Biotalys (BTLS) Q2 2026 Earnings Call Transcript

Thank you very much, Razia, and welcome, ladies and gentlemen, to the Biotimes webcast following our press release detailing our results for the first half of 2026, which was issued earlier this morning. I'm joined today by our CEO, Carlo Bouton, and CFO, Luc van Vrijenhoven. At the end of our presentation, we will be happy to take your questions. You can ask them both through the webcast tool via the chat function and the conference call. Let me remind you of our disclaimer on slide two, which is a standard part of our deck and which you can also consult in the tool of this webcast. Everything we say today is covered by these legal provisions. As you may have seen in today's announcement, Carlo Bouton has been appointed CEO on a permanent basis following his interim appointment in march of this year so please join me in congratulating carlo and carlo on behalf of the entire biotales team we are very pleased that you will continue to lead the company and help driving the execution of our strategy and with this carlo i leave the floor to you thank you so and welcome to everyone joining us on the call today so we will review our business highlights and financial results for the first half of 2026.

We will discuss the progress achieved over the recent months and provide an update on our priorities and outlook. But before we begin, I would like to sincerely thank the Board of Biotalus for their confidence in appointing me as CEO of Biotalus. I am excited to take up the role because I'm still convinced that about opportunities ahead and i'm committed to execute our strategy to advance our mission and to create long-term value for all stakeholders involved including of course our investors the first half of 2026 has been a very important period of focus and execution for us for us details following our strategy strategic refocus announced earlier this year we have concentrated our resources on our most valuable assets, we streamlined our organization, strengthened our financial position, and continued to advance the regulatory and development milestones that are necessary to bring our innovative protein-based biocontrol products to the market. So our objectives are clear, to transform BioTalus into a commercial stage company by by bringing novel, effective, and sustainable crop protection solutions to growers, and we'll do that by starting in key markets. Let me begin with our product pipeline. And that of course starts with Evoka and Evoka-NG. Our highest priority remains the advance of Evoka and its commercial success of Evoka-NG, which targets high-value food and vegetable crops affected by botrytis and powdery materials. Following the EPA approval of Evoca at the end of 2025, we achieved another important milestone in April this year with the first US registration in Florida, which is marking the first state-level approval of an agribody-based biocontrol products in the United States. Further in the US, we We have also continued to make meaningful progress in California, which remains a key strategic market given its importance to high-value crops. At the end of June, California's Department of Pesticide Regulation initiated the public commenting following a positive human health assessment. And this consultation phase has now been closed and the next steps are underway. until we expect state registration in California later this year. Switching to Europe, we also made significant advancements in our regulatory process in EFSA initiated its public consultation process in April, and following the completion of that consultation at the end of June, we submitted comprehensive responses to the comments received, And those responses are currently reviewed by EFSA and the Dutch Regulatory Authority, CTGB. Vitalis now projects a final regulatory decision in the course of 2027 for Evoca. Importantly, all of this work is creating a strong regulatory foundation for Evoca-NG or next generation product based on the same active ingredient as Evoca. And living this foundation, it should significantly reduce the time required for future regulatory approvals compared to completely new active systems. Evoga-NG remains the product with which we intend to enter the market commercially, targeting large and attractive fungicide segments for control of botrytis and powder milkyl in food and vegetable crops. We continue to target a U.S. launch in 2029 and European launch in 2029-2030, addressing a combined market opportunity of more than one billion U.S. dollars. A key and very important next step that we took for EvocaMG is that we started the five batch production campaign in early August, and we should not underestimate that. This is not only an important regulatory requirement to initiate a regulatory service for Evoca-MG, it also demonstrates consistency and stability in the manufacturing process, and we currently expect results from this five-back production by early November of this year. Finally, I'm pleased to share that Evoca-MG has been nominated for the prestigious Bernhard Blume Award by the Association of Biocontrol Industry Manufacturers and the final award will be granted at the annual A-BIM conference taking place in Bath and Switzerland in the second half of October. Switching to Bifrind 6 and having a highlight on the Bifrind 6 progress which is a major second priority or second bifrindicide program that is targeting the tribes and powder million including vegetables. We are very much encouraged by the data generated so far in field trials. So during the fall of 2025 and early 2026 growing seasons, our second lead candidate from our biophantics program was evaluated in more than 40 field trials across multiple geographies and crops, including grapes, strawberries, tomatoes, cucumbers. And the results demonstrated consistent and strong disease control. Of course, in many trial settings, the candidate outperformed existing biological alternatives available on the market today, and spray rotation programs where a biological product replaces synthetic chemistry by delivering disease suppression comparable