U.S. Markets open in 23 mins

Edited Transcript of MBLX earnings conference call or presentation 8-Nov-18 9:30pm GMT

Q3 2018 Yield10 Bioscience Inc Earnings Call

CAMBRIDGE Nov 19, 2018 (Thomson StreetEvents) -- Edited Transcript of Yield10 Bioscience Inc earnings conference call or presentation Thursday, November 8, 2018 at 9:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* 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

================================================================================

Conference Call Participants

================================================================================

* Han Jang

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

* Jon Robert Hickman

Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Greetings, and welcome to the Third Quarter 2018 Financial Results and Business Update Conference Call for Yield10 Bioscience. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, Yield10 Vice President of Planning and Corporate Communications, Lynne Brum. Thank you. You may begin.

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Thank you, Jen, and good afternoon, everyone. Welcome to Yield10 Bioscience Third Quarter 2018 Conference Call. Joining me on the call today are President and CEO, Dr. Oliver Peoples; Vice President of Research and Chief Science Officer, Dr. Kristi Snell; and Chief Accounting Officer, Chuck Haaser.

Earlier this afternoon, we issued our third quarter 2018 news release. This release as well as slides to accompany our presentation today are available on the Investor Relations section of our website at yield10bio.com.

Let's 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 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. And I'll turn the call over to Oli.

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Thanks, Lynne. Hello, everyone, and thanks for joining the call today. Please turn to Slide 3 and let's cover a few financial highlights starting with the balance sheet. We ended third quarter 2018 with $7.8 million in cash, cash equivalents and short-term securities. Net operating cash usage for the third quarter was $1.8 million. This represents a reduction in cash usage from the $2.0 million we used in the third quarter last year, reflecting the timing of expenses. In the first 9 months of 2018, our net cash usage was $6.7 million. We estimate net cash usage for the full year 2018 will be approximately $9 million to $9.5 million, and this range includes payments totaling $500,000 we completed in the first half of 2018 for our final restructuring costs. We continue to have no debt on our balance sheet.

We expect our cash on hand, together with the revenue expected under current government grants, to support our operations through a number of technology proof points into mid-2019.

Let's now review the quarterly operating results.

We reported a net loss for the third quarter of $2.6 million or $0.26 per share. We reported $0.1 million in grant revenue, $1.3 million in R&D spend and $1.4 million in G&A spend. For more details on our financial results, please refer to the earnings release.

Now let's turn to Slide 4 to go over recent accomplishments. I'll just remind you that Yield10 is developing gene trait technologies for food and feed crops to produce higher yields with lower inputs of land, water and fertilizer. In the third quarter, we continue to execute around our key objectives for 2018. We signed a research license with Forage Genetics for evaluation of 5 traits to increase biomass yields or drought tolerance in Forage sorghum. Forage Genetics is a leader in the development of forage crops, and I'll cover this in more detail in a moment. We received confirmation of nonregulated status from USDA-APHIS for our triple genome-edited Camelina line targeting increased seed oil yield content. As a result, we plan to test these Camelina plants in our 2019 field test program. This confirmation was significant as it clarifies the regulatory path for plants containing multiple genetics. We also reported our first research results with C3004 in Camelina. The results for this trait are exceptional. We showed -- as we showed yield increases of up to 65% and we recently completed harvesting at our field test sites and data generated by our studies will be extensive and is being collated and evaluated with our field test contractors, and we expect to report results later in the fourth quarter. We've been making solid progress and we'll continue to focus on achieving the key corporate milestones we've laid out for 2018 and beyond.

Let's now turn to Slide 5 on Forage Genetics. Our agreements with ag industry players have been aligned with the open innovation model for the evaluation of our novel traits. The intended benefit of this model is to allow ag companies to deploy traits in the proprietary elite germplasm at their expense and assess the performance of these traits in greenhouse and field trials that they control. Arrangement with Forage Genetics is consistent with this model. Forage Genetics is a subsidiary of Land O'Lakes which is a large cooperative of dairy farmers based in Minnesota. Forage Genetics is a technology and market leader in the development of forage crops used for animal feed. Under the research agreement, Forage will be evaluating 5 traits to increase biomass yields. Based on our prior work with switchgrass, we believe these traits could achieve this goal with sorghum. Following the signing of the agreement, our R&D staff began supporting the Forage Genetics R&D team to begin work with our traits. Sorghum is currently grown on 5.8 million acres in the U.S. and used as feed crop, primarily for cattle.

