Chembio Diagnostics (CEMI) 12 Mar 212020 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Chembio Fourth Quarter 2020 Earnings Conference Call and Webcast. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Philip Taylor. Sir, the floor is yours.

Thank you, operator.

Before we begin, let me remind you that the company’s remarks made during this conference call today, March 11, 2021, may include predictions, estimates or other information that might be considered forward-looking. Chembio’s for represent future. statements forward-looking current the judgment These risks to many control. They subject assumptions, and Chembio’s are, however, beyond numerous uncertainties, are of which risks in Chembio’s in with to the those from uncertainties filings Risk SEC under elsewhere filings, including Including time and Factors SEC. and described Chembio’s time and XX-Q’s. the its of third Including XXXX XXXX report on report and Form on quarterly annual Form quarter Form for subsequent XX-K its XX-Q for results may from materially Chembio’s those projected. differ any forward-looking obligation to publicly update revise Chembio made undertakes statement or no today. encourage to review all I the the SEC matters. of other with you company’s concerning filings these and I’d turn Officer. Rick that, call Executive Eberly, over With to like to Chief President and the

XXXX Philip. I Today, an performance, you, joining will providing you portfolio product to financial joining initiated review you Chembio on fourth expansion. of us I’m results and strategic the the upon for quarter Thank in update conclude and today. call open repositioning, cover for Neil March, discuss of the the Thank questions. all delighted our detailed status our I strong and will up

because was that we quarter year a performance. fourth a year, remained able team finish were challenging with strong we pleased the revenue this to resilient, Given were the

relentless and of meant on achievements strategy, about proud for acronym The to the XXXX challenges it business. our overcoming acknowledge along rapid be a I Before way. the commercial Research Development with on expanded in relentless to BARDA, pandemic. Biomedical our a Authority which result regulatory of did rapid, stands which Advanced testament is and during when very am period. Health executing, even the $XX.X product were Department focused growth, of $X.X year line spell revenue team, I challenges team’s for and our are development for revenue the global encountered Total respectively, million, R Human prior achieved many be fourth and and and million core product these year. the was times, revenue I we representing XX% our we talking the perseverance throughout capabilities. the the the Chembio’s operational the remiss those to a product relationship if numbers compared as values we would executed testing of part of business We not of including advanced range our Nevertheless, top and as and remain challenging our growth times, submission of part XX% or Services quarter

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testing more more for these With locations ideally often. more differentiating DPP patients features, are in suited test systems

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serve We for diagnostics this in to the current used support to greatest optimize realize team we of all professionals resources to potential distribution we Our XXXX, direct were a across accounts large these leadership, see testing broad both results our the future like a national sales, will selling distribution facilitates is And decentralized our In more and commercial we the priority. potential of channels win on opportunity with relationships access to have business is for component the markets. took increased to that To Establishing Fisher Micro we’ve different company. to needs and acting various professionals. Healthcare, decentralized that we U.S. a our – customers analyze U.S.-based objective of DPP management, revenue help Henry by core Schein is and model. demand organization markets, help market and steps strategy. Commercially, where the performance. service built comprehensive reach deeper new the the suit This tests. business Building our sales with distributors and visibility broaden new commercial comprehensively, customer where the Internationally, future is products. distribution customers to expanded our added the We experience. built force. for marketing see we recurring McKesson, of will offers a menu Readers of

opportunities on network working and Europe better are improved CE Mark and building approvals in our elsewhere. specific our Brazil, in ANVISA new to We subsidiary leverage with approvals our a distributor country

Brendan effective distributor, exclusive Diagnostics Luas now by UK portfolio. and a current in future product and aligned the resources veteran Commercially CEO, Farrell example, our is to industry led and more with operationally, an be are distributor As Ireland.

