Cibus, Inc. (CBUS) Earnings Call Transcript & Summary

Thanks, and welcome, everyone. I appreciate each of you making the time to be with us for Calyxt's conference call covering business updates and financial results for the fourth quarter and the full year 2019. Joining you as hosts today are Jim Blome, our Chief Executive Officer; Bill Koschak, our Chief Financial Officer; and Dan Voytas, our Chief Science Officer. A press release with all the details on these results went out over the wires at 7:15 a.m. Eastern this morning, and you can find it on the company's website, calyxt.com. There's also a formal presentation as part of today's call that listeners may follow through the webcast link included in today's press release, or by downloading a copy from the Events section of the IR website at ir.calyxt.com. Ahead of the formal presentation, let me remind everyone that remarks delivered on this call and webcast — among them those concerning future financial results as well as future operational goals and industry prospects — are forward looking and could be subject to a number of risks and uncertainties that might cause actual results to differ materially from those described on the call. For a list of associated risks, please refer to the company's SEC filings. A discussion of adjusted EBITDA and gross margin as adjusted is also part of this presentation. Each of those is a non-GAAP financial measure. Additional disclosures regarding these non-GAAP measures can be found in Calyxt's press release and its filings with the SEC, each of which is posted on the Calyxt website at www.calyxt.com. These non-GAAP financial measures should be considered in addition to GAAP financial measures, not as a substitute for results presented in accordance with GAAP. And finally, this conference call is being webcast, with the webcast link available in the Investor Relations section of our website at www.calyxt.com. At this point, I'd like to hand the call over to Calyxt's Chief Executive Officer, Jim Blome. Jim, the floor is yours.

Thank you, Chris, and thanks to everyone for being here on this call as we discuss Calyxt's results for the fourth quarter and the full year 2019. Calyxt is a technology company whose mission is plant-based solutions that are both healthy and sustainable. Our emphasis is on health and wellness advantages for consumers, such as better-tasting plant proteins, gluten-free options, heart health, higher fiber and reduced allergens. Sustainability benefits also guide our product development work, with projects spanning alfalfa, hemp, potatoes and soybeans. TALEN technology, the engine behind our innovation platform, lets us create plants with the characteristics we want, benefiting people and the planet. The gene-editing and plant-breeding methods we use imitate the way plants might evolve in nature; we can evaluate whether a trait is viable in under 2 years, and commercialization then takes another 3 to 4 years, all at a cost substantially lower than traditional development approaches. To safeguard our market position, we have assembled a broad IP portfolio containing over 70 patent families spanning multiple gene-editing platforms; right now 14 products are in development, and we anticipate launching as many as 6 product candidates within the next 4 years. A standout moment for Calyxt in 2019 came when we finished our voluntary consultation with the FDA for our high-oleic soybean. No one else in the world had taken on this process before us, and we see it as confirmation of our leadership position in the industry; the commercial launch of our high-oleic soybean products is now underway. We have demonstrated that our technology is commercially viable for use in plants. As innovation continues, we expect to deliver future products to market with options for revenue streams that are more diversified, higher-margin, and also less capital intensive. Beyond soybeans and wheat, our plan is to bring products to market through a collaboration business model, which lets us capture cash flows from access to Calyxt's TALEN technology. Milestone payments — technology milestone payments when we achieve development success, plus ongoing payments from royalties or other streams tied to the value of the product development. Bill Koschak, our CFO, will explain during his prepared remarks how we expect to both expand our margins on soybean products and how these new revenue streams will dramatically improve our gross margin profile in 2020 and beyond. Before I move on to Calyxt's 2019 accomplishments, I want to touch on our ESG initiatives here at Calyxt. Sustainability sits at the center of Calyxt, arising from our commitment to innovation and our belief that by further — by furthering environmental, social and corporate guidance — governance initiatives, we will build a stronger company capable of improving the world and the lives of those living in it. With that in mind, we are working diligently to create and report ESG metrics that improve our transparency with our stakeholders. Our ESG commitments will rest on 3 core Calyxt principles. The first principle is to successfully execute our core business while maintaining strong corporate governance practices, since our business success naturally improves and revolutionizes agriculture. When it comes to the second principle, that's environmental stewardship. Calyxt aims to make a difference there by setting emissions reduction goals of our own and then hitting them, and just as significantly, by assisting our customers and collaborators in hitting theirs. Social responsibility is the third principle — we back sustainable agriculture along with fair labor practices, and we work to strengthen how sustainable our supply chain is, cultivate a varied workplace, and contribute to the communities in which we live and work, just as we did last fall with our Harvest Fest in South Dakota. As it becomes appropriate, we're eager to share updates on our progress across various ESG initiatives, and we'd urge shareholders to keep an eye on what happens on this front. Let's move now to what we accomplished operationally. For Calyxt, 2019 was a year of transformation — we rolled out our first commercial products and laid the groundwork for strong growth in 2020 and beyond; we've shown the world that TALEN technology, the engine behind our innovation platform, can improve plants, which lets us create products offering health and sustainability advantages; during 2019 we overhauled our leadership, science and sales teams, adding a number of seasoned, highly capable people to run the business. The effect those individuals have had shows up in the scientific and commercial strides we took. With this group, I'm eager to work toward even bigger wins in 2020 and beyond. Ours is a technology company, and 2019 brought us numerous gains in our scope of activity and work processes. The count of projects in development grew to 14, more than double the 6 we had a year earlier. Crops we're working in went from 5 a year ago to 9; plus we anticipate launching a minimum of 6 product candidates by 2024, and today I'm thrilled to announce that later this spring we expect to launch our first product in hemp. On the work process side, we achieved a 50% gain in the time needed to assemble a TALEN construct, and we've reduced plant growth cycles by half. With Dan, Travis and Bobby leading, we anticipate this significant momentum will carry on. I'm glad to share too that we hit our financial metrics for the year. Every bit of the HO soybean meal we made was sold. And when the year closed, we held a modest amount of oil. A strong crush plan is set for 2020, and we expect — that we expect it will let us satisfy customer demand as 2020 progresses. A strong sales funnel exists for our high oleic soybean products, and multiple customers are testing them. The oil orders that came in early 2020 confirm our HO soybean oil's capability and performance. To fulfill the demand we anticipate for our oil, during 2020 we've already increased contracted soybean acreage to nearly three times what it was for 2019 planting, and we anticipate holding a 25% share of the market across all HO soybean acres planted in the United States in 2020; in addition, we've established a supply chain to enable business scaling, collaborating with 3 top agricultural cooperatives regarding seed distribution, grain handling, and grain processing elements of the operation. All of this work makes us confident that we can satisfy what our customers expect, whether they're existing or prospective. Having said that, I'd now like to turn the call over to Dan Voytas, our Chief Science Officer, who will provide an update on innovation and our product pipeline.