Let's now turn to Slide 6 and our affiliation in the ag space. We are developing a broad pipeline of novel yield traits that can be deployed across many crops. We are leveraging the expertise and resources of Ag industry leaders to deploy yield traits of commercial germplasm to collect field testing data on yield performance and provide a path to commercial licensing of our traits. In addition to our most recent license agreement with Forage Genetics, in late 2017, we signed a nonexclusive research license with Monsanto, now part of Bayer Crop Science for the evaluation of C3003 and C3004 soybean. We recently had an update with the technology team at Bayer/Monsanto, and we are very pleased to hear about the considerable progress they have made deploying C3003 in their elite soybean lines. There's a lot of interest in improving the performance of wheat. Therefore, to test our wheat traits in wheat we are working closely with the research group in the National Research Council of Canada. I'll now turn the call over to Dr. Kristi Snell for an update on R&D. Kristi?

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Thanks, Oli, and hello, everyone. In my presentation today, I will describe some of the recent advancements in our R&D pipeline. Let's now turn to Slide #7.

We have shown in prior studies that C3003 increases the availability of carbon in plants resulting in improvements in seed yield and individual seed weight. 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. Several weeks ago, we reported our first seed yield results for C3004. Our scientists made several Camelina lines over-expressing C3004 and grew the plants and 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. For comparison purposes, improvements to canola through breeding may be expected to increase yields by very low single digits.

Our data on C3004 is early and highly encouraging given the profound affect the trait seems to have on seed yield. As a result, we are planning to evaluate C3004 in Camelina in field tests in 2019. We are also working to accelerate the development of the trait and soybean and canola and to obtain data for the combination of C3003 and C3004. Since C3004 is a plant gene, there's also the potential for creating nonregulated crops by altering the activity of C3004 through genome editing. C3004 also demonstrates that it may be possible to achieve very significant increases in seed yield in Camelina, possibly enabling the crop to compete for grower acreage based on yield. Oli will expand on this topic later in the presentation.

Please turn to Slide 8. When our lead trait gene C3003 is introduced into plants, it enables plants to be more efficient at capturing carbon through photosynthesis, resulting in higher seed yield. This activity involves a unique biological transporter mechanism that we believe has the potential to improve yield in a wide range of C3 crops, which includes soybean, rice and canola. The 2018 field test program is the third season of field tests for the C3003 trait and our most extensive. Our objective with these trials is to generate both performance and molecular data to enable optimization of the traits impact. We are evaluating several generations of C3003. The main objectives of this study are: one, to test second-generation C3003, which includes Gen 2.0 and Gen 2.1 designed for seed-specific expression of the gene in Camelina; two, to repeat testing of first-generation C3003 and canola designed for expression throughout the plant and to test for the first time Gen 2.0 in canola; and three, to bulked up pure soybean seen from Gen 1 and Gen 2.0 C3003 plants for use in our 2019 field testing program.

We also conducted our first field test of the genome-edited plants, Camelina with editing of the C3008a trait. This trait acts downstream of oil biosynthesis and reducing its activity may lead to a reduction in oil turnover. This trait is part of the triple combination trait stack we have designed to boost oil content in oilseed crops. We have harvested the plants in our 2018 field tests and plan to report on our findings later in the fourth quarter. The results of these studies will enable us to finalize our plans for the field test we plan to conduct in 2019.

