iBio, Inc. (IBIO) Q2 2022 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the iBio Fiscal 2022 Second Quarter Financial Results. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to your speaker for today, Stephen Kilmer, Investor Relations. You may begin.

Thank you. Good afternoon, everyone. Before we begin, I would like to remind you that during this call, the company will be making forward-looking statements regarding our current expectations and projections about future events that are subject to risks and uncertainties. Reference to these risks and uncertainties are made in today’s press release as disclosed in detail in the company’s periodic and current filings with the U.S. Securities and Exchange Commission. No forward-looking statements can be guaranteed and actual results may differ from the results discussed in the forward-looking statements. The information on this conference call is provided only as of today and we undertake no obligation to update any forward-looking statements made on this call on account of new information, future events or otherwise, except as required by law. On the call today representing the company are Mr. Tom Isett, iBio’s Chairman and Chief Executive Officer; Martin Brenner, iBio’s Chief Scientific Officer; and Rob Lutz, the company’s Chief Financial and Business Officer. With that, I will now turn the call over to Tom.

Thank you, Steve, and good afternoon, everyone. I am pleased to report another highly productive quarter for our biopharmaceutical development activities, wherein we continue to grow and advance our recently established immunooncology pipeline, while also advancing our second-generation COVID-19 vaccine candidate. Last month, we received the FDA’s response to our pre-IND package for 202, IBIO-202, which is our nucleocapsid protein subunit vaccine candidate against the SARS-CoV-2 virus. Given the agency’s feedback, we are moving forward with IND-enabling studies and we plan to file an investigational new drug application before the end of this calendar year. We were guided in the development of IBIO-202 what we call our DAVi strategy, with the acronym reflective of the need for vaccines with greater durability, access and variant inclusion. These critical needs are currently unmet by commercially available vaccines, all of which rely in some way on the virus’ spike protein as their basis for generating immunity. Spike protein is a major modulator of CoV-2’s infectivity and lead a vision [ph]. And as we have seen, it is subject to frequent mutations. Indeed, since our last call, we saw the emergence and rapid spread of Omicron, a variant which had over 35 mutations at its spike. It’s important to note that it’s one of the very few companies, if not the only company, developing a vaccine exclusively based on the far less mutable nucleocapsid protein, iBio has the opportunity to lead in the development through its true second-generation solution. Our preclinical data suggests that IBIO-202 provides a durable memory T-cell response. And at least today, none of the variants displayed mutations in the region of the virus that we used for our antigen. Thus, with our work on IBIO-202, we are aiming to deliver people’s last COVID vaccine dose, not just their next dose. While we think that the switch to a nucleocapsid-based subunit vaccine to address issues with durability and the variance, we believe it also can favorably affect access as well. This is because subunit vaccines typically don’t have the additional costs and logistical challenges associated with frozen transport and storage, like mRNA vaccines too. However, we see technology solutions for other complementary ways to improve access even further. In particular, there are new delivery technologies that can avoid the labor-intensive process of delivering intramuscular injections, while making it easier for people with a fear of needles to seek getting vaccinated. To that end, in November, we executed an agreement with a leading innovator of microarray patch delivery systems to explore the feasibility of administering IBIO-202 intradermally. Microarray patches are minimally invasive and contain microneedles that painlessly penetrate the upper layers of the skin and dissolve to release their payload. This intradermal delivery method may even allow for vaccine self-administration, creating a more accessible alternative to intramuscular injections. Interestingly, this route of administration may also enhance durability is targeting a large pool of immune cells in the skin they elicit an enhanced immune response. In turn, a stronger immune response could mean a lower dose of antigen is required, which then again could further improve access via lower cost of goods. Turning now to our therapeutics, we are very pleased to see the investments that we began making in drug discovery R&D a few quarters ago already bearing fruit with multiple new pipeline additions and advancements. I would like to start our discussion in this area by pointing out that going forward, we will classify our discovery and preclinical programs into four distinct stages for greater clarity, ease of tracking and consistency with our peers. The stages are: one, early discovery; two, late discovery; three, lead optimization; and four, IND-enabling. Since we announced plans to create our in-house drug discovery capabilities at the end of last fiscal year, we went on to add six new immunooncology assets to our pipeline in just six months. Our newest candidate, a monoclonal antibody designed with machine learning tools, has progressed the fastest. Emanating from our partnership with RubrYc Therapeutics, the concept for this molecule was only just identified in October, but due in part to its high-quality design, this candidate has already moved through to late discovery stage. This example helps demonstrate the power of artificial intelligence in developing higher quality therapeutic candidates and Martin will speak to this further. Meanwhile, another element of our partnership with RubrYc is our worldwide exclusive license agreement to a novel IL-2 sparing anti-CD25 antibody for the depletion of immunosuppressive regulatory T-cells. This is a promising anticancer therapeutic candidate with the potential to turn cold tumors hot. We have transitioned the development of the molecule from the mammalian cell culture production methods that RubrYc’s CDMO was using to our plant-based FastPharming manufacturing system. So in addition to the scalability, sustainability and quality advantages, we are now realizing by switching to FastPharming, we also avoid the costly and complicated process of licensing the intellectual property needed to produce an afucosylated version of the molecule in mammalian systems. We can achieve the same end by simply deploying our proprietary Glycaneering technology to afucosylate the antibody implants. Data generated to-date demonstrates that the quality of the FastPharming-produced antibody is comparable to traditional mammalian bio-production methods. We continue to advance this candidate as IBIO-101, an estimate that we may enter the IND-enabling stage before the middle of calendar 2022. We added another candidate to our oncology pipeline in November when we announced a research collaboration with the University of Texas Southwestern Medical Center to explore the anti-cancer potential of the endostatin E4 molecule in solid tumors. A version of this E4 protein has antifibrotic properties and makes up the core of the IBIO-100 program. While we continue to develop IBIO-100 for two major fibrotic diseases, systemic scleroderma and idiopathic pulmonary fibrosis, this new collaboration with UTSW is based on E4’s potential to address tumors, with a strong fibrotic component like those associated with pancreatic cancer that make them so hard to treat. On a related note, last week, iBio and a licensor for the fibrotic indications, the University of Pittsburgh, signed an amended license agreement that extends a number of development milestone-related deadlines for IBIO-100. Now, I’d like to turn the call over to our Chief Scientific Officer, Martin Brenner, who will provide us with an update on our recent R&D activities and pipeline drug candidates. Martin?

