InMed Pharmaceuticals Inc. (INM) Q4 2021 Earnings Report, Transcript and Summary

Thank you for standing by and welcome to the InMed Pharmaceuticals Inc. Fourth Quarter Fiscal 2021 Financial Results and Business Update. 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]. As a reminder today's program maybe recorded. I would now like to introduce your host for today's program, Bruce Colwill, Chief Financial Officer. Please go ahead sir.

Thank you, Jonathan, and good day, ladies and gentlemen. My name is Colin Clancy, InMed's Senior Director of Investor Relations. Welcome to InMed’s fourth quarter and full year fiscal 2021 financial results and business update conference call. Please note our speakers are joining us today from remote locations, so we appreciate your patience if we encounter any unexpected technical challenges. Before we begin, we would like to go over our disclosure statements, followed by a review of our recent announcement to acquire BayMedica together with a progress update on our cannabinoid manufacturing and therapeutic development programs, which will be led by our President and CEO, Eric Adams. Mr. Bruce Colwill, our Chief Financial Officer will then review the financial results of operations. Following that, we will be available for a question-and-answer session. Also joining us today to address your questions will be Eric Hsu, Senior Vice President of Preclinical Research and Development; Alexandra Mancini, Senior Vice President, Clinical and Regulatory Affairs; and Michael Woudenberg, Vice President of Chemistry, Manufacturing and Control. Please be advised that certain statements in the following conference call regarding expectations for InMed’s business operations, clinical development, key personnel, contractual arrangements, regulatory approvals, revenue opportunities, financing and cash runway, all constitute forward-looking statements. Such statements are not historical facts, but rather predictions about the future, which inherently involve assumptions, risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. A description of these risks can be found in our latest disclosure documents and our recent press releases. InMed does not undertake any obligation to update any forward-looking statements during this call. I would like to now turn it over to InMed’s President and CEO, Eric Adams. Eric?

