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Edited Transcript of MBLX earnings conference call or presentation 25-Mar-19 8:30pm GMT

Q4 2018 Yield10 Bioscience Inc Earnings Call

CAMBRIDGE Mar 28, 2019 (Thomson StreetEvents) -- Edited Transcript of Yield10 Bioscience Inc earnings conference call or presentation Monday, March 25, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Kristi Snell

Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer

* Lynne H. Brum

Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary

* Oliver P. Peoples

Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director

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Conference Call Participants

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* Benjamin David Klieve

National Securities Corporation, Research Division - Analyst

* Han Jang

Maxim Group LLC, Research Division - VP & Senior Equity Analyst

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Presentation

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Operator [1]

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Welcome to the Fourth Quarter and Full Year 2018 Financial Results and Business Update Conference Call for Yield10 Bioscience. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Yield10 Vice President of Planning and Corporate Communications, Lynne Brum.

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Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [2]

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Thank you, Devon, and good afternoon, everyone. Welcome to Yield10 Bioscience Fourth Quarter and Year-End 2018 Conference Call.

Joining me on the call today are President and CEO, Dr. Oli Peoples; Vice President of Research and Chief Science Officer, Dr. Kristi Snell; and Chief Accounting Officer, Chuck Haaser.

Earlier this afternoon, Yield10 released fourth quarter and year-end 2018 financial results. This release as well as slides to accompany our presentation today are available on the Investor Relations Events section of our website at yield10bio.com.

Let's now turn to Slide 2. Please note that as part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance, and therefore, you should not place undue reliance on them. Investors are also cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. These risks include risks and uncertainties detailed in Yield10's filings with the SEC, including the company's most recent 10-K. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call.

I'll now turn the call over to Oli.

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [3]

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Thanks, Lynne. Hi, everyone. Thanks for joining the call today. Please turn to Slide 3, and let's cover a few financial highlights starting with the balance sheet.

Our net operating cash usage was $2 million for the fourth quarter and $8.8 million for fiscal year 2018. Increase in net cash usage for 2018 for operating activities as compared to $8.2 million in 2017 was primarily due to the company's payment of employee bonuses for 2017 during early 2018. Bonuses were not paid during the previous year. Our $8.8 million net operating cash usage compared favorably to the guidance range we provided of the $9 million to $9.5 million. In the fourth quarter, we captured some additional cost savings and benefited from the timing of certain expenses related to field tests that will be recorded in the first quarter of 2019.

We ended the fourth quarter of 2018 with $5.8 million in cash, cash equivalents and short-term securities. In addition, on March 18, we closed on a registered direct offering, raising $2.6 million net of operating costs, and issued approximately 2.4 million shares of our common stock. We were pleased to be able to price this offering at market with no warrants. For 2019, we expect a similar range for net cash usage as we had in 2018 in the range of approximately $9 million to $9.5 million. We will be directing that investment into generating proof points, working on collaborations and advancing development of our yield traits. We continued to have no debt on our balance sheet. We expect our cash on hand, together with expected revenue from our current government grant, to support our operations through a number of technology proof points into the fourth quarter of 2019.

Let's now review the quarterly and year-end operating results. The company reported a net operating loss of $1.9 million or $0.19 per share for the fourth quarter of 2018 compared to a net operating loss applicable to common shareholders of $4 million or $0.99 per share for the fourth quarter of 2017. Total research grant revenues in the fourth quarter of 2018 and fourth quarter of 2017 were consistent at $100,000. In the fourth quarter of 2018, research and development expenses were $1.1 million and G&A expenses were $900,000. This compares to $1.2 million of research and development expenses and $1.4 million of G&A in the fourth quarter of 2017.

For the year ending December 31, 2018, the company reported a net operating loss of $9.2 million or $0.92 per share, which compares to a net operating loss of $10.8 million or $3.29 per share for 2017. 2017 loss includes a $1.4 million adjustment related to the company's accounting for a deemed dividend from a beneficial conversion feature recorded in connection with Series A convertible preferred stock issued in our December 2017 financing. Total research grant revenue for the full year 2018 was $600,000 compared to $900,000 recorded in the previous year. Research and development expenses were $4.8 million in 2018 compared to $4.6 million for 2017. G&A expenses were $5.1 million and $5.6 million for the years ended December 31, 2018, and 2017, respectively. For more details on our financial results, please refer to the earnings release.

