TOMI Environmental Solutions, Inc. (NASDAQ:TOMZ) Q3 2023 Earnings Call Transcript

As we announced in August, Pfizer Rocky Mount engaged our iHP service to conduct emergency decontamination within their facility, which suffered substantial damage to the tornado. Pfizer Rocky Mount has been a long-term loyal client of TOMI, having commenced their utilization of SteraMist iHP corporate service in 2014. Since then, TOMI has been performing decontamination services twice a year, during their facilities, routine scheduled shutdowns and called on as necessary throughout the years. During the third quarter, we expanded our portfolio of CES systems with the delivery of a 3 applicator CES system to Ragon Institute of MGH, MIT and Harvard for implementation in their research and clinical lab located in Cambridge, Massachusetts. I would now like to turn the call over to TOMI’s Chief Operating Officer, E.J. Shane, who will provide a comprehensive overview of the company’s forthcoming initiatives with both new and exciting partners’ insights into our product development endeavors and the strategies in place to drive revenue growth.

E.J?

E.J. Shane: Thank you, Dr. Shane, and good afternoon, everyone. Our current pipeline and backlog remains healthy. We are encouraged by long-term disinfection and decontamination trends in aseptic manufacturing in the biopharmaceutical sector and general worldwide pandemic preparedness. Within the biopharmaceutical industry, aseptic manufacturing is undergoing several noteworthy developments. The emphasis on maintaining sterile environments in the production process is more critical than ever. There is a continuous integration of advanced technologies, such as automation, to enhance the aseptic manufacturing process, ensuring precision and minimizing human interventions. Stringent regulatory standards persist, demanding adherence to strict guidelines to ensure product safety and efficacy.

Biopharmaceutical companies are increasingly adopting a global approach, establishing facilities in strategic locations to meet growing global demand. There is a notable shift towards the adoption of single-use systems, offering increased flexibility, reduced contamination risk and quicker changeovers between production runs. Companies are engaging in collaborations and partnerships to leverage shared expertise and resources to allow for continuous manufacturing processes, providing for more efficient and streamlined productions, reducing the time and resources required for manufacturing cycles. Overall, the landscape of aseptic manufacturing with the biopharmaceutical sector is dynamic, driven by technological advancements, regulatory considerations and the evolving needs of the global healthcare markets.

We believe the competitive advantages to TOMI’s iHP SteraMist technology is well aligned with these prevailing trends within the biopharmaceutical sector. Furthermore, our expanded range of SteraMist products and applications, combined with recent partnerships, is poised to reinforce this alignment. These developments aim to enhance awareness among facilities, ensuring iHP technology caters effectively to evolving industry needs. Our partner in Germany, Universal Disinfection, has significantly expanded their list of opportunities in recent months across a variety of market segments, but mainly biopharm. They maintain a positive outlook on the collaboration with the German biotechnology company referenced during our last call, anticipating the conversion of this partnership into several orders for our CES or custom environment system.

On a side note, Universal Disinfection and the German Red Cross, the largest humanitarian organization in the world, recently released its successful implementation of SteraMist iHP, with its project manager stating, and I quote, SteraMist disinfection system could revolutionize hygiene measures in the ambulance service and would make it possible for ambulances to completely disinfect during the return journey from an infection transport. This would be a real milestone. Universal Disinfection purchased two SteraMist transports in quarter three. We are actively engaged with Fresenius Kabi in Brazil, and we anticipate the qualification process to be completed later this month. The next phase involves the assessment of SteraMist iHP in a second location in Brazil, two in South Africa and one in Argentina.

Notably, the technology has already been introduced to key personnel at these facilities. It’s worth reiterating the Fresenius Kabi extends to 47 countries around the globe. Adhering to the industry trends previously discussed, our innovative product, the SteraMist Integration System, or SIS, is gaining notable traction. This system introduces automation and ensures compliance with necessary guidelines, making it an ideal solution for large manufacturers of enclosures requiring decontamination. This product line meets every noteworthy developments referenced earlier. Moreover, it extends to small lab spaces, research universities and the animal research industry. The SIS is offered in three distinct packaging and assembly options, establishing a standardized product line adaptable for almost any enclosure utilizing life sciences.