to conventional solutions. In addition to our internal trials, we also received the latest results from independent fengicide evaluations conducted by the University of Florida. And while we are awaiting the official publication of that report, we can today already share that among the relevant programs evaluated, a spray rotation program that included our biofam6 lead candidate in a rotation with a synthetic fungicide achieved the strongest overall performance in controlling vitritis on stories and both these internally commissioned and academic trials are very encouraging because they support one of the central central promises of our activity platform which is delivering biological crop protection products with efficacy levels that growth can be pumped upon in a real world farming condition for five and six we are now continuing additional field trials focus on evaluating performance at lower dose rates these studies are intended to further optimize the product positioning the product profile and the product economics and we expect additional results of these trials around the year end in terms of manufacturing another important development during the first half was a strategic partnership with 21st bio because commercial success requires not only effective products it also requires scalable and cost competitive manufacturing and the partnership between the first bio gives us access to advanced precision fermentation technology that can support both of these manufacturing objectives so together with the first bio we are continuing to optimize our production process and manufacturing plans to ensure commercial competitiveness as we move towards market launch and I'm very pleased to say that the first tangible result of the collaboration is a five batch production of EvokaMG which started a couple of weeks ago at the same time we're also engaging with potential manufacturing and distribution partners globally as part of our commercialization strategy if you move beyond Evoca, NG, and BioFund 6 and the rest of the portfolio. Our BioFund 7 collaboration with Syngenta achieved a research master and we are currently evaluating the outcome of the research phase together with our partners and expect to provide an update about this collaboration during the second half of 2026. Our BioFund 7 collaboration with the Gates Foundation remains ongoing to the end of this year. BioTalus and the Foundation will join to assess if there's a sufficient basis to continue this collaboration beyond 2026. And finally, about our BIFM4 and BIFM8 programs, respectively, against Omicis in potatoes and grapes, and BIFM8 on alternary and fruit and vegetables, we remain open here for potential cooperation with third parties. And in this context, we can mention that the third party is currently testing an agribodied bioactive against omicids in Belgium and the Netherlands and then beyond the individual programs and more shifting towards the Agrobity platform, a platform for us remains crucial in our strategy because it enables us to generate a highly specific protein-based bioactives against important diseases and provide the basis for building further on a differentiated pipeline of sustainable crop protection products. Of course we are also continuously through building and strengthening our intellectual property, and have now also received a patent for EVOCA in Japan, building on our previous patents in key regions like Europe, the US, Brazil and China. Also, the word marks EVOCA and Agrobody are now registered as trademarks, protecting these as valuable assets for the company. With that, I will now hand over the call to Luc to discuss our financial performance.

Thank you, Carlo. Let me briefly review the financial results for the first half of 2026. Before going through the figures, I would like to emphasize that we continue to manage our financial position with discipline. We are closely monitoring our cash position and expenses, and the cost-saving measures implemented earlier this year are progressing in line with our plans. Other operating income amounted to 1.6 million euros, mainly reflecting R&D tax incentives and grant income supporting or innovation activities. Research and development expenses were 6.2 million, compared to 6.5 million in the first half of 2025. This reduction reflects lower operating expenses following the organizational changes implemented earlier this year, partly offset by continued investment in our key pipeline programs. General and administrative expenses decreased to €3.7 million from €3 million last year, again reflecting the impact of our cost-saving initiatives and streamlined organizations. We also recorded 1.9 million in restructuring costs, related primarily to termination benefits associated with the strategic refocus. As a result, normalized net loss, representing the loss of the first half of 2026 adjusted for restructuring costs, improved by 0.9 million compared with the same period last year, and amounted 7.2 million. so the loss for the period was 9.1 million compared to 8.1 million for the same unit last year importantly during May we successfully completed the 12.05 million private placement supported by our key investing as shareholders the financing strengthens or balance sheet and demonstrate the continued support of our investor base for our strategy and pipeline. At the end of June 2026 cash and cash equivalents amounted to 11.9 million euros. Based on our current operating plans we project our financial runway to extend through the end of first quarter of 2027. We are considering various options both dilutive and non-dilutive to continue to fund the company to allow to become commercially active the cost reduction measures implemented this year will continue to flow through the organization and we expect these actions to contribute to a lower cash burn profile going forward starting this year already and in full effect as from 2027 onward overall we remain on track with our current operating plan while continuing to carefully monet monitor or financial position and manage expenses with discipline with that