Thank you, Colin, and thanks everybody for joining us today. Since our last investor update, InMed has announced some significant corporate developments, and has made notable advancements across each of its therapeutic and manufacturing programs. In June, the company announced it had entered into a non-binding letter of intent to acquire BayMedica, a private company based in the U.S. that specializes in the manufacturing and commercialization of rare cannabinoids. Upon closing of the merger transaction, we will have positioned the company to become a multifaceted leader for rare cannabinoids in terms of clinical development, manufacturing and commercialization in the health and wellness sector. Also, at the end of the fiscal year, the company announced a private placement with an institutional investor which closed on July 2nd, further strengthening the company's balance sheet to the tune of an additional $11 million net of expenses. Most notably, in the fourth quarter of the fiscal year, and over the last few months, we announced some pivotal milestones with respect to our manufacturing program for our proprietary IntegraSyn process. We also continue to make significant advancements in both our therapeutic programs, as we continue to establish ourselves as a global leader in the clinical development of CBN or cannabinol. Let's turn first to the BayMedica acquisition. As mentioned on June 29th, we announced the non-binding letter of intent to acquire BayMedica, and they are currently a research collaborator of ours that's based in the U.S. and they specialize in the manufacturing and commercialization of rare cannabinoids and cannabinoid analogs. And last week, on September 13th, we announced the signing of a definitive agreement associated with the acquisition. The transaction, which is subject to certain standard closing conditions, is expected to close in the coming weeks. We see this as a transformative transaction of the company, establishing InMed as a global leader within the manufacturing and development of rare cannabinoids. Joining forces with BayMedica brings together rare cannabinoid expertise and capabilities like no other. We have been working closely with BayMedica since November 2019. And when we entered into that reciprocal Research Collaboration Agreement to explore our respective technologies, it became evident very quickly, how well our teams work together and the potential synergies of our combined technologies and extensive rare cannabinoid knowhow. The BayMedica team brings with them a wealth of experience across multiple disciplines, including synthetic biology, chemical synthesis, enzyme production, molecular biology and pharmaceutical drug design and development. Key members of their team are true pioneers in the biotech industry and have laid important groundwork in synthetic biology over the last several decades. Their unparalleled cannabinoid manufacturing expertise in both chemical synthesis and biosynthesis, together with InMed's existing pharmaceutical focused team, which really set us apart from competitors in the field of rare cannabinoids. This acquisition provides InMed with complete flexibility across multiple manufacturing approaches and gives us the ability to select the most appropriate, cost-effective manufacturing method for each specific cannabinoid in its target commercial market. We will have the ability to produce multiple rare cannabinoid products for both pharmaceutical development and consumer health and wellness products. BayMedica's primary focus is the B2B wholesale commercialization of rare cannabinoids to the consumer health and wellness markets, including nutraceuticals, cosmetics, functional food and beverage, as well as animal health markets. BayMedica currently leads the industry in large batch production of its initial non-intoxicating rare cannabinoid, CBC or cannabichromene with current batch sizes of more than 200 kilograms and an ability to increase to metric ton quantities as market demand increases. Sales of BayMedica’s initial product Prodiol CBC has grown considerably with cumulative revenues in excess of $2.5 million since sales commenced in December 2019, experiencing an average 35% quarter-on-quarter growth for the year ended June 30, 2021. Considering they have commenced commercial activities just prior to a global pandemic, BayMedica has done an extraordinary job growing revenues with limited resources. Upon closing, we intend to accelerate commercial activities and we expect to grow revenues considerably in the short to medium-term. In addition to CBC, BayMedica has several high-value, non-intoxicating rare cannabinoids in various stages of commercial manufacturing scale-up including CBDV, THCV, CBN and others for the health and wellness markets. This business strategy [in this sect] (ph) has the focus on high demand, attractive margin products, rather than compounds that are easily commoditized, such as CBD. Another key aspect of the acquisition of BayMedica is their library of novel rare cannabinoid analogs. They have several novel analogs which InMed intends to evaluate for use in future therapeutic programs. The main benefit of these analogs is that new chemical entity patents have been filed to protect their eventual commercialization, which is unlike the pathway for naturally occurring cannabinoids that have been identified in the plant and cannot be patented because they occur in nature. This adds an additional level of IP protection to our current strategy that provides future partnering opportunities. So, worth to mention BayMedica provides with an immediate access to an initial yet growing revenue stream that balances InMed's longer term pharmaceutical product opportunities with short-term commercial opportunities within the health and wellness sector. It offers complete manufacturing flexibility to serve all segments of the rare cannabinoid market. It brings with it an extensive suite of new proprietary cannabinoid analogs for pharmaceutical development and extends the breadth and depth of our scientific and management teams, and it opens the door to in house laboratory facilities to enable our own development of InMed’s pharmaceutical R&D programs. Everyone at both InMed and BayMedica is very excited to see this agreement close in the coming weeks, integrating our teams and starting to work together to build a true leader in this burgeoning rare cannabinoid sector. Let's turn now for a few minutes to IntegraSyn. IntegraSyn is InMed's integrated cannabinoid manufacturing approach designed to efficiently and economically produce pharmaceutical grade bioidentical cannabinoids. Earlier this year, our IntegraSyn program reached a pivotal milestone achieving an output level of 2 grams per liter cannabinoid yield, a milestone that signaled commercial viability, and supports the advancement to large scale production. Following continued process optimization, on June 17th, we announced that we had materially improved the yield to 5 grams per liter, significantly exceeding current reported industry yields. To put this in perspective, 1 gram per liter is often referred to as the threshold for commercial viability. The impact of improved yields is a significant reduction in the overall cost of manufacturing due to the increased