Name: Orgenesis Inc. Q2 2018 Earnings Call
Start: 2018-07-17T00:00:00.000Z

Executive Summary

Revenue grew 73.5% year over year to $3.99M (services $2.99M, goods $0.99M) and 51% sequentially, driven by expanded CDMO activity; gross margin reached 45% and CDMO achieved $1.24M operating profit .
Net loss attributable to the company narrowed to $2.61M ($0.20 diluted EPS) from $5.61M in Q1 and $0.26 EPS loss in Q2 2017, reflecting improved CDMO profitability despite higher SG&A to scale operations .
Strategic funding and consolidation: Great Point Partners invested up to $25M into Masthercell Global (37.8% preferred equity), enabling U.S. expansion and acquisitions of Atvio and Curecell; cash ended at $4.50M and equity at $25.80M .
No formal revenue/EPS guidance provided; future Great Point funding tranches depend on Masthercell Global EBITDA and revenue targets in 2018-2019, a potential catalyst for sentiment and stock narrative .

What Went Well and What Went Wrong

“Revenue increases 73% to $4.0 million… gross margin of 45%… CDMO segment achieved an operating profit of $1.2 million,” highlighting operational leverage in CDMO and stronger mix .
CEO: “We attribute this growth to the continued addition of new customers and expansion of services… especially… CAR T-cell therapies,” underscoring demand strength in immunotherapy manufacturing .
Strategic partnership: Great Point to advise and invest up to $25M into Masthercell Global, plus consolidation of Atvio (Israel) and Curecell (Korea), expanding footprint and capabilities .

Operating loss remained elevated at $2.76M due to higher SG&A (build-out, quality systems, network expansion), partially offsetting CDMO gains .
CT segment continued to generate losses (Q2 CT operating loss: $2.62M), as R&D progressed toward clinical readiness, pressuring consolidated results .
Working capital improved to +$0.77M from a Q1 deficit, but cash use in operations and investment remained significant in H1 (operating cash outflow $6.91M; investing $2.98M) .

Metric	Q2 2017	Q1 2018	Q2 2018
Revenue ($USD Millions)	$2.298	$2.636	$3.987
Gross Profit ($USD Millions)	$1.170	$0.992	$1.792
Gross Margin %	n/a	n/a	45%
Operating Loss ($USD Millions)	$2.324	$3.238	$2.764
Net Loss Attributable to Company ($USD Millions)	$0.559	$5.611	$2.614
Diluted EPS ($USD)	$0.26 loss	$0.52 loss	$0.20 loss

Segment performance

Metric	Q2 2017	Q1 2018	Q2 2018
CDMO External Revenue ($USD Millions)	$2.605	$3.181	$4.534
CDMO Operating Profit ($USD Millions)	$0.560	$0.692	$1.240
CT Segment Operating Loss ($USD Millions)	$(1.843)	$(2.243)	$(2.618)

KPIs and Balance Sheet

Metric	Q2 2017	Q1 2018	Q2 2018
Cash and Equivalents ($USD Millions)	$0.658	$4.225	$4.502
Total Equity ($USD Millions)	$9.898	$19.478	$25.801
Working Capital ($USD Millions)	$(10.037)	$(7.595)	$0.766
Deferred Income – Current ($USD Millions)	$4.264	$4.870	$4.596

Metric	Period	Previous Guidance	Current Guidance	Change
Corporate financial guidance	FY2018	None disclosed	None disclosed	Maintained (no guidance)
Masthercell Global Great Point funding tranches	FY2018–2019	n/a	Up to $13.2M follow-on payments contingent on specified EBITDA and revenue targets and shareholder approval	Conditional funding path (performance-contingent)

Topic	Previous Mentions (Q2 2017, Q1 2018)	Current Period (Q2 2018)	Trend
CDMO demand (CAR-T)	Emphasis on services growth; Servier and CRISPR CAR-T agreements	Strong YoY growth; CDMO operating profit; services mix remains key	Strengthening
Organizational transformation	Matrix organization to improve value creation; SG&A shifts	SG&A up for network expansion and quality systems; Korea facility scaling	Ongoing build-out
Geographic expansion	Belgium base; JV partners in Israel/Korea	Great Point investment; Atvio & Curecell acquisitions; planning U.S. expansion	Accelerating
CT diabetes program	Continued preclinical work; grant support	Continued R&D; CT operating losses as investment persists	Steady investment
Partnerships/IoT tech	n/a	Mircod collaboration on biological sensing; $50k upfront; 5% royalties (8% if self-manufacture)	New initiative

Note: No Q2 2018 earnings call transcript available in the document set; themes drawn from press release and 10-Q .

“We attribute this growth to the continued addition of new customers and expansion of services among our existing customers, especially as it relates to manufacturing of CAR T-cell therapies… our CDMO segment achieved an operating profit of $1.2 million” — Vered Caplan, CEO .
“This partnership and investment [Great Point] will allow us to expand our services as well as enter the U.S. market… we announced the acquisitions of… Atvio… and Curecell… enhancing our footprint within the Middle East and Asia” — Vered Caplan .

No earnings call transcript identified for Q2 2018; Q&A themes not available in the document set [ListDocuments: earnings-call-transcript returned 0].

Wall Street consensus (EPS/Revenue) via S&P Global was unavailable due to retrieval error; thus, beats/misses vs consensus cannot be assessed for Q2 2018. Values retrieved from S&P Global.
Reported performance showed clear YoY acceleration in revenue and CDMO profitability, which, absent consensus, suggests upward estimate revisions on CDMO contribution may be warranted .

CDMO engine is scaling: external CDMO revenue rose to $4.53M and operating profit to $1.24M; continued services growth (CAR-T) is the primary driver of margin expansion .
Sequential and YoY improvement: revenue up 73.5% YoY, gross margin 45%, and net loss narrowed versus Q1—operational leverage evident despite higher SG&A to build capacity .
Strategic capital and optionality: Great Point’s up to $25M financing, contingent follow-ons, and a potential spinoff/exchange right create pathways for value realization and U.S. entry .
Consolidation of Atvio/Curecell strengthens regional manufacturing footprint and integration under Masthercell Global, supporting multi-region client demand .
CT pipeline remains an investment area (losses in CT segment); near-term stock narrative is likely CDMO-driven with CT as medium-term optionality .
Liquidity improved (working capital turned positive; equity $25.8M); however, operating and investing cash needs are significant—funding discipline and milestone execution are critical .
Near-term trading: watch for client wins, Masthercell EBITDA/revenue performance relative to Great Point triggers, and additional JV/tech collaborations (e.g., Mircod) as catalysts .