Thanks, Jim. As someone who started this company, it's remarkable to see how much we move forward annually, and 2019 stood out in particular for what we achieved. Let me give a quick rundown of the way our TALEN technology and plant breeding methods function. The initial phase of development centers on pinpointing a target location within the genome of the chosen crop. Next, we create a TALEN, perform the edit or edits, and verify that the results match what we anticipated. Once those results are verified, the plants move along our development pipeline, going from the laboratory into a growth chamber, then a greenhouse, and finally a test plot. At every stage, we verify accuracy. Following the test plot stage, we cultivate those plants and gather their seeds, validate them, and then kick off commercialization. As Jim noted, 2019 brought numerous scientific milestones, capped off by our refreshed R&D pipeline. The count of crops in our portfolio rose to 9, compared with 5 twelve months earlier. During 2019, we brought in hemp, oats, peas and peanuts. Products in development grew to 14, versus 6 twelve months earlier. The projects in our pipeline tackle major difficulties in the markets they serve and open up fresh possibilities. A prime illustration is our high-fiber wheat product, where we've managed to provide 3x the dietary fiber found in traditional white wheat flour. We anticipate bringing this project to market as soon as 2022. Remarkable results like these leave me confident that Calyxt can transform agriculture. We anticipate further breakthroughs on projects within our development pipeline during 2020. Between now and 2024, we expect to launch a minimum of 6 product candidates, among them our hemp product candidate in the second quarter of 2020, our high-fiber wheat product candidate as soon as 2022, and 3 more product candidates, whether through our integrated business model or alongside third parties. This is especially thrilling as we keep ramping up our push to forge valuable collaboration agreements with top-tier industry firms to commercialize our products in a high-margin, capital-light way; we're pressing ahead with commercialization of our alfalfa product, an alfalfa with improved digestibility, slated to launch in 2021 via a collaboration with S&W Seed; we anticipate earning a royalty on seed sales, which monetizes our technology platform in a capital-light way. This alfalfa product is a thrilling illustration of what we can accomplish, since alfalfa that's more easily digestible might translate into lower water intake and methane output from dairy cows while producing the same amount of milk. Through this product, Calyxt will deliver advantages to farmers, consumers and the world via economic, logistical and environmental efficiencies. We can't wait to share more about this product and other sustainability offerings in our development pipeline. Our R&D pipeline has me very enthusiastic, and I'm focused on growing it together with partners both within and beyond the company, pushing our technology forward and broadening our IP portfolio, which lets us keep breaking past the limits we once assumed TALEN could reach. Along the way, we'll investigate fresh target crops, traits, pathways, and transformation methods. Beyond the products we've already told you about, we'll keep building out that pipeline so that potential blockbuster products can reach the market. A few illustrations of things we're chasing hard include sustainable oil replacement, in which one oil gets swapped for a different option that's more sustainable or better for health. We're also developing nongluten alternatives around protein flavor, examining concepts such as plant proteins with better taste. On top of that, we have several hemp efforts in progress, among them a number that let us apply our plant breeding know-how to speed up market introductions, since no gene editing is needed. To wrap up, 2019 brought plenty of achievement and laid the groundwork for a thrilling 2020. I'll pass things over now to Bill Koschak, our CFO, for an update on high oleic soybean sales and marketing work plus our financial results.

