ImmuCell Corp. (NASDAQ:ICCC) Q3 2018 Earnings Conference Call Transcript

Nov 14, 2018 • 09:00 am ET

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ImmuCell Corp. (NASDAQ:ICCC) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the ImmuCell Corporation Third Quarter 2018 Financial Results Conference Call. All participants will be in a listen-only mode. (Operator Instructions) Please note that this event is being recorded.

I'd now like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead, sir.

Executive
Joe Diaz

Thank you, Cole, and thanks all of you for joining us today to review the unaudited financial results of ImmuCell Corporation for the third quarter of 2018, which ended on September 30, 2018. My name is Joe Diaz, I'm with Lytham Partners. We're the Investor Relations consultant firm for ImmuCell.

(Forward-Looking Cautionary Statements)

With that said, let me turn the call over to Michael Brigham, President and CEO of ImmuCell Corporation. After which, we will open the call for your questions. Michael?

Executive
Michael Brigham

Okay. Great. Thanks, Joe. And thank you all for taking the time to join today's call.

Let me start with a review of the top line results. Customer demand for our product is up in this very challenging dairy economy. During the third quarter, product sales were up 7%. During the first nine months of the year, product sales were up 10%. During the rolling 12 months ended September 30, 2018, product sales were up 18%. Sales of the First Defense product line, our lead product, were up 8% and 14% during the quarter and the nine months ended September 30, 2018, respectively. These increases are all in comparison to the corresponding periods of the prior year.

So what we see is the market's response to our newly introduced Tri-Shield First Defense has been very strong, which is a good indication that dairy and beef producers value the ability to protect newborn calves with immediate immunity from three of the most common scours-causing pathogens, E. coli, coronavirus and rotavirus, in one preventative treatment at birth.

Additionally, we have gained substantial traction with our Beyond Vaccination message that positions our product as a viable alternative to traditional vaccines that are given to the mother cow or dam, intending to improve the colostrum that she produces and that is later fed to newborn calves to protect them from scours, even though we know that responses to these vaccines are variable. Previously, we could not compete effectively for these sales because the dam-level vaccines include the rotavirus claim that we did not have until late last year.

Initial customer feedback indicates that producers are responsive to the compelling benefits of our product, benefits that include reducing stress-causing injections to the cows and delivering a guaranteed level of antibodies to the calves. The calf-level market is worth something like $18 million per year and the dam-level market covers about twice as many calves. This is a large new market opportunity for us. Now, with Tri-Shield, we are in this bigger game, our production has been limited to about $250,000 worth of product sales per quarter since launch during the fourth quarter of 2017, but we do expect to be able to about