管理層發言
Good morning, ladies and gentlemen, and thank you for joining us today for ImmunoPrecise Antibodies Fourth Quarter and Fiscal Year-end 2025 Earnings Call. We appreciate your time and interest in IPA. Today's call will be led by our CEO, Dr. Jennifer Bath; and Interim CFO, Joe Scheffler. They will provide a review of our financial performance, strategic initiatives, and key operational highlights for the fourth quarter. Please note that a copy of today's presentation, along with our financial statements will be available on our company website for your reference. We encourage you to review these materials to gain a deeper understanding of our performance and strategic direction. Once again, thank you for joining. Before we proceed, I would like to remind everyone that today's discussion will contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties.
Actual results could differ materially from those anticipated due to various factors, including, but not limited to, global political and economic factors, changes in market conditions, and other unforeseen business risks. Please note that these forward-looking statements are made as of today, and we undertake no obligation to update them as a result of new information or future events unless required by law. We strongly advise all participants to refer to our filings with the Securities and Exchange Commission, SEC, including our most recent Form 20-F and other periodic reports for a more detailed discussion of these risks and uncertainties and for a more complete understanding of the risks inherent in our business operations and the potential impact of our future performance. We appreciate your continued interest in ImmunoPrecise Antibodies. I will now turn the call over to IPA's President and CEO, Dr. Jennifer Bath.
Thank you, Karen, and good morning, everyone. Thank you for joining us to discuss today's IPA's fourth quarter and full year fiscal results for 2025. Fiscal year 2025 was a standout year for ImmunoPrecise Antibodies capped with record-setting fourth quarter. With $7 million in revenue, our fourth quarter delivered the highest quarterly revenue in our company's history. We also achieved a gross margin of 64% in the fourth quarter, up from 48% in the fourth quarter of fiscal year '24. This improvement reflects the impact of our continued focus on operational efficiency and disciplined execution. For the full fiscal year ending April 30, 2025, we expanded our gross margins by 600 basis points from 49% to 55%. A key driver of this improvement was the exceptional growth of our BioStrand segment, which grew more than 180% year-over-year and delivered gross margins approaching 90%. As BioStrand continues this high-growth path, we expect it to remain a strong contributor to the top-line performance and to support continued margin expansion going forward.
Another key highlight in the fourth quarter was our record adjusted EBITDA performance. We narrowed the loss to just $316,000, a significant improvement compared to the loss of $1.7 million in the same quarter last year. This marks meaningful progress and highlights the impact of our focus on operational efficiency and disciplined execution. In parallel and of note, our Canadian business showed strong growth in the fourth quarter. Sales orders reached $4.3 million this quarter, more than double historical quarters. Year-over-year sales in Canada increased by 47% with quarterly orders coming in up 83%. Orders from new clients rose 93% year-over-year and 80% quarter-over-quarter. As we noted on our last earnings call, we've been actively moving forward with the divestiture of our Dutch subsidiary. I'm pleased to share that we are now in the final stages of that process with due diligence progressing with a single focused buyer.
While the timeline has extended slightly beyond our original expectations, the transaction remains on track, and we anticipate near-term completion. Once finalized, we expect this divestiture to sharpen our focus, streamline operations, and generate additional cash to further strengthen our balance sheet and support our strategic priorities. Shortly after the completion of the divestiture, we are rebranding to reinforce our position as a bio-native AI platform that integrates AI, connected data, and advanced lab research. This signals our shift from a service-oriented model to a customizable platform-driven business aligned with an industry transformation where AI and data integration are reshaping how drug discovery is done. We are positioned to deliver earlier insights, stronger candidate selection, and faster decision-making at scale. At the center is our LENSai platform, powered by our patented HYFT technology, which transforms fragmented biological information into a computable model for precision discovery and development.