Thanks, Dan. There are a number of traits our high oleic soybean oil possesses that allow it to match or exceed every other premium oil available on the market right now, among them its fat content and its polymerization levels. That holds true against other HO soybean oils too. When we first began pursuing this concept, we were lucky to get a single acre in the ground; we've since proven that demand exists today for our HO soybean products. To scale the business, we've enlisted a number of top agricultural cooperatives to operate our supply chain at scale, and over time we've grown both our acreage and our state footprint. Thanks to the new soybean varieties we're introducing in 2020, we'll be able to reach acres spanning 6 states. Those same 6 states account for 45% of all soybean acres in the United States, plus a meaningful share of wheat acres. That gives us room to expand both the market and our share of it. Based on our projections for the high oleic soybean market in 2020, we'll hold 25% of planted acres, which we expect will earn us a seat at the table with major vegetable oil users as they assess their purchasing needs. To evaluate the target addressable market for our products, we split the U.S. vegetable oil market into commodity and premium oils. It's the premium oil segment where we compete, and in 2018, per USDA estimates, that segment came to nearly 15 billion pounds. A range of oils, a lot of them imported, make up this portion of the market. Inside the premium oil market, we plan to concentrate on 4 segments, chosen based on our oil's quality and our capacity to scale alongside large customers while also working with others in the market. Our prioritized market segments are food service, food ingredients, industrial and animal nutrition. We estimate those 4 add up to an 11 billion pound addressable market. Our oil serves as a value proposition in each of these 4 market segments, alongside several overarching points of differentiation — for instance, superior stability, a clean neutral flavor and low polymerization. Those advantages make our oil highly competitive and versatile across our target market segments, especially in food ingredients and food service; we've built a robust sales funnel and are sampling, testing and moving through supplier approval processes with multiple customers. To date, we've shown customer success in the food service and industrial market segments, and we're in late-stage testing with multiple customers in the food ingredients segment, with supplier approval processes underway in multiple instances involving large, widely known brands and companies. We also recently received a series of purchase orders for future deliveries of our HO soybean oil as a plant-based alternative to synthetic fluids. These orders come from a new world-class customer that operates across all 4 premium oil target market segments: food service, food ingredients, industrial and animal nutrition. To give ourselves the greatest shot at succeeding, we break those priority market segments down even more—by customer type when it comes to food service, and by product category on the food ingredients side—so that our efforts are concentrated where they can deliver the biggest payoff. On the food service side, we've had success with distributors that sell our products to their accounts. We're also going after large operators directly, zeroing in on those that do a lot of frying. Over in food ingredients, we singled out 4 market categories: salty and grain snacks, plant-based proteins, industrial frying, and nondairy creamers. Those are also categories where significant oil users exist, letting us bring benefits to their customers. Two additional categories where we see near-term opportunity are baked snacks and roasting applications. The appearance of a brand in this presentation doesn't mean we hold any existing contracts with that brand—it's simply intended to illustrate where opportunities exist for us. To sum up, we account for a meaningful share of HO soybean acres, and given how focused we are on acquiring customers, we think our oil is set up for growth. Now I'll provide an update on our financial results for the fourth quarter and the full year 2019. A complete discussion of the fourth quarter and annual results can be found in our press release. We filed our Form 10-K this morning as well. During the fourth quarter, we kept up our rapid pace of operational execution. Revenue for the fourth quarter of 2019 came to $3.8 million, generated entirely through sales volumes of our HO soybean products. Our HO soybean oil accounted for 32% of revenue in the fourth quarter. Cash used during the fourth quarter totaled $7.9 million, which beat our annual run rate projection for 2019, as the operational savings we had projected earlier in the year started to affect our spending; for 2019, revenue came in at $7.3 million. HO soybean oil revenue made up 23% of the total. We sold out of our HO soybean meal production during the year. Cost of goods sold for 2019 rose by $9.3 million, which reflects the cost of products sold in the period plus an adjustment to the net realizable value of our inventories, reflecting the higher costs we've seen at this early stage of commercialization. Gross margin as reported for 2019 was negative $2.0 million, or 27%. We also report gross margin as adjusted, which came to a negative $4.5 million, or 61%, for 2019. The reason we're providing gross margin as adjusted right now is that we believe this non-GAAP financial metric gives investors useful supplemental information at this early stage of commercialization, since the amounts being adjusted affect how comparable our gross margins and financial performance are from one period to the next. Net loss for 2019 was $39.6 million, or a loss of $1.21 per basic and diluted share, compared to a net loss of $27.9 million, or negative $0.91 per basic and diluted share, in 2018, driven by higher personnel costs, higher stock compensation expenses, and negative margins tied to the launch of our HO soybean products. For 2019, adjusted EBITDA moved to a loss of $29.8 million, up from a loss of $18.9 million in 2018; the main driver was higher personnel costs, since commercialization expenses during 2019 were mostly offset by decreases in grain cost that had been expensed as R&D in 2018. Net cash used in 2019 came to $35.3 million, versus $18.4 million in 2018. The rise in cash used over the year came from commercializing our HO soybean products, which included investments in personnel and grain purchases. As of December 31, 2019, cash and cash equivalents stood at $58.6 million, compared with $93.8 million as of December 31, 2018. To sum up, our financial progress makes me pleased. We brought in over $7 million of revenue while spending under $36 million in cash. We anticipate that our investments in the team will let us move our pipeline ahead quickly, grow both customer and collaborator relationships, and introduce future products to the market. As we look ahead to 2020, we anticipate revenue will almost double compared with the prior year, and we expect to use roughly $34 million to $38 million in cash. We are handling our cash position and spending in a way that, I believe, will leave us with enough cash to fund operations into mid-2021. In 2020, we also anticipate expanding our gross margin, as adjusted. To achieve that margin expansion, we expect to sell products at prices above those we charged in 2019, and we also expect to start optimizing costs within our supply chain as production scales; we do not offer a reconciliation of gross margin as adjusted on a forward-looking basis, because without unreasonable effort we cannot determine 2020 adjusted gross margins, since we cannot determine what potential net realizable value adjustments to our inventories will be at year-end 2020. With that, I hand the call back to Jim.

