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

Good afternoon, ladies and gentlemen, and welcome to Calyxt Business Update Conference Call and Webcast. [Operator Instructions] This conference is being recorded today, October 5, 2021. At this time, I would like to turn the conference over to Bill Koschak, Calyxt's Chief Financial Officer. Please go ahead, sir.

Thank you, and good afternoon. This is Bill Koschak, the Chief Financial Officer of Calyxt. I would like to thank you all for taking time to join us for Calyxt Business Update Conference Call and Webcast. Presenting with me today are Michael A. Carr, our President and Chief Executive Officer; and Dr. Travis Frey, our Chief Technology Officer. The press release detailing this business update crossed the wire after today's market close and is available on the company's website, calyxt.com. Before we begin the formal presentation, I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and future operational goals and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks. Finally, this conference call is being webcast. The webcast link is available in the Investor Relations section of calyxt.com. At this time, I would like to turn the call over to Michael for his opening remarks. Michael?

Thank you, Bill, and thank you for joining us today for our business update call. Today marks the close of my first 60 days at Calyxt, and I'm more than excited today than I was the day I started. I'm surrounded by a strong and innovative management team, and the announcement we made earlier today caps the strategic review of our business that I started the day I joined Calyxt. We have a leading technology foundation and capabilities, including multiple gene-editing platforms, a strong and experienced team and expertise in plant-based molecules. Earlier this afternoon, Calyxt announced a strategic initiative to expand its business offerings to provide innovative, high-value and sustainable plant-based solutions for a wider group of end markets and a diversified base of customers, including world-class and industry-leading companies. This, in my view, marks a significant new opportunity for the company. This opportunity is predicated on customer demand-driven needs and the integration of our newly named proprietary PlantSpring technology platform, coupled with our already commissioned pilot bioreactor, the BioFactory, both of which we will speak to in greater length on the call today. With our technology platform and our commissioned pilot plant, Calyxt is a plant-based synthetic biology company that is able to advance solutions to important new end markets and customers that will help our customers produce sustainable consumer and industrial products to meet their corporate sustainability targets and financial goals. We believe that the capabilities of our BioFactory will enable the business to innovate more quickly; and, when combined with our customer demand-driven innovation process, should deliver compelling financial returns for our shareholders. In summary, the integration of PlantSpring and our BioFactory significantly broadens the potential impact of our mission of using client-based solutions to create a sustainable future across a broad range of industries. On today's call, we will outline the substantial plant-based synthetic biology opportunity that lies ahead for Calyxt. We will also discuss the power of integrating PlantSpring and the BioFactory as well as the end markets and new customers we are targeting. We will also update you on our other business activities and recap our recent corporate and financial highlights before taking your questions. Calyxt has a unique opportunity to revolutionize how the world uses plants. Our focus is on innovating where the consuming of finite resources and the sustainability of our planet intercept. The global economy today is not sustainable, as evidenced by such metrics as carbon pollution, water scarcity and soil erosion. Increasingly, shareholders and other stakeholders demand that companies produce products differently and in a sustainable manner. And plant-derived compounds and ingredients represent a differentiated and more sustainable alternative to many products and materials in use today. Consider that more than 2,000 of the world's largest companies have committed to be carbon-neutral by 2030. We believe that in order to achieve this goal, companies across industries will need to incorporate plant-based solutions into their businesses. The negative impact of unsustainable products and materials we're having on the planet, its climate and its resources is becoming increasingly clear. As a result, consumers are demanding that companies across industries, including cosmetics, personal care and wellness, food, advanced materials, chemicals, produce their products with sustainable and environmentally friendly compounds and ingredients. Boston Consulting Group recently estimated that the major derived products, such as those developed from plants, will affect $30 trillion of the global economy over the next 30 years. This is driven by sustainability, decarbonization and carbon-neutral goals. This creates a massive opportunity for Calyxt to work with its customers, developing compounds and ingredients to satisfy their end customers' demands. This powerful trend provides an opportunity for customers and other stakeholders to participate with Calyxt in the development and production of high-quality ingredients and materials to not only span the historical plant-based food and feed chain but also transcend other industries and segments that increasingly seek to decarbonize and improve their environmental footprint. When we speak to synthetic biology, we are speaking to the design and engineering of biological organisms. Synthetic biology is built on knowledge gained from the last several decades of genomic research, which is led by its core principle that biology is fundamentally programmable with cells not only solely acting as information storage but also as processors of information. The same way that computers can be programmed by code, cells can be programmed using natural code through our own DNA. Importantly, synthetic biology can be used to program the cell to make applications that are physical, and plants represent a uniquely qualified platform to deleverage. Relying on Calyxt's deep understanding of metabolic pathways provided by plants and leveraging our expertise and proprietary tools to drive efficiency gains, Calyxt is positioned to be a key driver in the sustainable biologically driven revolution. Since Calyxt's founding in 2010, our company has been focused on developing its technological platform and expanding its knowledge of plant genomes. Our newly named technology platform, PlantSpring, has been built on both our experienced engineering plant metabolism and our proprietary systems. This licensable platform has powered the Calyxt innovation engine. And until now, it is focused primarily on the agriculture end markets. Together with the BioFactory, this platform opens a wide range of new end markets to Calyxt. The PlantSpring platform spans from lab to market and will deploy predictive and analytic tools to drive down production cycle times, spanning from discovery through development and scale-up and eventually commercial production. Our PlantSpring platform provides a strong foundation for Calyxt [ build from ] and lead in driving this sustainable revolution. The output from PlantSpring integrates seamlessly with our BioFactory, which is accumulation of the work at Calyxt's researchers, that will enable our company to expand its production methods from solely outdoor agriculture systems to also include controlled environment, bioreactor-based production systems. The BioFactory will enable controlled replication and processing of plant-based molecules within an automated synthetic biology bioreactor with the replication expected to accelerate exponentially over time. As Calyxt designs and engineers plant-derived compounds for its customers via its platform, the BioFactory will be leveraged to commercialize compounds. I will now turn the call over to Dr. Travis Frey, our Chief Technology Officer, to walk us through our PlantSpring technology platform and the BioFactory in more detail. Travis?