cannabinoid yield per batch. Our team is now focused on scaling up to larger batch sizes in advance of commercial production. Through our contract manufacturer Almac, we have become aware of a global supply chain issue relating to a certain starting material which may impact the ability to produce the previously planned 1 kilogram batch this year, I repeat, it may impact the ability. We are awaiting guidance from Almac regarding the impact on the timing and the cost of the planned 1 kilogram batch. In the meantime, we are targeting production of a pilot batch to further verify the process in reaction parameters, as we progress to commercial scale batches. The cannabinoid from this pilot batch will be used for the requisite stability testing and post integration with BayMedica may also be used for scale up processes for additional cannabinoids. As a reminder, one of the key benefits of the IntegraSyn system is the ability to utilize the initial cannabinoid that's manufactured as a basis for production of differentiated cannabinoids. In parallel, our team continues to prepare the manufacturing process to be GMP-ready for pharmaceutical quality production. Our goal has always been to achieve an efficient, scalable, flexible and economical solution to produce cannabinoids with bioidentical structures to those found in nature. With these recent developments, we believe we are on track to achieving our goal in developing IntegraSyn as a commercially viable solution for large-scale pharmaceutical grade GMP production of rare cannabinoids. Now, let's move to our therapeutic programs. We'll start with INM-755 for epidermolysis bullosa or EB. INM-755 cannabinol cream is a topical cream in development for EB, a devastating genetic skin disease. On April 28, 2021, we announced that we had submitted Clinical Trial Applications to begin a Phase 2 clinical study in multiple countries. The Phase 2 clinical trial of INM cannabinol cream for EB is on track to begin shortly. The Clinical Trial Applications have been submitted to the National Competent Authorities and Ethics Committees in Austria, France, Germany, Greece, Italy, Israel and Serbia. While the approval process for these applications is ongoing, we remain confident that we will be in a position to start enrollment into this Phase 2 trial in the coming weeks. This 755 201-EB clinical -- Phase 2 clinical trial, also referred to as the 201 trial, is designed to enroll up to 20 patients, conservatively within 12 months. It will take place at multiple clinical trial sites in the aforementioned countries. All four types of inherited EB being EB Simplex, Dystrophic EB, Junctional EB, and Kindler Syndrome are eligible for this study. InMed will evaluate the safety of INM-755 cannabinol cream and its preliminary efficacy in treating symptoms and healing wounds over a 28-day treatment period. This study will use a within-patient, double-blind design, whereby matched index areas will be randomized to be treated with either INM-755 cannabinol cream or a vehicle cream as a control. The start of the 201 trial will be the first time cannabinol, this rare cannabinoid, has been studied in any Phase 2 clinical trial. Switching now to INM-088. INM-088 is a topical eyedrop formulation under development for the treatment of glaucoma. The active pharmaceutical ingredient in 088 is cannabinol, CBN, the same active ingredient as in the 755 program. Current glaucoma treatments work to reduce the intraocular pressure in the eye. Our preclinical studies have indicated that 088 may provide neuroprotection, as well as reduce intraocular pressure. InMed continues to make progress in its glaucoma program. At the H.C. Wainwright Ophthalmology Conference on August 17th, we shared preclinical data showing the effectiveness of cannabinol on reducing cell death in retinal ganglion cells, an indication of potential neuroprotection, which may lead to extended retention of vision in glaucoma, and other diseases. Over the past quarter, InMed has continued with a setup of a larger manufacturing process to support the upcoming GLP studies. And we completed dose ranging studies to evaluate different dose levels and regimens, which is necessary to support these upcoming GLP studies. Topline clinical design work with InMed's clinical research organization was also conducted during this period in order to support our future clinical programs. Key preclinical data on the 088 program have been submitted to a peer reviewed journal and we look forward to sharing this with you when it is published. We continue to work towards completing our preclinical studies of our glaucoma program in preparation for human clinical trials. We estimate to file applications late in the second half of calendar 2022 to initiate human clinical testing with INM-088. In summary, over the course of this last fiscal year, we have continued to make measurable progress across all programs and announced some positive corporate initiatives that will have a transformative effect on the company moving forward. In the next few months, shareholders should expect to see the following catalysts. Number one is the closing of the BayMedica acquisition. This will allow us to integrate the two teams and start advancing commercial activities including accelerating CBC sales and launching new rare non-intoxicating cannabinoids. Second, the commencement of Phase 2 clinical trial. We are now in the final stages of study startup preparation and envisage the clinical trial to commence very shortly. As noted, this will be the first time CBN has been studied in a Phase 2 clinical trial. Three, the publication of the glaucoma data in a peer reviewed journal. This is another key milestone for our therapeutic programs, and will add notable credibility to our data in advance of initiating human studies. We anticipate the release of this data may also spark interest in collaboration. And four, as mentioned, scaling IntegraSyn to larger batch sizes in advance of commercial scale production. I also want to take a second to talk a little bit about the share price. So before we turn to the financial summary, I think it's important to comment on this and its recent decline. We are both very surprised and very disappointed to see the recent performance, especially considering the strengthening fundamentals of the company, including the BayMedica announcement. While it's difficult to ascertain the exact reason for this decline, we would like to point out that although we are a biotech pharma company, we are considered “cannabis adjacent” and our share price is strongly aligned with the market performance of cannabis company share prices. And those have experienced a significant decline over the last six months. I can assure you we are monitoring the situation closely and are allocating additional resources towards Investor Relation related activities to increase exposure, outreach and clarifying our value proposition to the investment community. As I just mentioned, we have several important catalysts over the coming months, which should have a positive impact on the fundamentals of the company. On that note, I'd like to turn the call over to our CFO, Bruce Colwill to provide more information on our capital plans and for a review of our year-end financials. Bruce?