the features rapid detected in DPP FDA’s value From all sample, we by only death tests XXX% tests XXXX very as infections. diverse forward, the cases. may to bring both the XX simplest infant fingertip women that minutes. platform. untreated a a up HIV-Syphilis at syphilis the the testing from Access Chembio’s a specificity It in diagnosis result in will were to XXXX market. portfolio with illustrates differentiated of is the syphilis blood pregnant PMA sensitivity course, Of I’ll high hyper-focused we award first on of aid U.S. move approved approval start tests, of our the and U.S. regulatory driving of vital to both single and provided to in increased the because stillbirth infections by and DPP XX% congenital discreetly or to are development and in in which syphilis of HIV is

active five likely Additionally, infections times with patients HIV two are exposed. syphilis to if to more contract

physician and labs country. target the initial across Our offices, are moderately customers XX,XXX clinical hospitals complex

take pursuing U.S. codes for with single expand the market. DPP testing meaningful testing value reimbursement provide meaningfully well-defined awarded is the test CLIA and CPT a differentiated and both into single a opportunity applicable. are traditional Waiver share We the in under provides fair test The clinically which locations dual test, is HIV market HIV-Syphilis HIV the and would to

multiplex update an antigens comprise COVID-XX differentiated portfolio B, effective flu flu in patient all a extremely under and to platform. SARS-CoV-X, our DPP systems, volume the as importance systems development these and test regulatory the were By three in the them understanding tests COVID-XX of COVID-XX preparations enables to present. risk. BARDA produce recognizes be delay antigen the at which on down central detect of test still features PCR diagnostic system, antigen labs currently that with a of deliver of two complex COVID-XX lab-based for development Point-of-care Chembio’s for testing DPP and platform. put the and the panel, is of tests we be the source our and panel. Now, will made in times have which have refer been and and testing test are at proven tests the point-of-care grants results A patients submissions respiratory simultaneously clinicians and I contrast requires. provide spread DPP quick COVID-XX can to awarded diagnosis bogged and code around the or to information those tests controlling at antibody days testing for can discreetly for that from tests provide the decisions to respiratory to This The which between both BARDA run sample will take We to a antigen DPP virus.

the part a of the it’s and the approximately and issuance development antigen totaled of EUA first of The grant test. $XXX,XXX for COVID-XX

million the updated tests. January, very approval quickly develop rapid preparation Receiving collaborative tests FDA DPP issuance in XXX(k) wholly-owned ANVISA also the of the us second for helping subsidiary BARDA. date, been in high antigen regulatory totaled application permanent Their for our $XX.X COVID-XX The system, EU. which Emergency antibody COVID-XX January rapid our also a performing and guidance an in CE in and approximately We to have To and we Mark for test. clearance clearance. received traditional appreciate and by have development Brazil and we Authorization antibody test. support would respiratory XXXX for CE distribution the for the as provide Use for the and valuable award we XXXX, XXX(k) In with antigen distribution receipt panel relationship SARS-CoV-X obtain IgM/IgG as it’s of in refer will built the Mark test COVID-XX the

of on Brazil, take working Europe, we to to help new previously, commercialize are these advantage mentioned and I building in elsewhere these distributor As relationships approvals, products.

because the based we update the these on supplementally The development agency. FDA FDA tests receive U.S. for be application that in tests in in submitted, provide had of ahead clear, the and COVID-XX believe and not for limited COVID the we In capacity. of by was to COVID-XX an our on FDA like XXXX, by met out test testing a the the their FDA, of antibody the test December this the subsequent that it COVID-XX October in for FDAs and antigen test timelines order the our priority not U.S. be to prioritized We communicated. the our would was completed for the the for test filings applications that determined XXXX. authorization us prioritization of accessibility was impact information the would the declining antibody that September on I’d of requirements test respective data of FDA. application review nature XX regulatory we the in system XXXX review. need to BLA We COVID-XX submitted laid review EUAs have In submitted Now us testing reviewed the included guidance, relatively then-effective antibody or type to example, antibody Under guidance. performance notified a our has To advised of the it EUA

the Mark, We are and confident the of in and quality view its approval as validations tests of performance. CE

to that continuing antibody for the to systems. new commit development be in COVID-XX order would FDA evaluate to to are required whether resources application test EUA further submit our and We testing

which and was review it us application this advised based Turning antigen development testing engaged we not reviewing in of at updated FDA back new order under COVID-XX the declining a The application. EUA the prioritization information its EUA in to priority. the to the test supplementally for that tests receive support and COVID-XX nature has FDA’s FDA notified the information We a were January prioritized subsequent system a appreciate and gathering for BARDA’s review. we was antigen guidance committed on COVID-XX type our antigen XXXX, it be would for in completely of to in In us test. And specific required. order submit to are continued to a guidance, need

we are We have to technical confident resubmit plan. EUA. and capability a required the The resources

achievement on news We FDA the of the will timeline of the of changing in We based and the due look awards the or regulatory process not uncertainty about course. priorities. guidance regulatory resubmission, forward any sharing end regarding be to providing or

