Chembio Diagnostics (CEMI) 9 May 212021 Q1 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Chembio Diagnostics First Quarter 2021 Earnings Conference Call and Webcast. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Brian Johnston. Sir, the floor is yours. Brian Johnston. Sir the floor is yours.

operator. you, Thank

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

the of with to you. afternoon representing respectively, decline XX% including our revenue made quarter repositioning. XX%, the a a total reviewing strategic forward first afternoon. call first we is thank Health BARDA, period. progress Panel question-and-answer million, Research part SARS-CoV-X of for session. development the the milestone of Development everyone. then strong I you clearance product Authority, million And Today, and for the total all revenue for and the Neil I development Thank quarter, of Antigen results and million, Department achieving the look to Good Respiratory year DPP of and prior will DPP and of applications the and growth and from the our and Biomedical rapid part XXX(k) resulted growth financial system. In as Authorization Advanced this generated test of Services, which for $X.X and issuance from compared point-of-care of open revenue conclude the $XX.X $X.X joining of will Human the for us performance detail With Emergency Use a award discussing receipt

the need demographically are product existing are to clinically. these due regionally, clinical path diagnostic built criteria to in repositioning will and meet We when disease later rapid I three, patient the these have potential profitability. secondly, technology we Combined, leveraging deliver other first, current test available products selling outcomes; and upon platforms or strategic the number is diagnosis average opportunities and impacts DPP that more and touch a on The criteria: joined to states new provide to on treatment launched and focused prices in detail our year three products higher that availability; last call. underserve that diagnostic Chembio performance or markets target

platforms. on test new We technology are focused on current our and solutions

globally and NGOs Our reference ministries including hospitals, of and to product portfolio marketed urgent physician care is outpatient acute centers offices, labs, health. clinics, care

and branded DPP globally. meaningful products as CHECK, SURE such STAT-PAK share Our have market secured

technologies products leveraging Going infrastructure. pursue our to and of will with commercial and external developed growing internally on intent opportunities forward, novel the focus products we license

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of compared accurately for fit Reader applicable, with platforms information platform specific test lives. that care Chembio's is health delivering or advanced easy-to-use of interest because from two As DPP of system tests. business at decentralized patient reduced Overall, on the test test their can human core providers are be for patients use results our is through why different DPP the remain of limited many roughly Where system single by that platform care. risk related extracted years, resulting focused target some another technology offers Our to we to and rapid Chembio. including treated prices drop periodically, biomarkers quickly example, single which the sometimes swabs. rapid the profitable tests and enable of for Micro needs only clinical leveraged by results is in results specimens in to saving NGO to DPP of XX and capabilities. Chembio's tests for the DPP's of present portable platform, highly fingertip which suited tests seconds. Most we to one required sample. occur that on The average rapid less objective The results through seeing being various is real-time where diagnostic are results that? is such XX support within prove fever to outside minutes detection have grants that These delivers activity other Reader of prior DPP diseases in develop a do can that or U.S. content sponsorship are States, tropical a delivered one on diseases influenced HIV-Syphilis versatile the different like an revenue the differentiated government of to testing actionable manufacturer enough were the XX do well diagnostic Chembio up a How DPP streams. easy-to-collect rapid is highly-precise early different under test sites rapidly DPP nasal detecting purposes. targeted unique the legacy and can United multiplexing, recur eight capable while in the blood other consistent like technology, treat value analysis to commercial results at The ones Micro using these markets, support tests. In patients a sustained the form selling that focused not error, visual site. In assays

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of enable our our increasing the execution product meaningful and commercial customer synergies to scale U.S. being with expanded and We're Both starting DPP beginning spearheaded test. our they two new traction efficiently. COVID-XX/Flu us should diversity to are Our alike, and adoption to A&B following the attractive Status the see customer system by EUA-approved HIV-Syphilis is product in-licensed system footprint of point-of-care and represent are to frequency additions see within the COVID-XX/Flu of opportunity to distributors test. new customer an our portfolio: customers A&B and The HIV-Syphilis distribution strategy newest and acquisition. and DPP growth market our U.S. rapid, reach portfolio a is Status

planned other for reminder, overlapping the Respiratory products. our we a our Respiratory test capitalize COVID-XX/Flu available distributing organization decentralized is U.S. our and tests is HIV our the currently DPP being and demand commercial sold on product expanded It point-of-care Panel development. across under Panel leverage A&B As system and while to same markets Status are COVID-XX