Thank you, Tom. We continue to be very pleased with the progress we are making building out our drug discovery and development infrastructure, which we initiated in May last year. We have since ensured access to multiple diverse antibody libraries and a broad range of screening capabilities through external partners and at the same time have built a team of highly skilled drug hunters at our San Diego site. This team has not only entered six new oncology programs into the pipeline in less than seven months, but has also successfully advanced two of those programs from the early discovery to the late discovery stage. I want to put this effort into the context of the one to two years, it typically takes to establish a new R&D center and to three to five years, an antibody drug discovery program in oncology usually takes from target identification to clinical development. As Tom mentioned earlier, there are four distinct stages of the discovery program. The early discovery phase includes the identification of the novel target, which is followed by an antibody screening campaign and can take somewhere between 6 and 8 months and delivers early active molecules. In the late discovery stage, these molecules then undergo a thorough characterization, where they have to show among other things, potent and specific binding to their target protein, the desired biological effect in tumor cells, and their efficacy in a cancer animal model. This phase usually takes 6 to 12 months and is followed by the lead optimization phase. During lead optimization, molecules undergo improvement of their overall characteristics, which might include increasing potency on manufacturability by altering physical chemical properties. Lead molecules are subjected to a whole battery of tests, including animal models, which more closely represent the cancer indication in patients. At the end of this phase, the molecule with the best overall profile is selected as the clinical candidate and enters into the IND-enabling stage. The lead optimization phase depending on the complexity of the molecule can take anywhere from 8 months to 1.5 years. The following IND-enabling phase is focused to a large degree on developing the manufacturing process for the molecule and establishing that it is safe to be administered to patients. This is the most expensive phase apart from clinical development and depending on the molecule and the indication can take 18 months to sometimes even 2 years. So, we are obviously moving extraordinarily fast, enabled by our unique platform. Today, I will share some additional details about our RubrYc partner discovery program, which we refer to as Target 6 on our website. I hope you understand that we can’t disclose the molecular target at this early stage due to the highly competitive nature of the biotech industry. Target 6 is a protein on the surface of cells and is widely distributed throughout the body. Mutations in several solid tumor indications change the structure and the function of this protein in a specific way. RubrYc’s machine-learning technology allowed us to exactly reproduce the three-dimensional shape of the mutated region through generation of artificial proteins, so-called Meso-scale Engineered Molecules or MEMs. Using these MEMs as fishhooks, we were able to identify or fish antibodies from a library that specifically bind to the MEMs and therefore to the mutated region of our target protein. This ensures that our antibodies only bind to the mutated protein on tumor cells and not to the normal protein on healthy cells, which is believed to improve the safety of the molecule. In collaborating with RubrYc, we were able to reduce the time in the early discovery phase from usually 6 to 8 months down to 3 months. And since the molecule identified from RubrYc’s antibody library have already built in a certain degree of optimization, we can also potentially reduce the length of the lead optimization phase. Lastly, if the program reaches the IND-enabling stage, our FastPharming technology has the potential to further shape of 9 months, leading to development time savings of more than 1 year. I’d now like to turn the call over to our Chief Financial and Business Officer, Rob Lutz, who will provide an update on our financial results. Rob?