Now let's turn to Slide 4 to review our recent accomplishments. I'm very proud of the terrific job the Yield10 team did in 2018. We successfully executed on each of our key objectives and have a significant number of highlights I would like to mention here. We added a key adviser to the company to enhance our ability to achieve our goals and increase our focus on commercialization in 2019. And we named Sherri Brown -- Dr. Sherri Brown, a former Monsanto executive, as our Special Commercial and Technical Advisor. Sherri's extensive background in plant science, the assessment of yield traits in the field and knowledge of the commercial landscape, is making her an invaluable resource for the team.

We initiated an early-development program in corn to evaluate novel seed yield and drought tolerance traits. Some of you may know that corn is by far the highest value in the seed sector in the United States.

We announced encouraging results from our 2018 field test of gene C3003, producing seed yield increases of up to 11% in the best lines of canola tested. Based on these results, we plan to progress C3003 in canola into the commercial development phase in 2019. We continued our support of Monsanto/Bayer to develop a revalued C3003 for soybean. This is a continuation of the research license agreement granted in 2017. We announced promising research results for yield trait C3004 in growth chamber studies conducted using Camelina. Camelina plants containing C3004 grew more vigorously, and the best lines produced increases in seed yield of up to 65% as compared to control plants. We will field test these plants in 2019.

Our company signed a non-exclusive research license with Forage Genetics International, a subsidiary of Land O'Lakes, to evaluate 5 novel yield traits in forage sorghum. We exercised our option and executed an exclusive, worldwide license agreement with University of Missouri to 2 novel gene technologies, C3007 and C3010, significantly strengthening our edible oils platform. We also named the inventor of this technology, Dr. Jay Thelen, Professor of Biochemistry at the University of Missouri, to our Scientific Advisory Board. Jay is focused on the fundamental biochemistry of oil metabolism and his observations around generating new targets to improve oil biosynthesis are of high interest to us.

We received a positive response from the USDA-APHIS' Biotechnology Regulative Services, BRS, confirming that our triple gene-edited Camelina sativa plant lines developed using CRISPR-Cas9 for increased oil content are not regulated under BRS regulations. And we signed a non-exclusive research license agreement jointly with the Broad Institute of MIT and Harvard and Pioneer, part of Corteva Agriscience, the ag division of DowDuPont, for the use of CRISPR-Cas9 genome-editing technology for crops.

As I said, we are proud of the significant progress we made in 2018 and we'll continue to focus on achieving the key corporate milestones we've laid out for 2019 and beyond.

Let's now turn to Slide 5 on our path and time line to value creation. In our investor presentations, we refer to 2017 and 2018 as the emerging phase of Yield10 as we built our capabilities and credibility as a leading ag innovation company. These goals exemplify our relationships with Monsanto and Forage Genetics and the presence of Yield10 in popular media articles on CRISPR and ag. During 2019-2020, we will enter what we refer to as a growing phase, with increased focus on commercial development of our crops -- of our traits in major crops. During this phase, we are also increasing emphasis on developing revenue-generating partnerships through our traits and technologies. Success there will lead us into the harvest of commercial phase in 2021 and beyond.