a quarter U.S. lesser and in product East. Latin impacted benefited revenue the was Europe America, to in extent, but declines Asia, growth from the First Middle by in Africa, and,

the of Given and its the the management decreased. demand our products dynamic for legacy Brazil, state in pandemic

to from biopharmaceuticals the diagnostics meet ANVISA, focused of for Cruz a our public the Oswaldo is the agency we development pharmacy Brazil's with Brazil for both markets that long-standing for approval Recently, which health the production on system of Bio-Manguinhos, regulatory private, and state received national are the in DPP SARS-CoV-X is Bio-Manguinhos in Brazil's several and to being We subsidiary with system. country Antigen for subsidiary test responsible regulatory pursued health our opportunities the demand collaboration federal Foundation and in vaccines, primarily by and partner, market.

A&B and XXXX. XXXX commercial qualitatively PMA-approved sensitivity finger-stick is were back at to blood ongoing approval; DPP and work, a increasingly significantly FDA making a to test. in syphilis commercialization clearance to the and our that infections. the XXX% test with risen Requiring has United testing for efforts COVID-XX/Flu specificity potential Status customer XX for promote and is single DPP for found primary our in from first COVID-XX States Antigen awarded achieve base waiver just detect PMA rapid the secondary to HIV in to product test; both panel; COVID-XX the capable have approval DPP test market HIV-Syphilis of U.S.-approved the of level syphilis sample, both test test it already-underway CDC HIV-Syphilis the risen the: the in EUA minutes, test. important United the a that States pursue supported the Our have of and Antigen to XXXX. BARDA, will only Respiratory drive the by the of for strategy Access high this We expand becoming as DPP Starting is half able XXXX XXX(k) detecting and infections that syphilis FDA subsequently, Panel complete

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patients this, to to In active are when addition addition times with to this, infections with exposed. more active syphilis five contract likely to syphilis patients HIV infections In two

As clear testing we critically have U.S. test HIV-Syphilis previously the a our expanding reimbursement take step into market. first mentioned, which market in to and dual HIV is share waiver we well-defined for testing CPT pursuing allowing in traditional under locations, HIV our would has codes. currently us The differentiated are be the test, DPP

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in titled public departments STD resonating Syphilis in impacts downstream and the care national United We across especially markets. our to promote Coalition for using From based the Based of DPP HIV health The the system on partners "Fighting interest clinics Excitement Directors care need system by Voices is CLIA-waived distribution decentralized Later been across with health infections. have country. launched to share small- this leaders National experiences clinics, this pilot encouraging. for clinics marketing rapid of HIV-Syphilis and and of product departments their product departments, of programs supply manage programs a public product health OB/GYN and has hospitals. urgent HIV-Syphilis Planned hosting XX high presentations nearly with that May, medium-sized state test on States Parenthoods, the is the with webinar a DPP regularly Field", with is health Epidemics, The will our these who preliminary conversations, the at

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expanded convenient HIV WHO recommended is a self-testing to people test XXXX, with we in I including confidential position people. this who users WHO CHECK's CHECK's to features the standard self-tests for performance the option command financial beginning XXXX. reach now reported for the of people to benefits facility-based CHECK that, not way may this can as average are those prequalification of accurate, on product showed SURE and to in higher STAT-PAK returns approval and report HIV of improved Because testing." to international is with and from unique described, self-testing comparable to selling margins the and of in market We testing, that HIV promotion and SURE November adoption. to the men SURE marketing obtained price HIV achieve SURE that from and regulatory beginning safe, the ability of transitioning HIV Now controlled randomized HIV WHO workers. began see that in initiative I'm movement HIV HIV perform test WHO's ex-U.S. an HIV a CHECK and XXXX, In trained reliably HIV opportunity populations, trials the form market. increases that key in testing, to work care of times compared and of self-testing, young a health pleased uptake self-test two we business. otherwise, our Many and resulting that our benefits In three to "XX markets. Based accurately generate enhanced

countries of received purchase SURE We initial have completed registrations the in in Africa, Southeast quarters and and self-test shipments CHECK Asia in multiple orders HIV for for third in second XXXX. of

on for COVID-XX COVID-XX health valuable test our a portfolio, three test, of but systems to ability test. said results between antibody of a perfect and test now why test Status Turning for for days also which infection patient made the patients spread to clinician's a rapid often includes which quickly produced. the the This are testing testing is not virus. of to while is lab-based the example PCR crucial central labs, COVID-XX tests, products: A&B and diagnostic status are patient take the that at decisions is those In can close risk. COVID-XX site. and their a for A run be the antigen place controlling contacts administer of testing infected lag medical at diagnosis the determine COVID-XX/Flu only and is contrast,

