Full Press Release Details
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
The following Management's Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited condensed interim consolidated financial statements of ImmunoPrecise Antibodies Ltd. ("the Company", "ImmunoPrecise" or "IPA") for the three months ended July 31, 2021, together with the audited consolidated financial statements and accompanying MD&A of the Company for the year ended April 30, 2021. This MD&A is the responsibility of management and was reviewed and approved by the Board of Directors of IPA on September 8, 2021.
The referenced financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board and as applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. Except as otherwise noted, all dollar figures in this MD&A are stated in Canadian dollars, which is the Company's reporting currency.
FORWARD-LOOKING STATEMENTS
This MD&A may contain certain statements that constitute "forward-looking statements" within the meaning of National Instrument 51-102, Continuous Disclosure Obligations of the Canadian Securities Administrators.
Forward-looking statements often, but not always, are identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "targeting" and "intend" and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved and other similar expressions.
In this MD&A, forward-looking statements include the Company's future plans and expenditures, the satisfaction of rights and performance of obligations under agreements to which the Company is a part, the ability of the Company to hire and retain employees and consultants and estimated administrative assessment and other expenses. The forward-looking statements that are contained in this MD&A involve a number of risks and uncertainties. As a consequence, actual results might differ materially from results forecast or suggested in these forward-looking statements. Some of these risks and uncertainties are identified under the heading "RISKS AND UNCERTAINTIES" in this MD&A.
Furthermore, forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
The Company was incorporated under the laws of Alberta on November 22, 1983 and is listed on the TSX Venture Exchange (the "Exchange") as a Tier 2 life science issuer under the trading symbol "IPA". The Company's common shares were approved for listing on the NASDAQ Global Market ("Nasdaq") under the trading ticker symbol "IPA". Trading on Nasdaq commenced at market open on December 30, 2020. The address of the Company's head office is 3204 - 4464 Markham Street, Victoria, BC V8Z 7X8.
On November 23, 2020, the Company consolidated its issued and outstanding common shares on the basis of five pre-consolidation shares for one post-consolidation share (the "Consolidation"). All references to share and per share amounts in this MD&A have been retroactively restated to reflect the Consolidation.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
ImmunoPrecise is an innovation-driven technology platform company that supports its business partners in their quest to discover and develop novel antibodies against a broad range of classes of disease targets. The Company aims to transform the conventional multi-vendor antibody discovery model by providing a comprehensive suite of services tailored to optimize antibody genetic diversity and epitope coverage to discover antibodies against rare and/or challenging epitopes.
The Company offers comprehensive support to its partners starting with customized computational project design, antigen preparation, an on-site vivarium, proprietary immunization services, high-throughput discovery platforms, functional antibody testing, lead candidate selection, antibody characterization, antibody optimization, antibody engineering and manufacturing, all under one contract.
The Company believes that its experience, innovation, technologies, scientific rigor, and focus on producing quality products, provide a unique experience in one-stop service offerings, and assist the Company in its aim to reduce the time required for, and the inherent risk associated with, conventional multi-vendor product development.
The Company has achieved organic revenue growth through market penetration and service diversification in the biologics contract research organization (CRO) space, as well as accretive growth through strategic expansion of its operations into Europe, by acquiring and integrating innovative technologies, and through investments in research and development ("R&D").
The Company's capabilities include, but are not limited to, custom antigen modeling, design and manufacturing; proprietary B cell sorting, screening and sequencing; custom, immune and na ve phage display library production and screening; hybridoma production with multiplexed, high-throughput screening and single clone-picking; expertise with transgenic animals and multi-species antibody discovery; antibody characterization studies such as affinity measurements, functional assays, epitope mapping and binning; bi-specific, tri-specific, single domain (such as variable domain of the heavy chain "VHH", and variable new antigen receptor "VNAR" (shark)) antibody manufacturing; DNA synthesis and cloning, protein and antibody downstream processing with purification of protein in gram scale levels including characterization and validation; transient and stable cell line generation; antibody engineering, optimization and humanization; and cryopreservation.