Thanks, Bill. We take pride in providing goods to our clients and partners that concentrate on wellness and health advantages for shoppers along with sustainability gains for everyone. The progress in our pipeline plus our commercial achievements have laid the groundwork for a landmark 2020, in which we anticipate fueling our R&D pipeline through fresh initiatives, methods, and instruments. We plan to start voluntary talks with regulators and keep moving items forward via our development cycle. Additionally, we have numerous ventures in hemp, among them a number that let us apply our skills in plant breeding to speed up market debuts since this effort doesn't call for gene editing. Our fresh hemp breeding initiative is scheduled for commercial debut during 2020's second quarter. What thrills me the most regarding this debut is that our research crew faced a hemp-related obstacle and managed to craft a remedy, encompassing the approach, instruments, and workflows, within merely a handful of brief months, showcasing the strength of our tech platform and our personnel. We anticipate broadening our soybean product clientele throughout our priority market categories, achieving efficiencies in our supply chain, and enhancing our adjusted gross margin figure. We also look forward to creating and disclosing our ESG pledges and achievements. We stand as an innovation platform and a frontrunner within our sector. We keep propelling the completion of crucial operational goals throughout R&D and our commercial endeavors while routinely surpassing our internal targets. We possess an early-mover edge that we plan to safeguard and swiftly exploit; we'll reveal more about our evolving narrative at our forthcoming 32nd Annual Roth Conference in Orange County, California, and our Analyst Day in May 2020, which will be announced soon; with that, I'd like to open the call up for any questions.