In January, we celebrated our second anniversary as Yield10 Bioscience. We started Yield10 in 2017 with a vision to bring our unique skills and metabolic engineering and synthetic biology to bear on improving crop yield and to find new solutions to address global food security. When we started Yield10, our core assets included our novel yield trait C3003, the C4000 series of yield traits based on transcription factors and our capabilities in Camelina as a testing platform to rapidly evaluate new traits. In 2017, we embraced a new CRISPR genome-editing tool and brought it into our technology platform as a way to rapidly deploy as new crop traits. In 2018, the regulatory picture for genome editing was clarified in the U.S., and we executed a research license for the use of the CRISPR-Cas9 system in crops. During this time period, we also cleared 2 new exciting traits through USDA-APHIS. We're testing in the U.S. and we are working on more. By the end of 2018, we had a rich pipeline of traits in development over 10, and we've made the transition from studying the activity of our traits in Camelina to deploying our traits to generate proof points in key commercial crops, such as canola, soybean, corn, wheat and rice. In 2017-'18, we also found our first affiliations, driven primarily as a way to test traits in key crops, leveraging for a possible investment of resources by third parties. In 2019-2020, we expect data from our own studies plus data generated through our affiliations to provide us with data and observations that will enable us to perform revenue-generating collaborations in certain key crops.

Let's now turn to Slide 6 to talk about our affiliations to expand the testing of traits in key crops. We are leveraging the expertise and resources of ag industry leaders to deploy Yield10 traits in commercial germplasm, to collect field testing data on yield performance and to provide the path to commercial licensing of the traits.

In 2018, we signed a research license with Forage Genetics, enabling them to test 5 traits in forage sorghum, and the work is well underway. In late 2017, we signed a non-exclusive research license with Monsanto, now part of Bayer CropScience, for the evaluation of C3003 and C3004 soybean. We're very pleased with the considerable progress we have made deploying C3003 in their elite soybean lines. As part of our start-up strategy, we provided these companies the respective areas with non-exclusive licenses to test our traits and generate data at their cost in their target crops with the expectation that if they obtain promising yield data, they can come to us and negotiate a commercial license. For corn and soybean, the major crops in North America, our preference is to generate more data to understand the value of our traits before engaging definitive, collaborative or licensing discussions.

With respect to corn, we engaged a major ag company to deploy our traits into corn, and that work is underway. For wheat, we are working with researchers at NRC in Canada to develop genome-editing lines for evaluation based on our C4000 series of traits. In 2019, as we continue to generate more data on our traits, including field data, our activities will be focused on setting the stage for revenue-generating collaborations in crops, including canola, rice and wheat.

Let's now turn to Slide 7 to discuss the North American seed sector opportunities. Over the last 20-plus years, the ag majors have deployed biotech traits into canola, soybean, corn and cotton, and as a result, dominate the seed market for these crops. The traits deployed have provided resistance to herbicides and insect pests, essentially traits designed to protect yields. The largest investments have been made in corn and soybean, where stacked input traits now dominate the market in both North and South America. Canola in North America has also been engineered with herbicide tolerance. We are working on a pipeline of traits to improve inherent seed yield, which will be compatible with these traits and applicable to all of these crops. We believe we can have a large impact in these major commercial crops.

Wheat and rice are staple foods for the global population. These crops cover more than 900 million acres globally. The North America wheat crop is about 72 million acres, and rice is cultivated on an estimated 2 million acres. Historically, the seed supply for wheat and rice has not been controlled by the ag majors for a number of reasons, much of it regulatory. So these crops represent a commercial white space opportunity, where we should be able to align with the consumer perceptions of preferences by focusing on using CRISPR genome-editing approaches to bring meaningful improvement in yields in wheat and rice.

Forage sorghum and alfalfa represent a combined 20 million acres in North America. These crops are used to feed dairy cows and other livestock. It's an area where we can be opportunistic and work with specialty players just as we have done with Forage Genetics in sorghum. And we expect that activities in these crops, generating proof points on our novel traits, will provide us with many opportunities for licensing and partnering around our novel traits.

I'll now turn the call over to Dr. Kristi Snell for an update on our pipeline. Kristi?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [4]

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Thanks, Oli, and hello, everyone. In my presentation today, I will describe some of the recent advancements in our trait pipeline and our plans for 2019.

Let's now turn to Slide 8. Since our start as Yield10 in 2017, we have developed the pipeline of over 10 novel traits, and all of these are applicable to more than one crop. Using our metabolic engineering approach, we studied carbon use efficiency in plants and devised ways to improve the efficiency of photosynthesis as well as the ability of the plant to direct more carbon to seed. Our C3003 and C3011 are traits derived from algae and bacteria, respectively. C3004 is based on a plant gene and is amenable to CRISPR genome editing. Based on their fundamental activity, these traits could be broadly applicable to commercial crops.

