Scinai Immunotherapeutics Ltd. (SCNI) Earnings Call Transcript & Summary

Hello, everyone, and thanks for standing by. Welcome to Scinai Immunotherapeutics webinar. I'm Josh Phillipson, and I lead Investor Relations and Communications here at Scinai. I'd like to remind everyone that this conference call is being recorded, and the recording will be available later on, on Scinai's Investor Relations website. Please note that during this call will contain projections or other forward-looking statements regarding future events or the future performance of the company. These statements are only predictions and Scinai cannot guarantee that they will, in fact, occur. Scinai does not assume any obligation to update that information. Actual events or results may differ materially from those projected. Please see the risks identified in the documents that we filed with the Securities and Exchange Commission, the SEC. I'm now very pleased to introduce Amir Reichman, Scinai's CEO. Amir will provide a recent business update, including details about our NanoAb pipeline development and the collaboration with Max Planck, the progress of our in-house preparations and development of the NanoAbs and curator GMP biologics manufacturing facility, updates on other business including the new CDMO business unit and as well some financial updates, including updated cash position and the cap table following the recent offering. At the end of the webinar, we'll aim to answer your questions, which you can submit at any time via the Q&A box on the Zoom platform, that [ site ] icon down at the bottom of the Zoom screen. And with that, I will hand the call over to Scinai's CEO, Amir Reichman. Amir, please go ahead.

Thank you very much, Josh, and welcome everybody to our presentation. Let me start by sharing my screen with you. All right. So Today, we are starting our first investor and analyst webinar for 2024 and we'll be looking how we're going to build in 2024, building on our 2023s momentum. With regards to pipeline development, what we've done in 2023 was we licensed in anti-interleukin-17 nanobody or NanoAb as we turned it. We completed an ex vivo study with our anti-interleukin-17 NanoAb that showed potential psoriasis treatment. We also finalized the COVID-19 NanoAb in vivo studies where we demonstrated prophylactic and therapeutic capabilities of our inhaled NanoAb for the treatment of corona disease. In 2024, we are planning to continue the development of the anti-interlukin-17 NanoAb via in vivo psoriasis study, the next step on our way for first-in-human. Then we will be -- after completing toxicology study, we will be ready for first-in-human clinical trials. In addition, we plan to strengthen our pipeline as will be explained later in this presentation. With regards to business development, we launched our Scinai Bioservices CDMO business unit. We also conducted 2 capital infusions bringing in additional $3 million gross and then we rebranded under the new name, Scinai Immunotherapeutics to better reflect our new technology, our new strategy and vision for this company. And in 2024, we plan to focus on bringing more CDMO clients and pursue partnerships both for the R&D arm and potentially for the CDMO arm. So as mentioned earlier, we are now operating with 2 complementary business units. The one is Scinai Immunotherapeutics R&D arm. This business unit develop -- is focused on the development of inflammation and immunology, biological therapeutic products. And it focuses on building a pipeline of nano-sized VHH antibodies, which we turned as NanoAbs targeting diseases with large unmet medical needs. While the second business unit that we have, which is the Scinai Bioservices, provides end-to-end boutique CDMO services to help bring products to market by leveraging Scinai's GMP and non-GMP drug development and manufacturing capabilities. Our clients are usually small biotech companies in preclinical and early clinical trial stages. So what are these nano-sized antibodies that we develop throughout our pipeline. So on the left, you can see a human antibody, which is termed also a mAbs. The mAbs are composing approximately $205 billion in sales as of 2023. And then if we look at the ones, for example, that address psoriasis, the market leader there is Cosentyx of Novartis, they recorded $4.8 billion in annual sales just in 2022. And the NanoAbs that we are developing are basically Alpaca-driven nano-sized antibodies. They are much smaller than the human antibodies, and I will show and explain here later why are they so attractive and they can bring competitive edge over the current mAbs. And they are derived directly from alpacas rather than humans that are usually used to be driven from mice. So our technology and intellectual property is fully licensed from the Max Planck Institute in Gottingen, Germany. It's part of the Max Planck Society, one of the world-leading research institutes. And together with the University Medical Center, Gottingen, one of the 10 largest hospitals -- university hospitals in Germany. We signed with these 2 prestigious institutes, a 5-year research collaboration agreement through which they will be discovering and characterizing nanobodies or NanoAbs aimed at predefined list of molecular targets. We basically screened and trialed all the potential hundreds of targets known for monoclonal antibodies and identified those targets that are underserved by the current monoclonal antibodies. When we say underserved, it doesn't mean that they don't sell well the monoclonal antibodies. It just means that there are still plenty of patients or sometimes the majority of patients that do not have access to this mAbs because of the potential costs and risks that are associated with these mAbs. And so what we bring into this partnership is recombinant