To about management A this believe development can test clinical our HIV DPP will and utilization. future flu it overlapping the the will of We believe, to will are I platform and and is demand of we portfolio test the other respiratory on respiratory in agreement distribute SARS-CoV-X B assist antigens, detection under to flu a product improved resource a decentralized is patient tests products respiratory multiplex. and currently our EUA well. the because the well progressing A pandemic flu COVID-XX example signed of current our same Now, Again, for This great approved capitalize test. sold COVID-XX respiratory our and will the expanded extend in is in-licensing phase be of utility the respiratory B. organization, virus seasons. providers We point-of-care beyond talk across and available COVID-XX markets for the panel point-of-care of leverage Differentiating a systems development. commercial complement ability panel DPP our COVID-XX and our panel healthcare panel, DPP as an recently development, and its it U.S. this versatility while

this month. are launching respiratory We this panel

performing offer as excited the the to this and high component COVID-XX our are to commitment able testing future strong, be Our test of customers’ market first planned decentralized is we portfolio. to

proven DPP a U.S. provide The wide PMA approved tests can testing the HIV-Syphilis HIV Our and globally. of diagnostics. COVID-XX the CLIA and locations a value point-of-care and of comprehensive range combined well-regarded has value system with portfolio test our point-of-care, across waived decentralized pandemic represent that to the product

nursing patients infrastructure use variety system. did that require wide locations, for to such Our bodes ideally care mini the its throughout centers, decentralized of offices, skilled not DPP and easy future test the facilities. across as are systems clinics, provided suited and reference testing urgent They are We diagnostic central point-of-care an such the laboratories. doctor’s as has the homes, pandemic testing that well healthcare adoption hospitals, nursing global for visibility believe a

quarter through we’re the to state, we ANVISA. commercializing also wholly-owned Bio-Manguinhos subsidiary. to the the mentioned cross-register monitor pharmacy I the Brazil, in And As previously, and COVID-XX received antigen test working ANVISA are through local approval during approval that product But longtime with our of fourth supports we with market markets. product partner the federal their

product of course our reposition is focus our That regulatory priorities significant in our we the This commercial our test organization. was Over U.S.-based funded demand. on to and have made development, expanded reflected core XXXX, organization. changes to

upon built are XXXX for plans this Our groundwork.

about three, States. our tests CLIA in obtaining upon Number through transition begin the about creating overriding thoughts one, the and number approved diseases. the a market COVID-XX how get year. of with shared the Chembio and issues uptake our States. EUA insect are respiratory of ago, underlying I expanded the development I organization. panel DPP At the respiratory clear. nearly products number objectives beginning accelerate pandemic initiatives of the throughout remarks, Number all challenges HIV-Syphilis joining a thesis year operational faced vector in itself automation for my for of Chembio and and Number My the successes vaccine few together United disease, initial approach DPP turning excellence looks programs, transmitted portfolio of two, like, in viruses, the our been demand overall what the at trend to sexually the on Our downward launch testing the down the has throughout and the COVID-XX future point-of-care gastroenterology, product in-license covering of of of cases sales, the not in written has Chembio given approved and value with United weeks waiver U.S. five, And testing our changed. past build Much achieve four,

is for the testing haul. So the Chembio to let be broader point-of-care committed clear. business me long

PMA waiver portfolio work the panel the and the respiratory DPP in-license for and ongoing on strategy month, complete our is HIV-Syphilis with test. CLIA pursue respiratory Our product this antigen BARDA approved panel dedicated to launch COVID-XX test,

