Biotalys NV ($BTLS)

Good day, and thank you for standing by. Welcome to the Biotalys Full Year 2025 Financial Figures and Business Highlights Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Toon Musschoot, Head of Investor Relations and Communications. Please go ahead.

Thank you very much, Sharon, and welcome, ladies and gentlemen, to the Biotalys webcast following our press release detailing our results for the full year of 2025, which was issued earlier this morning. I'm joined today by our Interim CEO, Carlo Boutton; and CFO, Luc Van Fraeyenhoven. At the end of our presentation, we will be happy to take your questions. You can ask them both through the webcast tool via the chat function or the conference call. Let me just remind you of our disclaimer on Slide 2, which is a standard part of our presentation and which you can also consult in the tool of the webcast. Everything, of course, we say today is covered by these legal provisions. I will now turn the call over to our CEO, Carlo Boutton.

Thank you, Toon. And on my part, I want to welcome everyone joining us on this call today. I will start by providing an overview of our key business achievements in 2025, followed by our strategic priorities and outlook for 2026. Luc, our CFO, will then take you through the financials, our cash position and the discussions we are having around financing. And at the end, we will conclude with a Q&A session. But let me begin with a brief overview of 2025. 2025 was a pivotal year for Biotalys, marked by major regulatory, strategic and operational milestones, that significantly strengthened the foundations of the platform and the company. First and foremost, we reached a historic regulatory milestone with the approval of EVOCA by the U.S. Environmental Protection Agency. EVOCA, our first protein-based biofungicide, and this approval of EVOCA is a major value inflection point for our company and validates both the robustness of our AGROBODY platform and our ability to navigate complex regulatory processes in one of the world's most demanding crop protection markets. I'm also very pleased with the exemption on maximum tolerance residue levels that we received from EPA because this confirms the safety of our products and increases their value as safe and environmentally friendly alternatives for synthetic pesticides. In parallel, EVOCA received strong regulatory support in Europe. The Dutch CTGB issued a positive recommendation for EU-wide approval of EVOCA's active ingredients, supported by the confirmation from RIVM, which is the National Institute for Public Health and the Environment in the Netherlands. And they claim or they support that there are no critical areas of concern and that our product qualifies for low-risk classification. And together, these achievements position EVOCA as a credible, differentiated, safe biological alternative for growth, facing increasing regulatory pressure on conventional chemistry. I'm also very happy to share that EFSA, the European Food Safety Authority, has initiated yesterday the public consultation procedure in Europe, which is another important step forward in our regulatory efforts in the EU. And this consultation, which has now started, will run for 2 months, after which both EFSA and CTGB are expected to review comments and proceed to the decision phase. Beyond regulation, 2025 was also a year in which we continue to advance and refine our pipeline. We generated encouraging data across several programs while taking a disciplined approach to prioritization, and I will come back to prioritization when discussing our strategic refocus. And finally, we strengthened our external ecosystem through strategic partnerships, most notably our collaboration with AgroFresh in the Post-Harvest segment, which is expanding the potential application of our technology beyond the pre-harvest field. And taken together, these achievements reflect meaningful progress towards our ambition of bringing safe, effective, scalable and sustainable crop protection solutions to the market. If I now turn to our product pipeline and how it has evolved, we see at the center of our pipeline EVOCA, which targets high-value fruit and vegetable crops affected by Botrytis and powdery mildew. With the U.S. EPA approval now in hand, EVOCA serves as the regulatory and scientific foundation for EVOCA NG, which is our second-generation product. EVOCA NG contains the same active ingredient as EVOCA and hence is expected to benefit from a shorter regulatory