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

Thanks, and welcome, everyone. Wade King here, Cibus's Chief Financial Officer. We appreciate your time in joining this call and webcast covering our Second Quarter 2023 Financial Results and Corporate Update. Joining me are Rory Riggs, our Co-Founder, Chief Executive Officer and Chairman, along with Peter Beetham, our Co-Founder, President and Chief Operating Officer. Our press release with these results went out earlier today, and you can find it on the company's website, cibus.com. Prior to getting started, please note that anything said during this call and webcast — including remarks about future financial results, future operational goals and industry prospects — is forward-looking and could be affected by various risks and uncertainties that might cause actual results to differ materially from what's described here. A list of associated risks can be found in Cibus SEC filings; this call is being webcast. You can access the webcast link in the Investor Relations section of cibus.com, and it will remain available for 90 days. I'll now hand things over to Rory for his opening remarks. Rory?

Appreciate that, Wade. Glad to have everyone here for our inaugural quarterly report — something we're genuinely thrilled to share. On the numbers side, what you'll see this period won't quite match how later quarters look, since the figures we're reporting capture just a single quarter of Calyxt and Cibus operating together, given that the merger closed on June 1, 2023. So what that gives you is 2 months of scaling plus 1 month with the businesses combined. The simplest path to grasping all of this, I think, is to let Wade walk us through the financial presentation. Wade?

Thanks, Rory. We put out a press release earlier today that lays out our results for the second quarter of 2023. We're also submitting our Form 10-Q for that quarter today. If you want more specifics on our financials for the second quarter of 2023, take a look at that press release or our SEC filings. Like Rory mentioned, we're thrilled to unite the 2 top players in gene editing and agriculture through our merger completed recently. Today's financials reflect this transitional period, covering both the legacy Calyxt business and the combined company. Now, onto our second quarter 2023 financial results. Cash and cash equivalents stood at $50.9 million as of June 30, 2023. In the company's view, our cash and cash equivalents will allow Cibus to cover planned operating expenses and capital expenditure requirements through the first quarter of 2024. R&D expense came to $8.4 million for the quarter that ended June 30, 2023, up from $3.2 million in the same period last year. That $5.2 million rise stems mainly from higher lab supply and facility costs, more employee headcount, and greater stock-based compensation expense tied to restricted stock awards, award grants, and accelerated share vesting under stock award agreements from acquiring Cibus Global, LLC. SG&A expense reached $11.1 million for the quarter ending June 30, 2023, versus $3.6 million a year earlier. The $7.5 million increase largely reflects more headcount, higher consulting and legal fees, and greater stock-based compensation expense for RSA grants along with accelerated share vesting under stock award agreements from acquiring Cibus Global, LLC. Nonoperating income totaled $1.3 million for the quarter ended June 30, 2023, compared with $4.3 million in the prior-year period. That $3 million drop in nonoperating income results from fair value changes in the liability classified Class A common stock warrants. Net loss reached $20.5 million for the quarter ended June 30, 2023, against a net loss of $2.5 million in the year-ago period. Net loss per share of Class A common stock hit $2.74 for the quarter ended June 30, 2023, versus a net loss per share of $2.66 in the year-ago period. Now I'll hand the call back to Rory for his additional comments.