Thanks, Martin. Rather than reiterate the details of the company’s financial results that are available in the press release and the 10-Q, I will simply speak to a few financial highlights. Revenues for the second fiscal quarter of 2022 ended December 31 were approximately $200,000, a decrease of 76% versus the second quarter of fiscal 2021. As is commonplace for early stage pharma services companies, iBio has experienced significant quarter-to-quarter revenue variability driven by factors such as the number and size of customer contracts and the timing of revenue recognition. As previously communicated, the company expects revenue growth to return in the second half of fiscal 2022. R&D and G&A expenses for the second quarter of fiscal 2022 increased 40% and 48% respectively over the comparable period in fiscal 2021. This reflects the company’s growing investment in our pipeline, platform technologies, employees and related infrastructure. iBio anticipates this trend continuing. However, the rate of growth is expected to moderate over time. In November, iBio used approximately $6 million in cash and took on debt to purchase our manufacturing facility in Bryan, Texas as well as to acquire the remaining equity interest in our CDMO subsidiary, which is now wholly owned. This strategic transaction provided iBio with full control of our 130,000 square foot manufacturing facility as well as a CDMO entity, which holds the exclusive rights to produce biologics using the FastPharming System in the United States. Following the purchase, iBio began exploring the potential for a sale leaseback, whereby a buyer would purchase the facility and lease it back to us, enabling us to repay the debt, to recover the cash we put in and perhaps to receive financial help from the buyer with funds to expand the facility. With the transaction to be completed, it would help iBio raise non-dilutive capital to grow the business. In terms of liquidity, iBio had $57.4 million in cash, marketable securities and investments in debt securities as of December 31, 2021, excluding $5.9 million in restricted cash. Based on recent initiatives undertaken to extend our cash runway, iBio now believes that it has adequate cash to support our activities through September 30, 2023. That’s two quarters more than we were expecting previously. With that, I will now turn the call back over to Tom. Tom?

Great. Thanks, Rob. We are of course very pleased with the performance of our recently established biopharmaceutical discovery and development capabilities here this past quarter. We have exceeded standard industry benchmarks for the speed with which we have added our 6 new oncology assets and we are also encouraged by the forward momentum each of our therapeutic and vaccine program that demonstrated this quarter. Looking ahead, we will focus on continuing to advance our oncology assets, and in particular, moving IBIO-101 for its IND-enabling studies. We are looking forward to efficacy study results for IBIO-400 and progressing IBIO-100 to lead optimization stage. Finally, we will work to bring a last vaccine dose rather than the next vaccine dose as a response to the COVID-19 pandemic with the goal of filing an IND before calendar year end. Thank you. And with that concluding our highlights, we are happy to take any questions you might have. Operator?

[Operator Instructions] Our first question comes from the line of Kristen Kluska with Cantor Fitzgerald. Your line is open.

Hi, good afternoon. Thanks so much for taking my questions here. The first one is related to oncology, so I understand that Target 3 and the AI-driven IO Target 6 are undisclosed at this time, but wanted to see what information you could provide for us on a big picture basis. So for example, I know with your RubrYc’s collaboration, you have highlighted the potential amongst challenging targets, but then also recognizing that some of these targets have been well understood in the cancer setting. So, can you maybe speak at a high level about like the validation of the targets you are going after or perhaps if these are a little bit more novel to the company?