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across Status future tests test described the as other COVID-XX will the be I decentralized earlier, markets HIV products. As and our sold overlapping

of test, customer together both Status with diversity In and the addition, approval a the able a we for disease rear pending needs the for and to of EUA states. will solution non-rear-based Respiratory offer Panel, wide be the COVID-XX combined DPP flu

which we've Panel. both our the will for Antigen As test two SARS-CoV-X we and previously regulatory system, submissions and Antigen development Respiratory outlined, to test received have our DPP BARDA as of awards from refer the we DPP COVID-XX

authorization test. and The for development first antigen the receipt EUA was the $XXX,XXX roughly of for award for COVID-XX

that in approximately management suspected enable Reader respiratory be XX Chembio's the COVID-XX cases season. conserving the containment infections patients of for during limit Micro scarce to Disease The U.S. health testing The and million is Control intended DPP is the discrete of system as well the and for A, of receipt as the the COVID-XX influenza DPP simultaneous, provide a influenza B system minutes authorization to The recognized of SARS-CoV-X for antigen while and for EUA antigens The clinical expected Prevention three DPP contemporaneous is to specimen, with or the second resources. to appropriate It for Centers and swab. flu $XX.X in such assist XXX(k) analyzer. Respiratory of for test Panel. on and nasal Panel of a run award help information nasopharyngeal approval officials with will patient Respiratory single totals up public and spread intended receipt viruses respiratory as the test results has a to from provide viruses provide differential detection development

collaborative Recall our and and from we invaluable, process. earnings quarterly for support Our EUA EUA goals look been for thoughtful our submitted relationship DPP include: continued our XXX(k) clearance approval partnership forward year the CLIA this test; throughout the Panel; Their and HIV-Syphilis for securing Respiratory organizations. to last advice and between call, has Antigen with approval regulatory BARDA for for COVID-XX the has and authorization achieving the file DPP the test. DPP Waiver been

dynamic Respiratory submission change. top of regulatory the Achieving we our the COVID-XX and remains test laser-focused under FDA. are was the The subject EUA remain previous prioritized by COVID-XX to test awards Panel Our the a not approvals DPP and for and Antigen Antigen priority COVID-XX review BARDA for them. environment on Antigen

We are the achieve required capabilities confident that we possess to EUA. the technical

shared given regarding the be uncertainty last the will during status process. call, processes, estimated updates we or any the I lines earnings our EUA not providing As regarding time

Our further work anticipation trials, considered support obtain in point-of-care standard in approval XXX(k) market. to testing fund COVID-XX Antigen is regulatory becomes the of used BARDA's evidences test, commitments no longer and respiratory emergency an to permanent to diagnostics. for COVID-XX clearance long-term our when clinical is the with upper test the This a

United the the there in and programs, subsidiary approved Brazil in as States, yet by partner Bio-Manguinhos. our for our in ANVISA XXXX federal received our Antigen for EU through in wholly-owned COVID-XX approval CE in distribution not While Mark Brazil long-term distribution January for well test as

we have elsewhere As highlighted to South America on these relationships capitalize seeking Europe, new with previously, and we build approvals. across are to fully distributors

created to benefiting pressure. Mark, The government our pricing competitors the in I wrap from been has which dynamics selling being reiterating team to – expand year-end FDA self-certification not areas we that to with my select relationships. high-volume the about from are the team attractive cases, supply continue by with combined for what relevant. shots because varying has in opportunities during distributor comments has of continuing are Average has about large adoption, trend call foreign while will possible vaccine manufacturers. subsidies, across up of future needs In prices markets, thoughts of to and shared That, looks they Our market given I XXXX current United very lower-quality, for rates booster evaluated flooded what are us is and are and with in future the many plans the working COVID-XX like, many our market be testing that Europe. identify process, market the the with different the testing our States. written Europe. of downward overall demand opened programs CE mechanism Much

said point-of-care haul. I Chembio before, for to as So long the testing business committed the broader is

