Good morning and thank your standing by. Welcome to ImmunoPrecise Antibody’s Second Quarter Fiscal Year 2023 Earnings Conference Call. Also on the call with us today are Jennifer Bath, Chief Executive Officer; Brad McConn, Chief Financial Officer; Ilse Roodink, Chief Scientific Officer; and Barry Duplantis, Vice President of Client Relations. Before we get started, remember some statements we make today may be considered forward-looking statements for the purposes of applicable United States and Canadian securities laws. IPA cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Additional information about these risks and uncertainties is included in our SEC filings. IPA undertakes no obligation to update these forward-looking statements except as required by law. On today’s call, non-GAAP financial measures may be used to help investors and analysts understand IPA’s business performance. We refer current and potential investors to the forward-looking information section of its Management’s Discussion and Analysis issued today at www.sedar.com and on EDGAR at www.sec.gov. With that I’ll turn the call over to Dr. Bath.

Thank you, Dennis. Good morning everyone. I’m glad that you are able to join us today. We’re excited to share with you IPA’s second quarter updates and our progress toward achieving our strategic goals for the fiscal year, including the steady growth of our revenue driven by our expanding client relations team, as well as milestone achievements with our in silico platforms from our newest subsidiary, BioStrand. With several goals in mind, the company recently announced its voluntary delisting from the TSX Venture. These goals include creating a central market for its common shares on the NASDAQ, enhancing long-term liquidity and shareholder value, lowering administrative and legal costs, saving time, and harmonizing reporting requirements. Finally, we believe that de-listing from this exchange makes it easier to reach institutional investors who are prohibited by compliance from investing in such exchanges. IPA is considering a shift in its corporate offices as a compliment to its recent delisting from the TSX Venture. While the exact potential location has not yet been selected for shareholder approval at a future special meeting of shareholders, some of the key location characteristics being considered include a U.S. location with access to high-performing workforce with relatively low average wages, a region with expanding technology-based businesses that is complimented by numerous business incentives and easy access to government officials, highly competitive cost of business operations, and a highly educated workforce. This quarter, we look forward to keeping you informed of any developments relating to this particular update. As we approach the end of this calendar year we are focusing on accelerated revenue growth and sales integration of our in silico capabilities. This year we are also reflecting on market conditions and our historical performance as we strive to maximize shareholder value in 2023. This graph compares IPA's year-to-date share…

Thank you, Jennifer. This quarter IPA grew its sales team in key geographic areas. I am pleased to report that a new Director of Client Relations started with us shortly before the end of Q2. This new addition is covering CRO service sales in the San Francisco and Pacific Northwest region and brings with her years of experience serving clients from past antibody service sales and project management roles. In addition, IPA has received a signed commitment from an East coast-based Senior Director of Client Relations set to join the team in early calendar year 2023. This individual has an impressive background in antibody discovery, while also possessing firsthand knowledge of client needs and expectations. The San Francisco and Boston regional markets have always offered significant market potential for IPA and we look forward to the impact that these two key hires can bring IPA in the future. Last quarter we spoke of a significant increase in Q-over-Q sales orders. Those sales orders have helped drive a 9.8% increase in revenue of Q2 over last year. They have also yielded record quarters at both IPA Canada and the Utrecht sites. The Canadian site also posted a single monthly revenue record reporting over $844,000 in October, and we’re optimistic for continued growth with strong revenue trends continuing through November. These results are primarily driven by a continued and growing interest in IPA's memory B cell selection workflows, particularly IPA's rabbit B cell platform, while the Utrecht site is beginning to take advantage of their increased capacity following a seamless move to their new facility, which Jennifer will expand on later. We've also recently announced that IPA's BioStrand subsidiary has signed a research collaboration and licensed agreement with the clinical stage bio company, BriaCell. The research collaboration is based on BioStrand's ability…