Thanks, Michael. In a world seeking to evolve to more sustainable solutions, plants are uniquely capable of producing many compounds that cannot be produced through other means, including microbial fermentation. Calyxt estimates that more than 80% of all known natural compounds are being produced by plants. These known natural compounds comprise over 200,000 chemistries today, and we believe plants have the potential to access many of the nearly 1 million estimated chemistries not yet discovered. Calyxt scientists are experts in engineering plant metabolism, which includes enabling the plant cells to produce more or less of certain chemistries or novel chemistries that may be unique to plants. The scientific team has demonstrated this capability many times over across multiple plant species. This demonstrated expertise creates a unique perspective on the power of plants and how they can be used to shape our future and gives Calyxt an expertise advantage over others. PlantSpring represents Calyxt's technology platform, a full suite of capabilities based on its decade of experience in engineering plant metabolism, its scientific knowledge, proprietary systems, tools and technologies and applying an expanding set of artificial intelligence and machine learning capabilities across the platform. By using PlantSpring, Calyxt is able to unleash the natural capabilities of the plant, the original biological system, and makes available a platform for harnessing chemistries from rare and undomesticated plant species in a more robust and sustainable manner. Calyxt is focusing on deploying PlantSpring to address customer-driven innovation needs, utilizing plants to produce high-value products and materials that may address customers' sustainability targets and goals. We expect that in light of current industry trends, such needs will increasingly focus on replacing existing compounds with more sustainable alternatives. PlantSpring is leveraged throughout the development process, enabling the reduction of cycle times and leveraging of knowledge gained when developing the next compound. In the design phase, Calyxt uses systems and insights to identify metabolic pathways, target genes controlling these pathways, develop strategies for optimized expression of target genes and design a technical approach to achieve the targeted compound. In the engineer phase, Calyxt directs changes in the plant cell using a combination of tissue culture, gene-editing capabilities and transformation. After the target has been designed and engineered, Calyxt's rapid prototyping system can quickly produce compounds, which can be verified against customer specifications using natural product chemistry, metabolomics, genomics and gene expression tools. This system and these analytic tools will quickly ensure the exact compound desired by the customer has been produced and speeds new product development and delivery, all while collecting data and learning and reapplying these learnings in future product offerings. Calyxt has developed early-stage artificial intelligence and machine learning capabilities in PlantSpring, enabling knowledge gained from past activity to be combined with predictive analytics to rapidly prototype and provide feedback. These capabilities leverage Calyxt's deep scientific experience, the vast amounts of data that it has accumulated over its history, including a large proprietary of database of genomic information across numerous plant species and will also integrate publicly available and other data sources. As a result, Calyxt believes it can develop engineered biomolecules and plants for customers at faster speeds than its competitors in the synthetic biology industry. Calyxt expects to continue to develop its artificial intelligence and machine learning capabilities across all elements of PlantSpring and the BioFactory and anticipate those benefits to continue to drive down the development time frames. Next, I'll turn to the BioFactory. As Michael referenced earlier in this call, today's announcement is the culmination of work of Calyxt researchers. The BioFactory will enable Calyxt to expand its production methods from outdoor agricultural systems to include controlled environment, bioreactor-based production systems. We consider the BioFactory to be a natural evolution of how PlantSpring is applied. The BioFactory harnesses the potential plant cells in a matrix structure, combined with nutrients and media for its production. The BioFactory leverages multiple cell types, and the matrix structure enables controlled replication and processing of molecules with replication accelerating exponentially over time. The BioFactory is driven by the output from Calyxt's PlantSpring platform. In combination, the BioFactory and PlantSpring are capable of producing high-value compounds for use in a wide range of sectors at greater speed compared to other approaches. We also believe the BioFactory has the potential to be 1 of the most sustainable production processes across industries because of its production methodology. It does not use fermentation, and there are fewer of the sustainability challenges associated with other indoor production systems, including lower levels of off-gases, reduced water demands and lower energy requirements. The BioFactory is also expected to have limited downtime between production cycles. And because it produces compound year-round indoors, they are protected from any adverse climate effects. As we complete the verified phase of product development for our customers, production in the BioFactory begins. We start small scale and will ramp up to commercial-level production using a range of vessel sizes. We have been running last-scale bioreactors for several months. Our first pilot scale bioreactor has been commissioned and is expected to be online by the end of 2021. The initial pilot bioreactors deliberately scaled for 100 meters, and we expect to expand the scope of our pilot facilities based on customer demand. For our transition from pilot to commercialization, Calyxt's current plan is to use third parties, which we refer to as infrastructure partners for at-scale BioFactory production. In this way, we can operate the BioFactory in an asset-light manner and mitigate the risk of achieving production at scale. These are both key elements of our business model and strategy for commercializing the BioFactory. I'd now like to take you through a couple of examples that serve as proof of concepts for our PlantSpring platform and BioFactory working in combination. The first was a plant-derived protein called ovalbumin that is similar to the protein in egg whites and could be used in several end markets, including as a protein replacement. The second, which leveraged what was learned to produce the ovalbumin proof of concept, was betanin. Betanin is a natural antioxidant and red colorant normally produced through pH extraction of field-based beets. Betanin has the potential for use in the cosmeceutical, nutraceutical, flavoring and ingredients end markets and likely others. Commercially available beet-derived betanin is water-soluble and degrades quickly under medium to high temperature, ultraviolet light and pH changes, limiting its market acceptance. If Calyxt's betanin proof of concept can overcome the challenges associated with beet-derived betanin, we may seek a partner to fund further development to commercialize the compound. What is important with these first 2 compounds, both of which are proof of concept, is that we were able to move through the design, engineering and verified phases of development in a matter of months. This work demonstrates the power of Calyxt's plant metabolism engineering to produce compounds at high efficiency. And as Calyxt continues to scale, we intend to pursue numerous opportunities among expanded group of end markets and a diversified base of customers. In summary, the BioFactory is an emerging force and plant-based synthetic biology based on the sustainable nature of the process. The unique combined capabilities of plant metabolism and Calyxt's PlantSpring technology platform as well as the speed and cost at which Calyxt intends to bring these compounds to market using its customer-driven innovation process is a strong, new technology that exemplifies the innovation necessary to meet a significant unmet accelerating need for differentiated and sustainable ingredients and inputs. I'll now turn the call over to Bill to speak to the BioFactory business model.