protein drug development expertise and experience. Please remember that this company already took a drug from the preclinical stage to Phase III clinical trial. It is well equipped with manufacturing, quality, international regulatory experience. We own -- it's a very unique value proposition for early-stage preclinical company to own its own GMP biologics manufacturing facility. We have best-in-class equipment in our labs. And we have top tier big pharma and biotech leadership expertise. I will explain and show you the resumes and CVs of people here. On the other side, Max Planck Institute brings world-class science and access to leading scientists. NanoAb platform, they own their alpaca farm, where they raise the alpacas and they immaculate them and generate the antibodies and then they take blood samples. Don't worry, nothing happens to the alpacas aside from a small blood sample that is taken. And then large libraries of these antibodies are generated in the labs. And once these antibodies are well defined and they find the best and most potent antibodies, they send them to us. So the 2 professors that we work with are Professor Dirk Görlich. He's a director, one of the 12 directors at the Max Planck Institute for multidisciplinary sciences. He just won inaugural World Laureates Association prize in life sciences and medicine. It's a very prestigious prize. And Professor Matthias Dobbelstein. He is the physician and a fellow at the Max Planck Institute for Multidisciplinary Sciences and also Head of Department at University Medical Center, Gottingen. So what's the value proposition of the NanoAbs? Basically, the NanoAbs bring unique physical chemical attributes that can generate multiple crucial advantages versus the human monoclonal antibodies. Let's start with manufacturing. As I showed in the previous slides, the nanobody or the one that we call NanoAb, are 10x smaller than the conventional monoclonal antibody coming from humans. So when we produce in the end, we look at the cost per gram of protein because these antibodies are essentially proteins. And because each antibody is 10x smaller for each gram of protein that we need to make, we make 10x more active pharmaceutical ingredients, and that makes the total production much cheaper than the one for monoclonal antibodies. In addition to that, the production is much cheaper because we're producing yeast and not in mammalian cells. And also, it's done much faster because the fermentation time and cycles are much shorter, so we can generate a larger fermentation volumes with a higher yield at a much shorter time lines. From an R&D perspective, it provides a very big advantage on the part of quicker antibody discovery. Look, when a scientist identifies a molecular targets to go after, then they want to generate an antibody to neutralize that particular molecular target that they believe is going to be beneficial for the patients. They need to create an antibody against that. And they need to create libraries and then find that specific antibody that will do the work with a very good affinity and stability, et cetera, et cetera. Each time you do a round of antibodies in monoclonal antibodies, you get about 3,000 to 4,000 options to select from. It sounds a lot, but it's really not a lot and you go through it quite quickly. And then if you need to make another library, it takes more weeks and weeks and sometimes, it takes up to 2, 3 years to generate and find the right antibody. While in nanobody, we're not facing this issue. We are basically generating approximately 300 million options per round so our probability to find a very potent nanobody that will be stable and that will generate the work and can be cloned and we can be delivered to us is the time line to discover is much faster. So the ability to generate a pipeline that will continue to feed into our pipeline, new potent antibodies is going to be much cheaper and much faster. And the second thing, we derisked the pipeline because we decided to go after the predefined molecular targets that have been already validated by approved monoclonal antibodies and I will explain the rationale later. But in a nutshell, if it's already validated, then we know that targeting that particular molecular target will generate a beneficial clinical response with the patient. What we're trying to overcome with our nanobody is a strategy called [ biobetter ] we're trying to go after those patients that the mAbs cannot treat or after dosed indications that the mAbs cannot treat or stages in the disease that the mAbs cannot treat due to specific physicochemical properties that our nanobody can produce in a differentiating manner than the mAbs. From a product perspective, there is also the hyperthermal stability part, which is very important because the higher thermostable the product, the longer shelf-life it has, easier storage and distribution and use. And the other thing is a superior specificity because it's much smaller, so we can design it to feed the target perfectly. And so that we can expect less side effects and potentially enabling lower dose and lower cost. We can also play with half-life. If we need a chronic use through systemic administration, we can extend half-life, if we need something that will clear out from the blood rapidly, we can use the [ monomer ] a very small amount, and then it would clear out through the urine. From a safety perp and the patient convenience, we're talking here about the ability to use multiple and the easier routes of administration. As I explained that before, we showed that inhaled aerosols, the nanobodies were very potent in treating the COVID-19 infection. And we are now working on an intradermal injection of an antibody for the treatment of psoriasis which is a novel route administration for psoriasis usually