Yes, thank you, Barry and good morning all. As recently announced, IPA subsidiary Talem Therapeutics entered into a strategic collaboration with Ligand Pharmaceuticals’ new subsidiary OmniAb, expanded the ongoing relationship by further developing three antibody programs with validated immune oncology targets. Under this agreement, Talem will lead to the progression to clinically suitable molecules by combining the expertise with IPA's LENSai in silico technology to advance out-licensing and commercialization of these three human antibody therapeutics. Immuno app and Talem will share certain research costs of each program and are eligible to receive shared downstream economics upon potential out-licensing or commercialization of each program. We believe that the application of our in silico analysis has the potential to greatly enhance the quality and value of these programs as it does for any discovery pre-clinical or clinical program. During our last earnings call, we announce the maintained efficacy of PolyTope, Talem’s first-generation four antibody combination therapy against the SARS-CoV-2 variants, B8.5 and B8.275. We are very delighted that NIAID has agreed to include our product in their regular neutralization screenings of clinical and antibody therapies towards emerging variants. This demonstrates NIAIDs recognition of the exceptional resilience of PolyTope in maintaining effectiveness against variants. To-date, we have also had ongoing conversation with NIAID on clinical trial support through mechanisms facilitated by NIAID. We are pushing for the first patient doses of PolyTope in the spring of calendar year 2023 and accordingly, we have engaged a global clinical trial CRO, named the cells to support us with clinical development of PolyTope, [indiscernible] was selected based on the experience and constructive interactions as well as the results of an independent audit at IPA's request. [Indiscernible] is involved in the finalization of the study protocol to evaluate the performance of PolyTope in humans and will prepare…

Great. Thank you, Ilse. As a result of meticulous relocation planning, IPA's Utrecht team executed an extremely smooth transition to the new accelerator facility in October and quickly ramped up production to seamlessly serve clients. Lab for floor space has doubled and new equipment and staff additions are in place to support the increase in production capacity afforded by this move. The new facility will also allow the Utrecht team to add new services, including the expansion of offered biophysical characterization assays. In fact, even in the short period of time since the expansion, we have witnessed an appreciable revenue gain from the new facility offerings as will be highlighted next by Brad McConn.

Thank you, Jennifer, and good morning everyone. I will provide an overview of our financial results for the second quarter before touching on our financial position as of the end of the period. As a reminder, all numbers I reference are in Canadian dollars unless otherwise noted. Before we dive into commentary on the financial results, I briefly want to touch on a change that we made to the organization of operating expenses on our comprehensive income statement. We've updated the classification of our expenses to be organized by function as opposed to our previous presentation by nature. The four functions you'll see this quarter and moving forward are research and development, sales and marketing, general and administrative and amortization of intangible assets. I want to touch specifically on the research and development function and note that it includes compensation expense related to research, including share-based compensation, research, supplies and materials, service contracts for research projects and allocated depreciation. We feel this organization provides increased visibility into the cost structure of the company and much improved comparability to our publicly listed peers. Turning to the financial results. IPA recorded total revenue of $5.2 million during the second quarter, a 9.8% increase from $4.7 million during the second quarter of fiscal 2022. Barry previously mentioned record quarters at both Victoria and Utrecht, and both achieved greater than 20% revenue growth compared to Q2 of last year. Gross profit for the quarter totaled $2.8 million, an increase of 7.9% compared to the same period last year. Gross profit margin of 54% is a slight decrease from 55% in fiscal 2022. Our increased cost of sales is primarily attributable to increased salaries and benefits and lab supplies allocated to projects to support our increased revenue, along with some small effective inflation on the…

Thank you very much. [Operator Instructions] And your first question will come from the line of RK with H.C. Wainwright. Please go ahead.

Thank you. Good morning, Jennifer and team. Thanks for taking questions and congratulations on a very successful quarter. In terms of – I have few questions, so I’ll just go one by one. In terms of the revenue trajectory, which we are saying, it certainly is moving in the right direction, and it’s very encouraging. In terms of the resources that you are adding in Europe, to offer increased quantity and also quality of services, what do you – what are your expectations in terms of the growth in the project revenue from these additions and what percentage of – what percent growth in project revenue would make you and the team comfortable especially going into fiscal year 2024 and beyond?