Waiver complete Our is A, portfolio COVID-XX/Flu product the BARDA ongoing strategy on test; COVID-XX PMA-approved Panel Status DPP the Flu dedicated and the DPP for Respiratory and work test. distribute test; to B HIV-Syphilis our the CLIA with pursue Antigen

is an trials test patient test routine longer and emergency the we in emergency Antigen to providing why from funded our COVID-XX is and on a approval, when a achieve market a used United clearance the illustrates and positioning complete regulatory permanent upper COVID-XX respiratory becomes States. That standard strategy discussed, XXX(k) beyond care no to BARDA diagnostics. by As are focused transition use channel in clinical

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

Thanks, Rick.

first to million three continued the March the COVID-XX $X.X the to program to certain product are the products prior under of R&D year – performance which revenue we do XXXX months XX% and and XX, was revenues achieving developing ended first Government months the expenses. income XX, the compared related total year the government Gross of million, to increase this million BARDA, of grant $X.X was prior compared ended me, million. compared our offering quarter a during grant margins but months period. and period. bringing income, to the R&D Both $X.X to by XXXX, revenues Product revenue the prior declined March quarter year of of for $X.X government XX% for license million our XX, For growth under Of grant March $X.X compared representing XXXX the the during timing million, in combined XXXX to of to year not $X program XXXX three this to first incur revenue of always the invest first address period. continue a with royalty we million, were excuse $X.X obligations, three XXX% XXXX and decrease prior and quarter to an income pandemic. to program quarter Prior by million milestones of in was period cadence $XX.X approximately certain cumulative the earned the period. occur ended

decrease reliance implement product unfavorable mix fixed impact product and an of continued to improve to automation order reduce also margin due gross sales and was product million margin manufacturing overhead our manual labor product in volume. on unfavorable in $X.X our manufacturing margins. of percentage The the and comprised geographic to We product

have manufacturing past is entirety the based we the in automate process, our to Over of year, been the steps which taking U.S. now test

shareholder Our we general which was expenses U.S. pursuant increased improve add margins doing costs SARS-CoV-X lower principally Rick than second, internal to services R&D on for related XX, period. litigation commercial system team. increased and that expanded and head December EUA to primarily Selling, increased compensation DPP first, believe the loss cost reflected and $X.X test it count, our administrative was including for increased Panel, audit costs, that EUA for XXXX million $X.X for DPP of March and pursuing as capacity, product $X.X million in prior XXXX. so each and goal in from awards is and to variable the by months Antigen million, BARDA $X.XX reduce costs which services; or fees areas: for in three the legal by XX, will described. share, relating in related it per XX, XXXX XXX(k) $X.X net the Net diluted Respiratory the Antigen March or a diluted share per of million to $X.XX ended compared loss was year two to

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

cost months on the $X we million XX, March basis. an ended During executed XXXX, savings approximately changes of three representing annualized

adjusted now increase uses concluding in remarks. million and by receivable, EUA time chain previously primarily cash offset not inventory following of lines, Those cash payable a back $X.X loss decrease for million supply will noncash $X.X million the approvals; XXXX of turn net call and and of materials $X in for a a be other to XX, COVID-XX the part but deposits March assets. during of $X.X for the of deferred systems I in in canceled could FDA to million used the a an disclosed decrease revenue. were anticipation months items million $X.X ordered revocation operations in decrease million; in regulatory ended accounts combined accounts the to that Our from accrued other due liabilities; including related were $X.X and Rick three

we that the in diagnostic point-of-care that up, Thank the is on market testing Neil. Chembio believe last share based year. take to To repositioning you, wrap launched positioned strategic we

deliver additional that We will in average operational provide higher we will development first potential on continue the platforms applying of In profitability. test the and made for progress and that an company DPP of to future other benefit initiatives menu with position have markets product path our prices quarter XXXX, a the product technology leveraging and to selling the commercial, success.

