ImmuCell Corporation Q2 FY2025 earnings call

• Completed investment to increase production capacity for the First Defense product line, though delayed by contamination events.
• Initiated investigational product use studies for Re-Tain in the second half of 2025 to test market acceptance.
• Noted financial highlights: product sales growth, improved gross margin, and adjusted EBITDA of $1.4 million (3-month), $3.7 million (6-month), and $5.3 million (12-month) in 2025 compared to negative figures in 2024.
• Refinanced bank debt to reduce interest rate and avoid large balloon payments.
• Focus on regaining customers lost during supply shortage, increasing market share, and achieving strong production yields.
• For Re-Tain, challenges with CMO resolving FDA inspection observations affecting approval timeline; plans to use existing inventory for investigational studies in the second half of 2025, aiming to complete study and data analysis by Q1 2026.
• Go-to-market strategy for Re-Tain depends on FDA approval, validated aseptic fill solution, and adequate cash.
• First Defense sales team now focused on regaining lost customers and pursuing new business after inventory rebuild.

Product sales in the second quarter of 2025 increased by 18% or $972,000 compared to the second quarter of 2024. The first half of 2025 saw a 14% or $1.8 million increase in product sales over the first half of 2024. The trailing 12-month period ended June 30, 2025, had a 22% or $5.1 million increase compared to the prior 12-month period. Gross margin improved significantly: the second quarter of 2025 had a gross margin of 44% vs. 22% in the second quarter of 2024; the first half of 2025 had a gross margin of 43% vs. 28% in the first half of 2024; the trailing 12-month period ended June 2025 had a gross margin of 37% vs. 26% in the prior 12-month period. The First Defense product line completed investment to increase production capacity to support $30 million or more in revenue per year.

• Anticipate softening in sales in the second half of 2025 due to inventory rebuild being a one-time event.
• Re-Tain approval depends on CMO resolving FDA inspection observations, which is out of ImmuCell's control and ongoing.
• Evaluation of capacity expansion from $30 million to $40 million in revenue is under consideration, timing dependent on cash flow.

• Delays in Re-Tain approval due to CMO resolving FDA inspection observations, out of ImmuCell's control.
• Potential return to backlog if not managed properly, affecting sales and reputation.
• Uncertainty in Re-Tain approval timeline and impact on commercial launch.

Q: Can you provide organic growth excluding backlog benefit?

A: Focus on GAAP sales out the door, backlog worked through with most orders filled, caution on one-time backlog effect.

Q: Update on Re-Tain FDA approval?

A: CMO resolving FDA inspection observations, frustrating delay out of ImmuCell's control.

Q: Inventory expiring for Re-Tain investigational studies?

A: All inventory for Re-Tain used in studies, no P&L impact, commercial launch depends on FDA approval, aseptic fill solution, and cash.

Q: Strategic options for Re-Tain?

A: Looking for financial and marketing support to aid commercial launch, likely from strategic partners not distributors.

Q: Timing of capacity expansion from 30 to 40?

A: Under consideration, timing dependent on cash flow, careful evaluation.

Q: First Defense sales team focus?

A: Sales team distracted during supply shortage, now focused on regaining lost customers, new business, and selling.

Q: Rebuilding reputation for First Defense?

A: Sales team focused on selling now that inventory is sufficient, regaining customers by delivering product reliably.

Q: Breakout of Tri-Shield product line?

A: Start breaking out in third quarter, including spray-dried colostrum for beef segment.

Q: Regaining customers for First Defense?

A: Primarily end customers, sales team energized to sell.

Q: Beef segment seasonality?

A: Seasonal, driven by calving and stress, marketing campaign to build beef business.