U.S. antigen As providing trials by and when a test COVID-XX XXX(k) achieve COVID-XX clearance is a to market a upper regulatory clinical emergency is standard discussed the seasonal the why and strategy an patient in becomes from use were care BARDA test using respiratory emergency complete on That positioning funded diagnostics. our beyond permanent to approval and transition focused routine illustrates we channel

counter our I high sustained price XXXX products share that for the may turn point-of-care traditional in to disease market areas. market continue markets. We tangential gains, pursuing details on organization is basis the including and platform. strategy local compelling this for where market The over states believe that focused these diagnosed will the who maximize sustained well growth now clear. for of in we over position, we From with others each company exist all capabilities profitability the markets our Chembio we trials of towards clinical of where while development could including clinical is channels, will these our U.S. and financials. products, and staying will treated are believe the average diagnostic healthcare in the While is call our drive and commercial incremental this and develop differentiated testing, current proven the long-term is the develop, at-home disease markets, and and states on future under expanded PPP Neil presently decentralized We selling to these and channels. establish be listed, will I current can

Thanks, Rick.

with item. would like I First, logistical a to begin

registration business filing we corporate the within As days. of next a an anticipate few matter S-X shelf housekeeping,

revenue grant, representing were compared XXX% XX, million Government Consistent sharing increase XX, months year and combined $XX.X basis. prior and three December XXXX license an for for Moving compared of quarter million, the Net an fourth period. figures on I’m ended period. million, the year increase total were the on R&D past non-product financial growth prior XXXX, sales compared of sales these XX% of results, calls XXXX was the to the the combined December for months year ended royalty, the $X.X of XX% product with earnings prior period. three revenues $X.X to a to

of and during to the are and impacts income we incur automated R&D grant our government separately months cadence year XXXX, program reflected the manufacturing certain schedule this income are unfavorable $X.X The revenues timing our to occur not the product changes the with period. on compared million do related we approximately to and certain expenses. a continued continue operational effective the total and of of from statement. production addition, but period, presenting December revenue three qualification Both certain to equipment. sales by decrease income related geographic grant XX, Gross margins government ended within which always In revenue performance R&D obligations, period, the declined prior quarter of inefficiencies mix, during in

the margins of expired also therefore impacted write-off were and Our by product. obsolete HIV

During the our States. now toward XXXX, are processes, we based transitioning United in of all automation of continue manufacturing invest in to the which

due the organization legal costs loss the reduce few assembly to add commercial expanding talk costs related ended due in administrative and general trial Particularly product to from $X.X three this variable primarily by increased million, is months of facility Selling, tests. from transition R&D COVID-XX lines pandemic. from and costs Net to $X.X costs, focus U.S. our XXXX million, December intended $X.X more ended during clinical a months million $X.XX loss our per primarily diluted share occurred three to net will in compared per related to and prior minutes. about to costs or the of XX, the million manual I XXXX. the year of the automated share increased or period. COVID-XX $X.XX $X.X the and was diluted costs XX, a by the capacity, development costs implementation December improved margins. validation Our on automated to

R&D XXXX, was seeking the to operating reflected turning COVID-XX pandemic, we portfolio Government total of and XXXX systems, disruption regulatory product year in license by December XXXX grant, XX, combined ended margins XX, increase product compared for of revenues declined December develop sales and $XX.X The and months ended and $XX.X XXXX, XXXX XX.X% complications from year market invested our period. XX approximately revenues million, in Now $X.X year from products. to decrease than an a the extensive were were Gross XX% during year to as period. economic the of a prior exacerbated the test $X.X net selling greater decrease of and which results. offering legacy the for XXXX, XXXX. royalty, price commercialize prior full average is the COVID-XX products by to the million, results a by developing our In address those of million, we COVID-XX X% compared financial in pandemic, and had were million, faced caused to

our discussed, manufacturing drivers. three previously automation labor unfavorable decrease margins. product improve reduce also primary to $X.X in margins invest on product million product our The unfavorable The portion volume unfavorable and we towards in margin from sales of comprised and product reliance the margins. As related processes gross was from million $X.X product of had our transitioning continue manual to

that for antibody FDA’s revocation the COVID-XX by product sales of for in cost incurred customers returned tests the following were the that EUA we of the First, U.S., product.

