Scientific Industries Presented at October 2020 Lytham Partners Virtual Investor Growth Conference

Bohemia, NY – Scientific Industries, Inc. (OTCQB: SCND), a life science tool provider, participated in a virtual presentation and fireside chat at the October 2020 Lytham Partners Virtual Investor Growth Conference on Wednesday, October 7, 2020 at 4:00 p.m. ET (1:00 p.m. PT).

Management will also be participating in virtual one-on-one meetings. To arrange a meeting, please contact Lytham Partners or visit their website.

About Scientific Industries

Scientific Industries is a life science tool provider. It designs, manufactures, and markets laboratory equipment, including the world-renowned Vortex-Genie® 2 Mixer and balances; customized catalyst research instruments and bioprocessing systems. Scientific Industries’ products are generally used and designed for research purposes in laboratories of universities, hospitals, pharmaceutical companies, and medical device manufacturers. Please visit the Scientific Industries website here.

About Scientific Bioprocessing Inc.

Scientific Bioprocessing develops manufactures and sells sensors and instruments for cell culture and bioprocessing. For more information click here. 

Forward-Looking Statements

“Statements made in this press release and virtual investor conference that relate to future events, performance or financial results of the Company are forward-looking statements which involve uncertainties that could cause actual events, performance or results to materially differ. The Company undertakes no obligation to update any of these statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties set forth in the Company’s Securities and Exchange Commission reports, including our annual report on Form 10-K.”

View the Presentation Here

 

Presentation Transcript

Good morning. I am John Moore the Chairman of Scientific Industries and President of its newest business Scientific Bioprocessing Inc. which I will refer to as SBI. I have a six-minute and thirty-seven second introduction-give or take- to on the company and I am going to do this presentation a little different by not delivering a traditional presentation. I will let you review our Company investor presentation on your own that you can download from our website at www.scientificindustries.com. After my overview, I am happy to answer your questions during the fireside chat. Before I begin with the overview the Company, please note our Safe Harbor statement in the investor presentation on slide 2.

Scientific Industries is a publicly traded company established in 1954. We are traded on the OTC Markets under the ticker symbol SCND. It is a debt free business with two established product lines and a new one that is on the ground floor of one of the highest-margin and fastest growing markets in the life science tool business, single-use sensors for enabling the production of biologic drugs.

First, I want to spend a minute discussing our two most mature businesses. SI has been managed for the past twenty years very conservatively and wisely by our CEO Helena Santos. She has a strong focus on the bottom line and building our cash reserves. She is also leading SI’s transition from a general scientific instrument business to a focused life science tool provider. Our largest business is manufacturing benchtop instruments. Our main product the Vortex-Genie is a laboratory mixer that is in virtually every life science lab in the world. The products are sold through over thirty global distributors like Fisher Scientific and VWR and the sales are 50/50 US and ROW. Our second business, Torbal is an analytical balance and pill counter manufacturer that was established in 1887. It is remarkable that Torbal’s products are not only still relevant but the standard in most pharmacies in the US. Its new VIVID automated pill counter is a promising new source of profits and growth. Torbal recently signed a distribution deal with a pharmacy sales group with 38 direct salespeople. These two businesses are reliable generators of cash have been growing through good and bad business cycles. We are using the cash generated from our legacy business to help fund the future growth of our Scientific Bioprocessing operations.

What are the competitive advantages and why do customers select SCND’s benchtop equipment?

Now I will focus for the rest of the presentation on our newest business is Scientific Bioprocessing that since 2011 collects a growing royalty stream from its portfolio of sensor technology patents. I will now tell you about SBI’s technology, the market drivers for bioprocessing sensors and why we are aggressively investing in SBI to create a market leader in this exciting new space.

SBI’s single-use optical sensors are small (approximately a quarter the size of a postage stamp) and placed inside cell culture vessels or bioreactors used to make biologic drugs. The sensors measure dissolved oxygen and pH in real-time which are critical quality attributes for designing, manufacturing and achieving FDA approvals for biopharmaceuticals. SBI’s patented technology also covers fluorometers or readers that use light to read the sensors. There is rapidly growing but largely unsatisfied demand for new sensing parameters like glucose, glutamine, lactate and extracellular RNA. Up until recently most biopharmaceutical testing has been off-line and that has resulted in the three biggest headaches for the industry; extended time to market; high cost of goods sold due to low yields and safety. SBI’s 2011 acquisition of Fluorometrix positioned us on the ground floor of real-time monitoring which is recognized as a critical solution to these challenges.