now it's administered systemically. If -- so the summary of that is that our strategy is derisked and the drug development pathway is much -- is very derisked because of the fact that the molecular target is already validated. We know the mechanism of action because it's an antibody and the composition of matter is fully patented. It's a novel molecule. We have full patent life on that, and we have potentially better safety and efficacy than the match. So then we provide here an ability to have a shorter development pathway all the way to marketing authorization with a potentially lower cost because these 2 stages at the beginning here we're talking about at least $100 million to $200 million and approximately 5 to 7 years just to identify a novel molecular target and the novel mechanism of action here. We took it out and we are basically generating a biobetter version that can tap into under treated markets and have a very interesting opportunities. The superior routes of administration, we -- as I mentioned at the beginning, we showed it, we also published it on antiviral research. It's a highly credible peer review journal. You can see here it's published by Elsevier, nanobodies to multiple spike variants and the inhalation of nanobody containing aerosols, neutralize SARS-CoV-2 in cell culture and hamsters. It was a really nice collaboration between us, the United -- University Medical Center in Göttingen and the Max Planck, but also with the [indiscernible], in Hanover. It's a well-respected institute specifically in pulmonary diseases then the paper covered several aspects of our non antibody like the structure, the mechanism of action, the neutralization, et cetera. And the bottom line there was that exposing hamsters to these aerosols before or even 24 hours after infection with SARS-CoV-2 significantly reduced viral load, weight loss and pathogenicity. Concluding that these results show significant potential for aerosolized nanobodies for the treatment of coronavirus infections. With regards to our pipeline, the COVID-19 is the first one. We showed strong in vivo data for inhaled therapeutic and prophylactic treatment of COVID-19. The next one on our plate now is the interleukin-17 A and F. This is a unique NanoAb because it's neutralizing both the interleukin-17A is a form, F is a form in the AF complex is a form. And that's a very unique proposition because usually, the antibodies can neutralize either A or F or you need to make a mix thereof. And the importance here is that the isoform of A is the one that is most prevalent in the body, but specifically in the skin tissue, the F is highly relevant, taking a very high percentage of the isoforms of interleukin-17 and therefore, neutralizing the F isoform should provide a much stronger efficacy compared to one that neutralize only A itself. It's also being demonstrated by the fact that UCB just launched emicizumab that neutralizes both the A and F. It's a mAb but they are addressing the severe and moderate psoriasis patients while we go for the mild and moderate, which is a bigger market segment. And I'll explain on that more later. Asthma, we have additional 4 antibodies there, 1 for interleukin-4, the TSLP, interleukin-13 and interleukin-4 receptor alpha. We are looking here at novel routes of administration, for example, inhalation for asthma or intradermal for atopic dermatitis. And we have -- and then the last one are 2 antibodies that can address the wet AMD. For each of these antibodies, we do not have any limitation on our contract with the Max Planck Institute on any potential indication, and we are allowed to do any indication expansion and additional clinical trials to further develop the molecule for different products. If we look at the pipeline, the markets with the underserved needs, we can see that psoriasis is a massive market as of this year in 2023, sorry, last year. It was $17.4 billion in total sales. Out of that, approximately $9 billion was the sales of biologics usually sold into the severe, some of them to the moderate. Psoriatic arthritis, approximately $8 billion, atopic dermatitis, $9.2 billion, asthma with $10.4 billion and macular degeneration with $6.9 billion. The respiratory infectious diseases. The size of the market is currently unknown, and that's why we put this product now for partnering. We'd like to find a credible pharmaceutical company that would like to partner with us and take it to the next stage to in-human clinical end trials. And there is some evident risk there with the COVID. But nonetheless, we know that the infectious disease are [indiscernible] and change rapidly. We are ready there with something that can go into human clinical trials rapidly. We hold all relevant patents, and we'll give you more updates if things are going to change. With regards to the pipeline stage. So for the COVID, I just explained that it's ready for partnering for psoriasis. We are now starting the in vivo proof-of-concept, and we are estimating to go into the clinical trials in 2025. Asthma and atopic dermatitis, we have 4 molecules to choose from. We might go for one, a couple or mix, we might develop different products, most of them are almost coming to the technical readiness level for licensing by us, and we have an exclusive option for exclusive license. We've pre-agreed financial terms with the 2 partners. And it is up to us to be signed when to in-license these and start the development of these drugs. The guiding principles in general for the R&D are inflammatory -- focus on inflammatory and immunology. Infectious diseases, as I mentioned, is the second priority option. The platform that we are working on is the NanoAb platform and the research collaboration agreement with the Max Planck and the UMG is our main generator of assets for future licensing. It's