Thank you, Wade. Beyond the numbers, there's something else notable about this period — we're treating this release as Cibus's first call since becoming a publicly traded entity. That means today's format won't follow the usual pattern. What we want to accomplish right now is to start building a picture of Cibus — who we are, what we're aiming for as a business, how we plan to get there, and the milestones along the way. Going forward, we intend to hold calls each quarter to walk through our financial results and share news about commercial momentum as our developed traits reach the market. When Calyxt and Cibus came together, it was a remarkable one-time chance to unite two of the earliest innovators in gene editing. This combination matters because back when gene editing was just beginning, Cibus, Cellectis, Calyxt's ag subsidiary in University of Minnesota, and one of Calyxt's founders were the pioneers building the agricultural gene-editing field. Today, all of that foundational agricultural gene-editing technology from those years sits within Cibus; we couldn't be more eager to collaborate with our Calyxt colleagues and make the most of this outstanding intellectual property. Becoming a public company was another thing the merger made possible. For us, 2023 struck us as a solid year to list, since it marks our inflection point — the moment we shift from R&D into a commercial operation. Alongside that shift, we set out a list of 2023 milestones that mattered greatly to making it happen. It's genuinely thrilling, because a large share of those 2023 milestones are already behind us, and the rest remain on schedule. The major milestones we've checked off span several areas. First came the successful initial transfers of our first trait products. We have three developed traits: one addressing pod shatter reduction in canola and winter oilseed rape, plus two for herbicide tolerance in rice. Our model consists of editing traits within customers' elite germplasm, then delivering that elite germplasm carrying the trait back to them. Since the merger was announced in January, we've completed the return of our first three traits to a canola customer, along with two herbicide-tolerant traits to a rice customer. On top of that, we anticipate five additional canola transfers during 2023. We also inaugurated the Oberlin facility, the first gene-editing production site in the industry; this operation is essential to our commercial approach, which centers on editing a customer's lead germplasm, and it lets us carry out those edits at commercial scale. Last, we have 3 traits currently in development. Of those, two have reached an advanced stage, moving through greenhouse and field validation. One trait targets Sclerotinia resistance, which matters a great deal for both canola and soybean. During Q2 '23, we already shared highly encouraging greenhouse results for it; additional data on this important trait should arrive in the second half of '23. The final piece of our operations that's worth covering is how we bring major seed companies into breeding partnerships — both to advance the traits we already have and to create fresh traits alongside customers. That's why today's news has us genuinely thrilled: we've formed a breeding collaboration with Bayer aimed at testing and validating our Trait Machine process, along with our capacity to edit a lead germplasm and send customers back their plants containing those edits. Additional partners are lined up behind them, and this marks a truly significant moment as we begin shaping an entirely new sector — one where sophisticated traits can be placed into seeds at a fraction of the time and expense that conventional breeding demands. These are exactly the kinds of milestones we point to when describing 2023 as an inflection year for our company and its journey toward becoming fully commercial. Just as importantly, they help define the emerging field of high-throughput gene editing that we're constructing. What we aim to do on this call is leverage those milestones as a foundation for reporting how we're progressing in building the company within this new industry. During 2023, we began moving trait products and customers' lead germplasm. We kicked off production runs at the sector's first high-throughput trait production facility. We executed a key collaboration agreement with top seed companies to push this industry forward, and we achieved significant regulatory milestones — everything that flows from high-throughput gene editing as we work toward having it regulated in a similar way to traits. Thus far, 2023 has been quite a year. Now I'm going to pause — I'll break here, and we've assembled a few slides to guide you through our business, our objectives, and our prospects, giving you a framework so that as we educate you quarter by quarter on our pipeline's progress, you'll be better positioned to grasp it. I want to open this section with a slide we show in every presentation — one featuring my senior management team. What makes this company so exciting is that, as a co-founder, I've been part of the Wade for more than 20 years, with ratings by analysts at BioMatrix; I've spent over 20 years with Wade, and returning to collaborate with them once more is truly exciting. We're also delighted to have recently brought on the former General Counsel of Syngenta, who used to — who ran their licensing. That's genuinely important for us as we set about constructing our business and our trait development operation. A bit of context on who we are: Cibus operates in the productivity trait business. Because of that, whenever we develop products, we examine this line use shown here; it represents the slope of productivity gains within the seed industry across the past 50 years. Our role is to help sustain or increase the slope of that line. That is the work of those of us in the seed business—we belong to that industry. Editing is the process involved here; it modifies a plant's existing genes so the plant is able to defend itself against threats such as disease or the environment. What matters greatly is that farming's cost and yield are affected directly by what we sell. Put differently, the slope of this line is influenced by our products. Compensation for what we offer comes through seed sales containing our traits. A share of the economic value, or the benefit, that a trait delivers to a crop forms the basis of our royalties. Fundamentally, this mirrors how Apple compensates Qualcomm for the parts Qualcomm provides for an ingredient inside your iPhone within a business, and the value we contribute to that product is what we get paid for. Essentially 3 primary tools exist in the seed sector for boosting yields of the major crops. The first involves germplasm enhancements—the seed's own genetics—whereby new traits are improved. Such traits are what let you manage the environment more effectively. And third, chemicals exist, meaning crop-protection chemicals. Given climate change's arriving impact along with pressure to reduce chemical use, the central focus to date for raising productivity and scale has been improvements in germplasm and traits. Such is our business. An integral component of agriculture is the licensing of intellectual property tied to traits.