Thanks, Eric. Thanks, everybody for joining the call today. By way of reminder, and as Colin noted at the beginning of this call, we do have a fiscal year that ends on June 30th. So what we're talking about today as a consequence is our fiscal year-end results. Also note that our 10-K is now available on our website as well as on sec.gov. First, just a quick comment on [this summer’s] financing. As Eric noted earlier, on July 2nd, we closed a private placement, with an institutional investor raising approximately $12 million. Under the terms of that placement, we issued approximately 4 million common shares or common share equivalents in the form of pre-funded warrants and warrants to purchase approximately 4 million common shares. After deducting the fees and expenses associated with that, we received net proceeds of approximately $11 million. These funds give the company the ability to not only continue to progress our existing programs, but also anticipating the closing of the BayMedica transaction to accelerate BayMedica's commercial activities including the anticipated launches of several high-value rare cannabinoid products. Overall for the year ended June 30, 2021, the company recorded a net loss of approximately $10 million or $1.52 per share, which compares with a net loss of approximately $9 million or $1.71 per share for the year ended June 30, 2020. Research and development expenses for the year were approximately $5.3 million, which is a slight decrease from the approximate $5.8 million we incurred in the previous year. The reduction was primarily due to the decreased purchases of the active pharmaceutical ingredient used in the INM-755 cream used in the trial that was ramping up here. These clinical trial supplies were purchased well in advance of the planned 201 study. In addition, share-based payments were approximately $300,000 lower in the most recent fiscal year, while our contract research organization expenditures related primarily to the 201 study increased by approximately $200,000 relative to the prior year. Turning now to our general and administrative expenses. G&A expenses were approximately $4.5 million for the fiscal year 2021, which compares with approximately $3.2 million for the previous year. The increase results from a combination of changes, but primarily as a result of higher insurance fees, driven by our NASDAQ listing, and to a lesser extent, higher personnel expenses. These higher expenses were partially offset by lower share-based payments, and lower Investor Relation expenses. The company also incurred non-cash share-based payments in connection with the grant of stock options of approximately $600,000 for the most recent year, which compares with $1 million, approximately $1 million for the year before. These share-based payments amounts are not shown separately in our statement of operations, but are rather included within the research and development expenses, and general and administrative expenses categories. Looking at our balance sheet. At the end of the year, June 30th, our cash and cash equivalents were approximately $7.4 million, which compares with approximately $5.8 million at the end of last fiscal year. The increase in cash and cash equivalents was primarily the result of the November 2020 public offering combined with the February 2021 private placement, and then largely offset by our cash outflows from our operating activities. At June 30, 2021, the company's total issued and outstanding shares were approximately 8 million. It is probably a good point to discuss the impact of our July 2021 private placement on our issued and outstanding. As I noted at the beginning of my discussion here in conjunction with the July 2020 private placement, we issued approximately 4 million common shares or common share equivalents in the form of pre-funded warrants. These pre-funded warrants -- for these pre-funded warrants, the investor paid the full price of the common shares except for a fraction of percent, which means we received all of the $12 million except for a fraction of percent per pre-funded warrant into our treasury. For the shares underlying the pre-funded warrants are not considered issued until they're exercised. So as a result, technically our issued and outstanding will not reflect the 4 million common shares. And likewise, our market cap will also not reflect the existence of any unexercised pre-funded warrants. Briefly on cash. So, our cash runway guidance in this morning's filing stated that we expect our cash and cash equivalents of approximately $7.4 million as of the year end, combined with the approximate $11 million from the July 2021 private placement, will be sufficient to fund our operations into the second quarter of fiscal 2023, or the last quarter of calendar 2022. Following the closing and initial integration of activities with BayMedica, which Eric touched on earlier, we believe we’re positioned to further update our cash runway. With that I'd now like to the call back over to Jonathan for a Q&A session. But just as a reminder, Alex Mancini, Eric Hsu and Michael Woudenberg are also available for questions. Jonathan?