Thank you for your question, RK. So with regard to specifically the growth and added space, we’ve taken on in Europe, and then also with regard to the additional company in Europe, I can touch on that from a couple of different perspectives here. So the first one I’ll start with is the expansion of our space in Utrecht where the majority of the expanded space, it’s actually ROI generating space. And we’re looking for a couple of areas there where we have specifically focused on for increased revenue, not only ability to take on more programs because that site has been at maximum capacity for probably about half of the previous fiscal year. But in addition to that, to be able to take on certain types of programs that we’ve had to decline historically because of needed additional footprint to be able to house some of the equipment that we now have purchased since the move. So some of those include extremely high throughput small scale protein production from some of the large pharmaceutical companies in that region who have a very particular need for that and have inquired specifically about us filling that need. And the other one is exactly the opposite. It’s extremely large scale manufacturing in which we have received numerous requests over the most recent ones here to produce both proteins for outsourcing to a large companies interested in reselling those products for us. So we’re looking forward to the continued growth at that site. It’s already kind of beyond our expectations after just having moved two months ago. And we believe that revenue trend will continue there. As Brad stated, it’s already 20% year-over-year right now. So what would we anticipate or forecast on officially going forward and expect? I would expect that to…

Thank you very much, Jennifer, for that. Just to follow-up on your last set of comments. At a high level, those offerings within that AI-based product are – is basically to kind of test the market and see not only assessing your ability and successful delivery of whatever the objectives are for the client. But also kind of to tweak your product in such a way that you can offer it to all the current clients and also for to prospective clients. So for that – for you to get to that level, what is the sort of timeline that you’re wanting within your teams to deliver? And also I know it’s very difficult to figure out what sort of growth you’ll attend there, but for people like me who kind of think about numbers, how should we think about that? So if you can comment a little bit on the timing, whatever you can give at least qualitative statements about growth expectations.

Absolutely. So with regard to those offerings, which I just mentioned, we actually do include expected timelines in those agreements that have been drafted for those clients. So one thing I’d like to point out is with these groups that we have gone out to specifically, we went to four groups, this is something else that or four different companies, this is something else that we have not offered on our website or been very public about. And with respect to these particular groups, what we offered were four unique packages that we anticipate will become the future standard de novo in silico offerings at Biostrand. And with regard to those, we’ve given very specific timelines for the anticipated output of in silico sequence product. And every one of these packages on our early adopter program, as I mentioned, are slightly different. Some of these groups will be required to make an upfront payment as soon as an in silico product is generated, whereas others are based on actual validation of the product being able to do something most commonly a functional test. The anticipated timeline, I would say, average that’s been given for the in silico work is about four weeks. The anticipated timeline for follow on proof-of-concept work from the actual product produced from the in silico sequences four to six weeks. So for the majority of programs, we would anticipate that we would see some revenue generation somewhere between eight to 10 weeks after starting a program with these groups. And that first initial payment unilaterally becomes what we’re referring to as the upfront payment to actually be able to receive the sequence and the product that’s been tested.

Perfect. Thank you very much for that. In terms of the commentary that we heard today on the organoids business and how that could be growing quite rapidly in the R&D, certainly, we’ve seen enough in the literature. But how is that really translating into the Wnt protein sales? Because even though quarterly – on a quarterly basis, it’s certainly growing, but on a yearly basis, it seems like declined a bit. I’m not trying to make a big fuss about it, but I’m just trying to understand, is there some anomaly between last year and this year. And what is – what has changed – what is the expectations for this year and next year?