once a new nanobody is discovered with the research collaboration agreement, and it reaches the agreed technical readiness level, TRL, Scinai has an exclusive option for exclusive license for development and commercialization and the licensing of several assets through this RCA will help Scinai to diversify our product-unique risks. CMC activities are done in-house using Scinai's CDMO business unit. This is a major advantage of Scinai over other preclinical stage companies. We are not dependent on cues and pricing of this rent and availability of different CDMOs and the risks that are attributed to communication and the tech transferring work outside to CDMO, but we open -- we operate our own CDMO. We control most of these risk and costs. We, of course, keep -- and then we want to leverage the learnings, the route of administration experience for example, from one pipeline drug to another, for example, the inhalation or intradermal. We aspire to partner with multiple pharma companies, 1 or more at stages before Phase III so that we can provide the company with a validation of our science and commercial potential by a multinational company. We want to secure reliable product supplies, specifically in autoimmune diseases, the major market is the United States, which requires seamless production, distribution, sales and marketing capabilities that we currently do not have. And therefore, our expertise is now on the drug discovery through the Max Planck and University Medical Center Gottingen and drug development on our side, including all the CMC and clinical development and then for commercial launch, we want to partner with another pharma company. And we want to -- the last thing of doing such a partnership will provide the company with non-dilutive cash flow. I know that's something that is interesting to many of our investors. So that's one of the strategies here to bring non-dilutive cash through upfront payments, development milestones, sell milestones and of course, royalties out of top line sales when the product launches. Commercial manufacturing for supplies for the territories that will be left in the future for Scinai. At the first stage, we will produce them through a CMO. And that will be probably either in Israel or in Europe but commercial manufacturing by ourselves is something that we will have to discuss later at this point. Our strategy is focusing on drug development, bringing everything from the patented stage all the way to Phase III. And we're providing everything that is including in CMC and the clinical and manufacturing and supplies. And then, of course, CDMO services to other companies. Let's talk a little bit about the psoriasis market. So the psoriasis market has 78% of its population being underserved. What does it mean? Look, we have 125 million patients in the world. Out of them, approximately 16 million are in the 7 major markets, U.S., EU5 and Japan. 80% to 90% of these patients have plaque psoriasis, which is the psoriasis that presents itself with the lesions or plaques on the skin. Current biological therapies targeted only moderate to severe -- and severe patients. And they are mostly administered systemically. Mild patients those people here that compose 28% -- sorry, 50% of the patients. They suffer from considerable and visible lesions, which may be uncomfortable, painful and impact to social and mental situation and they are ineligible to biological treatments and moderate psoriatic patients, those ones that are here, 28% of the patients. There is -- many times they are reluctant to receive systemic biological treatments due to side effects and associated costs. And so just to give you a perception of what's the percentage of the body. The palm of our hand is approximately 1% of our body surface, the skin surface. So up to 3% is basically considered mild. But think about this 1%, 2% or 3%, sitting on somebody's face or the neck or the scalp or the groin and the genitals, on a women's breast. These can be considered by the physician as mild cases and therefore, not eligible for biologics. But for the patient, it's the end of the world. And so all they're left with is things that are not very helpful. Look, this is the current treatment scheme for plaque psoriasis. So first, when they meet with the doctor, they are administered corticosteroid creams, vitamin formulations, shampoos with vitamins, antibiotics. When things go worse, they are offered to go to phototherapy. Phototherapy lasts quite long. We will discuss that in the next slide. And then if that doesn't work well, they then transitioned to immunosuppressants. They're cheap. They're generic, but very potent and have considerable side effects like Methotrexate and cyclosporin. The next stage will be new orals, the JAK inhibitors, the TYK2. And only at the end, you'll get the injectable biologics. Usually, the injectable biologics will be the ones with the highest efficacy because they're highest specificity, et cetera. They are -- but costs, of course, are high and associated with side effects. Look about the -- let's look at the treatment shortcomings. So corticosteroids, the first ones that they get, they suffer from side effects like skin thinning. And so skin thinning can lead to bruising on these areas. So of course, not really appropriate for using on the face or groins or these kind of areas I just mentioned. It also can generate lightning of the skin color. And the worst thing you start to develop tolerance to that after excessive use. Then the next stage is phototherapy. But the barrier there is that it requires 20 to 35 sessions. So a patient needs now to work or drive to an outpatient facility 3 times a week for approximately 10 weeks. It's suffering from very low adherence or compliance and then it's very hard to do while people are