Yes, you bet. Thanks, Kristen for the question. I will hit it at the high level and then let Martin talk a little bit to the validation, second portion of the question. So at the high level, I think there is a lot of interesting targets out there of course, but a lot of times, easier said than done to get to the endpoint. And I will take what we are now calling IBIO-101, which RubrYc previously called their RTX-003 molecule is a really good example of this. So for years and years, people were trying to find a way to knockdown the immunosuppressive regulatory T-cells in the tumor microenvironment. And CD25 was a great target to research and folks were able to create molecules that could go ahead and bind really nicely. But guess what, it interfered with IL-2 signaling to the T effector cells, so you were getting rid of your immunosuppressive T-cells, but you weren’t letting the cancer-killing capabilities of your T effector’s function. So it’s areas like that, that we’re really seeking these hard-to-solve problems with antibody engineering that we think that with a combination of some of the ways in which we’re designing our methods, some of the libraries, some of the Meso-scale Engineered Molecules that Martin mentioned that RubrYc has and using some of the artificial intelligence techniques that are out there, we can solve for problems like the one Martin alluded to. So again, without getting into any detail, you can take a look at it what’s a really attractive marker – I’m sorry, target for going ahead and targeting solid tumors. But the particular molecule is also present on healthy cells. So the challenge there is engineering something that’s specific enough for your tumors without obviously creating a toxicity issue with that particular molecule also being displayed on other healthy cells. So that’s I hope helpful towards sort of the big picture view. And then maybe, Martin, you could talk a little bit further to how we get to the validation challenges that are out there.

Happy to, Tom. HI, Kristen. Yes, so I think what is important to mention here is that we’re utilizing the RubrYc technology here in this particular case to go after a relatively well-validated target where we see there is improvements and upsides on the safety side. As I mentioned earlier, this target is expressed in healthy cells and in tumor cells. It’s slightly different. And our technology hopefully helps to only target this protein on the tumor cell, which then would avoid kind of the toxicities one would expect to see when you target the endogenous protein on the healthy human cells. This is mainly kind of a play here in going after a target that’s relatively well validated, but increasing the safety margin.

Got it. Thank you. And then for your oncology pipeline, how do you think about precision medicine approaches and different types of sequencing to identify who might most likely be a responder versus looking at targets that might potentially have a broad effect either as a monotherapy and/or in combination?

So I’ll make a comment here, but generally speaking, with regards to the markets and then let Martin chime in. And it’s to say that we’re hoping to find and as part of our development efforts and goals solutions here for unmet medical needs for broader groups of people. So we think like in the case that we just described, that case is, I guess, I should say, between IBIO-101 and some of the new targets that we’ve entered into our pipeline that some of these hopefully will be broadly applicable to a whole variety of cancers and favorably help a lot of patients in the end. That said, to your point on precision medicine and taking a look at smaller patient populations and maybe getting after some of these rare cancers, I think what we can say there is that the nature of the FastPharming Manufacturing platform lends itself to helping in some of those cases because if you think about some of these really rare cancers where you may only have, in some of these instances, a few dozen patients worldwide in any given year. Being able to efficiently produce small quantities of molecule – molecules and of the therapies is not necessarily so easy when one thinks about some of the traditional methods. And in our case as we need material, we can obviously plant a lot of plants to make larger quantities of product, but if small quantities are required, our production system is kind of modular. Each one of our little plants is its own protein factory. So if we only need a little less, well, guess what, we can just plant only a little. So I think in that way, that’s how I kind of think about your question, Kristen, with regards to precision medicine. But Martin, anything to add with regards to this from a design and development strategy perspective?

Happy to weigh in here, Tom and Kristen. So if you consider your typical solid tumor immunooncology indication. Kristen, what you do is often an all-comer trial, right? So these trials can be lengthy. They can be massive and there have been, over the past few years, some efforts to characterize the tumors specifically of individual patients better, but also kind of using machine learning to that effect as well. So I think this is an evolving field. We keep a close eye on what’s happening outside and specifically now that we’re employing machine learning at an earlier stage, obviously, we want to keep our eyes out to kind of see if there are other gains we can actually have with that technology, say, on the clinical side, say, on the biomarker side and so on.

Okay, thank you. Last question is two-parter. So you talked about these four different stages in a little bit more detail, including the time frames that we typically see. So I wanted to ask with all of your platform capabilities, the AI, all of your partnerships et cetera, you talked about lead optimization really being where the molecule with the fact data is collected to enter IND-enabling stage. So with all of your platform technologies and everything we talked about, do you think that process will be more seamless given in advance your studying this in a little bit more detail? And then just in light of the updates related to your COVID-19 vaccine efforts, could you talk about the time line you saw there versus what might be expected without your platform? Thank you.