So yes, I’m happy to answer that. That’s very observant on your part for our product sales year-over-year. And so a couple of clarifications on that when we break down and look a little bit more closely at our product sales. So the Wnt protein is actually our best selling off-the-shelf product coming from our Utrecht facility. And as mentioned by Barry, it is something that we have exclusivity to an IP protection around. So Wnt protein is interesting in the sense that our primary buyers for that protein are ones who are seeking to include that in growth media for these organoids and also large scale contracts to be able to turn around and actually resell the Wnt protein. So that needs to, in those particular cases, be bought in bulk, so that they can be sold competitively still on the market. With regard to any sort of decrease in product sales, that’s because when we provide our product sales numbers, we actually do it, just on a consolidated basis across all of our sites across the globe. And we do have a particular product that historically has had a couple of large product sales out of our site in Oss in the Netherlands. And as of this year, the group that routinely places an order for that particular product has not yet placed an order, even though we still anticipate them to do so because they’ve been a regular client. So the dip is actually not something that pertains directly to the Wnt protein. And so going forward, we actually do anticipate that Wnt protein to take over more and more a significant share of the off-the-shelf product. And that’s in part, because what we’re beginning to see is more and more groups wanting to be able to come in and get access to that Wnt protein because of the quality of that protein, the stability of the protein, and the increased activity of that Wnt surrogate protein reported by several different larger technology companies compared to some of the standard Wnt proteins that are otherwise available on the market.

Perfect. Thanks. Thanks for breaking down that product sales. What is there in the product sales? So one final question from me before I step down. In terms of the tau [ph] we see, it’s obviously very encouraging to see [indiscernible] able to neutralize even the latest mutant of the virus. How are – if this, how big of a commercial opportunity do you think this is, especially when you would be coming into the market, at least two years down the line, if not more. And with the virus mutating all the time, do you think the structure of your antibody is such that it can capture whatever mutants comes down the pike? So that’s one question. And the other question is on the oncology offerings, are those more for you to out license? Or are these products more for similar to what you’re doing with TATX in the sense at least initiate data, and then, go to the market for out license?

Okay. Yes, so starting first of all with the PolyTope program. So I think one of the first things to always cover is the fact that we absolutely don’t see SARS-CoV-2 going anywhere. Just based on the science and what we know about virus evolution and its ability to continue to adapt. With regard to the relevance of our PolyTope, we actually believe that we’re in a better position than we ever could have. We were – so I think specific from the beginning and saying, we are not going to be the first out there. But our intent is obviously to build something that has sustainable efficacy. So that eventually when we predict others will need to go back to the drawing board, because they will lose efficacy, that we will retain that efficacy and eventually take a pole position in the market because we never had to go back and reset our timelines and reset our strategy. And so today, and kind of going back, real quick to one of the things that Ilse mentioned here we are sitting in working groups with these large pharmaceutical companies that did get products out there that did have commercialized products with emergency use authorization. Many of the products that only lasted a couple of months actually in that commercial setting. And then were no longer efficacious due to these mutations. And last, obviously, the regulatory approval. And so had relatively short timeframe with regard to commercial benefits. From our perspective, the probability of our program, of our products staying efficacious and having a much longer-term window in a commercial setting is probable. And the reason why we say that is because we have all of our historical data and based also on the scientific way that we actually constructed PolyTope.…

Perfect. Thank you very much, Jennifer, for taking all my questions.

You're so welcome. Okay. Thank you for joining.

Your next question is from the line of Michael Freeman with Raymond James. Please go ahead.

Hi there. Jennifer, Brad, Ilse and Barry, thanks much for taking my questions and thanks for a really great overview of what's been going on at IPA. I wonder as it relates to the BioStrand offerings and the general sort of in silico offerings that you are rolling out, I wonder if you could provide sort of a high level – your high level thinking on how that offering will be stage gated from being sort of a internal development to early adopter phase rollout to being more available to clients broadly. If you could take – if you could take us through that that process and your thinking that would be great?