This approach strengthens our value to partners, drives growth, and enhances our competitive advantage across the full biologics continuum. Now we will walk through some of our key milestones from the past several months. In February, we announced a strategic collaboration with RIBOPRO to combine their messenger RNA antigen expression technology with our AI and wet-lab antibody discovery platform aimed at accelerating next-generation therapeutic development offerings. In March, we strengthened our AI infrastructure through strategic collaboration with Vultr and deploying AMD's MI300X GPU to support the growing demands of our discovery platform. This upgrade has significantly increased our processing speed, improved scalability, and reduced compute costs by up to 66%, all of which contribute to stronger operational efficiency and improved margin potential as we grow. Also in March, we entered into a strategic partnership with a publicly traded multibillion-dollar technology company focused on antibody drug conjugates and bispecific antibodies in oncology.
This collaboration combines our B-cell Select platform and AI discovery capabilities with their research infrastructure. The agreement has an initial value of $8 million with the potential to reach $10 million over an 18- to 24-month term. In April, the FDA announced plans to phase out animal testing for monoclonal antibodies, a move that aligns with LENSai's in silico capabilities to predict toxicity, immune response, and efficacy, reducing reliance on animal models. Also in April, we launched our presence in Cambridge, Massachusetts, offering fee-for-service biologics services, extending our geographic reach and service footprint in a core U.S. biotechnology hub. In May, we validated LENSai's ability to map antibody antigen interactions with accuracy comparable to X-ray crystallography, which is the industry gold standard, but in hours instead of weeks. This breakthrough significantly accelerates early discovery and reduces the need for complex time-consuming lab work.
In June, we announced a major advance in our dengue vaccine program. Using our HYFT-powered LENSai platform, we identified a highly conserved epitope shared across all four dengue serotypes, a key step toward a universal vaccine. We also released in silico data showing the structural stability of the target and its potential to trigger a safe, balanced immune response, supporting its move toward translational studies. In the same month, we shared promising results from our AI-designed GLP-1 peptide, which matched or exceeded semaglutide in independent receptor activation assays. This milestone shows the versatility of our platform beyond vaccines with clear applications across metabolic disease, infectious disease, and oncology. In July, we released a validation case study showing that LENSai's immunogenicity screening can predict antidrug antibody risks with strong correlation to real-world results.
In direct comparison, it outperformed a leading industry benchmark. This supports its value in helping drug developers identify and derisk problem candidates earlier in the discovery process. Also in July, we regained compliance with NASDAQ's minimum bid price requirement following 10 consecutive days of trading above the $1 threshold. While procedural, this milestone reflects growing market confidence in the evolution of our platform-driven Bio-Native AI approach. On the leadership front, earlier this month, we welcomed Jon Lieber to our Board. Jon brings over 30 years as a senior executive in biotechnology and life sciences with deep experience in capital markets, corporate strategy, and governance at NASDAQ-listed companies, critical assets as we drive commercialization and scale platform adoption. We also expanded our advisory board with the appointment of Jeff Fried, an expert in healthcare data architecture and AI innovation. He's played a pivotal role in integrating vector search capabilities into LENSai's platform via our InterSystems partnership, further enabling large-scale computation-driven discovery workflows.
Thank you, Jennifer. Please note that all numbers referenced are in Canadian dollars. As Jennifer mentioned earlier, BioStrand is currently delivering triple-digit revenue growth with a margin near 90%, underscoring the strong performance and long-term value of this asset. Total revenue for the fourth quarter was $7 million, representing our highest quarterly revenues in the company's history. Fourth quarter revenue increased 8.1% over the year ago quarter and 13.5% for the prior quarter. The strong revenue growth was driven by increasing sales to our service platforms, in particular, our RevitDcell platform in Canada. Gross profit in the fourth quarter was $4.5 million, also at the highest level in the company's history. This represented a gross margin of 64%, up from 48% in the year ago quarter and 54% in the prior quarter. Gross margins in the fiscal year 2025 were 55%, up from 49% in fiscal year 2024.