Royalties collected on productivity traits in the major crops are projected to be more than $10 billion. That figure lands at about the same level as operating profit across the worldwide crop protection chemicals sector. When it comes to the target market, the productivity trait business and the agricultural chemistry industry serve essentially identical customers. Disease, pests, weeds and the climate all aimed at broadly the same set of targets. The economics here are quite clear-cut. Within any given crop, two main factors always drive productivity trait roles. The first is how many acres of that crop a particular trait touches; the second is trait acres per plain for a given trait. Our first disease trait, for Sclerotinia resistance, illustrates this well. Soybean acres affected by Sclerotinia come to about 25% of all soybean acres, or approximately 50 million acres. The projected trait range runs about $7 to $10 per acre, which works out to roughly one-third of what it costs to manage Sclerotinia with fungicides. That translates into a $350 million to $400 million market for Sclerotinia resistance in soybean. If canola and winter oilseed rape are factored in, the trait royalty market for this trait becomes far bigger; more importantly, though, these figures show nicely how to examine trait markets and pin down values for practically every productivity trait on the side. Our productivity traits work is exemplified well by the BT trait. The slide before us here serves as an illustration. The numbers are genuine, though BT is not a trait we own. Within the industry, BT matters a great deal. For corn and cotton, worm management was transformed by this trait, and it currently appears on more than 90% of the acres grown for each crop, which shows how widespread this trait has become. Trait fees fall in the $10 to $15 per acre range. Across all crops, total royalties paid for this trait are estimated at over $4 billion annually. The math is fairly simple. Take total acres grown with this trait on them, multiplied by trait fee or royalty paid per acre. It resembles the movie industry in many ways. When each season ends, accountants add up the revenues and work out how many people, factors or companies have earned royalties. In agriculture, this occurs every season. New slide. What this picture aims to show is the process of conventional farming. Technologies such as selective breeding have left their mark on this industry, yet the process remains slow, random and costly, and it has persisted for centuries, perhaps even millennia. Thanks to GMO technologies we now have extraordinarily impactful traits such as the BT trait, but these technologies remain very lengthy and expensive. According to the most recent study, a GMO trait takes on average 16.5 years and $115 million from ideation. What gene editing promises is that it can be agriculture's digital moment. These technologies have the potential to substantially alter how long trait development takes and what it costs, and our view is that this will begin a new productivity chapter like the one GMO technologies opened. I want to hand things over to Peter Beetham so he can walk through this technology. To truly grasp what we do, you have to grasp what the major breakthrough is that Peter and Wade have achieved. Peter?