Thanks, Travis. Historically, Calyxt has applied its technology platform to opportunities it identified, primarily focused on the outdoor agriculture end markets. Our cost to develop products were several million dollars per product, and the time line to commercialization was 5 to 6 years. Our approach to the BioFactory business model will be customer-focused and demand-driven. We have developed a set of criteria by which we will evaluate opportunities and drive focus for our development efforts that includes consideration of factors such as the nature of the customers' need, the size of the market or markets served, the speed of adoption, our biocycle capabilities and financial returns. When combining PlantSpring with the BioFactory, our cost to develop a compound are expected to decline significantly as are the associated development cycles as we continue to leverage PlantSpring and expand our AI/ML capabilities. This represents a significant advancement of our business model. From a financial standpoint, we anticipate that our customers will fund the development cost of their particular compound or compounds. And once we achieved at-scale production, the customer would purchase the compound pursuant to a supply agreement from Calyxt. Production would be handled by our infrastructure partners. Two key risks to this business model we believe we will mitigate with this approach are market demand and at-scale production. We intend to focus on customer need-driven demand when selecting compounds for development. And we believe the use of infrastructure partners will enable a faster and more certain path to at-scale production. And it also enables an asset-light business model given the early stage of the BioFactory. I will now turn the call back to Michael to speak to the end markets that the BioFactory can serve.