We are also developing a series of oil-enhancing traits. These traits were discovered through the study of the oil biosynthesis pathway in oilseed crops. We are testing these traits alone and in various combinations to identify way to directly boost oil content, and this approach can lead to new commercial traits for canola and soybean. In 2017 and 2018, we obtained new regulated status for 2 different Camelina genome-edited plant lines, one containing C3008 and the other containing changes to 3 oil content genes. We are planning to evaluate these genome-edited plants at sites in the U.S. this year.

Our third group of traits are the C4000 series, which are based on transcription factors or gene regulators in plants. In a model crop, we have seen significant increases in photosynthesis and biomass yield with these genes. We are deploying these traits in corn, wheat and rice, and Forage Genetics is evaluating some of these traits in forage sorghum. In 2019, our internal R&D resources will be focused on generating more extensive proof points on traits in canola as well as wheat and rice.

Let's turn now to Slide 9. In several prior studies, we have shown that C3003 increases the availability of carbon in plants, resulting in improvements in seed yield and, in some cases, individual seed weight. In 2018, we field-tested Gen 2 C3003 in canola and reported seed yield increases of 11%, data that led us to initiate advanced development of C3003 in canola in 2019. In our 2019 field testing program for Gen 2 C3003 in canola, we will continue to generate expanded data online that showed improvements in seed yield in 2018 and 2017 tests. The permitting process is currently underway for the 2019 trials. We expect planning to occur in the second quarter and anticipate reporting field trial results in the fourth quarter of this year. Based on our studies, we know that C3003 produces some significant changes in plants, and one of the things that changes is the expression of the gene we are calling C3004. While the function of C3004 is still unclear, we are studying the mechanism of this trait and believe it could be linked to transport of fixed carbon to seed, resulting in higher seed yield.

In September of 2018, we reported our first seed yield results for C3004. Our scientists made several Camelina lines over-expressing C3004 and grew the plants in growth chambers under controlled growth conditions. We observed that these plants exhibited more vigorous growth, increased branching and produced seed yield increases in the range of 26% to 65% over control plants. As a result, we plan to evaluate C3004 in Camelina in field test this year. We plan to collect agronomic data on the plants as well as initial seed yield data. We will also perform seed bulk-up to have field-grown seed available for field planning in 2020. C3004 is a plant gene, so we have the potential for creating nonregulated versions of the trait using genome editing. We are working to deploy C3004 in canola and corn and we'll keep you updated on our progress.

Let's now turn to Slide 10. As Oli mentioned earlier, wheat and rice represent very attractive areas for new trait development. Some approaches have been tried, but they have been met with public opposition to GMO, for example, golden rice. First, they have proven to be technically challenging, for example, hybrid wheat. We believe that CRISPR genome editing is opening up a new path in wheat and rice, and we also believe our yield targets could have an impact in value on improving seed yields. Last year, we published our work with novel transcription factors, and this research forms the basis for our C4000 series traits. In 2018, we made some good progress in wheat and rice with these C4000 traits. In 2019, we plan to generate more proof points that we hope will demonstrate the promise of our traits in these key crops and position us to identify collaborative opportunities to begin testing our traits produced from genome editing in commercial varieties.

Let's now turn to Slide 11. Yield10 is always interested in new, groundbreaking technology useful for generating plants with novel traits. We've recently participated in a research program led by MIT Professor Michael Strano that has demonstrated the selective delivery of functional DNA to plant chloroplasts using nanoparticles. Since chloroplasts have their own genome that encode some of the proteins required for photosynthesis, this technique has the potential to allow plant scientists to make targeted, precise changes to create crops with improved traits. The results of this research were published on February 25 of Nature Nanotechnology. Our collaboration with MIT on this important research is another example of our continued efforts to partner with leading academics and institutions to contribute to the development of cutting-edge technology.

I'm excited about the R&D program we've established for 2019. The R&D team is fully aligned and committed to the advancement of our research and future commercialization efforts, and we look forward to a productive 2019.