The Company's wholly owned subsidiaries, ImmunoPrecise Antibodies (Canada) Ltd. ("IPA Canada") and ImmunoPrecise Antibodies (Europe) B.V. (consisting of the former ModiQuest Research B.V. and U-Protein Express B.V.) ("IPA Europe"), have both been designated as approved CROs for leading, transgenic animal platforms producing human antibodies, along with protein manufacturing. Through IPA Canada and IPA Europe, the Company has made strategic investments in R&D activities to develop proprietary technologies enabling the application of its B cell Select and DeepDisplay platforms to a broad range of transgenic animal species and strains.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
Operations of the Company
The Company's operations are based in Utrecht and Oss, the Netherlands; Victoria, British Columbia, and Fargo, North Dakota.
The Company's global management, operating out of North America and Europe, is responsible for all global oversight into pipeline development, finances and accounting, sales and marketing, investor communications, and information technology.
The Company's head office is located in Victoria, British Columbia. The headquarters for the US operations is based in Fargo, North Dakota, and allows the Company to take advantage of a US location that has a significant and diverse economy with a strong history of supporting global life science companies. The site in Fargo was opened in 2018 and serves as the address of ImmunoPrecise Antibodies (ND) Ltd. And ImmunoPrecise Antibodies (USA) Ltd. ("IPA USA") and offers the potential for future growth plans in the United States.
IPA Canada operates from Victoria, British Columbia, performing custom antibody generation since its inception. The Company has sought to increase its capabilities at its Victoria location by adding equipment for protein purification and measuring protein binding kinetics, enlarging the vivarium, and further developing and improving technologies such as its B cell SelectTM platform.
Since the acquisitions of U-Protein Express ("UPE") and ModiQuest Research (now together named IPA Europe), the Company has focused on optimizing its cutting-edge technologies to support the development of novel therapeutic antibodies, bringing an expanded array of capabilities to partners in Europe, North America and the rest of the world. The former ModiQuest Research team located in Oss added, among others, in depth expertise in in vitro antibody phage library generation and screening, as well as antibody characterisation and engineering including humanization and developability analysis to the Company's extensive service portfolio.
As of January 1, 2021, UPE merged with IPA Europe to form one legal entity. The former UPE team continues its operations in the biotechnology hub of Utrecht, and has been operating in the recombinant protein community for close to twenty years. IPA's Utrecht site specializes in the manufacture of complex proteins and antibodies in a variety of formats, and from a range of mammalian cell types, using the proprietary expression platform rPEx . Their operations have enabled the successful support of over five thousand different programs for pharmaceutical and biotechnology industries as well as leading, academic institutions.
Research, Development and Therapeutic Discovery Program
CRO services are the main focus of the Company's business activities, though it also continues to develop an intellectual property portfolio of proprietary methods and physical assets through collaborations, acquisitions and in-licensing. The Company has invested strategically in the development and licensing of antibody discovery technologies and related intellectual property assets. These investments have been enhanced by internal discovery programs focused on novel therapeutic antibodies and vaccines in areas such as oncology, inflammation, neurodegenerative diseases, autoimmunity, atherosclerosis, and COVID-19. These programs diversify the nature of opportunities by which pharmaceutical partners may choose to engage the Company by enabling the in-licensing or sale of later-stage assets.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
In 2019, the Company formed Talem Therapeutics ("Talem"), based in Cambridge, Massachusetts, to support its internal and partnered therapeutic discovery programs, which includes a license for the use of Ligand Pharmaceuticals' OmniAb transgenic animals pursuant to a commercial platform license and services agreement dated October 30, 2019. Talem has the right to discover, develop and partner fully human antibodies from these animals. Talem offers strategic and selective partnerships with pharma companies using OmniAb transgenic animals or its alternative therapeutic antibody discovery capabilities. The ability for investors to support individual assets or portfolios generates an asymmetrical opportunity for investments, while avoiding Company shareholder dilution. The depth and speed of the offerings enable Talem to customize each program and leverages the Company's expertise and technologies in the antibody discovery.
STRATEGY AND OUTLOOK
The Company's management team places an emphasis on initiatives designed to drive revenue, bolster internal assets and maximize shareholder value. The Company aims to continue to build on revenue and asset generation through internal development and well-informed, strategic acquisitions and joint ventures. The Company's strategy also includes growth through alliances and partnerships, within both its research (Talem) and service sectors, as well as potential new market sectors such as pre-clinical and clinical manufacturing.