Thanks, Bill. As mentioned earlier, the Boston Consulting Group estimates that nature-derived products will affect $30 trillion of the global economy over the next 30 years, driven by sustainability, decarbonization and carbon-neutral goals. For example, the chemicals industry is a $1 trillion to $3 trillion market in and of itself that needs to reconfigure numerous compounds and products in order to reach its sustainability goals. As companies increasingly move to address the ingredients of their products, this market change, founded in sustainability and decarbonization, creates a tremendous opportunity for Calyxt's plant-based solutions. Target addressable markets for the BioFactory are valuable and diverse since plant-based synthetic biology can be used to produce compounds and products more quickly, less expensively and more sustainably. Broadly speaking, we believe that potential end markets for plant-based sustainable solutions are vast. In the near term, we intend to focus our customer activation and development activities in a narrow market segmentation where we believe our current BioFactory capability gives us the best opportunities to win. These end markets include the nutraceutical, cosmeceutical, pharmaceutical, advanced materials and chemical industries. These end markets contain strong potential customers for our innovation as they all have current business needs to reduce their carbon footprints. We have already begun discussions with potential customers in those target markets. Nearly every meeting has generated an additional customer idea or need. This feedback has exceeded our own expectations. With this announcement, we look forward to engaging additional potential customers across those industries to identify our first contracts for the BioFactory. We also expect to continue to license our technology and develop new products for agricultural partners based on their needs. With respect to technology licensing, this activity spans Calyxt's vast intellectual property library built over 10 years as a leading plant biotechnology company, including multiple gene-editing platforms, plant breeding and other capabilities. This activity includes the licensing of historically developed product candidates, which has improved digestibility alfalfa, high oleic, low linoleic soybeans and product candidates derived from other hemp advancements. As demonstrated by the recent announcement of the new product to be developed for a partner in soybeans, Calyxt will continue to opportunistically develop products for partners focused on traditional agriculture. To ensure appropriate resourcing, EBITDA opportunities, Calyxt has developed a set of criteria by which all opportunities are evaluated, which include the size of the overall opportunity, the nature of the product to be developed and the amount of cash to be received by Calyxt both upfront and over time. Now I'd like to turn it back to Bill to provide an update on our recent corporate and financial highlights.

Thanks, Michael. The past several months have been highly productive for Calyxt. At the end of July, Calyxt appointed Michael as President and CEO. Michael brings more than 20 years of business, financial and operational leadership experience and is focused on advancing and monetizing Calyxt's technology. In a short time with us, Michael has catalyzed the progress to advance PlantSpring and the BioFactory and positioned us as a plant-based synthetic biology company with important differentiators from others in the field. Another recent accomplishment is our successful transformation of the hemp genome and subsequent production of pollen-proof seedless hemp with our triploid breeding technology. Combined, our hemp advancement offers significant advantages and innovation, crop management and harvest potential. In our partner-driven model, we can now develop and deliver hemp products tailored to customers' needs across plant-based proteins and oils, advanced materials, fiber, cosmeceuticals, nutraceuticals and others. We are also pleased to announce that as of today, we have nearly completed the sale of our inventory of 2020 grain to ADM. The series of transactions, which began in the third quarter of 2020, has generated $35.7 million in total cash proceeds. We remain on track to complete these sales by the end of the calendar year. Just last week, we announced a research collaboration with a leading global food ingredient manufacturer based in Asia to develop an improved soybean capable of producing an oil as a sustainable commercial alternative to palm oil. As part of the research collaboration, Calyxt expects to receive cash payments in each of the 2 years of its term. This collaboration agreement also includes a commercial option for the global food ingredient manufacturer. Our current financial highlights are summarized on this slide. As of September 30, 2021, we had cash, cash equivalents and restricted cash of $14.9 million. This represents cash usage of $3.6 million in the quarter. This strong cash performance was driven by collections from the sale of grain to ADM, continued improvements in our working capital investment associated with the wind down of that activity and strong operating expense management. Late in the third quarter, we established a $50 million at-the-market, or ATM, share issuance program. The ATM program provides us with financing flexibility and provides a way for institutions that would like to establish a position in our stock to do so in the market. As of today, we have not sold any shares pursuant to the program. With that, I'll turn the call back to Michael for his closing remarks.