[Operator Instructions]. Our first question comes from the line of Scott Henry from ROTH Capital. Your question please.

Thank you, and good morning. Just a couple of questions. First, with regards to the BayMedica acquisition, how should we think about revenues for fiscal year 2022? I don't know if you can give us kind of a pro forma 2021 number. Just trying to get a sense of the magnitude we should expect in the upcoming year?

Yes, let me grab that one. So, good to hear from you, Scott, Hey, no, a good question. So, what we have disclosed is that BayMedica, they've launched their first product that Eric talked about CBC and they launched that very, very late in 2019. And they launched it basically just as the pandemic was taking off. But despite that, they saw some pretty good growth actually. And we announced that in 12 months, up to June 30, 2021 being our fiscal year, they did an average of 35% quarter-on-quarter growth in sales of that product, which is great. And we do see a number of product launches coming out of the pipe as well over the coming year here as well. So, with respect to your specific question, though, Scott with respect to what is our current guidance on revenue in 2022, it's just a little bit early for that. We haven't actually closed the transaction yet. So, one of the first things we need to do as a group as far as integration plans, is really sit down and look at that funnel. Look at the prioritization of that. Look at the prioritization of that relative to our own programs and portfolio. And then we'll be in a position shortly after that to give a little bit more guidance with respect to the sales growth. But suffice it to say, we do expect the numbers to grow from what I articulated a few minutes ago on the historical given that, that product has just been launched and the revenues have been growing pretty healthily quarter-on-quarter.

And then with IntegraSyn, as you're starting to make these bigger batches, do you get a sense of how we should expect that business model to play out whether you use those quantities internally, whether you license them, B2B? How do you expect that business model to play out over the coming years?

Thanks, Scott. Good to hear from you. It's going to be one piece of this machine as we start to integrate the two teams and look across the spectrum at the different technologies that we have available to us. I've been saying for some time that there's no one size fits all approach to cannabinoid manufacturing. There are the biosynthetic approaches, there are the chemical synthesis approaches, and there's IntegraSyn, which is kind of a hybrid approach. And depending on which specific cannabinoid you want to make and its structure, depending on how much of the cannabinoid you want to make, are you trying to make 1 kilogram, are you trying to make 1 ton, and what quality you need to make off that, is it food grade top quality for consumer health and wellness or is it pharmaceutical grade? That all plays a part in determining which pathway is best to take. The plant itself only uses biosynthesis for about a handful of cannabinoids, three or four primary cannabinoids are made via this enzymatic biosynthesis approach inside the plant. All the rest are made with some form of chemical synthesis. So just out of the gate, you can see that even the plant utilizes a number of different processes to do these things efficiently. And we suspect that that's probably from a cost perspective, the way to approach this and the way to look at it. So, we're going to sit down and kind of bring all the big brains together on the manufacturing side and the science side, and kind of develop a game plan for where best to utilize these different technologies to commercialize different cannabinoids. So there's not like a one specific game plan for IntegraSyn versus one specific for chemical synthesis, it’s really a suite of opportunities that we have to figure out how to optimize and where best to apply each of those inside the rare cannabinoid market.

Final question, just with INM-755, how long should we expect from completion of enrollment to data release? I know it’s a 28-day treatment period. But how long is the follow-up at the end of the treatment period? Just so we can get a sense of when perhaps that data will be out?

Sure. Alex, maybe you could take that one?

Yes, certainly. So the study design is, as you mentioned, 28 days of treatment for an individual patient as there is one additional week of follow-up for safety after the end of treatment. But of course, the enrollment period will take several months, as Eric has said, up to 12 months basically for enrollment once we get going. And we are -- therefore, the amount of time -- the 28 days is just for each patient, just to be clear on that. The amount of time it takes to have data available after the last patient is completed, then you have your processes to do database lock and consolidate everything then And then you have your data analysis period, it'll be several months until data can be revealed publicly. It’s at least a month or more to database lock and et cetera. So it takes I’d say good three, four months or maybe even longer after -- but it's in that range about four months after the last patient is completed.