Great, thanks, Kristen. Yes, in terms of the platforms and all and the relative seamlessness here, yes, we are expecting that with the way in which we’ve built these capabilities. We think that will come together and be the end result being a much more efficient process here with fundamentally more shots on goal for less money than the traditional way, which pharma has done it. And I’ll just cite some studies that are out there and that take a look at all of these processes together. And as we all know, if you just start with, let’s say, 10,000 perspective, discovery initiatives, usually, the numbers are something like five ever make their way to an IND out of that 10,000. And what’s interesting about it, of course, is that the time and the money that it takes. So you are often seeing as Martin started to characterize there, better part of 3, 4, 5, 6 years to get to IND and you’re spending $20 million, $25 million to get to that point. So this whole initiative and everything that we’re doing, both on our own and in partnerships, the idea is that, indeed, we do expect that the power of these approaches and sort of a measure twice, cut once, even in the early go will significantly help to bring down the cost and time for development. And again, this concept of taking more shots on goal we think, really applies here. So I think what we’re seeing granted it’s early days, and we’ve only got a handfuls here, but really, really promising, and we’re seeing what we had hoped and expected we would see with this build. And then with respect to the COVID vaccine and timing, again, yes, we do believe that we will be looking at an IND filing before the end of calendar and it’s just very interesting to watch the environment as it is right now. A lot is changing still from the standpoint of the regulatory approach. And I think you’re too seeing this emergence of Omicron and all the other variance that we think will still be coming. And while indeed, this change is likely where we’re moving from an environment where we’re dealing with a pandemic, and we’re moving to an endemic. And endemic doesn’t mean less of a problem. It’s still some serious issues out there. And as we deal with this virus, it will likely pick it spots. But it’s microbiology and we do believe that we’re likely to see more variance where like everybody, hopeful, that you don’t see a true escape variant come out, but we do believe firmly that a second-generation solution that’s not solely dependent on the constantly changing spike protein is the basis for providing the immunity is the way to go. We need – we think that there needs to be alternatives. We know that there is a couple of handfuls of companies out there working on it. And we also think that there is the opportunity to look at the second-generation vaccines also in the end, whether ours or somebody else’s. We do believe that there is the opportunity to provide cross protection with other beta coronaviruses, depending upon the design, whether it’s ours or some of the others that are moving through development. And we think governments and others should continue to look to fund improvements here so that we can get after not only this boosting and dosing so frequently, but also improve the accessibility, so we can move it to endemic and hopefully from there, get it even more under control for long-term doses of vaccine that can last for a very long time, not just a few months. Does that – hopefully, that answers your question, Kristen?

Yes. Thank you, again.

Thank you. Our next question comes from the line of Roy Buchanan with JMP Securities. Your line is open.

Hi, thanks for taking the question. I guess the first one to follow-up on Kristen’s first question around kind of the targets in the neuro-oncology – for Target 6 or the other targets. I guess anything you can say about the level of validation, your IBIO-101, you have a pretty good amount of preclinical data, your Target 6 similar to general philosophy around whether you’re going after a totally novel targets or other things that have some degree of validation. Thanks.

Yes. I’ll let Martin speak to this with, but worthwhile point to underscore is that not do similar again to what we saw with CD25, you can have a well-validated target but not necessarily an antibody that’s engineered properly to maximal effect either for efficacy or for safety. And as you know, I think we’ve got obviously core data for the molecules that are the later in the stage is, so 101 is that case. We’ve got a decent amount of preclinical data. But what we’re seeing on Target 6 is that it’s moving through quickly and putting us in position to possibly move over to animal studies. But Martin, do you want to comment a little further?

Yes. Roy, I think it’s fair to say, right? We are currently looking at targets that do have clinical validation. Ideally, we’re betting distance to our competitors. And we’re specifically looking at targets that we can actually – that are clinically in a degree – to a degree, de-risk, but at the same time, also provide a path forward for us, might it be on safety, might it be on efficacy. I think it’s fair to say that we don’t take on the risk right now to go after a completely novel target. Considering we are trying new technologies, considering we applying our existing technology to antibodies right now. This would just be a dramatic increase in risk if we went off the very early targets. So at the moment, we’re more focused on areas where we already know the target or a molecule might have worked, but might have failed due to safety reasons in the clinic or hasn’t gotten to the efficacy we’re expecting.

Okay. Perfect. That’s very helpful. And so for IBIO-202, do you still need to do the challenge study that FDA I thought was requesting a challenge study? And I still have some questions around that, but if not then I don’t.