Thanks, Bill. By leveraging our proprietary PlantSpring technology platform, together with our newly commissioned pilot BioFactory, we now have the pieces in place to advance plant-based synthetic biology solutions to important new customers and end markets. Calyxt is, in its own right, a plant-based synthetic biology company. The solutions we offer are expressly designed to help our customers produce sustainable products that help them meet their corporate sustainability and financial targets. Our new potential customers include large corporations from industries such as nutraceuticals, cosmeceuticals, personal care, pharmaceuticals as well as companies that manufacture advanced materials and chemicals. Our efforts are already underway to market our offerings to these target customers. I believe we are setting Calyxt on course to be an important driver of plant-based synthetic biology solutions and a partner of choice for our customers as they strive to meet their sustainability and financial targets. I'm confident that the integration of PlantSpring and the BioFactory significantly broadens the potential impact of our mission of using plant-based solutions to create a sustainable future. I further believe that our capabilities have the potential to deliver compelling financial returns for our shareholders. We remain focused on leveraging our considerable expertise, skill, technology and know-how to realize the significant value we believe that Calyxt holds. I look forward to providing you with updates on our progress in the future. Operator, that concludes our prepared remarks. Please open the line for questions.

[Operator Instructions] Our first question today comes from Bobby Burleson with Canaccord.

Congratulations on the expanded strategy. It sounds pretty interesting. I guess my first question is just maybe understanding what your engineering capacity is in terms of just headcount-wise, in terms of how many of these customer engagements you think you can commit to in a given year.

Well, Bobby, this is Michael. First off, thanks for the question, and thanks for calling in. Yes, we're pretty excited about the announcement today. And really, for me, it's been a great ride. As you know, I started about 60 days ago and have been going through a strategic evaluation. What really drew me to Calyxt originally was what is the foundation of technology and what you're just describing here with the R&D capabilities. One thing you probably heard in our opening remarks is that it can vary a little bit based on the complexity of the molecules we're going to be working with and the needs of our individual customers. I have Travis here today, our CTO, and I'd like to have him jump in and speak a little bit about your question specifically.

Bobby, this is Travis. So we're obviously very excited about the capabilities we're building in. And I think to date, what we've been able to see is that we don't have any current limitations, and we have plenty of capacity to take on additional customers as they come in. As we start to fill the product pipeline, specifically in the BioFactory, we'll be evaluating our needs as we grow and as those new products start to evolve and develop. From an engineering point of view, as we said, we went through the different phases, the real speed of getting through that process and then the complexity of the molecule is what we really are pushing towards building out. So that's the real value of the system right now, it's being able to integrate and rapidly prototype with the customer. So it really depends on the customers' needs and the complexity as to how fast we can move through that process. I think the last part of the question you had was just in terms of our resourcing, and I think I'll turn that over to Bill to talk a little bit about where we're at in that particular framework.

Thanks, Travis, and good afternoon, Bobby. Thanks for your question. There was quite a bit to unpack in your question, I mean, to have a handle on the capacity side within this R&D organization. But I think the important point is with this customer demand-driven approach to development, the finite resources of Calyxt can be applied to the things that are of the most value. And we have a process in place to evaluate opportunities that allow us to focus on the compounds and molecules that our customers are looking for that have the highest value and the greatest potential likelihood of commercialization success by the customer. And so we try to tie that together to force us to really get down to not trying to do everything for everybody but a really small focused set of compounds at least in the near term. And our intent is to have, as we get into 2022, 2 to 4 compounds that are under development next year and then continue to bring 2 to 4 compounds into that development funnel annually thereafter. So it's a very focused set of criteria that we're using, and that allows us to maximize this capacity in Travis' organization. And with customers handling, in our expectation, the funding of the development, we can scale the business within a funded way from customers' perspective.