working, and they want something that they can take once a month, once a few months, not 3 times a week for 3 months almost. Immunosuppressants, you're talking about the Methotrexate and cyclosporine, highly generics, lots of prescriptions but they come with concerns for health risks and adverse effects. Some of them are even used as chemotherapies. So yes, it's potent, but it's like an atomic bomb on the body. It's not specific. It's not very advanced. Then we have now the new orals, developed, for example, like BMS and others. So we have the JAK inhibitors, we have the TYK2. So first, they are expensive. Secondly, there are limited efficacy. So when we look at the market research conducted by Global Data and others, we saw testimonies from physicians, there is a limited efficacy to that specifically limited compared to biologics. And secondly, they are systemic and chronic with systemic side effects. And they are mostly administered to the moderate to severe cases. And then comes the injectable biologics with limited again to moderate and severe patients, very expensive. List price for a mAb is $7,000 for an injection. Negotiated price can go down to $1,500. And then we're talking about an injection every month for a lifetime. And so for the insurance, it can be quite expensive. It's -- yes, when you compare it to oncology, it's cheaper, but this is a chronic disease for life. And so the total cost per patient if the patient needs now to go on biologics, from age of 35, 40 until 85, it's quite expensive. And then, of course, there is an increased risk of developing comorbidities over the years like cardiovascular diseases, metabolic syndrome, psychological illness, there are -- there is very and growing evidence of suicidal thoughts with people that take them, inflammatory bowel disease that is developed with a considerable percentage of users, obesity, et cetera. So then why develop an anti-interleukin-17 NanoAb. So first and foremost, there is a strong business and clinical potential for the development and commercialization. Let's look at the interleukin-17 is well-established psoriasis target. We know that because there are drugs in the market, biologics mAbs that are targeting interleukin-17, like Cosentyx, Siliq, Taltz and now being bimekizumab, which is branded as Bimzelx. Antibodies that are targeting the interleukin-17 A and F are more effective in targeting plaque psoriasis, and that was demonstrated by UCB's, bimekizumab and also a MoonLake Sonelokimab, both targeting interleukin-17 A and F, and they showed superior PASI 90, which is the score for psoriasis versus anti-interleukin-17 only antibodies. There is also a clinical evidence that interleukin-17 being responsive to nanobodies or NanoAbs like our VHH antibodies, and that was demonstrated by MoonLake. MoonLake is a Swiss company, a spin out from Merck KGA. Originally, the technology came from Ablynx and they showed positive Phase II resulting in treating -- results in treating patients with moderate to severe psoriasis. The main difference between us and them is that they are treating moderate to severe while we go after the mild to moderate, and they go after systemic injections, we go after local injections. So specific physicochemical characteristics of our drug candidate make it optimal for mild to moderate, which composed 78% of the patients because most novel, oral and the biologics are looking at moderate to severe and are administered every 2 weeks or every month and mild to moderate patients seek local treatments that are specific, efficacious and safe and that do not require chronic use. So we took our NanoAb for anti-interleukin-17 AF, and we tested it on ex vivo study, where we took skin specimens from volunteers in France, after being -- conducting tummy tuck surgeries. And this skin samples were then induced to express psoriasis and then after expressing the phenotype of psoriasis, we treated them with different treatments with the corticosteroids with Cosentyx and with our own NanoAb and so you can see here from the histopathology that healthy skin on the left side and then you have the psoriatic skin. You see quite an inflamed skin with destroyed areas and here, after this treatment with the NanoAb, you can see that the skin resumed its healthy appearance. We significantly reduced the interleukin-17 release as compared to the untreated control and histopathology demonstrating improved skin structure. We can see the graphics here. You can see that the interleukin-17 concentration in a healthy skin on the left, then in the untreated psoriatic skin. So you can see an increased presence of interleukin-17 in the tissue. Then we treated the psoriatic skin samples with betamethasone, which is a corticosteroid, current standard of care, Cosentyx. And then with our NanoAb for interleukin-17, once with 1 injection or 3 consecutive injections. You can see that even with 1 injection alone, we reduced the interleukin-17 levels all the way to the healthy skin levels, and it's definitely very nicely reducing, and we have very good expectations for the next stage. When we look at -- we gave these results to Professor Amos Gilhar of the Technion to judge. And he said himself that the Scinai NanoAbs displayed potential as anti-inflammatory agents in psoriasis, particularly improving skin viability and structure and the Genoskin study, the Genoskin is the name of the company in France, where we conducted the skin study. The results indicated that just a single dose might have been potent enough to block all interleukin-17 effectively shutting down the immediate flare up of the lesion. And this immediate response of just a direct and effective inhibition of the existing interleukin-17 cytokines . Professor Gilhar is a dermatologist world-widely known one. He's the Head of the skin