review process. Importantly, EVOCA NG is designed to be our first commercial biofungicide with a planned launch in the United States in 2029 and in Europe in 2030, addressing a combined market opportunity of more than USD 1.1 billion. In addition to EVOCA NG, we made strong progress with BioFun-6, our second biofungicide candidate. In 2025, initial field trials in Europe and the U.S. demonstrated that BioFun-6 can achieve a similar performance to EVOCA at significantly lower dosage rates, which is a very attractive feature from both a cost and sustainability perspective. And these results were further supported by successful independent academic trials conducted at the University of California Davis. Alongside these lead assets, we continued work on partner programs, including BioIns-2 with Syngenta Crop Protection and BioFun-7 with the Gates Foundation. However, as announced in early February 2026, we also made the deliberate decision to strategically refocus our pipeline. This means prioritizing our most advanced biofungicides assets and spending early-stage programs, specifically BioFun-4 and BioFun-8, while opening this up for R&D collaboration with third-parties. And this decision reflects our commitment to focus capital and resources where we see the highest near-term value creation. And this brings me to our strategic refocus, which is a critical element of our plan going forward. The objective of this refocus is clear. We will concentrate and focus our resources on the highest priority programs, streamline operations and materially reduce our cost base while safeguarding the long-term value of our technology platform. Concretely, it involves adapting our organizational structure, including the leadership team, suspending selected early-stage activities and sharpening our commercial and regulatory focus. As a result, we expect an estimated reduction in total cash burn of approximately EUR 20 million through the end of 2028 compared to our previous operating structure. Our Board has now confirmed its decision to proceed with the implementation of the new structure, and we plan to execute this in the coming weeks. At the same time, we are not standing still operationally. In early 2026, we entered into a strategic partnership with 21st.BIO, which will support the scaling of our protein-based biocontrols through precision fermentation at commercially competitive costs. And this partnership is a key enabler as we prepare for future commercialization. Importantly, these measures are designed not only to extend our financial runway, but also to ensure that Biotalys remains well positioned to deliver differentiated products that meet both grower needs and also regulatory expectations. Looking ahead now to 2026, our priorities are well defined. First, we will continue to advance EVOCA NG and BioFun-6 as our lead biofungicide programs. On the regulatory front, we will work closely with the authorities in both U.S. and Europe. In the United States, we just received state registration for EVOCA in Florida, and we expect the same in California later this year. And for this year, we will prepare the regulatory submission dossier for EVOCA NG in the U.S. and for Europe. In Brazil, we have initiated the registration dossier, and we are exploring options to work with a local partner for local registration. With regard to the BioFun-6 trials, field trials in the second lead candidate are ongoing, and we are also planning additional field trials to strengthen the scientific foundation of this program. Second, we will continue to optimize the production and manufacturing plans, supported by our collaboration with 21st.BIO with a clear objective of achieving commercially viable cost structures. And third, we will maintain support for our pilot programs, notably BioFun-7 and BioIns-2, which allow us to progress innovation while sharing risk and investments. For BioIns-2, we have achieved the first research milestone early this year, reflecting continued progress in the collaboration, while not materially impacting Biotalys current financial runway. With regard to the BioFun-4 and BioFun-8 programs, we are opening this up for R&D collaborations with third-parties. And finally, we remain focused on executing our strategic focus responsibly, very responsibly, including engaging constructively with all stakeholders during this transition. And with that, I will now hand over to Luc, our CFO, to take you through the financial review and our current financing position. Luc?