customer plan sales sales precluded for impacted the certain revocation to in This mix. of our of systems the remainder the the resulted for U.S. opportunities COVID-XX customers of the deferral in of antibody U.S. these sales the Second, outside and test XXXX, negatively

we of R&D in of million, our qualifying portfolio of product lines therefore sales including related As of selling and and U.S., prices. sales expired have activities certain where production those the automated a highest much for together lower write-off higher cost selling we revocation, resulted inefficiencies, increased third, we which with products experienced as operational the obsolete sales, geographic HIV shifted our lower triggered to the of we by in product, prices regions average experienced we outside U.S., regions average And significantly relative where experienced to mix the costs to development those the costs to product. products including described general BARDA, and facility million, to COVID-XX trial arising costs by to legacy back tests, to and the costs production commercial related $X organization pandemic as increased COVID-XX $X.X offset by earlier. Rick the from our due to U.S. costs primarily Malaysia by administrative clinical in primarily legal from of related COVID-XX cost increased funded caused due expanding revocation retrenching by facility. of from Selling, subsequent part savings our our in

we $XX.X loss During per incurred share or related was our in non-cash ended $XX.X ended XX, net for totaling the million $XX.X costs year for period. XXXX, and Adjusted year items, the loss for severance million. XXXX million. loss the year a $X.X XX, diluted to was $X.XX December or $X.XX December compared per Net diluted prior million net XXXX of share

As I calls. and Rick have discussed prior on

no by our Our with that by required revenues, team including and eliminating expenses strategy. to align are continues reduce positions a better to execute costs longer our program

of the ranging annualized employees a basis. restructuring have during in representing XXXX, first are during on reducing million manually and our dedicated $X assembling $X.X million. period of that take cost XXXX, To-date, to executed Associated $X.X million expect we an that, charge with products from to changes of we half to approximately number savings the

as equivalents cash and cash XXXX working as $XX.X sheet, balance million. totaled the XX, XX, XXXX December capital of $XX.X Net million. was of December On

operations a the combination subsequent in non-cash the adjusted in increase antigen inventory primarily to test. orders, purchase and net used due cash to antibody for the of COVID-XX $XX.X non-cancelable of XXXX, million $X.X test million, associated items XX, for December building inventory, ended with totaled and material year raw revocation the a the loss During

forward, state the not the quarter. intend are given expectations operations amid guidance want the Finally, update an our where while to of provide provide first pandemic we we on current we going on for do the quarterly and quarter, to

quarter the the We to roughly to sequential now for call fourth revenue. first revenue back of turn offset a product compared I’ll in remarks. non-product increase decrease quarter Rick of expect be to concluding XXXX XXXX, by to but sequentially

you, Thank Neil.

ability Our care clinical point-of-care platform clinicians every the diagnostic in and DPP patients improve across of realizing offers are utility clinicians to setting the and health the technology Both to access decentralize testing. testing. fully system,

We can our of unwavering. regulatory There’ve on change. continue priorities the respective outlook to to understand promising. tests. our has believe technology been the is our paths commitment more challenges But never been for We this the COVID-XX FDA’s market

testing we the and learn the more evolves. As landscape virus about

team why has the the testing. to a technical for and differentiated. Our decentralized platform large and demonstrate is market capability highly resources DPP need There’s

for using for confident, is and are We our our more several customers. we this approval that Bolstering for will and confidence tests have fact DPP regulatory the provide mark achieved test. DPP antigen We value CE ANVISA our approvals tests antibody the platform. received COVID-XX

PMA approval. DPP the tests received Additionally, FDA HIV-Syphilis

We another from two totaling $XX.X also own awards million BARDA the DPP technology. that represent strong validation of

we on success. that build year, this plan of course the to Over

would is clearance DPP test, the to These XXX(k) DPP our to newest margins. to approval geographic us in Board approval to and shift Chembio’s that for enable opportunity for front can COVID-XX waiver achieve Our welcome panel respiratory antigen and to the of approvals a Directors. I the the like goal would lead mix and this to EUA clear regulatory improve take EUA for members product HIV-Syphilis test. in CLIA

leadership First, David insights to to applicable Dr. We long-term will joined value team. management in Acheson our the expertise strategy. infectious that Acheson brings confident Directors of and were creation in perspective and public meaningfully his our health XXXX. contribute Dr. Board disease December