Oli, back to you.

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [5]

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Thanks, Kristi, and the entire R&D team. I'm confident the team will continue to make excellent progress on the development of our yield traits in key commercial crops in addition to discovering new trait targets as our work progresses. But before I continue, I think it's worth pointing out that the unmet need in ag sector is not establishing seed germplasm, value delivery chains and regulatory capabilities. That is all well established. The unmet need is for new scientific approaches and innovation to enable step-change improvements in crop performance to meet both consumer preferences near term and the longer-term challenge of global food security.

Let's now turn to Slide 12 to review our business model and commercial strategy. Our traits in development provide us with multiple potential paths to revenue, driven by the value proposition. The major North American commodity crops, we think we can accelerate development through working with the ag majors in their elite germplasm using their resources. We have Bayer/Monsanto working with C3003 in soybean, Forage Genetics working with several traits in sorghum, and we've contracted a major ag player to deploy several of our traits in corn. Here, we anticipate commercialization of novel yield traits through license agreements with milestone payments to Yield10 and participation in downstream economics.

The next path is specialty and niche crops. There's a lot of innovation going on in this area. Here, the potential number in types of partners and commercial partnerships is much larger than the handful of companies in the commodity ag seed space. Our pace for improving seed yield or boosting oil content are very relevant to this space, especially as we see a lot of interest in healthy oils.

The third path to commercial revenue involves our technology platform where we can accelerate innovation based on the GRAIN platform to predict gene combinations for crop improvement. In our first years as Yield10, we have developed technologies under GRAIN platform to focus on yield in commodity crops. Going forward, we believe the GRAIN platform could be used to address a broad area of crops where there is clear economic value associated with improving agronomic performance or driving product composition. Today, we have set up a number of relationships with the objective of testing key -- traits in key crops and generating proof points. In 2019, we are focused on forming revenue-generating licenses -- alliances targeting potentially high-value business opportunities with our traits.

Let's now turn to Slide 13 to discuss our upcoming milestones. In 2019, we intend to build on our strong reputation as an innovator, continuing to identify traits for development and building a portfolio of traits all while focusing on activities that allow us to generate proof points in key crops, particularly canola, soybean, rice, wheat and corn. We'll continue to progress the following: advance the development of C3003 in canola, including generating data in our 2019 field testing program and support Bayer/Monsanto in the development of C3003, C3004 traits in soybean; generate yield data for C3004 in Camelina and deploy the trait in canola and corn; advance oil-boosting traits using CRISPR genome editing, including C3007 in canola; and continue testing our C3008 and triple edit Camelina lines in U.S. field studies; report progress with our C4000 series of traits in wheat and rice; support Forage Genetics in the evaluation of our traits in forage sorghum; continue to build our intellectual property portfolio; communicate our scientific innovation in technical presentations and papers; and securing industry -- ag industry collaborations.

With that, I'd like to turn the call back to Lynne for questions.

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Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [6]

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Great. Thank you, Oli. And Devon, can you now poll for analyst questions?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Ben Klieve with National Securities.

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Benjamin David Klieve, National Securities Corporation, Research Division - Analyst [2]

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First, I'm hoping for a quick clarification on your corn initiative. Is your R&D partner working on integrating your traits into seeds such that you may be able to conduct greenhouse trials next year? Or is this partner going to be able to conduct greenhouse trials this year such that field trial may be possible for you in 2020? Or neither?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [3]

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Yes. So our partner is transforming the corn lines for us, and then we will get feedback from them. We will then take that seed and make stable lines either in the greenhouse or in the field. That remains to be determined. We have a partner lined up that we could work with through that network. And then the next step would really be to make hybrid lines in elite germplasm for the corn and do field tests.

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [4]

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If I could just add to that, our goal in corn is to try and control the right to our technology in corn while generating data that would be convincing to the sector in terms of the value. And so we've identified this way of leveraging these third-party resources to take this all the way through essentially field data in hybrids, which should be pretty important. And so that's what the plan is now.

