Good afternoon, and thank you for standing by. Welcome to Kane Biotech's fourth quarter and full year 2023 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be open to questions. If you have a question, please press star one one on your touchtone phone. If you'd like to withdraw your question, please press star one one again. This conference is being recorded today, March 26, 2024. I would like to turn the conference call over to Ray Dupuis, Kane Biotech's Chief Financial Officer. Please go ahead.
Thank you, operator. Good afternoon and welcome everyone to Kane Biotech's fourth quarter and full year 2023 earnings conference call. We are delighted to have you join us today. This call will cover Kane's financial and operating results, along with a discussion of some of our recent highlights and goals for 2024 and beyond. Following our prepared remarks, we will open the conference call to a question-and-answer session. Our call today will be led by Kane's Chief Executive Officer, Marc Edwards. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call contain certain forward-looking information and statements within the meaning of securities law, which may not be based on historical fact, including without limitation, statements containing the words believes, should, may, plan, will, estimate, predict, continue, anticipates, potential, intends, expects or other similar expressions.
Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, events, or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the company's stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market the company's products, the ability to protect its intellectual property and dependence upon collaborative partners. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made as of the date hereof, and the company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future results, events, or developments.
For the financial results, all the numbers that I mentioned, I will mention have been rounded and are therefore approximate. The following figures are all in Canadian dollars. Starting with the fourth quarter 2023 financial highlights, license and royalty income for the three months ended December 31, 2023, was CAD 251,000, an increase of 66% compared to CAD 151,000 in the three months ended December 31, 2022. The increase is due mainly to incremental license and royalty income associated with Skout's Honor's launch of its oral care product line, as well as increased royalty revenue from Animalcare in the current period. Product revenue for the three months ended December 31, 2023, was CAD 491,000, an increase of 9% compared to CAD 450,000 in the three months ended December 31, 2022.
The increase is due mainly to higher online sales of Bluestem products in the current period. Total revenue for the three months ended December 31, 2023, was CAD 765,000, an increase of 11% compared to CAD 692,000 in the three months ended December 31, 2022. Gross profit for the fourth quarter of 2023 was CAD 398,000, an increase of 24% compared to CAD 321,000 for the fourth quarter ended December 31, 2022. Total operating expenses for the three months ended December 31, 2023, were CAD 1,735,000, an increase of 96% compared to CAD 884,000 for the three months ended December 31, 2022.
The increase is primarily due to short-term compensation expense adjustments in the comparative period, as well as higher non-cash long-term incentive expense and higher contract research expenditures related to the company's coactiv+ antimicrobial wound gel product development in the current period. Loss for the fourth quarter of 2023 was CAD 1,612,000, an increase of 92% compared to CAD 838,000 for the quarter ended December 31, 2022. Moving on to the full year 2023 financial highlights. License and royalty income for the 12 months ended December 31, 2023, was CAD 731,000, a decrease of 22% compared to CAD 933,000 in the 12 months ended December 31, 2022.
Excluding the one-time revenue recognition in the prior period associated with contract, contractual Veterinary Oral Health Council milestone payments received from licensing partners, license and royalty income increased by 46% in the current period over the comparative period. The increase is due mainly to incremental license and royalty income associated with Skout's Honor's launch of its oral care product line, as well as increased royalty revenue from Dechra and Animalcare in the current period. Product revenue for the 12 months ended December 31, 2023, was CAD 1,872,000, an increase of 25% compared to CAD 1,497,000 in the 12 months ended December 31, 2022.
The increase is due mainly to higher online and pet retail sales of Bluestem products in the current period. Total revenue for the twelve months ended December 31, 2023, was CAD 2.818 million, an increase of 6% compared to CAD 2.668 million in the twelve months ended December 31, 2022. Gross profit for the twelve months ended December 31, 2023, was CAD 1.389 million, a decrease of 2% compared to CAD 1.413 million for the twelve months ended December 31, 2022. Total operating expenses for the twelve months ended December 31, 2023, were CAD 5.475 million, an increase of 15% compared to CAD 4.777 million for the twelve months ended December 31, 2022.