Fantastic. That's very helpful. I think just a follow-on to that. As your development kind of portfolio expands, you're doing, let's say, 2 to 4 a year for the next several years, do you have an anticipated kind of conversion ratio for what commercializes? And then as part of that, could these compounds commercialize in multiple ways where you get 1 of these molecules that has multiple uses? Or do you see them all kind of directly focused on 1 use case per molecule?

Bob, this is Michael. I mean it's a good question. I think your answer is sort of twofold. One is that we're going to be looking at customers that are, again, as Bill said, demand-driven. So we're very focused in terms of our funnel and looking at the projects that we can be most successful at. As our process works and as we work through our PlantSpring platform, there could be a secondary product stream that comes out of our process. And again, I want to tap Travis here to talk about how that can possibly unfold, so we could have perhaps multiple revenue streams at a 1 targeted compound.

Thanks, Michael. Yes, Bobby, that's probably 1 of the most exciting things about the new platform is we have customers coming in. And what's interesting is we've had some conversations with some customers. I unfortunately can't divulge the names, but the interest has come in on particular compounds that have, to your point, very unique places in different markets, specifically across -- 1 particular compound has placements across cosmetics, can actually be in personal care with anti-cavity as well as antioxidant capabilities. And so as we're starting to have more of these customer interactions, some customers will have, as Michael said, that very specific need. But because of the way that we can optimize the platform and then also optimize and formulate the compound with the existing customer and possibly new customers, gives us a real breadth of expansion for the markets that we can touch with 1 particular compound that produced through the BioFactory itself. So really exciting technology and advancements for us.

Our next question comes from Sameer Joshi with H.C. Wainwright.

Congratulations on -- for this announcement. Just a clarification. The PlantSpring platform already exists. And has the expansion already happening or -- over the last few months? Or is it being planned? And what is the stage of that platform right now?

Very good question. As I think I said in our conversations previously, I mean, Calyxt has done a tremendous job throughout its history. It's been over 10 years of developing its IP and its systems and integration. When I joined, the platform was certainly far along, and it continues to evolve. It continues to evolve and incorporate new technologies, further advancing its artificial intelligence and machine learning capabilities. Today is something that we wanted to formalize where it's evolved to and where it's developed and also share the now current capabilities as we look to expand into these new end markets where previously we had not served customers. So it has been an evolution built on a tremendous foundation. And then we're excited about the new direction that we're able to take it and then also solve, I think, some pressing sustainability and decarbonization needs with our demand-driven approach.

Understood. And then another one on the BioFactory. Is this going to be some kind of a proprietary thing protected by IP? Or is it -- do you expect this more to be know-how-based protection, IP protection?

Yes. It will be IP and know-how-protected. We have a very strong IP portfolio base. We look to continue to develop that and build it out over time. I think one thing that's really important is to understand how the PlantSpring platform drives the BioFactory and how they're really sort of intertwined in that regard. So it's really done in conjunction with the 2 systems.

Okay. And then I think your transition now is -- or rather focus is now on customer and what customer needs are, and it seems you will be getting paid for the development of the molecule during the first few years of development. In this case, who owns the IP rights to the molecule that is developed? Would it be shared? Or will it all belong to the customer?

Well, one, I think you're highlighting a very, very important part with this new initiative and this new strategic direction is that we are going to a more of a customer-driven, customer-need model as opposed to purely an upfront technological model where we're looking for partners in the latter half. Obviously, as we look to our customers and their needs, we're going to be discussing with them the IP structure and how we go forward. Clearly, as you already heard, is that we -- from a revenue model standpoint, we will be paid for the development in the first few years of development. That can be as long as 36 months or much quicker if you look at some of our proof-of-concept efforts. From there, the long-standing IP will certainly be discussed with our customers, and we'll determine the most appropriate agreement going forward.

Our next question comes from Amit Dayal with H.C. Wainwright.