research laboratory at Technion. So next step. Next step, we will conduct an in vivo study. We expect results in April or May 2024. And what is being studied, impact of psoriasis treatments on in vivo xenograft to mouse model of human skin. So basically, Genoskin's ex vivo study, the previous one that I just showed you. It shows that our anti-interleukin-17 NanoAb reduces the interleukin-17 and improved skin appearance. But doing it on live animals will help measure duration of the treatment effectiveness compared to current standard of care and provide additional safety information. So how is it going to be conducted? It's a very interesting scientific style so pay attention. Human xenograft mice, we basically take an animal model. It's a normal human skin again, taken from tummy tuck donors. It will be engrafted into a SCID BEIGE mouse. These are genetically modified mice that can carry a human skin and the disease will be induced by injection of interleukin-2 activated PBLCs from psoriatic patients. And then what we will have is multiple groups of mice with human psoriatic skin on their backs, okay? So that's the zero. We do human skin transplantation. Then after 28 days when the transplantation is completed. Exactly now so transplantation already happened. So now we are waiting for the inducement on day28 and then treatment with the different treatments below here will happen on day 42. And then in the day 77, we harvest the skin and we do analysis. So and we are using 7 groups here, negative control, positive control for the model. That's not relevant here. But the positive control comparable antibody. So we take either Cosentyx or bimekizumab. We injected them subcutaneously once a week for 3 weeks. And then after 3 weeks, we continue to monitor for 2 more weeks. Then we have another positive control. We take standard of care or for mild to moderate, which is betamethasone, which is corticosteroids, topical, we give it twice a day for 3 weeks. And then after we do 2 weeks observation. And then we take our NanoAb, we take them in intradermal injection once a week for 3 weeks here like Cosentyx, and then 2 weeks observation. We take that another one every other day, and with 2 one with once. And the reason we want to see, okay, what is the duration of effectiveness of each injection and how much do we need to work on increasement of the half-life of the molecule in the in the dermis. And so that will give us a very good understanding of the future formulation we need to use in the development of the product. Let's talk about the IP status. So in nutshell, we have priority patent application that filed in 2022, international patent application in December 27, 2023, the PCT was filed. It covers the application of everything that we just discussed here. We will -- this presentation is available online and its exclusive license for Scinai worldwide for development and commercialization. Let's talk a little bit about the boutique CDMO services. So we are attempting to derisk our internal R&D investment by leveraging internal capabilities. I mean we provide a aseptic GMP manufacturing suites, state-of-the-art R&D and QC laboratories and pharma CMC experience. We are able to bring analytical method development, quality control capabilities. We are offering manufacturing process development, scale up for biological processes. cGMP suite, our site is designed to meet FDA and EMA regulatory standards. And very uniquely, we use single-use equipment, which allows us to adapt manufacturing processes for a pipeline of different products. It's very easy and quick for cheaper -- faster lead times and faster time to market for new products. All in all, we have approximately 20,000 square feet of laboratories in [indiscernible] which again is highly unique for a company at our stage. We already onboarded two 1st happy clients, CDMO clients. We just started it only a few months ago and started to present it in different conferences. So we have here a testimonial from Ohad Lavi , the CEO of Voyager Medical Research. So they said that we have demonstrated a very high level of professionalism combined with attention to detail and positive team spirit. Since then, we already signed up with additional customers. CDMO strategic guiding principles. So our value proposition, which is very important, is experienced and professional team available to execute drug development projects at high speed, while adhering to high EU quality standards, using new and modern equipment located in a well-maintained site offer that competitive pricing attractive to young biotech start-ups. We focus on serving Israel, Europe and United States. We target services for early-stage biopharma drug development projects from preclinical studies to clinical Phase II. And we target customers that are early stage biotech companies at a preclinical stage. So CDMO expected challenges. Of course, cash flow is king, and that's something we're putting attention to very closely. Capital for investment is something that we need to pay attention. Of course, the site is well maintained and a pristine and brand new. But the more the business will grow, we will need, of course, to invest in additional capabilities according to customers' requirements, but we do it organic growth together with the demand. Building a track record, developing service provider culture for the CDMO business unit is something that both myself and my COO, both are veterans from large manufacturers like Novartis and GSK. And the focus areas for the CDMO will be to expand the business beyond Israel. Business development team, processes and systems, marketing and sales, operational excellence and CapEx projects. So here about our team, myself, I was previously working at a senior global level roles at GSK Vaccines in Belgium. And before