We our believe growing expand our which are testing highly its to lead across testing confident in menu, decentralized adoption will we to ability and health care platform markets. DPP

remain customer excellence. operational Looking profitable to we and focusing leveraging expansion expanded delivering growing through and growth manufacturing while on team by committed our gross commercial also margin forward, base automation

regulatory priorities, quarterly and previous Finally, call, achievement as during on lines commentary providing submissions, any I the we continuously resubmissions. shared the will the or not process given time or changing guidance be of uncertainty any of

will forward visibility updates to that, we We Thank you. have call more this providing into up operator, matter. open to With look the questions. please when

Thank question you. coming line from And first Per, is Ostlund today Instructions] live. Per Craig-Hallum. your is [Operator from the

question. your ask may You

Great. afternoon, Thank to Neil. you. a product start specifically. revenue out Good question Rick on and with want I

Brazil, So still antigen light forecast like than quarter unabated upfront. I of year. the late given quarter know a revenue third running I'll last seems was look others. especially kind and product was revenue, testing in little approval fourth figuring my to pandemic in stipulate probably I be that that of guess I little kind higher a could the ANVISA first of of the that bit product system But more

of of about Latin demand So lower what play if that resulted there kind might quarter. market have talk you in be at here just curious America to dynamics out this might able and be the back circle

We Per. market the Obviously, have we question. Brazil very, strategic Yes, actually on. you following initiatives in a dynamics are Thank going for of the number you. very closely. Thank

closely us I with our to partner, think the for opportunity biggest work Bio-Manguinhos. to continue long-standing

relationship a with XX Certainly, we with the supplies approved basically very things with good Bio-Manguinhos, through work Brazil. care have had years federal get them. which to with to body in system and and with through organization back one of history Brazil the Our product diagnostics, dates in we their regulatory the ANVISA them was health the vaccines

in supporting effort some So have for been that we and working them time.

approval We've been with in of leading the that we to we're what up as this with the of just the approval So recent as test DPP a number needs know, for you are closely very, to ANVISA working product. dialogue for year. Bio-Manguinhos' so them months very balance of today released their ANVISA a monitor

So hospital Brazil partner that Bio-Manguinhos. at clinical markets, At our have them as as the retail the that we're that over-the-counter with engaged federal very we and market services we local through are state level, well in and the distribution closely pharmacy. approaching

support we we and commercial distribution the we're in Brazil, able a beginning launched strategy Brazil. our through test then strategy. pharmacy that And have in be over-the-counter broader So some for to and movement infrastructure DPP to antigen traction are finally, see in market to Brazil particular expanding the

As you with states. Brazil's country a many, huge know, many

providers. in we're to sub-distributors care health that dialogue so country some our upwards access with And into get XX product of local and the in potential states out to XX partners have the distribution to various

So number little in in very, have Brazil. we're strategy are high. the and tests with a early problem the COVID Certainly, a of cases massive they with very

chaotic response a bit what little Brazil. We of have would pandemic seen a I in little to the bit characterize as a of

to doing so we're very we're staying ready when support. move, close to they're what to So is there very, Bio-Manguinhos,

for it sustainable And follow-up side that, quarters, in the Thank relatively priority been isn't situation of margin the out that I'll the you and Where a can low-teens ASPs? business Obviously, a returns there to commanding tests pivot that and assume and more margin and P&L of margin a That’s much Okay. go helpful. product how last versus question of think and amount multi-analyte on I substantial pool I my single-digit of some year high are could XX% higher of the puts that a is like Rick. you, and you be that just business today? fair getting the there's U.S. guess, out coming do that. product in the more has know forever. far how substantial given But recent simply inefficiencies I today? to go, takes revocation you And equation.

So provide that Per, his I'll take at additional then a and shot let I'll input. Neil

and how focused the I XX% with have higher in margins. remarks can leadership not and of getting QX team margin products my markets in that am You just terms senior in here is from probably is acceptable. revenue growth prepared The gross tell

get about the average CPT selling very much codes you two United is talked terms lot the HIV-Syphilis. of team as that price We've the focused driving product higher for so in a And in States reimbursement. on

by priority we their is team, number margins. in our America, Kenya States, like for HIV-Syphilis selling this extent, a much I a gross been by average because our product one our the higher. and Malaysia now the today, Outside little increasing initiative HIV much, a self-test going margins is right team, probably talked and prices certain U.S. to So CHECK three-year deliver international it's And countries mean, to United even South two- SURE underway to that's higher commercial the bit drives although about, but sales self-testing.

product from and changing away this in This so you play mix what QX. our about changing mix. is our out getting about saw is And geographic

obviously, selling the of so today prices. and lot higher U.S. a our market Antigen COVID because Panel we talked into getting And the average about Respiratory

the COVID is I about manufacturers, they're Indian products pressures seeing talking think price for of flood the ex from everyone U.S. foreign in coming manufacturers.