Appreciate that, Rory, and hello everybody. The Trait Machine—that's what we call Cibus' high-throughput breeding—is a true game-changer. What sets Cibus apart within plant gene editing is this Trait Machine approach. Its foundation is Cibus' patented Rapid Trait Development System, known as RTDS. Going from the initial idea, molecular discovery—or, as I like to put it, deciding what to edit—all the way through editing and then field validation might require only 5 years. The Trait Machine is a standardized, crop-specific, end-to-end breeding system for gene editing that takes one cell from an elite germplasm, performs an edit, and produces that same elite germplasm carrying the edit. Within the plant gene-editing sector, it's the first breeding system that is both time-bound and reproducible; our Oberlin site uses this breeding system. As we shared recently, we're thrilled to now have a new stand-alone gene-editing production facility for Cibus. Cibus holds the view that RTDS together with the Trait Machine approach constitutes the technological leap in plant breeding that fulfills plant gene editing's ultimate promise—high-throughput gene-editing systems capable of functioning as an extension of customers' breeding programs. Through the Trait Machine, a standardized, reproducible system emerges that creates traits at a fraction of the time and cost associated with conventional breeding using GMO processes. One more dimension of the Trait Machine carries an equally significant advantage for this new era: the capacity to create prototypes and to speed up commercialization after a trait has been created. Prototypes confirm particular edits within a crop, which results in a validated trait. Cibus concentrates on complex traits requiring multiple edits and, in certain instances, multiple genes; often, for example with disease or nitrogen-use efficiency traits, the final product will be made up of multiple modes of action. Prototyping several modes of action is challenging, yet conventional breeding cannot do it at all. This stands as a core attribute of the Trait Machine; it's the reason we think we can create traits for numerous critically important ones, such as disease resistance, that have proven elusive through conventional breeding or GMOs. From our perspective, these advantages are central to what we envision for breeding's future. Over to you, Rory.