of phase the Chembio. growth next for As enter we

March Directors of the joined David XXXX. Bespalko Board Secondly, in

we our And satisfaction, is Mr. driven talent the other Given We every and and internally. DPP from platforms commercial customers forward expectation top strives look customer both and industry, extensive add Chembio from and technology the in value. meaningful maximize network are collaboration Bespalko. and David that value the and confidence. foundation, to performance Mr. of deliver experience Bespalko’s attract will in our Operational day. is insight this the growth, and Acheson to We excellence contributions retain can a market. to organization Dr. profitable help shareholder

for continue execute employees you steadfast I today. once reiterate to their I the strategy. our we FDA’s Finally, Thank we joining to appreciate forward we future for continued organization. would look and We to to our us of We our the BARDA’s in updates were guidance our specific support as competent. required. thank to Again, are gathering to information again, the like providing that commitment wanted committed tests. COVID And all

the timelines, the look submissions, have process to guidance or We providing requirements commentary and open the the this any At We Operator, FDA technical or in respective With based the news EUAs. priorities. of we submitted will time, the the achievement regulatory due regulatory resources, uncertainty sharing or not a call plan, questions. capability, be to about on regarding forward please that of changing up resubmission course. awards

is first Your Kyle Instructions] coming from [Colliers Bauser [Operator Securities]. question

Your is live. line

good would and about thanks percentage antigen markets? example, international came here. more selling and then evening And if great. commercialization be sorry color you I’m are antibody little what for in you product I from our but tests? tests all the can missed this, updates for Great, and Any markets, O-U.S. bit of talk a here sales going efforts

Yes, Kyle, thank you question. for the

of UK would very color international and and provide broken on that and revenue, between U.S. Ireland for EU international neighboring the Africa. the QX. is to product that. that haven’t like I of terms like some say, commercialization we’re terms In and we South markets Kyle, What in the Neil, additional in can out efforts focused our

in organization in also the well. great markets, helping with product partner given But our very there state we’re long-term pharmacy market Brazil And commercial got marketing is we’re region. only reading the into build And everybody Brazil in talked who those pandemic not very, in product about the pharmacy markets have closely a we’re to the in we a Bio-Manguinhos. the but in and to the We’ve expanding markets is distributor into very, us neighboring then local and In Brazil, our as terms working very bit severity little remarks. the Brazil active the in Kyle, in finally, prepared pursuing Brazil. order of to about as distribution of infrastructure Brazil

years. XX Chembio a of long-term been over you last As know partner the they’ve

working get very, closely very approved them the with cross-registration ANVISA. we’re the So by product to of

in we HIV-Syphilis begin and our we Brazil. organization. portfolio to been product and launching as the about States, for have today, very, provide focused respiratory also in opportunities very So our for a obtaining now in-license which customer the will talked very on And to very, product States. shortly excited United customers We’ve HIV the be about Bio-Manguinhos obtaining lot panel, tests. an turning we new very that to And announced test United antigen can adding were commercial

distribution? additional you want do Neil, the revenue provide So on to any color

in revenues product Kyle. hi, our breakdown afternoon, the by quarter points and second be this filed were sales a geographic Thanks under of United will the and and in XX% the sure. this little of fourth just represents which fourth XX% as were in first in couple $XXX,XXX, And our product data quarter In net which of quarter. our just sales. XX-K, XX% Yes, States contrast later a the revenues U.S. of year,

in I connects made the it that well how that see to as can with relates unfavorable mix. you geographic comments some as of So the

– what running, helpful. up the wondering, partner timelines, And next I’m and Sounds you but to Got it. so Your know just waiver for steps – that have kind you’ve there? can some the you next No, won’t got Rick required traction for are and CLIA like, it, about do? for talk but what’s test? Appreciate that’s I obtaining HIV-Syphilis of nice there Neil.