The Company's objective is to continue growing as a preferred partner for therapeutic antibody researchers. Therefore, the Company's aim is to deliver a comprehensive and integrated continuum of technologically advanced and high-throughput, data-driven protein and antibody services to its partners to enable them to bring novel therapies to the clinic faster. The Company intends to continue focusing on the development and refinement of its integrated end-to-end platform, which, when coupled with strong scientific know-how, can help partners navigate through the process of lead candidate advancement. The Company offers customized solutions for antibody discovery while providing details via the project management team to ensure partners have the project data they need, with the security measures required to ensure their peace of mind.
In summer 2022, the Company will move its Utrecht location from its current premises in the Life Science Incubator to new, larger premises within the Utrecht Science Park. In the new location the Company will significantly increase its capacity for protein manufacturing and related services. The building will also be home of the successful Dutch biotech companies Genmab B.V. ("GMAP") and Merus B.V. ("MRUS").
In the second half of 2023, the Company will move its Oss location to a new state-of-the-art facility within the Pivot Park campus. The move will increase space by almost 30%.
Both expansions are a strategic commitment to the locations of IPA Europe and enable the Company to significantly increase capacity, personnel and service offerings to serve the increasing market needs in Europe, North America and Asia.
The Company believes its strategy is supported by growing trends in pharma and finance. Large pharmaceutical companies continue to outsource research, with trends showing an increase on the reliance of external partners to improve the efficiency and cost of development, increase turnaround time, and access advanced and integrated expertise. A report by Objective Capital Partners dated July 3, 2019 titled "CRO Sector Fundamentals Remain Hot for M&A Consolidation" identified several major drivers of the CRO industry growth, including robust biopharmaceutical funding, accelerated drug approval rates, the growing number of clinical trials, and proliferation of biopharmaceutical companies without own internal research and clinical capabilities.
To streamline, many large pharmaceutical companies are limiting the number of external partners that can be contracted. This is particularly promising for those CROs that fill multiple niches in the discovery and manufacturing pipeline, as the Company believes it can do.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
According to a report titled "Global and China Monoclonal Antibody Industry Report, 2019-2025" published in April 2019 on ResearchandMarkets.com, the key industry participants serving the monoclonal antibodies market are Novartis, Merck & Co., Amgen, AbbVie, Johnson & Johnson and Roche.
In May 2020 ResearchandMarkets.com stated in their report "Global Antibody Production Market (2020 to 2025) - Growth, Trends, and Forecasts" that investments by pharma and biotech companies in antibody R&D are expected to increase given the rising prevalence of cancer, autoimmune disease and other chronic diseases. Accordingly, a piece on the website for Genetic Engineering & Biotechnology News titled "Antibody Discovery Looks over the Horizon" published on February 7, 2019, antibodies are mainstay in oncology as physicians move away from other types of therapies such as small molecules. In recent years, the success of key pipeline drugs in the immuno-oncology space have been a key component of the record high capital market funding for the biotechnology sector, according to Objective Capital Partners' report on the CRO sector fundamentals, as noted above.
The market for therapeutic antibodies was worth US$115 billion in 2018 and according to a study published in the Journal of Biomedical Science in January 2020, it is estimated that the human therapeutic antibody market will grow to US$300 billion in 2025. The Biopharmaceuticals sector is the fastest growing pharma sector. While the sale of therapeutic antibodies increased by 93% from US$84 billion in 2014 to nearly US$163 billion in 2019, other recombinant protein therapeutics have remained unchanged over the same period, according to "The Therapeutic Monoclonal Antibody Product Market" published in October 2020, on BioProcess International. Companies are currently sponsoring clinical studies for more than 570 monoclonal antibodies. In recent years, the number of monoclonal antibody drugs approved for commercialization has proliferated, with the 100th monoclonal antibody approved by the United States Food and Drug Administration ("FDA") as of May 2021 (Nature Reviews Drug Discovery) and further 17 investigational antibody therapeutics in regulatory review in either the United States or Europe as of June 2021 according to AntibodySociety.org.
The protein and antibody-related service and product market is expected to grow with a CAGR of 6.2% by 2027 to US$5.6 billion, according to GrandViewResearch.com.