The clearest illustration of the point Peter made about how long it takes to create new traits, thanks to the technology he helped build, is our Sclerotinia trait. Sclerotinia matters a great deal in canola as well as soybean. The losses it causes are astonishing. On top of that, we estimate royalties across those two crops exceed $0.5 billion annually. What excites us most in this conversation, though, is what the chart shows: the development timeline. The schedule for bringing this trait forward matches precisely our stated proposition of 4 to 6 years from the moment you first work on a given trait. You can follow how we handle this trait and judge how effectively we are managing it, since it gives you a superb benchmark for evaluating our approach. When Cibus began, we assumed without question that we would not be classified as GMO. Our aspiration was that if we could build technology producing traits indistinguishable from conventional breeding, we would be regulated the same way conventional breeding is. We must acknowledge that this vision took quite a while to materialize; even so, across the past several years, nearly every major market has either enacted legislation or is on a path toward enacting legislation that would treat traits from our technology much like those from conventional breeding. The final holdout, and the one most critical to GMOs, is the European Union, which in July proposed new legislation for what are called new genomic techniques, or NGT. Should it pass, the EU would regulate traits from our technologies as conventional-like. In the <<inaudible>> we built—first built—we believe the remaining holdouts will soon finish their own processes; meanwhile, the U.S., the UK, and the majority of Latin American nations have already passed legislation. 2023 has been the watershed year for genetic regulations in agriculture. New slide. As I noted, we operate in the productivity trait business. The technology sits at the forefront of gene editing in agriculture. A key advantage of merging with Calyxt is that the combined company now holds many of the core regional patents for gene editing in agriculture. The merger created a strong technology platform and a leadership position as we move ahead. Our aim in this section is to give an overview of our business today and the progress achieved in trait development with our Trait Machine, along with the progress achieved in commercializing our initial development traits. New slide, 12. The strongest proof of how efficient the Trait Machine process is comes from the pipeline of 6 traits we currently have. Three of those traits are fully developed and shipping. One is a canola trait for pod shatter reduction. The remaining two are herbicide tolerance traits in rice. Demand is strong for every one of these traits; for the pod shatter trait, we already have 10 customers that have entered into pod shatter breeding collaboration. What matters most here is that in the first quarter of this year we completed our initial transfer into new seed. By the close of 2023, we anticipate completing 5 additional transfers of this trait into our customers' elite germplasms. For 2 of these traits, development has reached an advanced stage. The first targets Sclerotinia resistance in canola. The second is a tolerance trait for a novel herbicide, also in canola. For canola and soybean alike, both of these matter greatly. Three modes of action make up Sclerotinia resistance. Positive results from the first mode of action were recorded by us previously, and more recently we reported encouraging results from the second mode of action. Additional greenhouse and field data for Sclerotinia resistance should be released by us before 2023 comes to an end. Nitrogen use efficiency is what the last trait addresses; for most crops this trait is critically important. The eventual aim is developing a plan capable of sustaining improved productivity while using less fertilizer. In canola and in rice, we are only now initiating this trait. Progress in the greenhouse and in the field will be reported by us regularly for each of our trait products, and going forward this will become a regular element of our quarterly calls. Next slide. Traits constitute a crop-by-crop business. Even though traits matter in many crops, any given trait in any given crop may differ on numerous levels, because geographies and environmental conditions affect traits differently. A specific crop team within each seed company is always our customer. You can therefore regard a crop at Cibus as a business unit; and if you turn on the slide, you'll see a canola business unit, a rice business unit, and we will have a soybean unit, all of which essentially collaborate with these companies in an effort to develop our initial trait together with the pipeline of traits accompanying it. Soybean matters because it makes our Trait Machine operational across 200 million additional acres. Notably, in adopting new traits, particularly the GMO trait, soybean farmers have been leaders. That's why we're genuinely excited to be moving into that marketplace. There are already two traits for which demand exists, and we're first launching those in canola; therefore, actually having a soybean platform is a truly, truly major development for us, one we expect to occur during the second half of 2023. Next slide. As has been discussed, the key to our business is cross-specific Trait Machine breeding processes. By means of the Trait Machine, we can enter directly into customers who lead germplasm and give the germplasm back to the customer of our edit. It also allows us to establish high-throughput breeding collaborations with seed companies in a crop, through which we could assist them in developing certain traits of their own. Crop-by-crop breeding partnerships with seed companies, in which we function as an extension of their cross specific breeding operation, are our vision. At present, we are in the Trait — the Trait Machine is operational by us in 2 crops, canola and rice. So that puts us inside those crops. We anticipate having the Trait Machine up and running in soybean by the close of the year, which puts us into the trait side of the soybean business. And by the end of 2025, we anticipate operating the Trait Machine business in wheat as well as corn. We've already established collaborations for the Trait Machine that are specific to crops with seed companies in canola, rice, and soybean. On this slide, our business plans are fairly simple. We have a technology platform that lets us create more traits at a quicker pace and get them to market faster. With this technology, we have a pipeline of 6 traits. Out of those, 3 are developed and launching, 2 sit in advanced stages of development, and the sixth is only now beginning the editing process. At present, we have the Trait Machine operational in 2 crops: canola and rice. On top of that, we're nearly at the point of having the Trait Machine operational in soybean. Altogether, for the 3 developed traits and 2 advanced traits, we estimate the royalty potential from these crops at $1.6 billion. And the truly fascinating part, as you can see on this slide, is that on the canola side, we're validating and launching Sclerotinia and herbicide-reduction traits in canola.