that, I worked for Novartis vaccines and prior to that, I was one of the founders of -- one of the founding team members of Neuroderm, a company that was then eventually sold to Mitsubishi Tanabe Pharma. Tamar Ben-Yedidia is our CSO, Chief Scientific Officer. She coinvented in the guided vaccine candidates through 8 clinical trials, including pivotal Phase III. She has a PhD from Weizmann Institute; Elad Mark, our COO, is also ex Novartis person work in Asia, in different engineering projects in China and Singapore and Dr. Dalit Weistein-Fischer is our Vice President of Technical R&D, and she held leadership roles at Merck KgaA, Israel and other companies. Board. Our Board brings a significant expertise. We have Mark Germain, who is a serial Founder and Director, Chairman of -- and investor in over 20 biotech companies, including Alexion, Incyte, Neurocrine, ChromaDex and others. Sam Moed is another Board member that was a Senior Vice President at Bristol Myers Squibb, Senior Vice President for Corporate Strategy. We have Mr. Adi Raviv, experienced in Wall Street investment banking and the capacity funding. Jay Green was the former CFO of GSK Vaccines. We have additional Board members such as Morris Laster, who was previously the CEO of BioLineRx and OurCrowd, et cetera. Yael Margolin was the CEO of Gamida Cell, and Avner Rotman was one of the founders and the former Chairman of Scinai. From a financial, this is the cap table that we have. We had as of September 30, we held $6.4 million in cash. We raised additional $1.7 million gross in December 29 and we have a EUR 24 million European Investment Bank loan payable on December 31, 2027, but we just now pushed it and agreed with them to postpone it all the way to December 31, 2031. So all in all, significant potential for value creation, pipeline of nanoAb-based drugs. We have promising preclinical results preparing for first-in-human clinical trial of anti-interleukin-17 NanoAb, a collaboration with Max Planck and the University Medical Center Gottingen. We targeted diseases with large, underserved needs and attractive commercial opportunities. And we have a CDMO business unit that buffers our R&D risk. Thank you very much for listening. And I think at that point, we will move to the Q&A stage.

Thanks, Amir. And at this point, we can open this up to Q&A. You'll note at the bottom of your Zoom screen the Q&A button, and you are welcome to send any questions that you have. We did have a few while we're waiting for you to submit. We did have a couple of similar ones that came in earlier. So I'll pose this to you, Amir. I'll combine them. So give me a second here. The question is the high level, what is our plan to finance the scaling of Scinai? And are there -- what are the opportunities to explore alternatives to significant dilution. There are some examples here that could involve securing additional grants, evaluating strategic sale of one of our assets or even considering the merits of taking the company private. So I'll turn that over to you.

Thank you for the question. Yes, so we are basically looking into, first of all, working as lean as possible to provide progress with the lowest expense possible, but ensuring the highest quality and the scientific standard. Doing so, we are constantly applying for grants. One example is a grant we just been awarded by the Israeli Innovation Authority, 66% participation of ILN 3.5 million project for ramping up our CDMO business unit. We are actively applying for additional grants, both with the Israel Innovation Authority and the other governmental agencies. We're also looking into nongovernmental agencies opportunities as well. So that's for the nondilutive brands. Actively, we are in discussions with pharmaceutical companies to make them aware and interested in collaborating with us in the development of our pipeline products. And we have been meeting with -- actively meeting with many pharmaceutical companies let them be large MNCs or medium-sized, family-owned pharmaceutical companies from Europe, for example and we are giving them constant presentations and looking into the next catalyst. I think in a general sense, everybody knows that usually pharma companies tap in when there is a proof-of-concept. Some of them are more aggressive and they come in after the proof-of-concept in animals. Some of them prefer to wait until after the proof-of-concept in human beings. So for us, the first catalyst will be in 2024, and the second catalyst will come in 2025. And then, of course, comes the dilutive funding. Usually, of course, we are looking very carefully into doing things like that. But if necessary, we will ask, we are working to find ways to couple that with catalysts and inflection points to generate as much as [ up ground ] as possible for investors, so not basically generating a reduction in the share price but of course, developing a drug takes investment. And in the long run, even when we look at the current situation in the long run, if one of the products works the multiples, one can make on such investments is very high. I can give one example that I was doing successfully in my life, which was being part of the establishment of Neuroderm that was eventually sold for $1.1 billion in cash when we were at Phase II. And that's one example. And again, it's a very tough business, the biotech. But when things go right and the science is following, the deals can be significant. So I acknowledge the risk in the investment and we cannot make any promises, and we do not have control of how the public market works and how the trends are going because there are so many other factors out there. But in general, we are doing our best to preserve investors value by providing the least dilutive funding opportunities for the company to come to the next catalyst.