Yes, Kyle.

customer as very the uptake moderately We’re we complex excited the about market about. in talked

the sector is great a that public market the that in clinical us health fit signs customers and market. some and We’re positive really seeing, has product utility OB/GYN certainly the giving

we have we the PMA CLIA to approval after FDA. by we do for FDA, a would so said, And as receiving waiver the filed

work the waiver So FDA questions any of submission. the the with we we’re and them will under timing now timeline our CLIA to they review as answer along

Okay. Oh, great.

that latest color. provide capacity, So And an share? just great. filed. update can about percent And would situation that’s you on from extent automated what your nice Just of You wondering output the to be on can how maybe manual? of still Great. with running then provide you color is and kind manufacturing? many I’m up already the of any some kind are lines

Kyle. Yes,

the not quarter but his validated automated prepared lines Neil in progress getting about tremendous remarks, made in As operational. talked only our fourth we in

will XXXX, as to continue we head and So, automated we validated our well XXXX we’re lines. into utilize into operational and

our to fully get automated product automated to well looking various of go certain for our the do products. lines is as sales need as production automated one lines, manual mix, we we are geographic year. we as throughout expansion well lines of We continue the it will and as regulatory as by at dictates out approvals product But also the possible things our balance

is add? Neil, So to anything there

comment shared the Yes, our I I reiterate And in changes count reflecting prepared $X executed taken automated guess, is, savings about just lines. annualized that that is head things. that the One approximately actions of remarks a generates we’ve million. our far in in capability we’ve of the confidence during that – XXXX to the related our thus couple I’ll that

production towards. that’s in we’re XX-K the we purchase just Secondly, as additional is orders is the file, And transition have lines. issued automated moving described that for of part

the lines qualification different to place, to vary geographies product, keep to place cetera. different is in of mind different regulatory authorities for from Something those products, under product et for

order So that as as manage we particular we those build day any in we in, just along the how product where day we multiple dimensions and out. are move decide

for the you you. updates, Thank helpful. That’s Okay. of all both

Kyle. you, Thank

you. Thank

Your next Jackson from [Benchmark Company]. question is coming Bruce

line Your is live.

you how lines the we the margins, course be will margin Thank And you profile impact there manufacturing do gross the back any gross the margins? the could unfolding question. for gross my to the increased taking year? If of automation on and go a over automated have see

question. for thanks Bruce So the

guidance to numbers. any as relates We’re specific not providing it forward-looking

provide We relative lines on margin the have described that production. in to benefit automated manual past the standpoint the

average as have Of to well. end selling course, the ultimately volume mix where significant will margins overall out we that and up. are shake a contribution where impact factors the prices those And

some half somewhat put Can us that a we might and we’re of rough estimate? that that help nine a Waiver? process it’s that maybe how a year, great. talking to for but And Waiver you back idea time I take? HIV-Syphilis getting CLIA know then give Can test. months, you the a maybe FDA are long the and the getting unpredictable, around Okay, before CLIA us just dealing year the like with

time to review it be that additional The Yes, does But for any terms does include, answered of our process. Bruce. questions response time Waiver to to and/or the not CLIA Waiver submission. CLIA in where a the have statutory there’s a specific request

CLIA the what when a this CLIA Because statutory uncertain like why can’t submissions. FDA point. But we before, Waiver that’s response on providing So receive at not guidance some timing. we’re time are point predict, process to we little that timing And the Waiver, that under in for going we’ll at provide is any is like information. and we why review I look said

Fair last question, you’ve several Anything companion of ongoing then the diagnostics programs? news got area. And Okay. enough. those report on programs in any

Yes. that any that on work of We We ongoing some to don’t any do that you news do report about revenue? at talk have want have point. area. more this out to in break Neil,

sure. Yes,

the the of programs – breakout as versus the between can government on statements. base see programs I income shared revenue actually from those you So the the

coming. where So that’s can see you

described MD&A to be about Rick we as read you’ll as later the addition talk that in and that able evening. this In

part Rick the our – here theme portfolio. is about of our focus products talked which that and our the as developing focus, think maybe the on have We is launching I and

the call have in that the interest very development. and the as And with away shifting and it we’re the the and capabilities that timeline all commercialization in towards of product time, see provided We the them. those they controlling develop outsourced associated The and much areas same were many over work did our substantial at highest were best the validation controlling exactly platform to unquestionably successful. for that is people – controlling respects inbound products, very we are doing we’re R&D from use we I’ll where we’re

very Thank right. you All much.

Thank you, Bruce.

questions Thank no further you. the queue in There at are this time.

Okay.

We up attention future updates. everyone’s thank me wrap look a Have time good and to you evening. and today. for Let forward say

and ladies today’s conclude call. this you, gentlemen, conference does Thank

have day. participation. you You wonderful line may Thank disconnect a this your time your and at for