There is an ongoing need for therapeutics to protect against COVID-19 even when a vaccine is available, as vaccines do not provide protection for all individuals. This is particularly true for immunocompromised individuals such as the elderly, cancer patients, individuals with HIV or those undergoing bone marrow and organ transplants, whose immune systems are too weak to mount an effective response upon vaccination. Without 100% protection, important segments of higher exposure risk populations will likely be left unprotected - namely frontline workers and those living in group care.
Therapeutic antibodies are providing breakthrough medicines for cancer, inflammation, autoimmune and infectious diseases due in part to their high on-target affinity and exquisite specificity making them highly efficacious with good safety profiles.
Technological advances in antibody discovery methods such as B cell sorting now enable the rapid and systematic identification of high-quality fully human antibodies from healthy donors, diseased patients and transgenic animals. Furthermore, when therapeutic antibodies are combined into cocktails, they can provide unique protection against infectious diseases by working synergistically to neutralize pathogens via engaging multiple mechanism of action in concert, boosting potency beyond the sum of their individual components. Single antibodies are vulnerable to mutagenic escape and can be rendered ineffective by a single point mutation in the virus. In contrast, antibody cocktails may protect against mutagenic escape because they cover a larger epitope footprint on the pathogen's surface than possible with a single antibody, providing longer-lasting protection against emerging mutations.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
The Company's diverse panel of antibodies with therapeutic potential can be curated into synergistic cocktails, providing opportunities for out-licensing and sponsorship deals which the Company believes would enable it to respond quickly to emerging viral variants as well as formulation into bi- or multi-specifics. The Company has successfully completed a preclinical study in Syrian hamsters and could demonstrate powerful in vivo efficacy in both therapeutic and prophylactic settings.
The Company is presently manufacturing a selection of lead candidates of monoclonal antibodies in human format and aim to use the resulting data to support conversations with sponsors, potential partners and funding agencies. The Company anticipates similar cocktail formulations, including its bi-specific, cocktail formulations, to also follow into pre-clinical testing in the near-term. As result, the Company anticipates that such developments will provide on-going opportunities for commercialization.
The Company is also testing adjuvanted, protein-based vaccines, based on a well-defined region of the SARS-CoV-2 spike protein. The Company anticipates moving this trial forward to a second pre-clinical study (two animal systems are recommended in the pre-clinical setting) which, following positive results, could be its first vaccine clinical candidate. The Company intends to combine the data obtained from this on-going trial with structural data from electron microscopy imaging of lead therapeutic candidates to inform the final formulation of its Polytope vaccine candidates.
OVERALL PERFORMANCE AND LIQUIDITY
The Company continued to emphasize the value of technologically advanced discovery programs utilizing diverse animal repertoires and multiple technologies with unique advantages, while continuing to achieve organic revenue growth through market penetration and service diversification in the biologics CRO space. The Company achieved revenues of $4.6 million during the three months ended July 31, 2021, a 22% increase over 2020 revenues of $3.8 million.
The Company continues to expand its commitment to research and development initiatives aimed at introducing new technological capabilities through both internal development and external partnerships, including research and development projects related to COVID-19 and other internal programs. During the three months ended July 31, 2021, the Company invested $1.1 million in research and development.
To support management and the Board of Directors in exercising oversight, the Company has implemented an enterprise resource planning system (ERP) for marketing and sales automation and customer relationship management, as well as accounting and financial reporting, resource planning and project management. Comprehensive operational and management reporting capabilities were implemented with a view to effectively support a geographically dispersed organization allowing managers access to the Company data globally.
As of July 31, 2021, the Company has cash on hand of $40.7 million compared to $41.8 million as at April 30, 2021. The Company's internal forecast indicates the cash on hand will sustain its existing operations, support its Nasdaq and TSXV on-going listing costs and satisfy its obligations for at least two years. The Company may need to raise additional capital to fund its strategic goals and there can be no assurances that sufficient funding, including adequate financing, will be available. The ability of the Company to arrange additional financing in the future depends, in part, on the prevailing market conditions and profitability of its operations.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
RESULTS OF OPERATIONS
| Three Months Ended ($) | ||||||||||||||||
| (in thousands) | July 31, 2021 | July 31, 2020 | Change $ | Change % | ||||||||||||
| Project revenue | 4,299 | 3,473 | 826 | 24 | % | |||||||||||
| Product sales revenue | 274 | 288 | (14 | ) | -5 | % | ||||||||||
| Cryo storage revenue | 15 | 4 | 11 | 275 | % | |||||||||||
| Total revenue | 4,588 | 3,765 | 823 | 22 | % |
The Company achieved revenue of $4.6 million during the three months ended July 31, 2021, a 22% increase over the three months ended July 31, 2020. The growth is due to increases in both volume and financial values of client contracts because of continued focus on expanding the breadth and depth of technologies available in-house, new partner onboarding, including top pharma companies, and growing its core existing partner business.