Thank you, Carlo, and good afternoon, everyone. I will start with a brief overview of our full 2025 financial performance before turning to our cash position, the runway and financing discussions. For 2025, our other operating income amounted to EUR 3 million, mainly driven by R&D tax incentives, grants supporting our research activities and recognized partner fees. Research and development expenses increased to EUR 13.3 million compared to EUR 11 million in 2024. This increase reflects higher external spending related to strain engineering and field trials. This is in line with the progress of our pipeline. General and administrative expenses remained stable at EUR 5.6 million, which is demonstrating our continued cost discipline despite inflationary pressures. As a result, our operating loss -- operating loss for the year amounted to EUR 15.8 million compared to EUR 13.5 million in 2024. The net loss for the period was EUR 15.8 million. Turning to cash and liquidity. At year-end 2025, cash and cash equivalents totaled EUR 8 million compared to [ 2020.6 million (sic) [ EUR 22.6 million ] at the end of 2024. The annual cash burn net of capital raised via private placements increased by approximately 8% to EUR 14.6 million. On the balance sheet, total assets amounted to EUR 19.7 million, while total equity stood at EUR 12.1 million. Our liabilities remained broadly stable, reflecting continued management of borrowings and working capital. Based on our current cash position, the company's financial runway extends until end of May 2026, consistent with what we have communicated previously. Given this runway, financing is naturally a key focus. As disclosed, Biotalys does not currently have sufficient working capital to cover at least 12 months of operations. We are in well-advanced negotiations with a number of investors to support the execution of our strategic refocus. Next to an equity injection, we are also exploring other alternative dilutive and non-dilutive financing options. In this respect, the measures Carlo outlined, notably the pipeline prioritization and cost reductions, are expected to significantly reduce the capital required to advance our lead assets and execute our strategy. We will continue to update the market transparently as these discussions finalize.

Thank you, Luc. And to conclude, 2025 was a year of significant progress for Biotalys, highlighted by a major regulatory success, pipeline advancement and strategic partnerships. As we move into 2026, we are executing a focused strategy aimed at prioritization, efficiency and value creation. We remain committed to transparency and disciplined execution as we work towards bringing precision biocontrol solutions to the market. I want to thank everyone on the call. And I'll now turn the call over to Toon to begin our Q&A session.

Thank you, Carlo and Luc. So Sharon, we are now ready to take questions from the participants.

[Operator Instructions] Our first question today comes from the line of Christian Faitz from Kepler Cheuvreux.

Two questions. First of all, can you give us any update on the European registration process for EVOCA in terms of time line? And the second question, I'm aware that the milestone achieved for BioIns-2 involves positive in vitro results. Yet, could I ask you to be a bit more specific about the BioIns profile and by when you would see this product achieving registration in key markets?

All right. Thank you for the question. I think the first question, if I remember well, was the question on the progress of EVOCA in EU. So first of all, let me say that we are super happy with the progress that has been made in EU. As we know, EU is a lengthy process. So we are excited that we see progress by the opening of the public consultation yesterday. This will take, I think, 2 months starting from yesterday. After these 2 months and depending on the questions, there will be a review by EFSA and CTGB and then after, it may take a couple of months to come to the final decision. What exact time will be a bit unpredictable, but that's the process and clear progress in place. But again, I want to stress that we are super excited by the progress that has been made. Second question was on BioIns-2. As correctly stated by the -- by you, Mr. Faitz, we have indeed made a very important research milestone. So that means progress. Of course, and I have to be very careful here in collaboration with Syngenta. I cannot make any further statements about further progress. But as a scientist, I -- we all know that the next steps are moving this into in vivo stage, but I cannot really highlight on further time lines or on expectations when such a product could be in the market.

And on confidentiality...

Yes. So I have to [indiscernible] -- I have to respect confidentiality with...

And the next question comes from Andrew Sab from Degroof Petercam.

This is Andrew Sab from Degroof Petercam asking a question for David. First question on EVOCA NG and the collaboration with 21st.BIO. In the press release, you indicated that important progress on production process and manufacturing will be made in Q4, allowing you to initiate the required regulatory studies for EVOCA NG. Can you comment a bit more on these studies, more specifically the design and the time lines and the outcome expected thereof? And how soon after completion of these studies, do you expect to submit the supplementary dossier to the EPA? And the second question on BioFun-6. How confident are you that trial results of the second lead candidate will exceed those of your first candidate? And how soon after would you launch later-stage trials? And when can you expect the market [indiscernible]?