governments and you tests the prices to that see COVID the within for, – high so $X range. are And paying of volume $X very

doesn't that gross the solve problem. So margin

senior Neil, very and time. product of that the price overnight we're and outside got what commitment to Neil what change to have market focused team change and U.S. Chembio and average And States with at U.S. to the United we have going mix going Per, that. market the we to geographic question, selling higher you've on, to anything and me mix your happen over It's selling opportunities. but not the we're the add? leadership selling in the So answer

dimension prices. are I a Rick. one. though, number three really that's only summary, selling The and other Number average would think number good that I two Yes, reference,

puzzle that can volume the that be The gives of on volume. as overhead to we're is focused average the to of volumes driving to able benefits is operations other automated And selling piece course, a that similarly a of times we're – allocate And the the through manner the our the price, price is favorable. impact in driving and facility achieve volume to driving achieve well. certainly revenue, that you can

benefits. heard the made mention, you changes seeing me already and are As we've

in it very described means where is sequential it very, numbers, they focused that nevertheless but the are, this and progress see team. destination, good you we're don't by entire regard. that progress, the on as is And the totally You in no but is sequential

Very good. Thanks for the color both of you. Thanks.

you, Per. Thank

Bruce is from Benchmark you. Thank line is question The your Bruce, next Jackson coming live. from Company.

You may ask question. your

Thank afternoon. you Good my questions. taking for

to to maybe tests you'd through Waiver that CLIA and Waiver, us HIV-Syphilis and process. get the go are the major CLIA remind With could combo just you steps that have you in the where

Yes, Bruce. that Thank call Waiver, – year-end that the we after you think for in CLIA disclosed submitted the we approval. PMA QX question. earnings I The the shortly

time to does So questions terms statutory statutory need process, they review with the how Waiver get lines publish so a their they quickly clarify is forth of the how and might application. CLIA FDA in back the the that so application, to quickly

the a not are even that a the estimating timing CLIA we FDA's frame out, because process. – So statutory given approval, on the can time for though there's Waiver process stretch

guidance will in providing we we point, submitted that or than application we review be timing, and to cycle. statutory say, So at any are this not other the

Okay.

process. your that do end everything part done were we're the the discussion and Is to a you've you characterization? then, supposed that on of iterative into now paraphrase to So fair

during Yes, and they it it Bruce, get we them. back questions And questions, process, review have ask us because to answer all forth answered. that iterative. their fair statutory If have they and is until they that's questions goes

that's process. a So of the description fair

our Rick of some HIV-Syphilis is as priority States with is back product. our that's what as partners. things as in that team, distribution United are are said about he moderately said commercial one refer Adding they directly There the number XX,XXX This well their the in while the that you labs on, to is I'll prepared the going complex targeting, to Neil. remarks both

as As around clinical we that can mentioned are today, in the registered is are Association lot they, Rick we release know know, as a with them marketing forward believe that and we've meet said, that programs I product that this co-sponsoring month we very webinar STD as differentiated launched looking the And because we of participants, to we've of the – Directors with that. you need. serious, a have as later need National the and well well

Okay. hop other queue. one in Then and question back I'll

you the So spending the from information BARDA on cumulative the provided contract.

contracts? at agreements can remind be major and valued there how that us much might potentially from other you the just you've be how with UNICEF, gained two out much got With those might those

This Yes, Rick. is Bruce, thanks.

description. milestone-driven. call, contract, year-end the out Neil it And BARDA started funding we QX in as revenue the With grouping the government in that as is mentioned

relative what to it contract. is visibility So the our into some BARDA gives income government you

break UNICEF, so customer a by a that of that's terms In basis. per don't a customer revenue-generating we customer and out

to So Neil, that? anything add to

Yes.

right. So that's

may don't about for while remember it So UNICEF we negotiated a upfront break a basis, spring, we an payment on ago. customer just last that per that you program from year

revenue. deferred cash we product, the it not revenue, of And of of most that through in revenue. of side is sitting of deferred recognize necessarily other sheet that the is deferred revenue but So of deferred most shipments and sitting out revenue, it the on balance as all we recognize

we've to program. left that year. give those launched can – that QX this a shipments that run through were you sense what's said, under So And as of scheduled of we when

has they that UNICEF the then if wish? And Okay. to relationship ability extend

they Yes do.

you very Thank Okay. much.