Your next question comes from the line of Max Jacobs from Edison Group.

So just on the BayMedica acquisition, I mean, I'm also wondering if you could provide any color on the rollout of the additional cannabinoids, which one do you think will be rolled out first and what can you say about timing?

Yes, thanks Max. We're not going to provide any guidance just yet until we're able to get in and get our hands dirty, and work through the details of what BayMedica has on their plate. They have some ideas about how best to proceed, and what the timing of those will be. But, they've been working under a scenario of very limited resources, both financial and human resources. So our goal is to -- part of the integration is to look at ways that we can expedite the ramp up, the scale up of these cannabinoids to commercial scale and their commercial launch. So it's just -- it's another one of those things, that's a little too early to give exact guidance on the timing. Certainly over the next few quarters, we would anticipate that there's going to be additional cannabinoid launches. But we really need to take a close look and work together with them to prioritize these and make sure that we're funding the right activities to achieve that. So we will be providing more guidance on that in the coming months, but right now, just over the course of the next year for sure and we hope to be able to provide some kind of revenue guidance. It's very difficult on the revenue side, unless you're already in the market and already selling something and already seen the demand because it is such a nascent market segment. These will be the first introduction of these cannabinoids at scale. There are some people who are selling those, they're making 1 kilogram or smaller batches. We're going to be scaling up to hundreds of kilograms, if not tons of product. And so you really -- one of the effect of that is the price point is going to come down significantly and by coming down, I mean some of these cannabinoids are selling for $80,000, $90,000 per kilogram, just because they cost $70,000 to $75,000 per kilogram to make with this benchtop manufacturing. So there's a lot of moving parts here. It’s something that we need to figure out a little bit better but we do believe there's A, a very high demand for these new rare cannabinoids; and B, that it’s going to be a very high margin business for us. And we'll be glad to provide guidance as we understand and get our plans solidified a little bit more.

Great. That was very helpful. And then just on the current product, the CBC product. Maybe what can you tell us about the types of customers for it, like who is buying it?

Sure. Well, my understanding is that currently it's all B2B. So, BayMedica doesn't actually have any consumer branded products of their own that are sitting on its shelf somewhere. So, the business model is to sell to either wholesale -- other wholesale distributors, who want to offer a full palette of different cannabinoids to their customers, or directly to the people who are taking the product and mixing it into their creams or lotions or tablets or whatever they're doing. And then they subsequently go and sell it in the marketplace. It's a relatively new cannabinoid to be in the market. They were the first ones to really make it commercially -- at commercial scale, back in December of 2019. And of course, the pandemic I think has had a dampening effect on the roll out of this product. But right now it's probably sub 50% going to wholesalers, and the rest going to smaller manufacturers that specialize in cannabinoid-based consumer health and wellness products. And they are putting it into different formulations. It's is a lot of that's been testing the market to see where the interest lies, and getting their formulations right. So it's been, I would say dribs-and-drabs. It's been a little bit more than that. But it's kind of in the ramp up phase. And they probably have under a 100 customers right now. Many of them are repeat customers and they're adding to that as they're able to manufacture more. The demand is growing. So, they're manufacturing more, and pushing it out into the B2B space. So, it's still early days. But it's very encouraging. And, yes, I think, BayMedica is poised. If it isn't already, it's going to be the dominating manufacturer CBC.

Wonderful. That was very helpful. And then just last question, just on INM-088. I mean, what do you think, will be the timing for an IND for that?

Yes. I mentioned that we're looking at the second half of next year a filing, possibly in the later half. We still have a number of things we have to do, that's going to play into the timing of an IND. We have several IND-enabling toxicology studies that have to be conducted. We want to have a pre-IND meeting with the FDA to discuss our development game plan, and make sure that we're aligned with what their expectations are. We're already -- we have the formulation locked down. We've done multiple studies looking at the formulation, the dosing regimens, the dosing amount, those kinds of things. Nevertheless, we still have to continue to conduct these toxicology studies in preparation for that. So, that's going to take up a big chunk of the next year. And as we progress and as we start to see the results and start to compile the information, we'll be in a much better position to give a more exact date on the filing of an IND. But right now we're thinking the later half of next calendar year.