Okay. Thank you for the questions. I think the first one is related to the EVOCA NG time lines and the production costs or production time lines. So thanks to our collaboration with 21st.BIO, we are making significant progress in terms of production process of EVOCA NG production. So we're aiming to start regulatory experiments towards the end of the year, so in Q4. And therefore, we need material that is quality that is representing the final material. And so that's -- I don't think I can go any -- much further than that, but that's what we need to have. So in a way, we need to have a process that is able to generate material that is representative for the end material. And that will allow us to start regulatory experiments in the fall of this year or Q4 this year. In terms of time lines, these time lines will take -- or these [indiscernible] will take a couple of months. So we aim to submit EVOCA NG both in U.S. and EU somewhere mid next year and hopefully to have it approved in 2029 U.S., 2030 EU. And then the second question was about BioFun-6. So you correctly understood that we have a second lead candidate that we have -- that we are starting field trials now. As you may remember, we have published very encouraging field results for first lead candidate. As you know, in our business, we typically have one program, typical candidates in the [indiscernible] For us, the comparison mainly is EVOCA. So the ambition is to have the same efficacy of the BioFun-6 program at a lower dose. So we compare towards efficacy. The question that you raised was comparison versus the first lead candidate, so we believe or we aim to have like a similar efficacy as the first lead candidate. What I want to say is in terms of selecting candidate, it's a [ multiparametric ] process or multiparameter decision. Efficacy is one thing and a couple of other things like cost of goods, et cetera. So it's a [ multiparameter ] decision.

Okay. Andrew, does that cover all your questions?

[Operator Instructions] And the next question comes from the line of Guy Sips from KBC Securities.

Two questions from my side. First question is on the production yield. Can you give us some indication of this evolving? And what are your targets for the next, let's say, 12 and 24 months for that? And my second question is on the expected news flow. What news flow can we expect during 2026 from Biotalys? What is in the plans from that side?

So thank you, Guy. Your first question in terms of production yields. As a target, I wish, but I can't go into much detail. Where we are now is, since we started with our host generation and engineering, we have made a progress of more than 10 times, more than 15 times improvement in terms of yields. I cannot give you a concrete number. And actually, the concrete number is also super important because the yield you're achieving also depends on the host. So the type of the yield is one parameter, then you have the [ hosting ] plant [indiscernible], which is the second -- or which are other parameters. But we have made significant progress, more than a tenfold increase in yields compared to where we were a couple of years ago. In terms of news flow for this year, of course, we have -- I want to stress that we have approval in Florida which we are very happy with. Later this year, we're also expecting approval in California, which is also a very big market. We will, of course, also announce progress on BioFun-6 for lead candidates for the field trials, which -- for which we should receive results towards the middle of the year somewhere. That's also a second important milestone to help me now a couple of my head.

Update on the production process by the end of the year?

Thank you for that. I was sitting out of mind. That was actually a previous question as well. So update towards the third or fourth quarter of this year, update on the production process of EVOCA NG. And I think that's going to be the 2 major one at least from a technical point of view.

I will now hand the call back to Toon for the webcast questions.

Thank you, Sharon. We have one question currently in the webcast from Mr. [indiscernible] . What is the potential of bioinsecticides in comparison to biofungicides?

Well, I think both are important. As you know, if you look at our pipeline, we are working on both. The majority of our focus is on biofungicides, which was a source of focus. The reason for that is that we're most advanced in EVOCA NG and BioFun-6, deliberate option to focus a bit more on biofungicides. Bioinsecticides is also an important market. And then we were a bit opportunistic and have a nice collaboration with Syngenta, which we cherish very much. But I think I would say, from a market perspective, both are equally important, so to speak. But as a company, we have to focus. And that's why we made the decision to focus a bit more on biofungicide, but we're not excluding bioinsecticides.

Thank you, Carlo. We currently have no further questions through the webcast tool. Sharon, do you have any other questions?

There are currently no further phone questions.

Well, I think that everything was clear then. I don't see any new questions coming in. So if that's the case, I want to thank you all for joining our webcast today. And of course, please keep in touch through our e-mail address, [email protected], our website and, of course, also our LinkedIn accounts. And we look forward to speaking with you next time. Thank you very much.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.