The significant increase in our gross margins over the past year was due in part to increasing sales from our BioStrand division, which has margins approaching 90%, much higher than our core wet lab business. We expect our gross margins to trend higher over time as BioStrand continues its growth trajectory and represents a larger portion of our revenues. With our strong fourth quarter revenues, our fiscal year 2025 revenues amounted to $24.5 million, a slight increase over our fiscal year 2024 revenues. R&D expenses in Q4 were $1.1 million, down 14% from the fourth quarter of last year. Sales and marketing expenses were $1 million in Q4, up from $900,000 in the year ago quarter. General and administrative expenses in the fourth quarter were $3.7 million, down 10% from the fourth quarter of last year. In total, operating expenses, excluding amortization and one-time charges, declined to $5.8 million, down 7% from the year ago quarter and down 2% from the prior quarter.
This year-over-year decline in operating expenses was driven primarily by lower G&A and lower R&D, while the sequential decline was driven by lower sales and marketing. Our decreasing operating expense is a result of our targeted focus on improving efficiencies within the company. Adjusted EBITDA for the fourth quarter was a loss of $316,000, a significant improvement from a loss of $1.7 million in the year ago quarter and a loss of $1.7 million in the prior quarter. As a percentage of revenues, adjusted EBITDA was a negative 5% in the fourth quarter, a big improvement over the negative 24% in the year ago quarter and a negative 25% in the prior quarter. Again, these improvements are the result of reducing our expenses as well as improved gross margins. As of April 30, 2025, we held $10.8 million in cash compared to $3.5 million at the fiscal year-end of 2024. With our strong cash position, validated AI economics, and strong partner momentum, we believe we are entering a new fiscal year in a financially disciplined position to support our growth. Thank you. And now I'll turn it back to the operator for the Q&A portion of our call.
分析師問答
So our question comes from Swayampakula Ramakanth.
A couple of questions from me. Actually, congratulations on generating high efficiency, the GLP-1 peptides that you were talking about in your opening remarks. So in terms of clinical development, what should we expect for them? And also, how do you plan to monetize this asset?
RK, this is Jennifer. Thanks for joining us. And thanks for your question. I appreciate that. So first of all, in terms of development, we have two partners that we're working with at the moment, one of them very specifically on the actual drug product manufacturing as well as formulation and then an additional partner who actually brings about novel ways to administer the drug product in a unique route of administration. That partner is actually working with us not only on dosing escalation analysis and formulation but also has done the preclinical design and validation in terms of how we will execute on preclinical IND-enabling data to support translational work and clinical design. We ourselves actually do not intend to take this product into the clinic. We do have an interested party who contacted us on the day of the very first press release with GLP that we are focused on demonstrating some of these initial formulation studies and dose-dependent responses to where our hope and anticipation is that we will be bringing along a financial sponsor that will then sponsor this in the clinical setting.
Okay. Perfect. Then regarding the biotech partner that you're working with on the oncology assets. So for you to start recognizing some of the initial payments of the $8 million, what sort of milestones do you need to achieve? And if you're unable to spell out the milestones, at least what's the kind of cadence that we should expect for that $8 million? Can we see something in the fiscal year '26? Or is it like one big lump payment that you will get at the end of whatever you were supposed to be doing in terms of the product?
That's a good question. I understand that from your analyst perspective, you're looking to see when some of these financial components will start to be recognized. It's not all coming in one lump sum; we'll be closing out our first quarter this Thursday. We expect a significant portion of this program to be evident in our second quarter. We're launching multiple programs simultaneously for this partner, which will progress to a more advanced stage where we can recognize that revenue in Q2. That’s when I anticipate you’ll start seeing the impact from this partner in the upcoming quarter. As for milestones, we have the typical ones we use when developing a therapy, but there are no deal-breaking milestones or anything out of the ordinary. We move through our process while maintaining transparency with clients to demonstrate the quality of our work as it advances. Technically, every program has go/no-go aspects, but our success rate on these platforms is nearly 100%, so it’s uncommon for something not to progress. This program is similar in that we’re using highly validated platforms, and we don’t have any specific milestones that could lead to stopping or completing the program prematurely.
Okay. We are all aware of the FDA's guidance encouraging the shift to AI-based systems for preclinical drug development. Since that announcement from the regulatory agency, what kind of interest have you observed in your services? Is there a way to estimate how much the LENSai platform will be utilized in your fiscal year 2026? You mentioned in the press release that currently only 5% of your annual revenues come from the AI segment. I'm just trying to understand how rapidly this could grow and what potential scale it might reach.