i handle a hand over the call back to color for closing remarks thank you luke to conclude the first half of 2026 has been out about creating focus building momentum and advancing our key milestones that matter most for the future of by balance we have strengthened the company to a strategic refocus we secured additional financing we advanced a regulatory process for evoca in both the u.s and europe initiated critical or regulatory activities for evoca ng demonstrated encouraging field performance for the biome 6 and made a lot of progress in our manufacturing strategy through the partnership with 21st by so we are on track Before we start with questions, I would like to sincerely thank all the Biotalis colleagues for their commitment and resilience, because this has not been an easy period, particularly following the restructuring earlier this year. The team, however, and all colleagues remain focused on our mission, and they continue to drive the progress that is needed to bring or innovative crop protection solutions closer to the growers. Looking ahead, our priorities remain unchanged. We will continue to advance Evoca NG and BiFem6. We will continue pursuing key regulatory milestones. We will further optimize manufacturing and commercial readiness, and we will continue operating with disciplined capital allocation. We believe that a fundamental opportunity for effective, safe and sustainable protein-based crop protection remains highly compelling and we are committed to realizing the full potential of our Agribity platform for growers, for partners and for shareholders. So thank you all again for joining and for your interest in bio-talent. I will now turn the call back over the tone to begin our Q&A session.

Thank you, Carlo, Oh, and Luc. So, Razia, we are now ready to take questions from the audience.

Thank you. As a reminder to ask a question on the phone, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Once again, please press star 1 1 to ask a question on the phone. And to withdraw your question, please press star 1 1 again. if you wish to submit a question via the webcast please type them in the question box and click submit thank you we are now going to proceed with our first question and the questions come from the line of guide slips from kbc securities please ask a question yes thank you i want to come back to the five batch production of evoca ng um the main question is can you liberate Elaborate a little bit more on this and especially is this a

process or is it yes or no or is the answer a potential yes but answer and what is the expected news flow on this one and the second question is on the general news flow what news flow can we expect from now until let's say ends Q1 2027 thank you So thank you Guy for the question and thank you for the question because we should not underestimate the value of the start of these five batch production.

What it really means, and I try to be non-technical, is that we are finalizing the production process of RevocaNG. It means that we come to a production process which is robust, consistent and production process that will reflect the final material and this is a necessary step to do regulatory trials but also to work for the commercialization so it's not a binary process it's a more complex process but we are confident that the steps you're taking it's a major hurdle it's major de-risk in fact that we took in the next step in commercial manufacturing the The second question, if I may, was on the further outlook of 2026, important of course that we, first of all, for EVOCA, approval of EVOCA in California, second, more news on the finalization of the five batches, which we expect around November, and then hopefully by the end of the year also some other results of the BIFM-6 trials. I think that's the main key factors look don't forget to be let me know by particular I think I mentioned by the result of the end of the year for batch production and in California is that clear did you have any other questions?

No, that was it. Thank you. Thank you for my sight and all the best. Thank you, Guy. Thank you.

We are now going to proceed with our next question. The questions come from the land of Christian fights from Kepler-Chevre. Please ask your question.