John, let me address the 2020 guidance once more. What I'm trying to grasp is the revenue picture and the outlook. The acreage, after all, is tripling compared to last year. You've brought in additional customers for this product. And those troublesome commodity prices keep hanging around. So my question is whether more of those sales are moving into 2021. It really doesn't look like pricing is the problem. I'm simply attempting to connect the rise in raw materials for HO with what you'll actually record as revenue during this year.

Absolutely, John. To begin with your question — keep in mind, there's a 1-year gap separating when acres get planted and harvested from when we turn them into revenues. That tripling, then, actually applies to revenue in 2021, not 2020, correct? So a great deal of the revenue we generate for 2020 will be based on the 18,000 acres we — pardon me, the 36,000 acres we planted back in 2019.

All right; and after that, regarding the...

That's what the strategy is built on.

All right. So nothing out of the ordinary regarding customers or anything along those lines — it's simply a matter of timing — okay, understood.

Second, John, we carried out the $7 million to $8.3 million this year from the acres we planted in 2018 and earlier; and our pricing plus several other elements played a part, shifts in soybean prices and such, which shape the range of figures for next year, yet everything stems from the 36,000 acres.

All right. Then second, regarding how you're thinking about the middle section of the P&L, could you perhaps take us through what you expect for the R&D versus SG&A split in 2020? What I mean is, it appears the underlying R&D run rate is nearer to, I suppose, $9 million once you adjust for the grain adjustments there. So what's your view on R&D and SG&A? And beyond that, any perspective on working capital too, so we can arrive at that cash burn figure?

Yeah. So our — apologies, our R&D figure for 2019 was nearer to $12 million, correct? And nothing distorts that figure. Comparability is impacted by what ran through R&D expense twelve months earlier; therefore I would anticipate our run rate sitting at that level. And as we ramp up on a few of these projects, that would be where we focus investment in 2020 from an SG&A standpoint. On the working capital side, we gained considerable knowledge during the 2019 harvest regarding how much grain could be delivered, what the expectations were, how fast we can turn it into cash, and we have a crush plan, as noted in the remarks, that will let us burn through our existing grain inventory with a high degree of certainty in 2020; after that, everything depends on how many of those acres we harvest in the fall of 2020, which will determine the working capital requirement at the close of the calendar year.

Okay. I've got a few things to ask. Let me start by going back to that 2020 revenue outlook. I want to be clear about this — with those 18,000 acres harvested last fall, how much of that will be counted as revenue in 2020? Is it all of them? Or did some of that get recognized in late 2019? And is there a portion of the acreage that, while harvested, ends up being used for R&D or demo purposes? Basically, how directly does what you harvested in '19 translate into revenue in '20?

Thanks, Ben. I appreciate you asking. Let me clear something up. The acres we planted in 2019 came to 36,000.

My mistake there — apologies; I simply chose the wrong word. Sorry about that.

It's completely fine. So during 2020, those 36,000 will turn into revenue. As for samples and similar items, their effect on how much product we can offer for sale isn't significant. Should someone request a big sample, we would — not probably, we would actually sell them that oil. We wouldn't simply hand over a tanker, say.

All right, understood. And then, if I may just confirm, none of the revenue that mattered came in from the fall harvest prior to the close of the calendar year. Right?

Right.

All right. Now, regarding acreage for 2020 — I suppose my first thing is just a point of clarification. You mentioned that the acreage was almost tripling. A few weeks back, you issued that press release saying acreage had reached 100,000. At this stage, is contracted acreage still at 100,000, or has it gone above that?

That figure was made public by us roughly one month ago. And clearly, there remains opportunity to sign up acres. As a result, it has kept growing. Our bigger focus is the portion we hold of HO acres within the U.S., and that's a figure we feel genuinely enthusiastic about — holding 1/4 of the share, according to what we estimate.

That said, Ben, you're raising a fair point. We kept selling right through until after April 1 of last year in order to hit our target. So the fact that we got there sooner said something about how strong demand was. Even so, we'll keep watching and keep backing growers.

Understood. All right. So my final question, and then I'll rejoin the queue. What's your approach — how are you positioning the business ahead of spring planting to ensure you have seed inventory available as we move into 2021? And is that planted acreage being increased beyond your doubling — the target you set of doubling? Can you give us some way to grasp what your 2021 outlook looks like when it comes to seed inventory?