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Benjamin David Klieve, National Securities Corporation, Research Division - Analyst [5]

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Okay, perfect. And then with regards to, Kristi, your comment on integrating C3004 in the corn, is that something that you think may be ready for initial trials, say, this time next year? Or is the time line a little bit longer for that trait?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [6]

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Yes, the time line will be a little bit longer. We will be getting the feedback likely next year, early next year. So we'll take a little bit longer to do field trials.

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Benjamin David Klieve, National Securities Corporation, Research Division - Analyst [7]

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Okay, got it. And then transitioning over to Camelina, I'm wondering if you can talk a bit about the result of last year's trials with C3003. You indicated that those were a bit impacted by weather. And I'm just curious how those -- how the trials from last year are impacting your trials for Camelina for this year?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [8]

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Yes. So last year, we pretty much saw the same thing as we saw the year before in Camelina. It is true that we experienced severe drought conditions during the trial, but we did see similar results as we had seen the year before. As we also mentioned before that we saw some interesting results -- due to the drought, we saw that our trait was seeming to perform better under drought conditions. So that was also something positive that we saw come out of the trial.

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Benjamin David Klieve, National Securities Corporation, Research Division - Analyst [9]

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Got it. And just a couple of more quick ones from me here. Oli, on the presentation, you talked about transitioning the company from being an emerging player to a growing company this year and talked about an increased emphasis on developing revenue-generating collaborations. Can you elaborate a bit on this and what that really means? I mean, what are you expecting to do differently this year versus last year? And what are the kind of goalposts that we can kind of look for over the next couple of quarters to show that, that transition has taken place and that you are -- the increased emphasis is really generating results?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [10]

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Yes. And I think as you hopefully see in our presentation, some of the more recent investor presentations, an increased activity around essentially developing commercial events in -- of C3003 in canola. Canola is a pretty important crop. We do have the capability in-house to develop that. And so we obviously, based on last year's field trial results, are really pushing pretty heavily on canola this year and really kicking into what we referred to as the early commercial development phase. So that's -- a big emphasis for us going forward is to do that. Because it's a traditionally ag biotech trait, there's a lot of work that goes on in that with respect to making additional events to see if we can get higher yield and -- as well as sort of essentially carrying out multiple field trials and multiple site. So that activity is ongoing. We have also begun the test -- to test this year some of the oil traits. We're particularly excited about C3007. We have maybe new versions of that in canola, which, again, is an important crop. We've been pretty clear that increasing the oil content of canola by 10% can add up to somewhere around $800 million to the sort of Canadian crop in terms of value. So it's a pretty valuable thing. That's one of the traits we licensed through the University of Missouri. As an edited trait, obviously, that would have a potentially shorter path to market, which should be very exciting for us. C3004, obviously, last year, was quite frankly a bit of a positive surprise, the data we generated with that, obviously, as a plant gene amenable to editing. And so obviously, the first thing this year is to repeat our work in the field for the first time in Camelina then rapidly drive those into canola and corn. We're a little limited in our abilities in soybean. So we haven't quite figured that out yet, but we definitely have been moving forward in corn and moving forward in canola, and we're pretty excited about that. And then in the 4000 series, it's really -- we haven't -- we've talked about the work we're doing in wheat and rice. We haven't really reported anything in terms of results there, but again, we have now successfully edited C4004 in rice. Hopefully, we'll be in a position to report on that this year. We're working on editing C4004 in wheat. Those are 2 very important global crops. Hopefully, we'll see some exciting results there in addition to the basic information we're getting from the engineered, the ag bio versions we made with the 4001 and 4003. So we have a lot of activity in crops that are really very important for food security and food production, each at different stages of proof points. And I think we're looking for validation across a fair number of crops to show how broadly applicable this unique approach of integrating GRAIN with genome editing is.

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Benjamin David Klieve, National Securities Corporation, Research Division - Analyst [11]

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Perfect. One last one from me. Curious about any impacts on your -- that the government shutdown had on your ability to secure any kind of grant funding. Were there -- did you see any kind of impact whatsoever from that 6-week shutdown?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [12]

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Kristi?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [13]

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No, we didn't. We have a current grant from the Department of Energy, and they were not impacted by that shutdown. We had already received their funding that year, so it didn't affect us at all.