Thanks, Amir. Another question. We've got a couple of questions now. What's our plan as we proceed in development in terms of partnering or being acquired or having some of our assets acquired by big pharma.

So what's the -- can you repeat, what's the chances?

What is our plan? Do we have a plan in terms of some of our assets as we proceed through the development of being acquired by big pharma. I think the question is looking at some other reason to deals out there where smaller pharma companies where their assets have been acquired.

Yes. So partnerships that I described, usually, that means -- so you can do either an acquisition of an asset, and there you just do a tech transfer. But from my experience, having worked with a start-up like Neuroderm and then with large companies in the United States like Novartis and the large companies in Europe like GSK. Partnering at these early stages, usually, the project will be staying with us. The company usually will inject money as an upfront, which will give us non-dilutive funding. And then one way or another cover for R&D expenses for the continuation of the project. But because we can offer our R&D services, usually the larger pharma company will keep the development with us until they need to go to Phase III. Usually, in Phase III, it moves to the pharma company, the larger one that is going to do the commercial launch so that they can do a complete scale up a tech transfer to their commercial facility. And from that point and on, they do the launch. And we have usually these contracts include an upfront milestones for development, milestones for sales and royalties. Selling a full asset out of our pipeline at this stage is not really something feasible. Not I wouldn't say it's impossible, but I wouldn't say better need because what we are doing now, we have the full exclusive option for exclusive license from the Max Planck. But the assets we are taking are basically at the patents writing. So they are doing all the discovery and characterization, all the R in the research and development. And then when it goes to development, they hand over to us, and we take a full license for development. Usually large MNCs, they like the smaller partner to develop the drug to first catalysts, proof of concept in animals or as I said, or proof of concept in human beings. The chances of licensing an asset that we have just being discovered with our proof-of-concept are usually low. But pay attention that the associated costs of bringing into the first catalysts are not massive. It's not big costs, the big costs are usually the Phase III and the preparation for commercialization, not the early stages.

Thanks, Amir. We have two questions in about 3 minutes plus conclusion. So just a quick one here. Someone is asking, David is asking regarding our previous flu vaccine candidate, is there any possibility of future development?

Yes. So that's the thing. So with the advancement of technology today and the advancement of AI, we decided recently to relook at potentially -- relook at the results of the Phase III and see whether there was a response in a specific subpopulation. This is an initial preliminary research that we're doing now. I can tell that there were other companies that, for example, had a Phase III that was originally announced as a failure but then this kind of technology was used in order to analyze the specific parameters measured with the patients. And suddenly, it was revealed that a specific subpopulation, which is large enough to provide a commercial opportunity actually responded well. Sometimes it's because only a subpopulation responds. And sometimes it's because the way the clinical trial Phase III was designed that it actually created more noise than the ability to look at the true signal. So in the past, it was quite tough to do it. You just did it with statistics and normal mathematical measures. But now there are much more advanced computational algorithms that can do it. And yes, we are looking into that. I cannot predict what will be the results. But if there will be, we will, of course, notify the market. We still hold our patents and we will be more than happy to find out that we can actually do something with this vaccine, which was at the time a massive promise for the company and for the patients and for the market.

All right. We have only one more question, and it's actually a nice one to finish on. So at this point, I'd like to thank everybody here for joining the call. Where we'd appreciate any feedback that you have. It's a reminder that the recording of this webinar will be made available on our website and also in social media. So to conclude, I'd like to hand this back to Amir for his final statement, including this question, I think it ties in nicely, is what is your 5-year vision for Scinai, where will we be then?

Right. So the 5-year for Scinai, in my view, the IL-17 should already be in advanced clinical stages, hopefully, with nice partner to support us. We will be looking at additional indication expansions for the IL-17. We will be moving into -- beyond already the preclinical already into the clinical stages of the next round of NanoAbs, particularly the ones that can address atopic dermatitis or asthma. On the CDMO side, we are aspiring to grow the business. We have a nice capacity at our site. The site you can see very nice double-digit growth in top line sales, and we are doing our best to maximize our sales and the marketing capabilities so that we can provide a longer runway for any dollar that comes from our shareholders because it basically can cover for our fixed costs and allow us to utilize our site in a much better way. So with that, on behalf of Scinai management and Board, I'd like to thank you for your interest in Scinai. I'm very proud in the recent progress. And I thank you for the interest as we continue on this journey. I look forward to continually updating you as we proceed. And thank you, and have a good day.

Thank you.