Those are the very same characteristics that, once we've validated our business model for soybean, we'll be in a position to move across and bring into soybean. So it won't require creating an entirely new pipeline of trait development. What it involves is moving a trait from one crop into a different crop, and that's genuinely powerful. At present, our aim is to bring these 5 traits to commercial status in these 3 crops. That's the thing we'd like to concentrate our integration efforts on. If we're able to pull it off, it represents an enormous opportunity for us, and all of us are truly thrilled about it. These are the targets, and we anticipate updating shareholders on them over the quarters ahead. Moving to a new slide. By this point it should be obvious that we're quite enthusiastic about the milestones achieved since we signed the merger agreement with Calyxt. The milestones still ahead of us in 2023 are likewise foundational to our business plan. Our guidance in soybeans is clearly of critical importance; we hold one of the two mega crops for trait development. We think we'll have the Trait Machine process finished for soybean by year-end. Positioning soybean connects to our other two milestones: we anticipate announcing further greenhouse and field data for our Sclerotinia-resistant traits along with our HT2 trait in canola. These serve as the cornerstones for our advanced traits; they're enormous traits for canola, yet equally enormous traits for soybean. Our intention is to begin editing of soybean for these traits the moment our soybean platform becomes operational. Taken together, these milestones successfully carry us from R&D into commercial, with over 250 million acres operational, a pipeline of six traits and major seed company partners across all new crops; we have signed trait collaboration agreements and have moved their germplasm over to Cibus. Together, they complete important milestones that make 2023 the enormous point of inflection receivers, and we believe for G&A in plants in general; and this slide matters particularly because it is our milestone. This is our first guidance for our first quarter, and we hope you'll agree with us on this; and for the next quarter, we hope to tell you how far we've moved in moving things forward. And in general, this is how we approach these quarterly calls, and we'll try to get you excited about some of the stuff we're doing anyway to show you how the new industry moves. Thanks for listening to our business overview. As is evident, our business right now is driven by our execution to get developed traits launched commercially and together of developing traits to sell it. The royalty potential in just these 6 traits in the 3 crops is immense, the material increases as we had in wheat and corn. And these activities are truly consistent with being a commercially driven company. We're going to show the industry how gene-editing traits work. On our subsequent calls, we'll focus on tracking our progress in hitting these milestones for each of these products and keep you posted on new trait developments. That brings us to the question-and-answer portion; we're happy to field whatever you'd like to ask.

Morning, everyone. To start things off, regarding that cash burn, could you describe whether we should expect it to stay even, come mostly early on, or arrive mostly toward the end? Also, of the initial cash burn you laid out, what portion relates to items beyond the first 3 commercial products?

Appreciate that, Laurence. One quick remark ahead of diving in. Our expectation had been that the slides would line up with the wording. If that wasn't the case for those listening in, we're sorry. Then I'll hand things to Wade to go over the cash; our view is it should come out flat, given what — in my mind, the matter of cash burn, our current position, and the way we handle it is an extremely significant matter for every shareholder. Wade, would you like to give it a try?

Okay, Laurence — Wade here. At the moment, we're burning roughly $6.5 million every month on operations. By the close of this year, we anticipate that figure rising toward $7 million per month. Naturally, that covers every one of our sites. It takes in the new Oberlin site, our dedicated Trait Machine location in San Diego. And, naturally, the Nancy Ridge headquarters, plus the Roseville site tied to the former Calyxt — that one measures 43,000 square feet. So it factors in, clearly, what we need to run the business as well as the capital spending required to bring each of those sites fully up to speed for the Trait Machine. We brought on 80 employees during the prior year, and since that point we've held headcount growth in check. Honestly, we see the company's capital requirements staying level going forward, with modest step-ups tied to bringing more people aboard and the CapEx those sites need on a continuing basis. So I hope that answers what you were asking. To repeat: $6.5 million per month, moving up to $7 million per month, and level after that.

All right, that's helpful. Now for my second question: could you explain what distinguishes a trait when it's in the breeding collaboration phase from when it reaches the transfer phase? And after a trait enters that transfer stage, how long does it take before cash revenues show up in your P&L and your cash flow statement? Could you just lay out the sequence of that — especially for the 3 products you've already brought to market?

That's a great question. So we've begun handing over the trait we developed to our customers. And the guidance we provided, Laurence, is that we believe it's going to take 2 to 3 years for them to complete what's required to validate, register, build up a seed inventory, and get launched. So our expectation is that 2 to 3 years after we transfer to a customer, we'd begin seeing revenues. We think that could be somewhat quicker in rice, given the nature of how the rice market operates; but in the canola market, we think those numbers are really solid. And in the rice market, we're going to learn, but given the nature of how rice is transferred and works, I think it could be faster.

Okay, just one more point to clear up, and after that I’ll get back in line. Once this product hits the market, could you describe what kind of delay there might be before you actually receive payment? Is the money you get tied to when planting begins, or does it come after harvest wraps up? Could you just explain how — what the structure ought to look like when it comes to those royalty payments beginning to reach you?