Please turn to Slide 9. We believe there are compelling market opportunities around specialty oils, and we are advancing approaches using genome editing for optimizing oil content in oilseed crops. These traits will also have the potential to stack with other traits for changing oil composition such as the high oleic and Omega fatty acid containing oils. We are currently working on multiple gene targets involved in oil biosynthesis and are building IP around these targets. The position of each of these targets in oil biosynthesis is shown on the illustration on the right of the slide. C3008a helps prevent lipid turnover which may result in a better quality oil. We edited C3008a and obtained nonregulated status from USDA-APHIS last year. We tested the trait in field tests this year and look forward to receiving the results of the study from the contractor. Earlier this year, we completed genome editing of the Camelina line edited for C3008a, C3008b and C3009 to boost oil biosynthesis. In the third quarter, we announced that USDA-APHIS has confirmed nonregulated status for this trait. This was significant for us because it clarifies that multi-gene edited traits can be confirmed as non-regulated. We plan to test this combination in field tests in the U.S. next year.

We are also working with technology from the University of Missouri for which we signed an exclusive license and are editing C3007 in both Camelina and canola. We plan to start editing the C3010 trait soon. Our objective is to create edited lines and then submit them to USDA-APHIS through their "Am I Regulated?" process to enable nonregulated status for the traits to simplify the process of field testing these traits.

To illustrate the potential value of increased oil content, we have included a table showing the breakdown of the value for the 2016 Canadian harvest canola seeds. If a new oil trait that increases oil by 10% is deployed across total Canadian canola acreage, this would add CAD 0.8 billion in value to the annual harvest. We believe this work focused on boosting oil content is promising, and it represents an important opportunity for licenses and collaborations.

To summarize, our R&D team is positioned for a very productive year in 2018 and is focused on generating proof points to guide the development of our novel traits. I'll look forward to updating you in the months ahead. Oli, back to you.

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Thanks, Kristi, and thanks to the entire R&D team. I'm confident the team will continue to make excellent progress on the development of field traits in key crops in addition to discovering new yield track -- yield trait targets.

Let's now turn to Slide 10, our pipeline of traits. The table on this slide shows our traits in development with seed yield traits such as C3003 which based on the algal gene we are focused on to date may be regulated in our focus is on large acreage biotech crops. As Kristi mentioned, we are generating additional proof points for the C3003 traits in Camelina, canola and soybean. The C3004 initial results are certainly very promising and this is a plant gene we may be able to deploy for example, by genome editing such we can achieve nonregulated status.

In addition, we have 2 categories of genome editing traits in our pipeline, our oil enhancing traits and the C4000 series of transcription factor genes. All of these traits are good targets for genome editing to improve crop performance. We have worked underway either in-house or through third party relationships in a variety of crops including beets, rice and sorghum. We expect to begin work in corn later this year.

A key objective of these activities in the development of the GRAIN platform is to generate revenue by providing R&D services for the ag sector. Across all of these areas we see opportunities for licensing our partnerships as we demonstrate the value proposition of our traits and technology platforms.

Let's now turn to Slide 11 on exceptional performance traits. This is certainly an exciting time to be in the field of ag biotech. In many ways new tools enabling the development of exceptional performance traits, whether it's yield or compositional or nutritional traits, many new traits are emerging.

In the green box on Slide 11 we've highlighted some of the research achievements using a range of technologies to probe plant machinery to see what's possible in yield. C3003 and C3004 we've seen increases in seed yield ranging from 23% to 65% in our best lines. In our work with transcription factors we've measured increases of 70% photosynthesis and 150% increases in biomass. We've also created the synthetic biology trait which sidesteps photosynthesis altogether and produced a more than doubling of seed yield. This is evidenced was that no yield traits can be identified and developed may lead to valuable commercial outcomes.

Currently available biotech traits were introduced in the 1990s to provide crop protection through reinvesting systems. In 2017, biotech traits were deployed on approximately 470 million acres worldwide. With the proof points we've generated demonstrating step change improvements to the yield, we believe we are on the right track to buying our GRAIN discovery platform with genome editing. The value of a trait for commodity grains is maximized by having it used on the largest acreage possible. This is reflected in the ag industry business model which involves deploying new traits broadly across commercial crops through licensing. Our objective is to enable the development and commercialization of our traits as broadly as possible in food, feed and biomass crops.

We view CRISPR as an important tool for accessing new traits and one that can significantly reduce the timelines and cost for new trait development and commercial deployment.

