,000 Cash and cash equivalents on 01/31/2025 was $8,200,000 This figure includes additional Series A warrant exercises totaling approximately $215,000 Our just filed 10 Q maintains a disclosure from our prior Form 10 ks of a substantial doubt of a going concern. Our ability to alleviate the going concern is dependent on our ability to further implement our business plan and generate revenues or raise capital. We sought shareholder approval for the exercisability of the warrants issued in the October 2024 financing on January 23 in a special meeting that was adjourned due to a lack of quorum. We will reconvene the meeting tomorrow at eleven a. Beth JantzenChief Financial Officer at Applied DNA Sciences00:08:32M. Eastern Time and we encourage all shareholders who own shares as of the record date of 11/25/2024, who have not yet voted their shares on the proposal to vote. As of the January 23 meeting, 80% of all shares that were voted did so in favor of the proposal. This concludes my prepared remarks. Thank you for joining us today. Beth JantzenChief Financial Officer at Applied DNA Sciences00:08:59I will now turn the call over to Jim for his comments. Jim? James HaywardChairman, President & CEO at Applied DNA Sciences00:09:04Thank you, Beth, and good afternoon, everyone. Thank you all for joining us on today's call. I want to begin by addressing our strategic restructuring. The restructuring reflects our full commitment to rebuilding shareholder value through an optimized cost structure, prudent financial management and a deeper focus on LineaRx. Post pandemic, emergent trends in biotherapeutics and interest among the investor community has centered chiefly on our LineaRx subsidiary and its ability to enzymatically produce DNA at scale to meet the growing demand for alternatives to plasmid DNA. James HaywardChairman, President & CEO at Applied DNA Sciences00:10:00In particular, in the last eighteen months, we've seen an acceleration in the pace of LineaRx's operational progress. Interest and feedback on our Linea DNA and Linea IVT platforms have exceeded even our most optimistic expectations. The biotherapeutics market is ready for what we have to offer. And as we'll talk about on this call, we are now ready to deliver. We recognize that while each of our business segments offered their own return on investment, but cumulative to these disparate ROIs blur our path to profitability. James HaywardChairman, President & CEO at Applied DNA Sciences00:11:00This drove our decision to exit our DNA tagging business segment and implement the work force reduction. Segment customers have been informed and certain of them will be supported for a period of time. Fiscal twenty twenty four had significant successes. We did not have the benefit of a fourth quarter investor call. Therefore, let me summarize certain key we achieved during the year, then Clay and I will address our strategy for fiscal twenty twenty five. James HaywardChairman, President & CEO at Applied DNA Sciences00:11:42So in fiscal twenty twenty four, we validated our Linea IVT platform. Data generated internally and with the CDMO partner were conclusive. Our platform demonstrates a reduction in problematic double stranded RNA contamination on a commercial scale and is cost neutral to legacy manufacturing platforms. Linea DNA also entered the clinic. We announced that the Institute of Hematology and Blood Transfusion or IHBT in Prague received approval for and initiated a Phase one trial of a first in human CAR T clinical trial. James HaywardChairman, President & CEO at Applied DNA Sciences00:12:39IHBT's therapy utilizes LINEAR DNA as a critical component of its CAR T therapy to enable a rapidly manufacturable viral vector free workflow for the treatment of relapsed and or refractory acute myeloid leukemia. This approval highlights the first instance of regulatory consent of Linea DNA's use in a clinical setting, a key milestone. LineaRx's customer acquisition In fiscal twenty twenty four, we engaged over 25 customer projects and we expect multiple projects to enter the clinic in calendar twenty twenty five. Furthermore, in advance of our GMP certification, multiple customers validated us as a GMP supplier. As part of our strategic restructuring, the Board promoted Judy Marra to President, where she will oversee a continued drive toward operational excellence Judy. James HaywardChairman, President & CEO at Applied DNA Sciences00:14:12In a moment, Judy will discuss her role in greater detail. Similarly, the Board has given the additional responsibility of President of LineaRx to Clay Shirak. Congratulations Clay. In addition to his corporate officer duties in recent years, Clay has led global sales and business strategy for LinearRx and has cultivated a marquee list of customers. Applied DNA Clinical Labs secured New York State Department of Health LDT approval for TraitPGX, our pharmacogenomics assay that forms the basis for our PGx testing service. James HaywardChairman, President & CEO at Applied DNA Sciences00:15:08And we secured an expansion in use for our mPOXX assay. And we are now licensed to accept samples from all 50 states. Finally, last month, our GMP Site 1 was certified operational as an ISO seven space with ISO five workspaces. With this site, we've demonstrated a low CapEx approach to enzymatic DNA production at scale, empowering our entry into long term GMP supplier agreements. Now let me turn the call over to Clay to offer some specific insights into LineaRx's plans for fiscal twenty twenty five. James HaywardChairman, President & CEO at Applied DNA Sciences00:16:06Clay? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:16:11Well, thank you, Jim. First, I want to thank the Applied DNA Board of Directors and management team for the opportunity to lead LinearX as we approach what I believe is an inflection point in a trajectory. For those of you who are new to our story, I've been with Applied DNA since 2016, sitting in various legal and business roles. My background is in biology and intellectual property and I have fifteen years of legal and business experience. I have a passion for building companies and I believe with the plan we have in place, LineaRx will be a growth engine for Applied DNA. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:16:49Now, since the COVID-nineteen pandemic, the growth trajectory for enzymatically produced DNA has rapidly increased. As Jim mentioned, with over 25 active projects in fiscal twenty twenty four, we see a strong market demand for our Linea DNA and Linea IVT platforms. With our initial DMP site now online, we are focused on monetizing this demand. To this end, our commercial emphasis is threefold. First, to sell our DMP capacity for IVT templates. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:17:21Second, to develop additional LinearRx products and capabilities and third, to leverage our platform scalability with minimal CapEx to derisk growth and reach breakeven. So first, as a quick primer, mRNA is made from a DNA starting material called an in vitro transcription or IVT template. It's these IVT template materials that we are ready to produce in our GMP facility. The mRNA market continues to grow with almost 500 therapies in the global pipelines. We believe each of these therapies represent a manufacturing opportunity to produce IVT templates at our new GMP facility. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:18:03Based on our current customer interactions, the initial revenue opportunity for LineaRx for IVT templates used in the production of Phase one clinical trial materials varies. It ranges from about $50,000 to $1,000,000 per opportunity for IVT templates alone or about $150,000 to $3,000,000 per opportunity for IVT templates sold with corresponding Linea RNApp under the Linea IVT platform. These opportunities grow rapidly as the projects progress through the clinical phases and eventually into commercial supply. It suggests this exciting backdrop that we entered 2025 with a robust sales pipeline for GMP IVT templates. We are currently in the final stages of project development with a Boston based mRNA therapeutic developer for potential GMV supply. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:18:54If development is successfully completed, we anticipate GMV manufacturing for this customer in the MayJune timeframe. In addition, we continue to work on closing GMV manufacturing contracts with several CDMOs and therapeutic developers that have undergone successful evaluations of our technology and are targeting the clinic in the next twelve months. To help further extend our sales funnel, during our restructuring, we created a new multi person sales team within the DRX. This organization will be led by a Vice President level employee for which we seek to hire an industry key opinion leader. We plan to have these position staffed by the end of the current quarter. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:19:37In addition, we have increased our attendance at trade shows and are in the process of overhauling the LineaRx website and marketing materials. Finally, we are in the late stages of development of a new and proprietary enzyme and buffer system to increase the manufacturing yields and sequence modality of our linearly DNA. In addition to being a valuable sales tool as a proprietary technology, we believe this new enzyme, once launched, will provide us with a distinct advantage over enzymatic DNA producers, while at the same time potentially improve our margin profile through lower cost of goods and higher DNA yields. Now, history shows us that rarely does a single product make for a successful business and we're no different. So as such, we have developed LRx to be a multi product business. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:20:28While IVT templates have been our initial focus, LRx built a diverse revenue base in fiscal twenty twenty four. To support additional growth in non IVT template segments, we are currently engaged in the development of several new forms of Linea DNA. Due to then, we are announcing today the availability of a new type of Linea DNA we call Linea Donor DNA for use as a donor DNA in CRISPR gene editing applications. Linear donor DNA is a high fidelity, double stranded, once ended form of DNA optimized for use in CRISPR mediated homology directed repair or HDR applications, which are commonly used in a wide range of gene editing modalities. We believe the enzymatic we believe that enzymatically produced linear donor DNA has numerous advantages over plasmid, donor DNA and like IVT templates, the market is primed for a large scale cell free alternative. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:21:28Linear donor DNA is available now for research use only with targeted GMP availability later in this calendar year. In addition, we are actively upgrading our GMP capabilities to allow for the manufacture of Linea DNA drug substance and drug product. These upgrades will allow Linea DNA to be used in a wide range of high value clinical applications in genetic medicine ranging from CAR T manufacturing to personalized DNA vaccines. Turning finally to our growth strategy. Our ability to manufacture at scale is now proven and our additional GMP our initial TMP facility is operational. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:22:09We are now sharpening our focus on using our platform's low CapEx requirements to achieve growth and invested profitability. As opposed to GMP plasmid based DNA manufacturing that require large environmentally controlled spaces and expensive instrumentation, the Linea DNA platform uses benchtop instruments with minimal space requirements. Our initial GMP facility was designed to use modular cleanroom designs and have an end to end manufacturing workflow in less than 1,000 square feet of environmentally controlled space. Our benchtop instrumentation is cost effective. And since we manufacture in smaller volumes than plasma DNA, our purification instruments are smaller and less expensive. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:22:53In addition, PCR has fewer raw materials and potential contaminants than plasma DNA workflows, which leads to lower incoming and batch release QC costs. We believe these unique attributes of our platform enable our ability to rapidly scale our GMP manufacturing using a simple copy and paste approach for a fraction of the CapEx that would be required for legacy DNA manufacturing technologies. This results in two near term benefits. First, using our simple copy and paste approach, we can scale and deal real time with our production contracts. I'll make other CDMOs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:23:31We don't face to build it and hopefully they will come to LA, where it's necessary to build a large complex and capital intensive facility before commercial contracts are signed. Instead, because we can rapidly build additional manufacturing capacity via the construction of small identical modular clean rooms, we can align CapEx spend to closely mimic our commercial contract timing, thereby reducing our balance sheet risk. Second, we believe that our target CapEx investment needed to achieve DNA production capacity necessary to support our profitability is significantly less than other legacy technologies, particularly in the biologic space. Based on our current cost of modular cleaner construction and instrumentation, each of our cleaner costs less than $1,000,000 yet each has a potential revenue opportunity of $10,000,000 to $30,000,000 per year depending on the applicable mix of products. This, we believe, coupled with a strong margin profile for our products, allows the company to breakeven on a fraction of the capital investment that has historically been required for the biologic CDMOs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:24:49In conclusion, we believe the operational launch of our GMP facility is a pivotal juncture for this company, representing the final piece of the multiyear business strategy to commercialize our expertise in PCRV's production of DNA into new markets with higher margin programs. We look forward to where the future holds. Now, Judy, over to you. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:25:11Thank you, Clay, and good afternoon, everyone. It's my pleasure to speak with you today. Let me use this occasion to first thank Jim, my fellow officers and our Board of Directors for the opportunity to continue to lead Applied DNA operations with now a broader charter as President of the company. From Jim's and Clay's comments, it should be clear that we are a highly innovative company, sitting at the precipice of tremendous market opportunity. I'm eager now to expand my efforts and further unlock value for all of our stakeholders. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:25:48My immediate and ongoing focus will be centered on overseeing the company's operations, driving operational excellence, and enabling the company in setting and achieving its key business objectives. How well we orchestrate sales opportunity closure, product mix, quality, delivery volumes and schedules to ensure top notch customer success. These will determine much of our future success. Also in my new role, I will work with the team in orchestrating deliberate resource allocation towards growth initiatives, while at the same time we drive and maintain spending discipline and a quality culture. With GMP execution as a cornerstone, we delivered and we have a deep bench in how to manage going forward. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:26:44We are not starting from scratch. We've operated under ISO 9,001 for ten plus years. We've managed our clinical lab operations at scale and to the high bar of a demanding New York State Department of Health, the FDA and in direct contact with healthcare providers and their patients. Leveraging this experience, GMP is also predicated on a quality culture, a quality that must permeate every individual, every function and our pursuit in every opportunity. Our customer base resides globally. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:27:24They have no mismanufacturing schedules. And these force us as a mission critical supplier to adhere to higher level FDA, European Medicine Authority and Asian regulatory body requirements. We do have the building blocks in place today. To our knowledge, we have today the largest manufacturing capacity for GMP grade PCR produced DNA in North America implemented under budget. This in addition to continuing our supply of RUO and GLP grade materials for IVT templates and genetic medicine and we also offer large scale supply for the IVD market. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:28:11We have an initial projected annual IVT template capacity of over 10 grams, a quantity we actually have delivered annually across several product categories in GLP grade. For context, 10 grams is sufficient product capacity for our customers to produce up to 30,000,000 doses of mRNA vaccines. We complement all of this manufacturing capability with a full suite of analytical instruments, stability chambers and programs to offer our customers and an operative quality system from incoming materials to outbound product. Moving to our clinical lab, in the face of the considerable undertaking that has been GMP, our pharmacogenomics testing service, TRATE PGx, at Applied DNA Clinical Labs has admittedly been managed at a steady state. Looking forward, we are assessing our markets and our capabilities to evaluate elements that could potentially establish further value in our New York State certified laboratory asset, which is a very rare commodity. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:29:27Under evaluation are such things as more promising target segments for PGx, the qualification for insurance reimbursement and the validation of additional diagnostic assays. In closing, our goals are significant. Our resources are finite. To that end, we will remain prudent in managing our financial structures and allocations through this restructuring and thereafter to capture the market that we know is out there. We will stay closely tuned to our business operations and market dynamics, ready to modify and refine our business strategy as context may change. Judith MurrahPresident & Chief Operating Officer at Applied DNA Sciences00:30:13I strongly believe that we have the infrastructure, the people and the determination to execute across all aspects of the company to unlock value for shareholders. Thank you. And I will now turn the call back over to Jim for concluding remarks. James HaywardChairman, President & CEO at Applied DNA Sciences00:30:31Thank you, Jeannie. Before opening the call to questions, I want to reinforce some key takeaways from our collective remarks. The market is very receptive to our platforms. Our GMP1 site is in place and we can now deliver product ranging from evaluation and RUO to clinical grade. And we have a blueprint for further expansion of SiteOne as warranted by customer demand. James HaywardChairman, President & CEO at Applied DNA Sciences00:31:10We have an excellent stable of DNA customers to convert into recurring orders and those order sizes will increase as these therapies graduate through the late preclinical and clinical phases of their development. We are targeting additional new DNA markets and bolstering our product offering. And we recognize that the path to rebuilding shareholder value will come from a combination of disciplined OpEx and growth through enzymatic DNA production. Well, thank you all for your time and attention this afternoon. Operator, please open the call to questions. Operator00:32:00We will now begin the question and answer session. Our first question comes from Yi Chen with H. C. Wainwright. Please go ahead. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:32:27Good afternoon. This is Eduardo on for Yi from H. C. Wainwright. I was wondering if you could provide any color on the new Linea products, kind of interested to know how you quantify the opportunity there for these CRISPR therapies versus maybe the kind of conventional IVT or even the existing CAR T therapies that you guys are developing products for? James HaywardChairman, President & CEO at Applied DNA Sciences00:32:50Clay, that's for you. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:32:52Sure, absolutely. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:32:54Nice to meet you, Eduardo. So, yes, so we think that there's a lot of parallels between the IVT template and the donor DNA market. In part, PCR is very good at making blunt ended DNA. And so we looked at the market and saw where there's market opportunities for large scale blunt ended DNA. One of them is IVT templates, the other is ECR donor DNA. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:33:19So that's the logic there. We can use our existing workflow, node modifications to our manufacturing workflow to make those donor DNA. So it's an amplification of the kind of existing manufacturing line. In terms of market opportunity, obviously CRISPR and CRISPR based therapeutics are less mature than mRNA in some ways. In some ways, they're not. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:33:42But we do believe it is a very large market, especially in kind of the cell and gene therapy as CAR Ts start to move more to the gene editing space versus the viral vector like lentivirus based manufacturing workflows. And that's something we're very excited about. We also think in vivo gene editing has a future, but I think near term we're really focused on kind of those CAR T like workflows and ex vivo gene editing. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:34:11Great. That's really helpful. Then kind of, I was also hoping if I could get any color on where the revenue increases were coming from, if they were primarily new customer acquisitions or primarily from increased kind of scaling and manufacturing of existing customers? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:34:31Beth, do you want to tackle that or something? Beth JantzenChief Financial Officer at Applied DNA Sciences00:34:33So for Q1, the two increases came from product revenue. The primary reason for that was a shipment of DNA tagging for the marking of cotton, one of our customers' contracts we've had for a while. And the other bump in revenue this quarter came from increased volumes in our isotopic testing services business. James HaywardChairman, President & CEO at Applied DNA Sciences00:34:59Clay, is there anything you'd like to add? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:35:04I would add to the shipment of DNA tag end to a cotton tagging customer is a contract we are currently retaining post restructuring. We're able to manufacture that with the same workflows that we have for the Glynia Rx. So it just makes sense to keep that contract. But no, Jim, that's all I have to add. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:35:30Great. Thanks so much. And then if I could just have maybe one more kind of in that line of the you mentioned the AML therapy, and I'm curious what the timeline and kind of I know it's Phase one, I think you mentioned first in human, the timeline and revenue recognition dynamics that we should expect for that? Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:35:51Yes. The timeline for that trial, so it is in The Czech Republic. I think Phase one is probably about eighteen months. It's an interesting therapy and that is a non viral CAR T. It uses a transposon system to actually make the CARs. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:36:07So we are excited for that. We don't know in terms of revenue opportunity how large it's going to scale because it's a hospital based trial. It's not run by a commercial entity. But the important part there was twofold. One, we were able to get through the regulatory approval process quite easily. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:36:26And two, we were chosen over a plasmid competitor because we were faster, but also it eased the regulatory process for the customer. So those are two of the mainly takeaways from that. Jim, I don't know if there's a large revenue opportunity in that trial necessarily, but it was critically important validation in Europe. James HaywardChairman, President & CEO at Applied DNA Sciences00:36:50Right. I think it demonstrates to a broader industry base the entire CAR T industry provide a faster path, which in many cases is urgently required. Eduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLC00:37:23Wonderful. Thanks so much for that and exciting developments. Congrats on the quarter. Clay ShorrockChief Legal Officer & Executive Director of Business Development at Applied DNA Sciences00:37:28Thank you. Thank you. Operator00:37:46This concludes our question and answer session. I would like to turn the conference back over to Doctor. Hayward for any closing remarks. James HaywardChairman, President & CEO at Applied DNA Sciences00:37:56Well, thank you. And thank you, everyone, for joining us on today's call. Operator, you can now conclude the call. Operator00:38:08The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.Read moreParticipantsExecutivesSanjay HurryExecutive Director of Investor Relations & Corporate CommunicationsBeth JantzenChief Financial OfficerJames HaywardChairman, President & CEOClay ShorrockChief Legal Officer & Executive Director of Business DevelopmentJudith MurrahPresident & Chief Operating OfficerAnalystsEduardo Martinez-MontesBiotechnology Equity Research Associate at H.C. Wainwright & Co., LLCPowered by