Yes. With respect to the challenge study, is guidance that we took from the review that led us to go to this next step for the challenge studies. And Martin, do you want to take it from there?

Yes. So Roy, as you know, both Pfizer and Moderna went through challenge studies. And since COVID-19, the pandemic is a very fluid environment. This is something now drug manufacturers and developers have to kind of take into consideration. We are at the moment in the planning stage of this study. And once we have more details about it, we will report out about the results of that study.

Okay. Great. So I guess, it’s still on plan. But anything in the guidance that says whether you’ll need – I know you’ve shown both antibody and T cell responses, but I guess more of a focus on the T cell response, given that it’s intra – an antigen internal of the virus, it’s not a surface antigen. Anything you can say about T cells versus antibodies? Thanks.

Martin?

Yes. So I think it is an evolving area, Roy, and it shows basically we have more and more evidence from academic scientists around the world that there is specifically N mediated T-cell response that seems to be protective. I have to say here that these small studies, but it’s accumulating evidence that kind of shows that the N protein might be more important than we initially even thought. So I think this is speaking towards kind of a long-range plan and our strategy to try to be ahead of the pandemic for once and not kind of chasing one variant after the next. So going after the N protein might cover us in the broader variant inclusion range, but also might cover us from a durability perspective. But again, I want to caution everybody here, it’s early data, and we have not done the studies yet. One of the areas why we do a challenge study is to actually do that proof of concept. And then obviously, clinical data has to tell if the hypothesis actually holds true.

Okay. Great. And then last one I have for Rob. Just remind us of the cash guidance includes some component for the sale and manufacturing facility. I think it did previously and you guys also bought your portion of the CDMO business back, correct? So presumably, you’re not reselling that again. So essentially that’s some discount to the price you can get for the manufacturing facility, correct? How do we think about that? Thanks.

Yes. Thanks, Roy. So generally speaking, Roy, the assumptions we’re using, we try to be right down the middle of what we think is the most likely to happen or on the conservative side. So we’re not out there ahead of ourselves. So I think that’s the best way to position the guidance across all areas. Does that give you enough color?

Yes, that’s fair. And then the CDMO part of the business, that’s not what you’re looking to – you’re maintaining the full ownership, correct?

That’s correct. Yes, absolutely.

Okay, got it. Thanks.

Thank you. Our next question comes from the line of Matthew Herm with Matthew Herm LLC. Your line is open.

Hi, Tom. Congratulations on the progress and thanks for taking my question. I was wondering if you could offer any further insight or explanation regarding the Board’s recently adopted resolutions regarding the change in the – was it the percent of shareholder ownership to constitute a proxy, for example, is that related to any future plans for request for an increase in authorized share, further stock split proposal?

Yes, Matthew, thanks for the question. And as we noted in our release here today and previously, there are certain structural impediments that are in place here. And without getting into too much of the detail, I think you may be aware that there is – for companies that have very large retail shareholder bases like our very valued one, the voting of the shares and people’s ability to do that, there were mechanisms in place previously with some of the large brokerage houses, whereby there were things such as proportional voting and other mechanisms to help more easily translate the will of shareholders forward. But now, a lot of those mechanisms have gone away. There is many individual shareholders who have small stakes or may only be in any one biotech companies or any company for that matter for a short period of time. And so vote turnout, and there are many other companies that are in a similar situation as iBio, whereby there is difficulties in even just doing the basics such as having enough shares voted to even hold one’s Annual Shareholders Meeting. So yes, some of the changes that we are making are in an effort to try to enable the company to be able to move forward with conducting its business, while still being in compliance with rules of exchanges and Delaware law. So yes, we think, as we have said before, we did have strong support, 2:1 in favor of the proposals that we have out there, both a reverse split were had out there, I guess I should say, as well as a net increase in authorized shares, but an actual decrease on an absolute basis. So yes, we – some of those changes are related to that and putting the company in the best position to conduct its business in light of circumstance.

Okay. I appreciate the answer. Thank you.

Thank you.

Thank you. Our next question comes from the line of Philip Barnett. Your line is open.

Hi Mr. Isett and team. Thank you for your time today. It’s always great to get updates on the company’s progress. I have a couple of quick questions. There was a request for information posted by HHS and BARDA for next-generation COVID-19 vaccines. It was due back on February 2nd. Reading through that, it looked like the RFI was written for iBio. Just wondering if you were aware of that and if you submitted a proposal for the RFI?