That's a great question. We’re observing significant interest in the direction of early-stage preclinical work concerning FDA guidance and applications. Through our peer networks, we've seen some initial purely in silico projects that have supported specific cases for FDA clinical use approvals. However, a solid transition in this area may still take a few years. We're also intrigued by how this work will align with what we're doing at BioStrand. Recently, we’ve noticed a surge in inquiries related to IND applications, specifically around clinical safety, patient safety, and the uniqueness of patient enrollment in studies. The most notable change aligns with some of our recently discussed platforms, particularly our immunogenicity platform, which encompasses the analysis of antibody drug responses and epitope mapping. It's challenging to determine how much of the interest is a result of regulatory changes that allow clients to quickly, affordably, and accurately enhance their IND applications with more data than before.
Previously, these steps were often time-consuming and limiting. Now, clients can gather more information to create robust data-rich applications. As we showcased these capabilities at various conferences, we experienced a rapid increase in demand for services like epitope mapping. To answer your question, the inbound inquiries have been substantial, not replacing IND applications but enhancing them with additional data that clients might have found cumbersome to collect previously. Looking forward, we anticipate this trend to persist. We also believe that other aspects of BioStrand will continue to expand. Overall, we expect the rise in demand for our core capabilities to carry on into the next fiscal year, further supported by these new applications gaining momentum.
One last question from me. Just would like to understand if the divestment of the European facilities, how far into it are you at this point? And also regarding your base business, there were some transfers happening between Europe and the Canadian facility. Is that all done? And then is the Canadian facility able to have enough resources for the work that you do?
Yes, that's a great question. We are very advanced in the process. We currently have a dedicated buyer and are in the final stages of agreeing on the sale and purchase agreement. We're working on the finer details that need to be addressed before and after the closing to ensure full independence for both locations involved. Regarding Canada, there's been significant growth there over the past quarter or two, faster than we've ever experienced at any of our sites in IPA's history. Even though the Canadian facility is quite busy, they are managing to handle the incoming work thanks to our ongoing expansion in the region, which will continue through fiscal year '26. There were very few programs being transferred between Canada and Europe, and we do not anticipate any negative effect on Canada. In fact, we've been able to handle all programs from start to finish, whether diagnostic or therapeutic.
Additionally, we are integrating our LENSai applications into the Canadian site, enhancing the data packages provided by this location. We completed the transfer of these applications, which are now part of our quotes and officially included in all our therapeutic programs since last March. We are starting to see the positive effects, which will not only improve our offerings but also ensure that all our clients benefit from the capabilities of these in silico applications. Overall, our core business in Canada remains strong, and both Canada and BioStrand are well-positioned for future growth, showing stronger performance quarter-over-quarter and year-over-year, along with an increase in new clients specifically related to that location. We expect the divestiture to proceed quickly as we finalize the details of the sale agreement in the coming week.
Thank you for your insightful questions. I will now hand the call over to Dr. Jennifer Bath, our CEO, to conclude the call.
Thank you, Karen. To close, fiscal year 2025 definitely marked a clear turning point for IPA. We've delivered strong revenue. We've expanded gross margins by 600 basis points year-over-year, and we did significantly improve fourth quarter adjusted EBITDA, narrowing the Q4 loss by over 80% compared to the same period last year. These results reflect the tangible impact on our focused strategy, operational efficiencies, and growing commercial traction across high-value platforms. Our BioStrand segment continues to grow rapidly, contributing strong margins and expanding pipeline opportunities. The nearing completion of our Dutch divestiture and planned rebrand will allow us to further concentrate resources where we see the greatest return potential. With a sharpened focus, strengthened leadership, and increasing momentum behind our platform-driven model, we believe IPA is well positioned to drive long-term value creation. We remain committed to building a scalable, capital-efficient business that delivers innovation, margin leverage, and sustained shareholder growth. Thank you for your continued trust and your investment in IPA.