Yes. Yes, absolutely. So as I mentioned a little bit earlier we started with limiting who we went out to share these opportunities specifically for the de novo in silico programs. And we did so based on wanting to offer these early adopter basically pricing, but in return for an – in return for our ability to collect that information and use that information also in a blinded manner to go out and also show proof of concept of our capability to other companies when we were ready to do so. And so what we really wanted to start with was let's find some of these groups we have very good relationships with already, but we also have insight into what they've been working on for the last multiple years, what's been their pain point, what's been that program they couldn't be successful with historically with other CROs and with other partnered programs. And really demonstrate to them, how we can conquer these challenges that haven't been conquered by more traditional methods. And so with those particular groups, we decided to stop with the outreach with just those for particular groups and not further specifically so that we could continue to optimize our algorithms so that we could adjust if we saw any areas that we felt needed improvement, and so that we could utilize all of the sequence information coming in from those programs to also feed our algorithm as our AI would enable it to continue to collect statistical data and improve. We anticipate that it's probably two to three months before we go out with data. And again, it really depends on how these programs go from a timeline perspective and a quality perspective. But to be able to start using some of that data to go out and, and share with other groups, probably again for several months on a face-to-face, one-on-one offering with various groups. And I would anticipate and again there's caveats there that make it difficult to exactly pinpoint, but not until we've had a total of five or six successful programs through there that we would open this up on mass to larger offerings. That being said, the offerings that we've gone out through but right now for these four groups are two smaller biotech and two very large more like Top 10 pharmaceutical companies. And what we anticipate and what's also been indicated by those larger companies is if we were successful with these programs for them, they would likely be interested in taking on larger target deals to use up the capacity that this available at BioStrand with a larger upfront payment? So whether it's more companies or just more programs, well, we'll have to see. The overall timeline for that if we had to put an estimate on it is probably around eight months.

Okay. That's extremely helpful. And I'm glad you provided that detail of two small biotechs and two large biopharmas, I guess. I get, and this is rolled nicely into my next question. We were glad to see that that you were able to publicly announce like the name of your health department that you're working with BriaCell. We recognize that you are partnered with a high quality group of partners through the CRO – the historical CRO business and your other businesses. Do you expect you will be able to announce the names of partners that you work with and in the future this is helpful to understand the pedigree of groups that are attracted to the offerings we have today?

Yes. Great question. So right now as a part of the early adopter program, it is actually a requirement that we have written into the four different standard agreement options. So right now we do have approval from those groups and the three remaining groups that if those agreements go through, we would be able to share their name publicly. There is one time consideration for one of those groups who said we are currently working on something that's very important that would suggest that maybe not releasing our name right away would be pertinent, but that timeframe is possibly one to two months out. So if that deal closes prior to that particular significant event changing for them then we would make the announcement without the name and then follow up on the first event with that program with a name. On the contrary if their personal big event for them occurred prior to signing the agreement, we would be able to announce it. So short answer is that yes it's been written in definitely for the 75%, three of the four, the name will be out there in the initial announcement for one it may trail slightly.

Fantastic. Well we'll watch the newswire to see those names announce. Thank you very much for taking my questions. I'll hand that.

Thank you.

Your next question will come from the line of Will McHale with Ingalls & Snyder. Please go ahead.

Good morning, Jen and team and thanks for taking my question. I'm delighted to see the progress at BioStrand so far with partnership agreements. I was hoping you could explain what specifically about the technology is resonating the most in discussions and how it might be different differentiated from other offerings out there.

Sure, and hi Will. Great to hear from you. But yes, I'd be happy to explain that. So as I mentioned a minute ago, we had offered these to four different companies from smaller well funded biotechs to Top 10 pharma. Participating in this early adopter program and during the due diligence process what really became evident for these companies going into due diligence especially the larger ones was really what was kind of driving their excitement around these particular programs and why they came to us in general. And one of the more common themes here is the potential for LENSai software to analyze and solve these very complex programs that couldn't be achieved with those traditional laboratory settings. And in addition to that, we saw a number of programs that reflected therapies that these groups have been working on for close to a decade that never had a success. Lot of the enthusiasm, which I think is also of note, has been around the concept of the HYFT and the uniqueness of the HYFTs, and as a distinguished and differentiator from our competitors. In fact, the two larger pharma companies that that we’ve been working with have gone into a pretty significant due diligence on that and really wanting to understand, how the HYFTs really drive that differentiation. And has garnered quite a bit of excitement around how the HYFTs drive the algorithm based exploration and their potential to be able to identify these relationships that the traditional AI and ML supported codes being used by other companies don’t have. And so I think that’s actually been where quite a bit of the interest and differentiation has come in, is around the uniqueness of the way that we have a real true discovery backing, the development of these codes and the fact that for them, that’s a concept of a HYFT and how that HYFT relates to what we understand about evolutionary biology is very tangible and very directly related to their experience in biology. Let’s see. Will, I apologize I don’t know, if I answered all of your questions, so please…