Peter Beetham here, Laurence — appreciate the question. When it comes to canola and the ties we have with every one of our customers, things essentially wrap up at what’s known as counting bags during the season. They put the crop in the ground, and once all their returns come in — so roughly the middle of the year — they’ll return to us with a breakdown of precisely how many bags got sold, and at that point the royalties per acre come back our way.

And let me jump in here, Laurence — Wade here — and what that really amounts to is this: we prefer to provide ranges, and under our expectations, royalties would appear on the P&L tied to customer shipments somewhere between 2025 and 2026, with the first royalties in that window. Then, clearly, free cash flow would be produced somewhere between 2026 and 2027, marking the first generation of free cash flow; so ideally, that hands you a set of metrics you can use for modeling purposes.

Could I have another one? You know, Laurence, I've often told you that in many ways I view this as being similar to what goes on in the film industry. Once the season wraps up, all at once you take a look at every player and determine which ones are owed royalties. So as Peter laid it out, based on how we understand things, that's precisely the way it works in the agriculture business. At that moment, they review all the customers, they pay out quite a bit in royalties, and they review all their people, who also have royalties; and my sense is that essentially the entire industry accounts for our royalties around the same time.

Okay, great. I’ll drop back in queue. Thanks.

Morning. I want to ask a few things regarding the possibility of introducing HT2 and Sclerotinia into soybeans. To start, could you explain what HT2 is? Does it work through a separate mechanism compared with the many transgenic herbicide tolerance traits already present in soybeans? Is it distinct in that way? Could you also speak to whether there is any challenge in placing your gene-edited traits into soybeans that already contain a lot of transgenic traits? Some people say that when a transgenic herbicide trait exists, gene editing becomes quite hard to carry out. What are your thoughts? Then, regarding the introduction of a gene-edited trait into a crop such as soybeans that is exported, would European import approval be needed for that gene-edited trait, which clearly at this point is basically ruled out? Yet as you mentioned, that regulatory process is scheduled for streamlining; so do you require that European and regulatory reform before you can place these gene-edited traits into soybeans destined for export? And sorry, one final point on this: when you put your gene-edited traits into soybeans, in certain regions of the world those seeds get saved. Are you at all worried about your ability to gather royalties on your gene-edited traits, since the grain handler cannot detect it?

Thank you, Steve. Peter here. I believe I have addressed the majority of what you asked.

That was a single question about…

To start with, the capabilities of what lies ahead for us in soybean have us genuinely thrilled. As you pointed out, HT2 along with Sclerotinia tolerance — those are 2 traits that will truly shift the way people view trades and soybean, and not only within the U.S. but across South America too. Regarding HT2, what I can share is that it involves a brand-new mode of action. Together with our partners, we intend to bring those in, potentially stacked within soybean, so growers gain access to a far wider weed control system. That helps in situations where extra herbicide tolerance might be needed to handle genuinely stubborn weeds. So it hands you an excellent chance to plan out the product lineup by bringing HT2 in. A number of our partners have raised exactly this with us. As you’re aware, we have a relationship with GDM down in Latin America, and that’s one of the areas where we’ll be collaborating with them. Sclerotinia is the other area as well. White mold in soybean is a trait of real importance. We do see the potential to stack this on with other approved event transgenics. The other question you brought up, I believe, concerned EU import. From what we understand at this point, once again, there will be approved events that you’ll be able to work with — ones already being imported into Europe. But with the gene-edited addition, given that the proposal they just approved in July will not only permit planting in Europe but also clear the path for imports and exports, we’re excited about that. Then the final question you had, I think, was about save seeds. We are an independent developer. Our customers receive traits from us through our work with them. How that reaches the market will be managed by the customers. As for safes, they handle that on a yearly basis. I believe they manage it very well and recognize that certain parts of the world have farmers who will save seeds. So taking the traits to market and having safe seeds is not something we have concerns about.

Peter, I appreciate you taking this quick one. Here's a fast question about Sclerotinia: might you be interested in moving into fruits and vegetables? I could see there being some appeal there.