| Three Months Ended ($) | ||||||||||||||||
| (in thousands) | July 31, 2021 | July 31, 2020 | Change $ | Change % | ||||||||||||
| Gross profit | 2,506 | 2,410 | 96 | 4 | % | |||||||||||
| % of total revenue | 55 | % | 64 | % |
Gross profit totaled $2.5 million during the three months ended July 31, 2021, compared to $2.4 million during the three months ended July 31, 2020. Overhead costs have been allocated to Cost of Sales more consistently across the Company with the implementation of the Company's new ERP system, resulting in a decrease in profit margin to 55% during the three months ended July 31, 2021.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
| Three Months Ended ($) | ||||||||||||||||
| (in thousands) | July 31, 2021 | July 31, 2020 | Change $ | Change % | ||||||||||||
| Advertising | 163 | 33 | 130 | 394 | % | |||||||||||
| Amortization and depreciation | 670 | 678 | (8 | ) | -1 | % | ||||||||||
| Bad debt expense (recovery) | (3 | ) | (16 | ) | 13 | -81 | % | |||||||||
| Consulting fees | 173 | 37 | 136 | 368 | % | |||||||||||
| Foreign exchange loss (gain) | 14 | 20 | (6 | ) | -30 | % | ||||||||||
| Insurance | 480 | 36 | 444 | 1233 | % | |||||||||||
| Interest and bank charges | 79 | 170 | (91 | ) | -54 | % | ||||||||||
| Management fees | - | 197 | (197 | ) | -100 | % | ||||||||||
| Office and general | 275 | 148 | 127 | 86 | % | |||||||||||
| Professional fees | 301 | 188 | 113 | 60 | % | |||||||||||
| Rent | 31 | 97 | (66 | ) | -68 | % | ||||||||||
| Repairs and maintenance | 48 | 9 | 39 | 433 | % | |||||||||||
| Research and development | 1,119 | 309 | 810 | 262 | % | |||||||||||
| Salaries and benefits | 1,473 | 1,351 | 122 | 9 | % | |||||||||||
| Share-based payments | 1,116 | 97 | 1,019 | 1051 | % | |||||||||||
| Telephone and utilities | 10 | 13 | (3 | ) | -23 | % | ||||||||||
| Travel | 23 | 17 | 6 | 35 | % | |||||||||||
| Total operating expenses | 5,972 | 3,384 | 2,588 | 76 | % |
Variances of note in the Company's expenses for the three months ended July 31, 2021 include:
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
Other Income / Expense
| Three Months Ended ($) | ||||||||||||
| (in thousands) | July 31, 2021 | July 31, 2020 | Change $ | |||||||||
| Accretion | (24 | ) | (101 | ) | 77 | |||||||
| Grant income | - | 568 | (568 | ) | ||||||||
| Subsidy income | 1 | 139 | (138 | ) | ||||||||
| Interest and other income | 4 | - | 4 | |||||||||
| Unrealized foreign exchange gain | 443 | - | 443 | |||||||||
| Total other income (expense) | 424 | 606 | (182 | ) |
The Company recorded other income of $424,149 during the three months ended July 31, 2021, compared to other income of $605,516 in 2020 made up of:
The Company recorded a net loss of $3.2 million during the three months ended July 31, 2021, compared to net loss of $549,318 for the three months ended July 31, 2020. The Company achieved an increase in gross profit of $95,534 while investing heavily in research and development without the benefit of government grants, and incurring higher share-based payments, salaries, and ongoing costs related to the Nasdaq listing.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
SUMMARY OF QUARTERLY RESULTS
The following table sets out financial information for the past eight quarters:
| Three Months Ended ($) | ||||||||||||||||
| (in thousands, except share data) | July 31, 2021 | April 30, 2021 | January 31, 2021 | October 31, 2020 | ||||||||||||
| Total revenue | 4,588 | 4,876 | 4,516 | 4,755 | ||||||||||||
| Cost of sales | 2,082 | 2,099 | 954 | 1,966 | ||||||||||||
| Gross profit | 2,506 | 2,777 | 3,562 | 2,789 | ||||||||||||