Yeah; we're bringing out — appreciate you kicking things off, Ben. In 2020 we're bringing out 5 new soybean varieties, and that lets us grow our geographic footprint and cut down our exposure to weather, which was a genuine threat in 2019. Beyond that, it lets us multiply those seeds over the 2020 growing season so we can extend further into the geographies we've selected and get better margin optimization. So from the start, we've stated in our initial business plan that our focus is on a strategy that doubles acreage annually, and that remains our public guidance to date.

I just want a clarification regarding the 2019 revenue figure from this morning's K. You reported $5.7 million from meal and $1.6 million from oil. I'm attempting to consider how that breaks down relative to the premium oil value you produce. That revenue split, in my view, would fall short of what you'd anticipate making if you were merely crushing commodity meal and oil. I recognize you still have carryover oil left to sell during 2020, and there were likely some trial and sample volumes involved; nevertheless, just assist me in understanding that revenue mix, because if you're crushing and producing a value-added oil, I would have assumed the mix would lean more heavily toward oil rather than meal.

Thanks, Adam. Our perspective on 2019 is this — and this is among our margin optimization levers going forward — we sold our oil during 2019 into various market segments, though not at the premiums we anticipate moving forward, since our greater focus was on ensuring we didn't take on additional costs while managing our crush plans and demand; therefore, we felt we needed to move that crop out so our farmers could place new crop into the bins, and that entire conversion process, rather than leaving us holding a substantial inventory, produced the prices shown in the reported figures.

To build on that, what makes those 100,000 acres so exciting is this: we've at last reached a land position and crude contract that lets us discuss larger volumes with larger buyers through a dependable, steady process. And I'd put the 2019 experience down to startup.

All right. So perhaps — we might be able to take this up separately, off-line, but my intention was — well, if I look back — I planned to revisit a few of the comments you folks have provided during earnings calls across the last 12 months. Once you began bringing high oleic soybean oil to market, the communication has stayed fairly steady: you were receiving the premium prices you had set out to capture. So where does that disconnect come from?

Two factors are at play here. Whenever we sold the oil to buyers we anticipate serving over the long run, premiums came our way. Whenever we sold it to avoid racking up extra expense and because we wanted to turn it into cash, the premium we described did not come our way.

You've got it right about the customer mix. And at this point it's set — now that it's set in dependable supply, we can shift toward the top segment instead of the bottom.

All right, that's useful context. Now, taking a longer view, I want to understand how you're structuring the product pipeline. It stands out that the term collaboration appears far more visibly in today's forward-looking discussion than would have been the case 6 or 6, 12, or 24 months back. Jim, I'd like to hear your perspective on whether the lessons from having the value — that completely integrated product chain with high oleic soybean — have shifted how you think about collaboration as opposed to building it into the model, and how that's shaped your forward view of the business?

Excellent question, Adam. We've said consistently, I believe, that within the soybean market, going farm-to-fork was necessary for proof-of-concept, along with controlling the supply chain. And we constructed a fantastic supply chain centered on soybeans that could likewise serve wheat. So over the last year, as you'll notice, we've consistently discussed pursuing soybeans alongside wheat, since those dilute a fixed cost tied to what we had or the system we'd established, and we would contemplate handling those ourselves, though we'd always weigh partnerships with parties in different crops and markets possessing a go-to-market brand plus our strategy and/or resources. So what you're hearing today is consistent: all that difficult effort during 2019 to create that soybean system is going to benefit wheat. Yet at this point we're shifting and pivoting toward applying the science in additional crops, which, as we've mentioned, means collaborations with other businesses that already possess established distribution networks across these crops and markets, and we're thrilled to do so, but that's what separates prior earnings calls from this one: You're finally hearing us say, yes, we've successfully constructed that soybean/wheat distribution system, and we're advancing into other crops and other collaborations.

All right. Well, since — apologies, perhaps just one thing worth stressing there. And if — what would keep you from using the infrastructure already in place and the relationships being built on the soy and wheat side to create more traits and capabilities in those crops, so that franchise lasts into the future? Why wouldn't the extra spending keep going that way instead of — I'm not suggesting putting money into the other crops is wrong, I'm only attempting to confirm I grasp the reason; it looks to me like soybean isn't really where future R&D sits. And the same goes for wheat. You've got the high-fiber wheat, but beyond that, there's nothing more.