Let's turn to Slide 12 on genome editing traits. Genome editing is an advanced crop breeding tool that enables targeted changes to specific plant genes or gene combinations to develop new crop genetics. So it's not surprising that our industries and raising genome editing as a means to develop nutrients to improve crop performance. This technology has the potential to be disruptive to the agricultural landscape, and I think everyone is expecting a thwart of new traits, new ergonomic profiles, new product profiles and more players to enter the landscape. In fact, earlier this week, we saw media reports indicating support from 13 nations including the U.S, Canada, Brazil and Argentina for a statement of the World Trade Organization supporting agricultural applications of precision agriculture, including genome editing. This is a step in the right direction to having consistent rules for genome-edited crops. The blue boxes on this slide outline what we see as 4 major steps in the development and commercialization of the genome editing traits in crops. Genome editing allows us to assess genetic diversity in plants to enhance composition, yield or other attributes. The USDA-APHIS has position on genome edited crops significantly streamlines the development of new traits. Our work can [indiscernible] others in the field so that the first 2 steps can be achieved in 2 to 3 years. We've shown that the C3008a and the triple-edit C3008,a, b and C3009 in Camelina. The significance is that plants that exit USDA-APHIS process can be tested in the U.S. in field studies and commercialized at lower regulatory hurdles as compared with the path for a biotech trait can result in reduced cost and timelines to commercialization will bring the market to new players and new products. Given the value sharing licensing model of the sector, what this means for Yield10 is that we may be able to negotiate greater participation in the value of a trait made using genome editing and receive a royalty stream much sooner than a traditional Ag biotech trait where the seed company would typically be responsible for the regulatory approval process and costs. Genome editing also dramatically reduces the barrier to entry for specialty crop opportunities.

Let's now turn to Slide 13, the business case for Camelina. Camelina has been of interest as a commercial crop for specialty oil production for some time as it offers a number of benefits as a rotational cover crop. To a large degree, progress in commercialization has been impaired by the potential economic returns to growers based on its current yield and oil contact. The seed yield results we have demonstrated with C3003 and C3004 have been the catalyst for us to begin re-examining the business case for commercializing Camelina. Improving seed yield 2,500-3,500 pounds per acre with higher oil content could make it an attractive commercial crop providing solid returns to growers. At Yield10, we have been developing Camelina platform for trait valuation for several years. And in that time, in addition to the yield results with C3003 and C3004, we have learned a lot about the crop through development of our own lines. For example, we have been testing Winter Camelina that we believe has the potential to provide growers with additional revenue from oil while preventing nitrogen runoff as a winter cover crop. We have a number of high-yield, high-oil-content Camelina traits that we could insert into work for Camelina. One commercial area of interest is the production of nutritional oils, and here, I'll mention a recent clinical research paper that was published in early 2018 showing the consumption of Camelina oil results in better benefits to human health when tested side-by-side with fish oil. We also see opportunities for developing Camelina-based replacements for fish oil in aquaculture feed. We are currently assessing the potential for the commercial development of Camelina. I look forward updating you on our analysis in 2019.

And let's turn to Slide 14 and discuss our upcoming milestones. Yield10 has a strong pipeline and exciting crop technologies that we believe will help us build significant value in the business. In 2018, we anticipate reporting our field test results in the fourth quarter. Under a research license Bayer/Monsanto is working for C3003 in soybean we will update them further on C3004. We will also continue independent development of C3003 and C3004 in Camelina, canola, soybean, corn and rice. We will continue to progress oil enhancing traits using CRISPR genome editing in Camelina and canola. Progress our C4000 series traits into rice and corn and in the months ahead support the Forage Genetics R&D team as they deploy and test their traits in Forage sorghum. Our results to date in scientific publications have helped us engage useful discussions and are expected to position us to negotiate and secure ag industry collaborations a key area of focus for us. We will continue the work we've been doing with our academic partners on the underlying science, file new patent applications in our discoveries and expect much of our work will be published in academic journals or presented at scientific conferences. Taking this all together, we have a clear vision for our business of finding a commercial opportunity in 3 areas, commodity crops, specialty oils and our GRAIN R&D platform. We plan on making steady progress towards our goal to create value for our shareholders. And with that, I'd like to turn the call back over to Lynne for questions

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Thanks, Oli. Jen, can you now poll for questions?