The increase is primarily due to higher long-term compensation expense and employee separation costs incurred in the current period, as well as higher government assistance received in the comparative period, partially offset by lower contract research expenditures incurred in the current period. Loss for the year ended December 31, 2023, was CAD 5,270,000, an increase of 38% compared to CAD 3,824,000 for the year ended December 31, 2022. Contributing to the higher loss were higher finances, finances expenses in the current period and higher non-cash fair value adjustments on government loan advances in the comparative period. Cash from continuing operations as of December 31, 2023, was CAD 749,000. With that, I will now turn the call over to Marc.
Thank you, Ray. Dear fellow shareholders, I'm very proud of everything that my team has accomplished in 2023 and look forward to 2024 with great anticipation and excitement. We started the year with multiple licensing and distribution agreements, starting with ProgenaCare Global, who promises to be a fantastic partner in the U.S. wound care market. We have developed a close collaboration and shared vision for revyve antimicrobial wound gel. We've slowly started introducing revyve to a number of partners as we ramp up manufacturing, and the response has been overwhelmingly positive. Salud Pharma have built an impressive network in Colombia, Panama and Costa Rica. They have a solid track record of success with complementary wound care products, and we're confident they will do very well with revyve once they obtain the regulatory approval in their jurisdiction, which is expected later this year.
Skout's Honor licensed and launched our pet oral care line in the North American pet specialty market, establishing our first animal health licensing agreement outside of the veterinary channel. They have done a remarkable job of building a strong network of retailers, which will allow them to ramp up sales in this channel. Now, the achievement I'm most proud of is obviously our U.S. FDA 510(k) clearance for our revyve antimicrobial wound gel for the management of ulcers, including diabetic foot and leg ulcers and pressure ulcers, first and second degree burns, partial and full thickness wounds, large surface area wounds, and surgical incisions for adult populations.
revyve is a triple threat combination of efficacy, thanks to our patented coactiv+ technology, ease of use due to the thermal gelling properties that make it easy to apply and stays on the wound, and is easy to remove. And last but not least, accessibility, as Kane intends to offer its gel at a price point that fits within Medicare and private payer allowables. So far it has been extremely well received by practitioners as it checks all the boxes. In November, we strengthened our board of directors with the addition of Dr. John Coleman, who brings a wealth of scientific and business expertise to the board. We're, we've already started to reap the benefits of Dr. Coleman's knowledge and experience.
Finally, we closed 2023 with the signing of a non-binding offer for the sale of our interest in STEM Animal Health. In 2018, when I joined Kane as CEO, Kane made the strategic decision to continue to build Kane's animal health portfolio while expanding into advanced wound care. Since that time, we have created STEM in partnership with Animalcare, received VOHC seal of acceptance for our pet oral care water additives, and signed licensing deals, licensing and distribution agreements with Animalcare and Skout's Honor Pet Supply Company. These achievements have created real value within STEM, which we believe is reflected in the offer we received. The sale of STEM will allow us to strengthen our balance sheet and provide capital to grow the company, and it will certainly focus Kane.
We believe that most persistent topical infections in both wound care and unabraded skin, such as acne or atopic dermatitis, are particularly hard to treat due to the existence of biofilms. We have both the right technologies and the right team to win in this rapidly growing market. Now, 2024 is off to a fantastic start. The appointment of Dr. Robert Huizinga as chief, as Executive Chair, of the company. Dr. Huizinga will devote his time to the development and implementation of strategic initiatives, strengthening the company's partnerships with existing clients, and fostering key relationships that will lead to new business, including strategic acquisitions.
The announcement of the revyve Antimicrobial Wound Gel Spray, a follow-on product to our FDA 510(k) cleared revyve Antimicrobial Wound Gel, which we have now loaded into a new patent-pending delivery, creating a highly differentiated product ideal for burns and other sensitive wounds. I was also very proud and honored that Kane was named the Bioscience Association of Manitoba Company of the Year. Once again, I'm extremely proud of everything we've accomplished and look forward to a big 2024 for Kane. Robert Huizinga, our new Executive Chairman, was not able to join us today, but I do have a recorded message from him, which I will share immediately.