Two important facts to keep in mind are that seven of the top ten selling drugs today are biologics. Biologic drugs are much harder to produce than traditional small molecule drugs. For example, a pill like aspirin is composed of 25 atoms. A typical large molecule drug like a monoclonal antibody is composed of 25,000 atoms and producing them is very complex involving up to 1,000 separate manufacturing steps. Increasingly biomanufacturers are moving from re-useable stainless-steel bioreactors that required extensive clean-up and turnaround time to single-use bag bioreactors with sensors that can be disposed after use. Real-time sensors are important for keeping the biologic production within the design space and eliminating costly waste and potential patient safety concerns.

SBI licensed its sensors to Sartorius in 2011 for use with their ambr and Culti-bag single use bioreactors. GE also uses the sensors under license for their single-use Wave bags. Together these two companies have sold over $1 Billion of devices under license from SBI. The best is yet to come for these producers as there are currently twenty biologic drugs that use single-use bioreactors but 800 of 1000 new biologic drugs in clinical trials with the FDA are being developed with single-use technology. These new drug candidates are going to need sensors as part of the FDA’s new Process Analytical Technology mandate that requires critical quality attribute monitoring from the earliest experiments to IND submission and as support post marketing. Wall Street is rewarding the single use providers richly as they are growing fast and sporting huge margins. For example, GE’s $2.3 Billion bioprocessing business with 75% recurring revenue was sold to Danaher and Sartorius for $23 Billion. Even off-line sensor suppliers like Berkley Lights with $57 million of revenue and $23 million of losses trade at a $4.5 Billion market cap.

In June of this year SI raised $6 million in equity, led by Roy Eddleman the largest individual shareholder in Repligen, to launch a proprietary line of sensor enabled products targeting not only the biologic drug producers but also emerging applications like cell and gene therapy, organ on a chip and regenerative medicine. A quick word about Roy. He built Spectrum Labs, a provider of hollow fiber membranes for bioprocessing to $40 million of revenue and sold it to Repligen in 2017 for $367 million- or 9.1-times revenue. He sees SI and its SBI business as an opportunity to replicate his success with Spectrum. Our use of proceeds of the financing is to build a direct sales force, expand the sensor product line beyond dissolved oxygen and pH and make important investments in gamma irradiation and validation of our sensors so they can be certified to be safe in downstream biomanufacturing and for use in humans.

It is critical to get the right people around the table and we recruited the LeBron James of Bioprocessing, the former EVP of Sartorius as the Chairman of SBI. RV joined Sartorius in 1983 and transformed it from an analytical balance and filter provider to the food and beverage industry with 30 million euro in sales into today a $22 Billion market cap bioprocessing industry leader through fourteen acquisitions totaling 500 million euros. He retired in 2019 and spends half of his time with Sartorius and Danaher backed venture fund, Dynamk and last month we entered into an agreement with him to spend the other half of his time as Chairman of SBI. His vision is to use SI as a vehicle to consolidate other single-use sensing technologies to service emerging new applications and create market leading solutions that can be sold through a world class global sales force. We also recruited another star player, Bucky Polk, the VP of Key Opinion Leader Engagement of Philips Medical to serve as our Chief Commercial Officer. Over the next year we will be deploying our capital to release our sensor enabled systems and build our sales force.

SBI is updating our go-to-market plan over the next ninety days to reflects the insights of our new Chairman. SBI is a member of two federally funded manufacturing Institutes the Advanced Regenerative Manufacturing Institute and NIIMBL which is a biologic drug manufacturing institute. Our membership is providing substantial customer interaction and non-dilutive financing as we seek to expand our product portfolio beyond dissolved oxygen and pH.

A great Board of directors is a tribute to the quality of a business. Two of our stars are Marcus Frampton, personally one of our largest investors whose day job is the Chief Investment Officer of the $65 Billion Alaskan Permanent Fund. Under Marcus’ leadership the fund made the anchor $128 million investment in the creation of Juno Therapeutics which was sold to Celgene for $9 Billion and Chris Cox, the former Chief Commercial Officer of the Medicines Company, a biologic drug developer, which was sold in December to Novartis for $9.7 Billion.

This is our first investor conference in the company’s sixty- year history. I am happy to answer questions now.

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