Yes, Phil, thanks for that question. And indeed, we were aware of that. And in particular, we have been very active in evaluating all the RFIs, actual calls for proposals and contracts with the U.S. government for related areas. So, without being able to get into too much detail, obviously, about whether it’s RFIs or contracts that we are applying for either at the Federal or at State levels. Indeed, we have put resources in place here within the company as well as bringing on key advisors to help us with responding to opportunities for the U.S. government and really even looking at those rare instances, worldwide. So, this is a capability that the company didn’t have when we first switched from being a CDMO over to pursuing our biotech interest in December of 2019. But we have gotten a lot of that in place. And so thanks for that question. And indeed, we are hopefully not leaving any stones unturned with regards to those kinds of opportunities.

Alright. I appreciate that. I know you never want to hear about reverse splits and dilution. And so I will trust that leadership is exploring all of those opportunities. On the topic of 202 here, I am interested to hear that we are tackling both IND-enabling studies and alternative drug delivery at the same time. As I understand, IND-enabling studies focus on that molecule efficacy. I am wondering how we are able to also look at alternative deliveries like this intramuscular or the patch array? How are we able to investigate both at the same time? It seems to me like you would look at the molecule first, make sure it’s efficacious and then look at alternative deliveries. So, could you speak to more of that effort?

Sure. Good question. We are firmly committed to driving behind the intramuscularly delivered IBIO-202. And what we can say is that, that effort is delinked from the exploration of some of these alternative routes of administration. So to a degree, you are right. I mean, we have got the antigen and the adjuvant combination that we are very happy with, and that’s led to us taking the decision to move forward here with 202. And so we can progress that, but then also walk and chew gum at the same time because all we are doing is evaluating the feasibility of the same antigen for sure and to a degree, adjuvant combination with a different platform. So, these are feasibility studies, more to follow on this. But we have seen these microarray patch technologies improved significantly here over the years. These first emerged in the mid-2000s and look really attractive from the standpoint of what they can do to provide a durable immune response. So, there is a lot to like about them. Some of the manufacturability issues and some of the rest were a question, but now especially in the past 3 years, 4 years, 5 years, there has been a lot of progress made on that front. So, we don’t think it negatively affects at all our plans and timing to push forward with an IM second-gen nucleocapsid based subunit vaccine for us to go ahead and do this feasibility work here. We are going to be looking at SARS-CoV-2, the antigen adjuvant combination for that as we evaluate feasibility. But then also if this is successful, we would see this prospectively being a platform, part of a platform for vaccine delivery in the human health area, generally speaking. Does that makes sense, Phil?

Yes, absolutely. It’s exciting. I know I am a little adverse to needles. So, I was excited to hear about that. And last question here. I know back in May 2021, we heard that we won the case against Fraunhofer. I got a couple cash delivery dates there, but part of the settlement was confidential. I am wondering if we are ever going to hear about what that information is. And if not, if we could hear like a high level, is it confidential financials, or is it possible contracts, manufacturing, potential future business, just there is a large part of that that’s never really been settled for me?

Well, two things, Phil. One, I don’t feel bad about being one of those folks is not fond of the needles. You are one of approximately million other Americans out there who are in the same boat and heaven knows how many worldwide. So, I mean we do – that’s part of the other reason why we want to bring these kinds of innovations out here and solve big problems. And that’s one of them. You have people who don’t want to get vaccinated just because they are definitely afraid of getting a shot. But moving on to the Fraunhofer thing, I would point you to certain 8-K filings that we have out there. So, while the press release didn’t necessarily have a lot of the financial details in it, some of our other filings did. So, there is, in fact, quite a bit out there. And yes, I think it even includes the specifics around some of the financial splits, timing of when those come into the rest. But at the end of the day, it was the $28 million. So, we have got the cash and the cash payments. The first set is due this quarter for both settling the case and then for the license to the FastPharming technology and other IP actually that was created as part of the relationship. They have also taken out a license to that, and there is revenues expected from that coming up here in this second half of the fiscal year. So, it’s out there and available.

Alright. Thank you. I am still wondering about that because it said there was something confidential there, and I don’t know if those filings ever really spelled that out. But thank you very much for your time and that’s all I have today.

Okay, great. And Rob, I don’t know if you want to add anything to that. But Phil, some of the confidential stuff goes to these legal cases and can have elements of them that certain parties don’t want to have broadcasted in a press release. But Rob, do you want to comment at all on specifics on the financial side?