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Operator [14]

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Our next question comes from the line of James Jang with Maxim Group.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [15]

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So yes -- so you guys -- Oli, you laid out the road map for Yield10. So far, everything seems to be on track. So when we look at 2019 in C3003, what kind of results are you hoping for?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [16]

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Well, I'm hoping to see the same sort of performance you saw in canola last year. Kristi, you want to speak to this?

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Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [17]

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Yes. So last year, as Oli mentioned previously, we saw an 11% increase in field trials in canola. And so we'll be looking to repeat that result and learn more about how the plants grow, their agronomics and that kind of thing.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [18]

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And so if you're able to replicate like this 11% seed increase, is that enough to go out and now start to commercialize? Or are there different milestones that have to be achieved before that could happen?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [19]

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Yes. So an 11% increase in canola, I think, is worth -- is about $900 million a year in incremental revenue for the canola growers. So obviously, that's a pretty meaningful number. I think what we want to do is demonstrate year-on-year reproducibility. But I think we also need to make additional events. This is very typical when an ag biotech trait enters the development path. Really, there's a lot -- amount of work associated with making additional traits looking for higher performance. And so we will have quite a deep quality of work going on in canola. This year, we have a clear goal set for the technical team in terms of new events, the field tests in 2020. And obviously, we're field testing the existing events this year, and hopefully, we'll have that data by Q4.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [20]

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Okay. So if everything was on track, so you're able to replicate the performance in '19 and '20, so would '21 be too early for commercialization then?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [21]

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Yes, so in terms of the commercialization path through licensing, the answer is hard to know when we'll reach a license agreement. But certainly, we are, as a company, very interested in establishing relationships in canola this year, never mind in 2020. So we are talking to people about some of these traits. We are really focused on looking at crops like canola, wheat, rice, (inaudible) that we would be prepared to do or establish relationships on sooner, whereas I think in corn and soybean, our preference is to get more data under our control before we discuss the ultimate licensing.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [22]

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Okay. And if you were to take, I guess, the one crop that will be the main focus in '19, would that be canola?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [23]

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I think that's actually pretty fair.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [24]

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I know you're working on a number of things concurrently, but if you were to choose one...

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [25]

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We're working on a number of things, but I think -- no, I would say that we are placing a lot of emphasis on canola. We obviously have work going on in soybean as well, and we've got working on corn, but we won't see -- as Kristi mentioned, we won't see field data from corn until 2020, '21, right? So we're doing a lot in canola this year with the editing of C3004, with the C3003. We've got a lot going on in canola. I mean, it's a very attractive commercial crop, and we can add [such good] value to that crop. It would be a good first...

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [26]

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All right. And can you give us a little more update on what's going on with that partnership with Forage Genetics?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [27]

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Yes -- no, I haven't talked to Forage in a while. I mean, basically, they have got a lot of work just like when we started with Monsanto. They've got many months of work before they'll be at the point of seeing plants that are engineered. So I've reached out to them and we've had some other discussions. But as far as I know, [we're the same] sort of on track.

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Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [28]

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Okay. And so that should start to move in '19 as well, right?

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [29]

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I would hope to hear from them this year, yes.

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Operator [30]

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We have reached the end of our question-and-answer session. And I would like to turn the call back over to Lynne Brum for closing remarks.

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Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [31]

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Yes, thanks, Devon. And I'll now turn the call back over to Oli for conclusion.

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Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [32]

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So I'd like to personally thank all of you for joining us on the call today and especially our shareholders for your continued support. This is an exciting time for our industry and for Yield10. Our team is laser-focused on progressing our traits to fulfill our mission to produce step-changes -- change improvements to crop yield to ensure global food security. I want to thank everybody at Yield10 for helping us reach our goals in 2018, and I look forward to reaching our milestones this year. Have a nice evening.

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Operator [33]

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This concludes today's teleconference. You may now disconnect your lines at this time. We thank you for your participation, and have a wonderful day.

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