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from the line of Jon Hickman with Ladenburg Thalmann.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [2]

--------------------------------------------------------------------------------

Okay, I have 3 questions, I think. And I don't know who you want to answer these, but can you tell us anything about what's going on with the Bayer/Monsanto progress with C3003-4?

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Sure. When we started the relationship with Bayer/Monsanto back in December of 2017, that's a 3-year program that would potentially enable them to generate field data with C3003 and 4 in soybean. We did not provide them with C3004 at the time as we still had some things we needed to learn, but in the call we had with them several days ago, we learned that they've actually made good progress in getting C3003 into soybean, but it's still very early in the process, but we're very encouraged by the fact that they are quite far along, perhaps further along than we expected. And so we're just pleased with the progress they're making.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [4]

--------------------------------------------------------------------------------

So do you think they'll be able to put that in the field next year?

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

It's hard to say, and I think we'd have to ask them for permission to provide you with information on that. I would say that it's going pretty quickly, they're pretty engaged in it, which is good, and I think that reflects some of the underlying scientific mechanism we provided to them. So we're just pleased that they're moving right along even in the midst of the merger with Bayer and the takeover and all that entails in terms of the ultimate challenges they'll face us as Bayer really takes control of the company.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [6]

--------------------------------------------------------------------------------

Okay. So now I'd like a little clarification on C3004. So you said that C3003 results in changes in how C3004 works. Does C3004 work without C3003 in the picture?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [7]

--------------------------------------------------------------------------------

The short answer to that is yes and surprisingly so. I think that's clearly something we were not expecting. And Kristi, do you want to elaborate further on that? I mean, it's simply, we expected pretty much the opposite result of the one we achieved. We've obviously done a lot of work on trying to understand what the C3004 gene is. We don't yet have that defined, but having said that, we're very aggressively moving it into canola and soybean, in addition to bulking up the seeds from the C3004 Camelina lines. It'd be ready to plant in the field next year.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [8]

--------------------------------------------------------------------------------

So if you go back to Slide 7, Kristi, and 1, 2, 3, 4, 5, 6. So you did 6 different versions of C3004. Is that what C3004 by itself without C3003's effect?

--------------------------------------------------------------------------------

Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [9]

--------------------------------------------------------------------------------

Yes, so those are independent lines. They're in -- what are called independent events that are shown in that graph. So there were 6 independent events that are shown in that graph of C3004 only.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [10]

--------------------------------------------------------------------------------

Only. Cool. Then why bother with Camelina? Why don't you just take this right into, like, a seed crop that everybody already plants like soybeans?

--------------------------------------------------------------------------------

Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [11]

--------------------------------------------------------------------------------

Yes. So we use Camelina as a fast testing platform. It's very easy to engineer it...

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [12]

--------------------------------------------------------------------------------

No, I understand that for testing, but why bother with it? I mean, Oli, you've spent a lot of time telling us that you were going to maybe try and make this into a commercial crop.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [13]

--------------------------------------------------------------------------------

Yes, actually that's why we're bothering with it. I think the yield increases of seed and the interest in essentially Camelina oil and the potential to use Camelina as a platform for making essentially omega oils for aquaculture feed is clearly a very interesting crop with some significant potential. That's also a crop that's been largely underdeveloped and certainly the types of technologies that we've demonstrated with C3003 and 4 and oil traits clearly indicate that we could create very large positive improvements in the performance of Camelina. And so of course, we're looking at it as a potential commercial crop. Now regarding canola and soybean, we already got that work planned out and it's getting underway as soon as we found out that C3003 -- sorry, C3004 did have these benefits, we did 2 things. We started the process of looking for the C3004 equivalent in canola and soybean, and I can't tell you where we are on that, but we also started the process of introducing the Camelina C3004 gene into essentially canola and soybean. And as you know, it just takes longer to actually develop the engineered plants with canola and soybean. And therefore, we want to get as much information from the Camelina as we can and learn as much as we can about how this is working. And the best way to do that is actually in Camelina.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [14]

--------------------------------------------------------------------------------

Okay. Then my last question is, I've never heard you talk about C3005. Can you tell us a little more about that?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [15]

--------------------------------------------------------------------------------

Well, C3005, one of the things that Kristi's team did is really try to look at carbon fixation in general. And I'm going to turn it over to her because it's quite a tour de force of what's possible in crops.