Thank you. I'd now like to hand the program back to Colin Clancy.

Thanks, Jonathan. So, we've had a couple of questions submitted prior to the call by email from shareholders primarily focused on BayMedica. Question one, Shane, has mentioned on the previous webinar about the 200 kg batches of CBC, can you explain what that really means to the market, whether they can do the same quantities for other cannabinoids?

Sure. By point of reference, as I mentioned, a lot of people are manufacturing 1 kilogram batches. They're using chemical synthesis or other processes that are not necessarily able to be scaled up into commercial size. So, you can do a lot of things on the benchtop. But trying to move it into an industrial setting, that process may not work. So, as I mentioned, there are several people who are doing benchtop 1 kilogram size production runs of things like CBC and other cannabinoids, it's tremendously expensive. They're -- they -- but if they can sell them for $90,000 per kilogram, then it doesn't -- it's not so painful to make it for $70,000 per kilogram. But that's just not sustainable in a large market at industrial scale. So, where BayMedica specializes with their organic chemistry expertise, as well as their synthetic biology expertise is coming up with industrial ways of making these things at very large scale, very inexpensively. So, along the lines of what we've been looking to do. So, they started with CBC, and they were able to identify a process to make this at exceptionally large scale, 200 kilograms is a massive undertaking. But now that they've demonstrated the ability to do that, they can go up to ton quantities using the same process and at relatively same cost, if not a cost reduction, because of economies of scale. So, they've kind of cracked the code, if you will, for making CBC at industrial scale. Now, they're working on these other rare cannabinoids, they are in process right now. They have a very interesting pathway. That is, some of its proprietary, some of it is working with other groups to identify these industrial scale processes. And so the -- it's now going to follow the same pattern as CBC, scale it up to hundreds of kilogram quantities. And then, be able to -- be able ready to blow that out to ton quantities as market demand increases. So, it's kind of -- that's their pathway, their focus. So, there's just a huge difference, as I said, between doing this on a benchtop and then doing it in stainless steel at very, very large quantities.

Thanks, Eric. And one final question. As a pharmaceutical company, how important are BayMedica's new analogs and patents?

Yes, that's a great question. So, the combined company will have 12 patent families, 7 of which are manufacturing related, 5 of which are product related. And one of the key patents that BayMedica brings with them is a patent application that covers a very broad spectrum of cannabinoid analogs. So, an analog if you could think about it, you take in a natural structure. So, let's say CBN and you attach a different chemical group to that structure in order to increase its therapeutic potential, to increase the safety profile, or maybe increase some rate of absorption into the body or some other pharmacokinetic quality. That new entity that you created is patentable. And CBN itself, the molecule itself, you cannot patent, because it occurs in nature. So you cannot hold the patent on that. But for this analog you can, because you've modified it in a way that -- you've done it in a way that is not obvious and hasn't been done before. So that's really big value to us. So now what we're going to do -- and this was the nature of the research collaboration that we had with them from November of last year, we're going to take these novel analogs, and we're going to screen them in some of our models to see if there is therapeutic potential to treat different diseases, which is what -- that's the core of what we do at InMed. So we now have that in house. We have a very -- what I call a treasure trove, a treasure chest of these cannabinoids, we just have to dig through them and find the most attractive gems that are in it. So that work is already ongoing from our research collaboration. And now we'll be able to accelerate that. And that program will be under Eric Hsu and his preclinical group to start identifying these potential hits, and then moving those through the subsequent development pathways.

Thanks, Eric. That was -- yes, that was the last pre-submitted question. So, yes, with that, I would like to hand it back to Jonathan.

Thank you. And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Eric Adams, President and CEO for any further remarks.

Okay, thank you. So just in closing, I would like to thank everyone for their continued support over the last year. We have recently made significant advancements, and we are confident these will create considerable shareholder value in the short, mid and long-term. Looking ahead, we are excited for what the next few months will bring and the immense opportunities that lie ahead for InMed. We truly believe that this will be a transformative year for the company and its shareholders and look forward to updating everyone on our continued progress and milestones over the coming months. Thanks again for participating today.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.