Genomma Lab Internacional, S.A.B. de C.V. (LABB) Earnings Call Transcript

Thank you very much for joining us today from the New York Times Building in New York. Earlier this morning, Genomma Lab, and Oramed subsidiary, Oravax Medical, announced the landmark agreement for Genomma Lab to develop and commercialize Oravax's oral COVID-19 vaccine candidate initially in Mexico to ultimately open the gateways throughout Latin America. Manufacturing will also be assessed. I'm joined by Nadav Kidron, CEO of Oramed Pharmaceuticals and the Chairman of Oravax; and Rodrigo Herrera, Chairman of Genomma Lab, will discuss key highlights of this announcement. We will begin the program with a short video about Oravax to give you a better sense of the company and tremendous potential of the partnership. Mr. Kidron will then follow with his remarks. Oravax's oral vaccine technology is based on an oral delivery platform for injectable medications developed by Dr. Miriam Kidron, Oramed's CSO; and by Nobel Laureate Professor Avram Hershko. Their technology is now being used for their oral insulin candidate currently in Phase III trials and has been safely dosed thousands of times. Mr. Kidron will discuss the many benefits of an oral vaccine. Mr. Herrera will then provide a brief overview of the joint venture and will discuss the significant opportunity in Mexico and Latin America. Genomma's role in the success of navigating the regional regulatory environment and the development and rollout of this innovative life-saving oral vaccine throughout the region. We will then have time for your questions after their opening comments. Please note that today's discussion is being webcast and it includes forward-looking information. Actual results might differ materially from those projected. We advise you to refer to the information within our joint press release issued this morning as well as additional information contained within the SEC filing of Oramed Pharmaceuticals and within the Bolsa filing of Genomma Lab concerning factors that could cause future results to differ from forward-looking information. All related materials can be found on the company's respective websites. Let me take this opportunity to share a brief video that introduces Oravax. [Presentation]

Thank you, Barbara, and good morning to everyone, and thank you for joining us today. I really think we have something to celebrate here. We started talking with Genomma Lab, I think, we, maybe 2 or 3 months ago, and we reached this day after a tremendous amount of work. So I really want to start off by really thanking the teams from the Oramed side, which put a tremendous amount of effort into it. And also from the Genomma side, this is a very important and complex deal to achieve. But we felt right from the beginning that there is a strong synergy and chemistry between the companies and between the people who manage those companies. We are really excited today because we are implementing the strategy that we set for Oravax. As we said previously, what we want to do is, we want to get the oral vaccine approved ASAP. We want to get to emergency use approval and we want to start with the developing countries. So while we work with the United States and other countries where the oral vaccine can serve as a booster, what we're doing here today is, we are going into Mexico and potentially into the rest of Latin America in order to enable us to get it approved as soon as possible and to help potentially close to 700 million people who can really enjoy the advantages of the oral vaccine. So why is oral vaccine so interesting? Why is it such a game changer? So think about the oral vaccine. The oral vaccine means that it's easier to take it. Compliance is going to be higher. The oral vaccine means that you don't need a professional to administer it. Logistically, it's much easier. It doesn't have to be part of the cold chain, a country who want to distribute it to its citizens, much easier job to get done. But not only that, with the oral vaccine because we take it orally, there should be less side effects, which again will help a lot of people take it. Least but not last, the reason that Oravax  oral vaccine is so exciting, it's because that this vaccine is made out of 3 proteins. The idea that we can introduce a vaccine not only taking the spike, but also the E and the M-- means that we have the potential to have a vaccine that will be good against the variants. And as we look around us, and we see what's going on in the world, we're extremely excited to bring this opportunity that can really help not only hundreds of millions, but potentially billions of people around the world to go back to normal life, to go back to the days of before the COVID-19, if we're going to do our mission right and we're going to get this into the right place as soon as possible. So I really want to take this opportunity, and I want to thank Rodrigo that has been such a pleasure working together, sharing the vision, and I have no doubt that the 2 companies will continue working and trying to do a lot of good things to make this world a better place.

Thank you. Before we turn the conversation over to Mr. Herrera, we'd like to turn to a short video on Genomma Lab. [Presentation]

I want to start by thank you all the team in Oramed and Oravax, Premas Biotech, Mr. Nadav Kidron, it's a pleasure -- it has been a pleasure to make this deal happen. Also, Dr. Prabuddha Kundu, and of course, Dr. Miriam Kidron, and Professor Avram Hershko, 2004 Nobel Prize winner for this amazing technology, which makes this partnership possible. I also want to thank Genomma Lab investors and analysts that have placed their trust in us. I'd like to thank our team also, which has done an intense work to make this venue possible. And finally, I want to thank all the media companies that are here today covering this event. This strategic alliance continues with our mission to empower people to have amazing health and wellness. This vaccine technology makes the distribution easy in the geography of our countries. And it doesn't require cold chain, something that has been proven very difficult in the geographies of most of the countries in Latin America. And this is very relevant because there are very poor and vulnerable communities that they need access to health, that they need access to this vaccine. And thanks to this incredible pharmaceutical breakthrough after clinical trials and authorization for emergency use, we could -- it could allow us to accomplish this goal. We, as Mexican and Latin America company, could be in our countries, the first adopters for this technology. We still have a lot of work ahead of us. We know a population that we need to finish vaccinating our communities. And after that, we will require boosters to keep our immunity strong. The Mexican authorities as well as many other Latin American authorities have done a great effort, a great job trying to get in line to get the vaccines. And sometimes after a long line and they have been suffering and struggling to get the vaccines to their . And I think it's very important that with this alliance of Oravax and Genomma Lab capabilities of commercialization and regulatory expertise, we're going to be able to bring this vaccine first to Mexico and to Latin America. This is a really big deal. And I want to put this into a perspective. It was a team that includes a Nobel Prize winner that we're able to put a vaccine into appeal. And on top of that, with no cold chain required -- this really -- it's a big deal. And also, it's very important that for the first time, Mexico and Latin America, we could be the first ones to have this technology available. Now let me turn it over to a video that describes this technology. [Presentation]