No, no. That’s super helpful. I guess then I also wanted to ask, just sort of looking back over the course of 2022 multiple members of the management team have bought stock in the open market and pretty consistently throughout the year. So I was curious to just hear from you guys what most excites you about the IPA investment case going forward.

Yes, absolutely. So we’re, yes, you know that we are really excited and part of it really is because all along will we have had this really a magnificent vision for IPA. Our strategic goals every fiscal year have been aligned toward that vision. Many of the milestones that we have accomplished in the past couple of years were built specifically toward our vision of fully integrating digital – of being, I’m sorry, a fully integrated digital technology company that’s able to solve the most complex personalized medicine challenges. And I think also importantly on an unprecedented timeline and budget. And so, for years we have emphasized the increase in our discovery program throughput, and then accordingly also, the optimization of antibody sequence outputs from our lab, standardizing those workflows across all of our locations. We focused on high-throughput NGS or next generation sequencing capabilities, but more specifically, we built a digital pipeline to mine large multi-species sequences and structures with amplified functional diversity. And then another, milestone we had built into that was, we coded algorithms to, and this is outside of BioStrand. We coded algorithms to augment our ability to mine and formalize and perform deep sequence analysis while building a repository for all of the data. So our ultimate aim was to apply this information to the right tool when that tool was identified with the ability to continuously learn from an AI or ML perspective, and then to apply the knowledge gained from these collection processes. And that tool is now our LENSai tool that we acquired through BioStrand. So going back more specifically to your question, during the past three to four months, our excitement is definitely possible in particular amongst the, the management team because we’re starting to see very real world examples of how we’re able to process and interpret these informative models to solve real and complicated life science problems. And not only do we see our vision now starting to come to fulfillment, but it’s also being accomplished on a timeframe that accelerates some of our more lofty ambitions around the de novo and silico discovery and development, which is actually the foundation of the application supported by this BriaCell deal that we’ve been discussing, and then some other similar discussions. So in essence, really we see strong concrete signs that our vision is rapidly unfolding, that the pieces of the puzzle that we’ve been strategically constructing over the past couple of years are coming together, and the potential that – it generates is at the root of our enthusiasm and our excitement. So I think going forward, we’re most excited to demonstrate the power of our algorithms to solve these challenges for our partners. And then of course along with the anticipated revenue generation that could result from these accomplishments.

Great. It seems like the scientific achievements are really on the verge of producing some pretty exciting financial performance as well. So thanks for that. I think everything else I had has been hit on, so I will drop. Thanks.

Okay. Thank you, Will.

And at this time there appear to be no further questions. Dr. Bath, would you like to take over for closing remarks?

Yes, sure. Thank you. All right. So now first of all, I wanted to start by just talking a little bit about the fact that we have accomplished, a great deal in developing, integrating these new technologies to drive our commercial potential. We’ve also been successful in recruiting and assembling a world-class team which continues to execute on our stated objectives to achieve new heights in terms of our commercial goals. All of this was accomplished also while delivering on our partnerships and signing our first extended revenue potential deal which is the in silico licensing agreement with BriaCell. We are confident and we remain confident in our capacity to continue acquiring new in silico partners and programs this year, as well as our potential to realize revenue through comparable agreement structures through our Talem Therapeutics subsidiary. Prior to closing, I would like to recognize and thank our team for their unwavering commitment and remarkable efforts so far this year. And as you can tell, we are very enthusiastic about the future, and we look forward to communicating with all of you and even meeting some of you next month at JPMorgan. And we appreciate your attention and again, we look forward to speaking with all of you soon.

Thank you all for joining today’s call. You may now disconnect.