--------------------------------------------------------------------------------

Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [16]

--------------------------------------------------------------------------------

Yes, so we've engineered a couple novel carbon fixation pathways and they're very complicated, but they really appear to increase seed yield significantly. In fact, one of them we've seen has doubled seed yields in Camelina. But these are really a proof of concept projects to really determine how far you can push seed yield and we're learning a lot from them. But the next would really be to try to minimize the number of genes that it takes to make these novel pathways to try to get a small set of genes to achieve the same yield effect.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [17]

--------------------------------------------------------------------------------

So do you think C3005 is going to be one of those?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [18]

--------------------------------------------------------------------------------

No.

--------------------------------------------------------------------------------

Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [19]

--------------------------------------------------------------------------------

It's very complicated. I think all we're doing is learning from it, so no, I doubt it will be.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [20]

--------------------------------------------------------------------------------

It's -- Jon, it involves a large number of trans genes from microbial systems, and so that adds a lot of complexity to the process of commercializing.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [21]

--------------------------------------------------------------------------------

It's not a specific independent trait? Or a combination?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [22]

--------------------------------------------------------------------------------

It requires -- it's a combination of a whole biosynthetic pathway for recapturing especially carbon in the plant, and it just -- it does a phenomenal job. The number of genes involved is somewhat similar to the number of genes that's recently been approved in canola and -- by both Nuseed and also BASF where they've engineered a pathway to produce omega oils in canola using 8 or 10 genes. So it's a similar complexity to that, so yes, it is potentially approvable, but right now, we're rather encouraged by the potential to genome-edit traits like C3004 which will reduce our timelines and potentially increase our opportunity for better share of revenues going forward.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [23]

--------------------------------------------------------------------------------

Okay. So as long as you're talking about revenues, can you tell us anything about your potential discussions to get some maybe new engineering contracts or licensing contracts that might generate some income for you in the 6-to-9-month timeframe?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [24]

--------------------------------------------------------------------------------

So as you know, these things are always complex to negotiate and actually bring to a positive conclusion. One of the things that happened, particularly with the C3004 data and the fact that it something that could be amenable to genome editing is we have been approached by 2 other interested parties, both, I would say, significant players in their respective crops, both interested in genome edited yield traits. So that's very encouraging to us. Where those will go in terms of the discussions and the negotiations, we'll just have to wait and see. But certainly I think folks out there are now recognizing that Yield10 has some really cool, exciting breakthrough science, has an ability to discover things that others haven't looked at and that these things can certainly bring potentially very large benefits.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [25]

--------------------------------------------------------------------------------

Okay. And then the data on the harvest, is that like a December event? Or can we get that in November? Do you -- can you give us any kind of timeframe besides Q4?

--------------------------------------------------------------------------------

Kristi Snell, Yield10 Bioscience, Inc. - VP of Research & Chief Science Officer [26]

--------------------------------------------------------------------------------

Yes, right now, all we can really estimate is that it will be the fourth quarter of 2018. There's a lot of work that comes with both packaging the seed, drying the seed, weighing the seed, but also a lot of analysis, a lot of statistical analysis of the data, and we're awaiting a lot of the data from our cooperator, and then it will take some time for us to go over it and ask questions, and at that point, we will release it.

--------------------------------------------------------------------------------

Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [27]

--------------------------------------------------------------------------------

Do you want to say anything else about that?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [28]

--------------------------------------------------------------------------------

You know, one of the challenges with these operators is they're obviously in the business of doing trials for as many clients as possible. So just because of the nature of the harvest, like if the farmer gets stuck with harvesting 19 million acres of corn in 6 to 8 weeks, these contractors also have to essentially process, segregate carefully and manage thousands of seed plots being tested and ours is among that number, so we have just be patient around getting the data when it comes.