Thank to The Bruce. funded the other addition program, products. about relates talk UNICEF is Bruce, only you, to program, for that keep mind is, in extending thing which let's two in for UNICEF as to benefit it everyone's that it multiplex briefly reason

by agencies are markets selling clinical UNICEF funding the sample. way, those this of the the and with in hope, by use world. the needed are mosquito markets the why see to for these in these was the that, the at extend to have is present three reason around earlier. and compelling And on their comments where the flu create address The very, also based how need all addition the those mentioned and and development from opportunities to because a favorable products. first important you results are And same and DPP diseases they that is program same the Zika/Dengue/Chikungunya second delivers they single cases very other life-threatening blood opportunities DPP a COVID, unlike symptoms that differences. but spread Rick’s the Zika/IgM/IgG And and, and six multiplex the funded donor product they not prices, treatments UNICEF And IgM/IgG product, they're the are would different is to that's average

you. Thank

Kyle question next Bauser questions. ask Colliers Your from you live, Kyle your coming Securities. your may is from line is

you Great, me and Rick hear Neil okay? you thank all the updates Can here. for

can fine we Kyle. you Yes, hear Thanks.

Great. Perfect.

XX in, to manufacturing How I automated next manufacturing look should like I lines? it be for the type? made from looks mean to each you in have saw hybrid automated a might additional investments and output think, come envision we there. XX So way, in goals the K. any I lines, product Or some will say, said something you've it the another do percent of manual operations always of months? what kind of

investments. capital spending question of of Yes, great that Kyle sort the higher I'll the level side have and that tackle the Neil address or of and the

last, three two. We with have made automation last I'd or two, year made the say, company tremendous months over progress, Kyle, investments the the over the

are fully was production So step operational. lines That the automated one.

completed. been that's So

automated on validate was part largely to And and on a depending that production and the for anticipated the our body products of FDA whether that's product change ANVISA the regulatory are or been products. in the world, those that then accomplished high-volume that approval. third WHO lines, it's that necessary, in or step approvals the depending certain on to is second The in regulatory get requires

down well path. that we're So

actually have automated well operational team organization the and the established be team. lines, our the X And greater manufacturing operation for line goal than of and COVID X this as – as We that for to are year. goal products we a has set line manufactured for XX% fully

of the We're organization driving So we're high focused automation. on achieving those levels by that. very

cost bodies a Of into plan taking of conversion process We'll process. lines. production a course, to We're and those few and extensive that also consideration automation the don't there's fairly fully move manual a lower-volume them keep manufacture involved volume, validation in to assess through the justify the under going to the really automated to require we'll products products that. some to have manually regulatory that continue because from manual

a be small production So, fully some move and of to to hopefully, over production as volume in of it's time, full automation. answer go automated question, going your we forward manual complete mix to

to want you that? anything to do add Neil, So,

of I to great other investments a relates the back of overview. I are of it half milestones our tied only Kyle, is their equipment. The part customized thing would the to performance question, the ongoing supplier your the to equipment of as think share that's sort the automated hitting

So those that's flow how along investments and always, the the measuring managing costs the accordingly. on flow, as and focused we're cash way. And

how in you Rick. XX that Got you months? trended coming about know kind you to trend changed the where commercial over how it. maybe I compared and appreciate can well. curious, about Kind head as has built can just it. That’s to helpful. the out how of imagine a talk you And operations, count then the past now ago? the I’m year are of talk I you But quarters it's

we head operations. will Yes. and based more Sure, the on production, of automate less that our any where is evaluate in need but One additional certainly that, to can we – count factors. Kyle. we head information continue is couple Neil will on count the manual the a manufacturing and dictate provide our

we manufacture. at the in continue million in million. impact in down number reductions QX. And trending keep think that move going trend will evaluate gave the head I made $X QX fair as so say we But count that that is and throughout to annualized that that look count. to year closely terms the of $X units we're certainly, head necessary sales make we And to down. that We'll it's Neil we volume the think of continue based decisions I of of to and on The

Thanks for my questions. and great. Okay, all for taking the updates

you, Thank Kyle

this time. And are questions at no there further queue in

your for thank evening. time time. for Okay. wish everyone and good again, And I you very Operator, a you today, thank the

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

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