| Operating expenses | 5,972 | 5,876 | 4,823 | 5,054 | ||||||||||||
| Other income (expenses) | 424 | (913 | ) | 56 | 1,855 | |||||||||||
| Income taxes | 188 | 1,021 | 89 | 54 | ||||||||||||
| Net loss | (3,230 | ) | (5,033 | ) | (1,294 | ) | (464 | ) | ||||||||
| Basic and diluted loss per share* | (0.17 | ) | (0.29 | ) | (0.08 | ) | (0.03 | ) | ||||||||
| Three Months Ended ($) | ||||||||||||||||
| (in thousands, except share data) | July 31, 2020 | April 30, 2020 | January 31, 2020 | October 31, 2019 | ||||||||||||
| Total revenue | 3,765 | 4,146 | 4,034 | 3,162 | ||||||||||||
| Cost of sales | 1,355 | 2,202 | 1,810 | 672 | ||||||||||||
| Gross profit | 2,410 | 1,944 | 2,224 | 2,490 | ||||||||||||
| Operating expenses | 3,384 | 3,510 | 2,600 | 3,625 | ||||||||||||
| Other income (expenses) | 606 | 82 | (110 | ) | (171 | ) | ||||||||||
| Income taxes | 181 | (538 | ) | 139 | 58 | |||||||||||
| Net loss | (549 | ) | (946 | ) | (625 | ) | (1,364 | ) | ||||||||
| Basic and diluted loss per share* | (0.01 | ) | (0.01 | ) | (0.05 | ) | (0.10 | ) |
*The basic and fully diluted calculations result in the same value due to the anti-dilutive effect of outstanding stock options and warrants.
The Company achieved revenue of $4.6 million during the three months ended July 31, 2021, in line with the previous three quarters. This represented a significant increase of 22% over the three months ended July 31, 2020, continuing a trend of year-over-year revenue growth over the past four quarters. The Company has achieved success expanding the breadth and depth of services offered, onboarding new partners including top pharma companies, and growing its existing partner business.
During the past eight quarters the Company improved its accounting and financial reporting systems, culminating in the full implementation of a new enterprise resource planning system effective for fiscal year 2021. While the system was used for the full year 2021, its implementation was complicated by travel restrictions due to Covid 19. These complications, along with the new processes and procedures, caused the Company to mis-calculate eliminations of intercompany transactions, primarily related to research and development sales to Talem. The correction to eliminate intercompany revenue was made in the third quarter resulting in an immaterial, but notable understatement of CRO revenues in the third quarter and overstatement in the first and second quarters. The intercompany elimination correction also impacted Gross Profit and Research and Development expense.
IMMUNOPRECISE ANTIBODIES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED JULY 31, 2021
The following table sets out the Company's segmented Revenue in a ProForma view, allocating the adjustment to the appropriate quarter:
| ProForma | Three Months Ended ($) | |||||||||||||||
| (in thousands) | July 31, 2021 | April 30, 2021 | January 31, 2021 | October 31, 2020 | ||||||||||||
| Project revenue | 4,299 | 4,582 | 4,271 | 3,867 | ||||||||||||
| Product sales revenue | 274 | 197 | 1,191 | 221 | ||||||||||||
| Cryo storage revenue | 15 | 97 | 3 | 1 | ||||||||||||
| Total revenue | 4,588 | 4,876 | 5,465 | 4,089 | ||||||||||||
| Three Months Ended ($) | ||||||||||||||||
| (in thousands) | July 31, 2020 | April 30, 2020 | January 31, 2020 | October 31, 2019 | ||||||||||||
| Project revenue | 3,190 | 3,722 | 3,896 | 2,965 | ||||||||||||
| Product sales revenue | 288 | 344 | 148 | 187 | ||||||||||||
| Cryo storage revenue | 4 | 79 | (10 | ) | 10 | |||||||||||
| Total revenue | 3,482 | 4,145 | 4,034 | 3,162 |