Hello, everyone. Firstly, I'd like to thank Philip Renaud, the entire Kane board, and you as shareholders for your trust in me. As you may know, I've been part of the scientific advisory board for Kane since 2018, the same time that Marc Edwards became the President and CEO of Kane. During that time, I've had a chance to review and work with the portfolio of technologies that Kane has. My decision to take on the executive chair role at this important time is fueled by my absolute conviction and potential of Kane's portfolio to transform wound and skin care. I've worked in nephrology for much of my career and have seen the devastating impact of biofilm on both chronic wounds and long-term catheters.
I was really fortunate to work with the Kane team on their successful 510(k) clearance, a coactiv+ antimicrobial wound gel from the U.S. FDA, and I look forward to continuing to work with the team. Once again, thank you for this opportunity, and thank you for your trust in me.
With that, I will now pass the call over to the operator to begin the question and answer session. Thank you.
As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of David Kemp with ITG.
How are you, David?
How are you?
I'm doing well. Good to hear you.
Great. Congratulations on all the accomplishments, you've done over the past while. It's very gratifying to see. I wanted to just touch base briefly on an independent lab called Valisure, who recently did a very in-depth study on all the current acne medications, and it was found that virtually all of them have a multiple of the levels allowed for benzene, which is a cancer-causing agent. And I would think at some point, these things will have to either be reformulated or pulled off the shelf, and that seems to play into your hand quite well. What are your thoughts in that regard?
Yeah, I think the products in question were creams that contained benzoyl peroxide, if I remember correctly there. And yes, it was quite alarming to see the levels of benzene. I think that really that's the beauty of Kane, is that as people become aware of biofilms and how they impact bacteria and making bacteria hard to treat, we have 20 years of research and technology development in that market.
So we really believe that we're very well positioned for the topical infection market that includes acne, and that potentially our technologies could really be game changers and be the missing link in a variety of topical infections. So it is a big concern. And the beauty of using our technology is also, David, that by first breaking up the biofilm, you can significantly reduce the amount of antibacterials and antibiotics that you need to use to treat a topical infection. So that's really, I think, key to us and key to where the future lies in dermatology for us.
Just to say, a couple of the products, just to mention names, they were the top-selling acne medications on the market, which are Clearasil and Clinique. Anyways, they've got to find a solution. I hope you guys reach out to the aforementioned companies and make them aware of what your products offer.
We're always looking to talk to the big players, David. I really do appreciate the comment there. And as you know, we're really believe that acne, for one there, I think this is specifically what you're referring to-
Yes
... is really a biofilm problem, where, what's happening is that, Staph epidermidis biofilm, which is found on our skin pretty commonly, is creating an anaerobic, is plugging up the hair follicles, creating the anaerobic environment that, C. acnes needs to, to, thrive and, become an acne lesion. Now, it's... If you read the research papers, it's commonly known, but I don't think a lot... there, people are reading a lot of research papers on the weekend, but, Staph epidermidis is actually our positive control for DispersinB. So our intent this year with the University of Miami is to run a proof of concept clinical trial on acne patients to see if... to test the hypothesis there.
That by using DispersinB, we could remove that plug and eliminate that anaerobic environment, and prevent C. acnes from creating that acne lesion. So that it'd be a very effective skin cleanser.
May I ask, Marc, when that trial gets underway?
We're very much looking forward to getting it going. We've been trying to save all our money as best we could. Once the sale of Stem gets concluded, we should be good to start. We'll have more of a better idea of when we can get going with that.
Thanks very much for your time, Marc.
Thank you, David.
As a reminder, that is star one one to ask a question. I'm showing no further questions in queue at this time. I'd like to turn the call back to Marc Edwards for closing remarks.
Thank you very much. Thank you, everybody, for tuning in. We announced last week the extension of the exclusivity period with our buyer for STEM to the end of this month. And believe we should be able to get quite close to that date. So, as I'm sure you all are, we're very much looking forward to wrapping up that transaction and to providing further details as to what that transaction looks like. Thank you very much.
This concludes today's conference call. Thank you for participating. You may now disconnect.