Yes, thank you. Good afternoon, Carlo, Luke, and Tone, and team. And Carlo, congrats again on your now permanent CEO position. Two questions, if I may. First one is, would you expect any more restructuring expenses to come in the second half of this year or into 27? And second question is, just a quick check on BioINZ 2. You mentioned in your release, this morning's release, that you and your partner, Syngenta, are quote-unquote currently evaluating their collaboration. in view of the outcome of the first research phase of BIOINS 2. Is there something in terms of earlier results you could already share, or do we have to wait until you are prepared to say something in the course of the second half of this year? Thanks.

Thank you, Christian, and thank you on the wishes. Very much appreciated. On the restructuring expenses, look, I'll hand it over to you.

Yeah, so the question was, if I understood well, There's more restructuring to be expected, I think, on the expenses on the second half of the year. So the answer on that is no. So we have taken all restructuring expenses according to the EFRS accounting guidelines in the first half of the year when the people had to leave the company, unfortunately.

So all expenses for the amount of 1.9 million, as we have laid out in the numbers. have been taken into consideration in the first half of the year Christian yeah okay thanks well thank you look if it's okay we have a second question on the on the body and collaboration with Syngenta so again reiterating we achieve the first research milestone earlier this year Based on that research success will continue, still in the research phase, next steps, which are further ongoing. Depending on the outcome of these results, together with Syngenta we will evaluate if these results are good enough to proceed into development program, if they are good enough to proceed into a further research phase, or if it's not enough to proceed. and that's actually what we are alluding to okay thanks very much you're welcome we are now going to proceed with our next question and the questions come from the line of frank classen from the group peter camp please ask your question yes good afternoon two questions please first of all and now that you have implemented your refocus

Could you elaborate how much lower the cost base will be in the second half versus the first half and also going into 2027? And secondly, on Evoca NG, well, the five-batch production, you expect the results in November. My question is, what are the next steps after that? What are the next hurdles you have to overcome before you can file for approval in the U.S. and Europe? Thank you.

Thank you, Frank. Perhaps the first question, Luke, you can address that. So, in fact, when we have laid out the restrictions on the guide sizing program, Frank, we have announced also in the press that that compared to the original structure that that would lead to a saving compared to the original structure till the end of 28 total saving of in total 20 million euro so that's what we have announced and in fact it consists of internal expense saving which is based on of course the related salary expenses overheads and so on and so on but also partly related to

external program expenses which are the number of programs that we have put on on hold so it's a combination of both but that's in fact the total of 20 million saving compared to the original plan till the end of 2028 yeah thank you on the second question on evoca ng and then what's happening after successful part patches um so to reiterate the five batches are requirements for regulatory studies so that the material of these five batches we will do a number of regulatory studies not all of them because after all we use the same active ingredient so limited number of regulatory studies which are required for next submission we also do bridging trials with evoca-ng to demonstrate that the efficacy of evoca and EVOCA-MG are similar. And then we also, we are in discussions with commercial manufacturers to upscale the commercial manufacturing of EVOCA-MG. Submission of EVOCA-MG is planned for mid-2037 both U.S. and Europe.

Okay, thank you very much.

Thank you, Frank.

There are no further questions on the phone, so i'll now hand back to you for the webcast questions thank you yeah so we have a question here in the tool in the chat function of the webcast uh i will read it out aloud can you shed more color on the third party currently testing an agrobody bioactive against all my seeds in belgium and the netlands i'm sure it's a very relevant question so thank you for the question of course we cannot name third party we are about the confidentiality there but indeed it is ready to buy from four I've mentioned before my son for them is a bit on hold we had some early lead candidates we had several

discussions with a couple of parties about its early candidates and now there is one poor party who is the interesting in testing the performance of these by and four lead candidate both in phytophthora which is which is a heavily devastating disease in potato in Western Europe and then plasmapar or downy mildew on grapes thank you Carlo I don't see any other questions in the tool Razia I don't know whether there are other questions in the conference call no there are no questions on the conference call currently

well we're I think we're happy to to close if everything is clear then and with that of course I would like to thank everybody for joining the call thank you Carlo and look for the clarity everybody can reach out to us through email via ir dots or at biotinics.com or you will also be able to find us on our direct email addresses thank you very much for joining us today and speak to