It's important to outline that Mexico just became a member of the ICH. With this, Mexico becomes more strategic destination to carry out medical trials, eliminating the need to duplicate test carry out during the research and development of new drugs.

With that, at this point, we'd like to turn the conversation over to your Q&A.

We have a question from Jim Martin. Can you give some color on the JV itself?

So thank you, Jim, for the question. The JV is structured in the following manner. Oravax  will support Genomma Lab with technology for the oral vaccine. Genomma Lab is going to run through the process of getting it approved under emergency use approval in Mexico. Ideally then, we hope we can also get a deal done, but there's still time until we get to that. So the Genomma responsibility will be to take it all the way for the approval and Oravax will support it all the way. Beyond that, what we also -- and we announced it in the press release, we are going to enjoy -- Oravax is going to enjoy the capabilities, the contacts, the understanding of Genomma Lab in Latin America in order to open the doors for more countries in South America. We're starting with Mexico, but the idea is really to go way beyond that. On top of that, we also announced that when we're going to do a next raise for Oravax, Genomma Lab wants to be a partner in that as well and to have some equity in Oravax. So once that happens, Genomma Lab will also participate in that. And also the other thing that we're doing as part of this deal is that the 2 sides, and this one is coming from Oramed, and not from Oravax. But in order to align the interest and to deepen the connection and the relationship between Oramed and Genomma, we're actually going to do a relatively small but the symbolic share swap. Each company will invest in the other company. So when Genomma Lab enjoys Mexico and South America, Oramed enjoys it and vice versa. So we're really looking forward to this partnership because it opens the gate for many, many more possibilities for Oramed, Oravax and our shareholders.

We have a question from Alvaro Garcia, BTG Pactual. Is this agreement exclusive to the COVID-19 vaccine or does it include potential distribution of diabetes-related oral technologies?

Thank you, Alvaro, for the question. Now it includes -- it only includes the COVID-19 vaccine. We haven't get further into discussions of the other technologies that Oramed has that are very exciting. But probably, in time, we'll see after the results, what are the possibilities that we can do together in the future?

Question is from Luis Willard. Congratulations on the announcement. Certainly, COVID has become humanity's ultimate test and certainly projects like this are much appreciated. So thank you. Now on to the question. Number one, right now, some governments have established proof of vaccination for people to enter the countries. Do you see this oral vaccine to be approved as a means that can really substitute the shots? Or are you thinking more in the -- along the lines of a booster question?

Okay. Thank you for the question, and thank you for the introduction to the question. The idea is it's really to go in 2 parallel tracks. Number one, people who haven't been vaccinated, we believe that this is going to be the best vaccine. You take a pill, you're vaccinated. And your government once approved in the specific region, should give you the approval. You can travel, you can do anything, you are vaccinated. And I want to reemphasize it, because it's made out of 3 proteins, this has the potential to be better against the variants. This really has the potential to be a better vaccine than anything available today on the market. And we anticipate and hope, and we're going to work very hard to make sure that the governments that will approve it, will obviously treat it accordingly. Parallel to that, people have been vaccinated, but by some of the existing vaccines, we'll be able to take it as a booster, and we believe it should be the preferable booster. So we are working towards both areas, Mexico, United States and other places -- So at the end of the day, anybody who needs to get vaccinated, the choice for him will be to take the Oravax vaccine.

Question from Vanessa from Credit Suisse. What additional investments will be needed in addition to the share swap? Did Oramed signed similar JVs for distribution in other parts of the world? Is there an expected timing for the distribution of the vaccine, what happens in the scenario that the vaccine is not approved in the expected time line?

Okay. So maybe I'll answer some of it, and maybe Rodrigo, you can talk more specifically about the time line in Mexico. So regarding additional channels, yes, Oravax is currently engaged in discussions about doing deals in a few other territories. The world has 7 billion, 8 billion people, and we believe that this is something that will be needed by basically everybody who lives on the planet. The advantage of the oral vaccine is that it's much easier logistically to get it to different parts of earth and also it's easier to administer it because you don't need a professional to give you the injection, but you can literally take it with cup of water or without. So this is as far as the strategy, and I really hope that more of those discussions will mature into firm agreements. And obviously, as soon as we have something substantial, we are going to report that. As far as additional investments, right now, Oramed has got a very good balance sheet. There's no immediate need. We are in discussions with potential partners for manufacturing and so on and so forth. We want to do our best that once it's approved, once we see that it works, then we are in a position that we can meet to the best that we can, the demand that we foresee that will come to this. And now I'll ask Rodrigo to really refer on the time line and the Mexican procedure.