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Cibus (CBUS) Conference Transcript
CBUSCibus(CBUS)2025-05-21 21:40

Summary of Cibus (CBUS) Conference Call - May 21, 2025 Company Overview - Company Name: Cibus (Ticker: CBUS) - Industry: Agricultural Biotechnology - Focus: Development of gene-edited crop traits in canola, rice, and soy using a rapid trait development system - Current Rating: Buy with a price target of 23.50[1]CorePointsandArgumentsGeneEditingvs.GMO−∗∗Definition∗∗:Geneeditinginvolvesmakingprecisechangestoanorganism′sDNA,whileGMOsinvolvetransferringgenesfromoneorganismtoanother[3][4]−∗∗RegulatoryRecognition∗∗:Globalregulatorshaveacknowledgedthatgene−editedcropsareindistinguishablefromnaturaloccurrences,leadingtorecentapprovalsinvariouscountries,includingEcuadorandtheEU[6]RapidTraitDevelopmentSystem(RTDS)−∗∗Technology∗∗:Utilizesagenerepairoligonucleotidetomakepreciseeditsatthesingle−celllevel,allowingformultiplechangeswithingenesandacrossgenomes[7][8]−∗∗SpeedAdvantage∗∗:Traditionalplantbreedingcantake10−30years;Cibusaimstodelivernewtraitswithin12months,significantlyimprovingtime−to−market[9][11]RevenueModel−∗∗Pre−RevenueStatus∗∗:Currently,Cibusisapre−revenuecompany,planningtogenerateincomethroughroyaltiesfromdevelopedtraits[12]−∗∗MarketPotential∗∗:Traitsdevelopedformajorcropslikesoy,whichcoversover250millionacresinNorthandSouthAmerica,canleadtosubstantialroyaltyincome[13]−∗∗RoyaltyEstimates∗∗:Expectedroyaltiesof23.50 [1] Core Points and Arguments Gene Editing vs. GMO - **Definition**: Gene editing involves making precise changes to an organism's DNA, while GMOs involve transferring genes from one organism to another [3][4] - **Regulatory Recognition**: Global regulators have acknowledged that gene-edited crops are indistinguishable from natural occurrences, leading to recent approvals in various countries, including Ecuador and the EU [6] Rapid Trait Development System (RTDS) - **Technology**: Utilizes a gene repair oligonucleotide to make precise edits at the single-cell level, allowing for multiple changes within genes and across genomes [7][8] - **Speed Advantage**: Traditional plant breeding can take 10-30 years; Cibus aims to deliver new traits within 12 months, significantly improving time-to-market [9][11] Revenue Model - **Pre-Revenue Status**: Currently, Cibus is a pre-revenue company, planning to generate income through royalties from developed traits [12] - **Market Potential**: Traits developed for major crops like soy, which covers over 250 million acres in North and South America, can lead to substantial royalty income [13] - **Royalty Estimates**: Expected royalties of 10 to $15 per acre for traits related to weed management, with potential for significant revenue as traits are adopted [14][15] Developed and Developing Traits - Current Traits: - Rice: Two herbicide-tolerant traits for efficient weed management [20][21] - Canola: Pod shatter reduction trait to preserve yield during harvest [22] - Future Traits: Advanced traits in development include additional herbicide tolerance and disease tolerance for canola and soy [23][24] Farmer Value Proposition - Cost Reduction: Traits can reduce input costs for farmers, improving profit margins by decreasing the need for herbicides and other inputs [25][26] - Market Dynamics: Farmers are willing to pay a premium for traits that enhance productivity and reduce operational costs [27] Timeline for Revenue Generation - Projected Start: Traits expected to be planted and royalties to begin flowing in 2027, with a gradual increase through 2029 [28][29] Near-Term Catalysts - Customer Announcements: New customer acquisitions in the rice portfolio and advancements in field trials for advanced traits [30][31] - Wheat Platform: Expansion into wheat traits is also being explored [31] Bio Fragrance Business - Overview: Cibus has discovered a yeast that produces oil, which can be used to create bio fragrances for consumer packaged goods (CPG) companies [32][33] - Revenue Potential: Expected nominal revenues in 2025, with significant growth potential in the tens of millions of dollars annually [34] Key Drivers for Business Growth - Predictability and Speed: Ability to deliver traits within 12 months is a significant competitive advantage [36] - Regulatory Environment: Harmonization of regulations globally opens up markets, allowing Cibus to operate similarly to conventional breeding programs [36][37] Other Important Content - Market Size: Major crops involved cover over 500 million acres, indicating a vast market opportunity for Cibus [36] - Investor Interest: Recent press releases have generated significant interest from prospective partners and customers [36] This summary encapsulates the key points discussed during the Cibus conference call, highlighting the company's innovative approach to agricultural biotechnology and its potential for future growth.