--------------------------------------------------------------------------------

Jon Robert Hickman, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research & Special Situations Analyst [29]

--------------------------------------------------------------------------------

So you don't do that yourself, huh? Okay.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [30]

--------------------------------------------------------------------------------

No, we don't. We use an organization.

--------------------------------------------------------------------------------

Operator [31]

--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [32]

--------------------------------------------------------------------------------

So I have a couple of quick ones. Oli, I think if we turn to, I guess, Slide 12, so is commercialization of partnerships, has that been pushed out because we were expecting something to materialize in '19?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [33]

--------------------------------------------------------------------------------

Slide 12?

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [34]

--------------------------------------------------------------------------------

Slide 12.

--------------------------------------------------------------------------------

Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [35]

--------------------------------------------------------------------------------

Let's just talk about what you've done with Forage.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [36]

--------------------------------------------------------------------------------

Yes, I think with regards -- no I think we are working on those all the time. I mean, the Forage Genetics is an example of that in terms of that, quite frankly, is essentially the icing on the cake for Yield10. Although we know that our traits have had a significant impact in biomass yields and switchgrass, we really weren't pursuing them in the commercial crop and the interest of Forage essentially allowed us to do that, the good thing about the Forage relationship is you'll actually get access to all of the data from those studies, and that will be very helpful in how we progress and further develop the GRAIN platform. SO that's one place. But we are also...

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [37]

--------------------------------------------------------------------------------

So, obviously, okay, if we could talk about canola then? So canola is -- canola is a big one, that's the one that you guys want to go after that's got that has the greatest upside.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [38]

--------------------------------------------------------------------------------

Actually soybean has the greatest upside, but you can...

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [39]

--------------------------------------------------------------------------------

Yes, I'll get to soybean and my thoughts on that in a little bit, but if we talk about canola, so in '19, should we expect any revenues or licensing agreements or additional research partnerships?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [40]

--------------------------------------------------------------------------------

Well, all I can tell you right now is we are working on them. Will they be closed in 2019 or not, that's not something I can tell you.

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [41]

--------------------------------------------------------------------------------

Are you closer? Are you closer than you were in, I guess...

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [42]

--------------------------------------------------------------------------------

The way I look at it is, every step forward we're closer to the end. So that's kind of how I'm look at it. So yes, in a way, we're closer. We are talking to someone about -- we're talking to a number of parties about canola obviously. When will something happen? We don't know. But if it does -- if and when it does, we would basically be more than happy to inform you guys that, that's where we're at. So we're also interested in relationships with soybean beyond the relationship we already have, and we have interest there as well. And for the first time, we're actually -- just here in the next few days essentially starting the process in corn. So we're working on a number of things. The field's completely changed. I think it's become more favorable to the small player. Now we are actually able to progress quite far in corn and soybean just using third-party services in a very economic way without adding staff at Yield10. So it will become more management thing. So we've got a lot going on. We've got a lot of interest that came in based on the publications and the presentations that have been given and the results of things like C3004. But that's not something that happens every day. And so we're getting the attention and garnering the attention and interest into relationships and those relationships bringing in resources is kind of a focus for me.

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [43]

--------------------------------------------------------------------------------

So -- and also, have you seen anything shifting in terms of planting behavior with soy? Because I know that there's tons of soybeans sitting in the grain elevators in the U.S. and...

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [44]

--------------------------------------------------------------------------------

Yes, so that's a result of the trade war. So yes, actually that's not a good thing because soybean oil will tend to degrade while it's sitting there, and so the quality of the soybean as it sits there will be reduced. So it's really not a good situation for the farmers. But fundamentally, again, we're not looking at that situation next year or even the year after. Although in time when you see the demand for soybean and other protein crops really, really dramatically growing to feed the growing demand for protein and basically meat in the developing world as well as in Asia. So, I think short term, I do feel some sympathy for the farmers in the Midwest, but right now, I think we've got everything on track to be moving forward in soybean, canola and now corn as well. So we're feeling pretty good about where we're at.