Have you identified or sort of telling the partners who will provide the production and infrastructure for this effort?

We certainly have identified potential partners and -- what we call infrastructure partners. Well, obviously, we are now pleased to announce the commission of our pilot plant. We'll be starting there. As we work through with certain customers and their development needs through our PlantSpring technology, we'll start at the pilot stage and work through that. We may expand into additional pilot locations and then simultaneously have additional and further conversation with infrastructure partners, whether that may be greenfield [indiscernible] infrastructure that's already in place. But we -- yes, we have identified a few partners that we'll continue to look to have discussions with.

And also, who do you -- sort of who are your competitors for this type of offering?

Well, it's interesting. I mean if you look at what we are now, and I think this is something that Calyxt has been for a long period of time, is it's been synthetic biology company. What we announced here with our strategic direction is a further expansion with our lasting PlantSpring platform and BioFactory. But then also the new end markets that we're going through. The thing that's unique here, and again, I'll defer to Travis here in a moment. But what's unique here is that we are a plant-based in syn bio company, which is rather unique, I think, if you begin to have a discussion around competitors. When you use plants as opposed to, let's say, microbial fermentation approach, which you see in many other instances, we're able to address and work with much more complex and challenging molecules and be able to perhaps address needs that others cannot. And that's what's really unique. So as opposed to looking at competitors, I think it's really important first to start off with our plant-based structure that plant cell matrix that was mentioned earlier and then go from there. Travis, would you expand on that a little bit?

Sure. We -- obviously, the syn bio space is fairly large, and the success of fermentation has really been key to driving the value in that area. But one of the gaps we've seen that's growing is a lot of the molecules that can be produced through fermentation are limited in their complexity or they're just not able to be engineered into microbes because of the limitations of the microbe itself. And so there's a vast plethora of compounds that are available that are known. There's also -- as we mentioned, there's about 8 of the 200,000 or so that are currently known in various databases. Plants make about 80% of those. We believe there's a lot more. There's probably closer to 1 million. There are some estimates as high as 1 million that say plants could actually produce that microbes are not able to. So I think that's the excitement of where this platform starts to enable really a new class of molecules and compounds that have never really been able to be leveraged or utilized in company's innovation platforms and formulations of the products. So we're hoping that opens up a new opportunity for them as well as the syn bio space for us to really fill a niche need or a large gap that's been in the industry for a long time.

Just along those lines, guys, like on the fermentation side, some of these companies are reliant on sort of 1 feedstock or a few feedstock services, like sugarcane or corn, et cetera. So what you are saying is you're not limited to just 1 type of plant; you can leverage different varieties, et cetera, to develop these molecules and compounds?

That's exactly right. And then, again, your question is spot-on. And it's 1 of the big differences that we're so pleased about with this announcement is that while we can be looked at and should be looked at as a synthetic biology company, but a plant-based synthetic biology company without some of the limitations that you've mentioned.

Okay. Perfect. Does this effort impact time lines and plans for your existing programs?

Not generally, no. No. We were able to do this in parallel with everything that we have in terms of our existing programs. I think 1 of the things that's really interesting is about the efficiency of the system. If you look historically at Calyxt and the efforts that it did in the agricultural space, I think our first soybean took 10 years to add it. We're now looking at things at 36 months at the outside and much quicker in other proof of concepts. And so the efficiencies of this process with PlantSpring and the BioFactory in comparison to an outdoor or an agricultural approach is much different.

Amit, this is Bill. I'll add on to what Michael just said from an impact perspective. So there's certainly no impact, and where that would fall as we think about the business going forward is we talk about licensing. Licensing includes both intellectual property as we've been talking about as well as licensing those things that we've worked on throughout the company's history. And we did cover all of the things that were in our product pipeline to this point. And then final point would be opportunistically, we develop products and then ultimately license those to customers, as Michael mentioned in his remarks on the call. So that's how we see it fitting together. But for sure, the focus of the organization's resources will be on the combination of PlantSpring and the BioFactory.

This concludes our question-and-answer session. I'd like to turn the call back over to Mr. Carr for any closing remarks.

Well, thank you, everyone, for joining us today for our call. If we were not able to address all of your questions, please feel free to contact us or our Investor Relations firm, Argot Partners. We'd be happy to help you. Operator, back to you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.