No. I think those financial – the financial information is out there and to reiterate what Tom said, some of the confidential information is to protect the parties, but it’s not relevant. I don’t think there are any surprises hidden out there that we would be required to make shareholders aware of those. So, nothing material should be out there that’s meaningful.

Thank you.

Thank you. Our next question comes from the line of Patrick Wolff.

Hi. I am just kind of wondering looking at our sales numbers last quarter and seeing how really weak they are. I am just wondering, what are you doing to put some food on the table here or get some cash under the – for the 225 million shareholders that are starving to death, when you are sitting on a $100 million production plant producing nothing? So, I am just kind of wondering where are we going with this. You bought in on this extra percentage of this production plant, where are the sales, I mean, $200,000 a quarter, shock?

Yes, Patrick. So, a couple of things. So, we do have a large and diverse shareholder base. I don’t think we quite have 225 million shareholders, but we do have that number of – roughly that number of shares out there and held. And with regards to the CDMO services and the revenue-generating capability, I think we have tried to be clear here with respect to the business model that we were moving to. So, when it comes to the bioprocess areas, whether that’s the service provision or other products that we are looking to put into the catalog, part of the reason the company struggled previously was that with this business model where they were CDMO only. So, that’s how they operate. That’s how we operated at iBio from roughly 2016 to 2020. The ability to deploy that plant and have large volume contract development and manufacturing business switch over to it. It is a challenge because once a molecule has already found its way on to a manufacturing platform like the standard that’s out there, mammalian cell culture. Well, once somebody has gotten into preclinical and then certainly by the time that they are in the clinic, they don’t switch that business over. It’s – they would have to oftentimes create so much risk that they might even have to rerun the clinical trial, which is why you take a look at this kind of example with RubrYc. And we were able to switch and move it onto our platform because they got – hadn’t gotten too far down the path. So, we let everybody know that when we changed the strategy and built the team that we were going to build a biotech business and in it along the way, demonstrate and validate the strength of FastPharming and begin after we got the biotech portion of the business stood up, which you can see here this quarter and the previous one, we have added quite a few assets to our pipeline. I want to get back to that in a second. But in the course of doing that, we are also self validating, if you will, FastPharming platform and putting ourselves in a position to go out and now commercialize the facility and the manufacturing services with this extra comparability data that we now have in hand. So, that’s a lot of what we are doing right now. I think the other point, when you take a look at revenues in any given quarter. I just want to underscore what Rob said and what we said in our press releases and what we saw last year and really what any fairly young in its business development cycle. CDMO is going to confront as a result. And that’s, a certain lumpiness to the business and high quarter-to-quarter variability. So, there is a lot of reasons for that. It goes to everything from RubrYc to manufacturing campaigns that get done at sometimes and not others. So, you will see some ups and downs in the quarters. I mean you look at last year, I think we had a quarter where – or the one before where we had $1 million in the quarter and $200,000. But look, those are small numbers. The business ramps over time and as part of what we are doing here, I just want to also make the other point, as I mentioned that I would is that you have the ability to generate. This business has the ability to generate non-dilutive revenues from the sale of the CDMO services, which we are continuing to offer. But then also, what we are doing is we build a pipeline here of new molecules, folks will know, right, that biotechs don’t necessarily always take all of their molecules all the way through the development cycle. And to that end, because we are taking more shots on goal here, our business model as such is that we are projecting the opportunity over time to have some of our molecules be partnered. And one perhaps noteworthy comp that’s out there goes to the anti-CD25 monoclonal antibody that we presently have in our portfolio. And what’s comparable is to Tusk Therapeutics, which was a biotech with just two, I think maybe three assets in its pipeline. They had a preclinical anti-CD25 antibody directed against those immunosuppressive regulatory T-cells. And they partnered with Roche, and Roche bought just that one asset for $75 million upfront approximately, $80 million or $81 million, I forget, but I think the total deal was $750 million if all the milestones were met. So, we are given the – we have promised everybody that we would build a business that de-risk where the company was before with its CDMO-only model and create optionality to monetize the technology, whether it be in CDMO services or in ultimately driving for our own commercially available products, taking them through the clinic and then also in partnership. So, that’s a little bit on it. Patrick, hopefully, that helps to answer the question a little bit.

Thank you. Ladies and gentlemen, this concludes the Q&A portion. I would now like to turn the call back over to Stephen for closing remarks.

Thank you, operator, and thanks, everyone, for taking the time to join us today. This concludes iBio’s Fiscal Second Quarter 2022 Investor Call. We look forward to updating you again on our next call.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.