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [45]

--------------------------------------------------------------------------------

Right. So if you were to kind of rank where you could see some type of revenue coming in based on the seeds, like would soybeans be 1, or would canola be 1, Camelina 3?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [46]

--------------------------------------------------------------------------------

That's really difficult to say. There's an awful lot of things going on and also it depends on the appetite of the partners. And so -- and those are different and different geographies. So it's difficult to see which one would actually happen first. Ideally, I'd like them all to happen. That's my goal so that's what I'm working on. But it's unpredictable and the timing of these things is very difficult. And so I think the main thing is, is that we keep moving the needle forward, Kristi and her team have just done a phenomenal job in the technology job, the proof points, and I think we're achieving the entire, I would say not only ag sector, but academic sector, just simply haven't seen before. So Yield10's in animal of the different vein. We're kind of unique.

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [47]

--------------------------------------------------------------------------------

And so is there a near-term milestone, is there anything we should be looking out for the next 2 quarters? Aside from the yield data coming in.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [48]

--------------------------------------------------------------------------------

So basically we have a very large set of samples in those field studies. We won't have -- know we won't have all the data of those in Q4 there'll be some additional data that won't really kick in until later in probably let's say the early part of Q1, right, simply because of the time it takes to do the analysis of so many samples? So I think right now, reporting the field data would be Q4, continue to build the data set on C3004, that's a pretty unique thing and we're really fast tracking in canola and soybean. And obviously the question about it that was raised regarding quickly getting into canola and soybean, I think that's something that we have been doing and that was one of the first things that we started doing where we started up. We got a whole series of field trial plans for 2018 -- or 2019 already. We know we're going to be putting the Camelina C3004 lines in there. We know we're going to be putting these triple genome-edited lines of Camelina in oilseed field trials. We know that we will be planting the soybean where we bought the seed up this year. That's going to be planted in trials in 2019. And then depending on the results of the analysis over the next couple of months, we'll have a whole series of other things that will be field trialed or re-field-trialed in 2019 as well so we expect pretty full plate in 2019. We'll continue to work with Forage Genetics supporting them in what they're doing, working with Bayer supporting them in what they're doing. And obviously, we'll be pretty communicative about any successes we're having as we go forward. So that's what we plan to do.

--------------------------------------------------------------------------------

Han Jang, Maxim Group LLC, Research Division - VP & Senior Equity Analyst [49]

--------------------------------------------------------------------------------

And one final one. Any cannabis applications you guys are looking at?

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [50]

--------------------------------------------------------------------------------

We actually get asked that a lot. And so it's an interesting thing and so we've really, not really paid any attention to it. I mean, we do see the sort of spikes in interest. We see some of the original industrial biotech companies jumping into it to make various things and yeast, and we see companies that are -- that seem to be perhaps overvalued, but we haven't really spent any time looking at cannabis.

--------------------------------------------------------------------------------

Operator [51]

--------------------------------------------------------------------------------

Ladies and gentlemen, at this time, I would like to turn the floor back to Lynne Brum.

--------------------------------------------------------------------------------

Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [52]

--------------------------------------------------------------------------------

Great. Thank you, Jen. And then Oli is just going to make some concluding remarks.

--------------------------------------------------------------------------------

Oliver P. Peoples, Yield10 Bioscience, Inc. - Co-Founder, President, CEO & Director [53]

--------------------------------------------------------------------------------

Thanks for being with us today, guys. Look, Yield10 is working hard to progress their traits to fulfill our mission to produce step change improvements to crop yield to ensure global food security. It's a pretty big mission. We're focused on executing in a series of technology proof points we've outlined in the milestones. I mean, that's -- the company is all about execution. So, thanks for to our employees for a job well done so far in 2018, and thanks, also, to our shareholders for your support, and thanks to everyone for joining the call tonight. Thank you.

--------------------------------------------------------------------------------

Lynne H. Brum, Yield10 Bioscience, Inc. - VP of Planning & Communications and Secretary [54]

--------------------------------------------------------------------------------

Jen, back to you.

--------------------------------------------------------------------------------

Operator [55]

--------------------------------------------------------------------------------

Thank you. Ladies and gentlemen, at this time, the conference call has concluded. You may disconnect your lines at this time. Thank you for your participation.