Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you explain the factors affecting the gross margin and what steps are being taken to improve it? A: Michael Brigham, President and CEO, explained that the gross margin improvement to 36.5% is due to several factors, including product mix and pricing. Tri-Shield, a more expensive product to produce, has contributed to growth despite its higher costs. The company is focusing on increasing production yield and throughput, which were previously affected by contamination issues. The goal is to return to a gross margin of over 40% by maintaining higher production levels and leveraging a 25% price increase.
Q: What is the current status of inventory, and how is it being managed? A: Michael Brigham noted that the company had contracted for increased milk deliveries in anticipation of growth, but unforeseen events like syringe shortages and contamination led to excess inventory. This inventory is now being used to explore a new product format, which involves bulk feed rather than individual doses. This initiative is expected to progress in 2025, with potential market decisions in 2026.
Q: How is the company addressing the variation in doses per batch? A: Michael Brigham acknowledged that biological processing inherently involves yield variance. The company is working to minimize this variance by improving production processes and aiming for more consistent batch yields. The focus is on resuming previous yield levels rather than creating new ones.
Q: What is the timeline for the new product format to reach the market? A: The new product format, which does not require regulatory approval, is expected to be tested with customers in 2025. This will inform decisions for a broader market launch in 2026. The absence of regulatory hurdles allows for a faster market entry.
Q: Can you provide an update on the FDA approval process for the Retain product? A: Michael Brigham stated that the company is awaiting FDA clearance for inspectional observations and the review of their non-administrative NADA submission. The submission includes product labeling and responses to previous FDA feedback. The company is seeking expedited review and remains committed to achieving regulatory approval for Retain.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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