Quotient (QTNTQ) 9 Aug 222023 Q1 Earnings call transcript

Greetings and welcome to the Quotient Limited First Quarter Fiscal Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host Mr. Officer Limited. Financial Chief Kiboro, of Quotient Ali Please, sir. go ahead,

update. morning, and you. as Quotient's business first Thank well to the results, quarter everybody, financial welcome Good XXXX fiscal as year

our Joining today Chief is me at live audio the www.quotientbd.com. replay an and through Manuel be conference today O. call broadcast Executive Today's will conference is Officer. call a of webcast Mendez, available later

development guidance and Quotient may will projected time events, results be and including projections statements. call statements, operating future as the this in such During and differ Because forward-looking expected commercialization lines. with those statements future to making forward-looking materially deal from results actual

concerning only no Exchange over call, release. The from Mendez. projections filings publicly I as in Chief date, to assumes Quotient information Quotient's With call to statements. valid morning's Additional the Commission, provided would Manuel cause Officer, in the Executive this August be Quotient's that differ those this and that, like as turn Securities US and during obligation as found actual these with materially of guidance well and forward-looking the XXXX today's results to forward-looking factors forward-looking could in are update O. statements including to X, statements, can

Thanks, the Ali, joining first and and for good update. for morning, everyone. quarter today results us Thank you business fiscal XXXX

provide priorities on we progress the update we to will in our an last had our since call, the earnings made fiscal I months During call today's have and XXXX. key

progress increasing the Since participating will our product, potential our Mark in then you by commercial network, growing have this MosaiQ CE made tenders for for maximizing the many we Immunohematology know, year of and earlier on this of awareness solution. microarray. received distribution we extended As

to MosaiQ to new are report all pleased R&D Pursuant US and these the Biomarkers the Serological costs Also, on have focused three microarrays. we development alliances potential autoimmune commercialization track initiative, new closest We with ones leveraging announced I of Screening filings to simultaneously and work am our clinical to our Disease microarray. with recently with and time our been to and for exploring extended are of immunohematology extended ways on Theradiag. microarrays. development and products. we platform new InfYnity alliances will products microarray, The diagnostic the We lower decrease we to microarray remain strategic commercialization. to market our disease this bring infectious enhance screening believe regulatory

continued activities our our we to just our advancements of addition, over XXXX. I in white since affairs Innovator's In expansion the with pleased scientific workflow a our forward last and and priorities studies key medical made I Circle, of have completion look papers. execution and with of ago the fiscal of in our am month Overall, call development progress

global distribution with commercial our commercial begin MosaiQ $X.X of and XXXX, the expanding MosaiQ's bookings footprint for CE fiscal immunohematology a revenue Let's focus generated team we our secured execution. on major solution. million to million review in In $X.X extended continues of The first Marked geographies. quarter across recently in

enthusiastic. cases month Switzerland in agreements countries our at over shared XX with held XX use first We from we meeting. MosaiQ. XX different annual practices for meeting was Participants network and distributor best last have distributor headquarters clinical signed and hosted participants The our who were

collaboration. like solution. is ease the our for experience system's and forward her participants, told us, she MosaiQ of the is Tereza participants. with MosaiQ from thank Marsic I'd impressed use the all to customers look excited and she of other to One to Tereza Croatia continued We

opportunities. European our immunohematology to Turning tender donor

the tenders months. XX XX and participate actively expected over in prepare to next continue for the immunohematology European We

for track extended transfusion microarray, pipeline. year our FDA diagnostics immunohematology US on end. is to submission The Turning by

extended the of development the in progress Screening Serological make microarray panel. Disease to continue We

We are expected in commercial launch XXXX. for track, year on an calendar

expands further infectious Biomarkers, has immunoassay about announced the proven our Antigen InfYnity collaboration partnership. also Antibodies partnership the opportunity on network serves Theradiag technical and innovation expertise Extractable and the Nuclear to We're and are of SDS disease MosaiQ recently seeing enrich confirmed MosaiQ benefits collaboration, Biomarkers, microarray. pleased commercialization. time development diagnostics our we line. allowing with with in menu an clinical clinical to infectious this cost as and excited has diagnostics to us disease it early as InfYnity the Our reduce are we the feasibility The accelerate ENA from team time

$X.X commercialization and the the development of this Anti-Nuclear us diseases connected make include to development. ANA. market Antibodies which eventual confident clinical our continued in are of Like tissue This will collaboration, progress, with access the panel, the diagnostics us We into cost panel provide of to ENA our entry the commercialization segment. autoimmune billion, accelerate to part to allows partnership and and time InfYnity reduce will

the scientific affairs medical on you update activities. to like would and I Next,

members, the de this in add Innovator's now We total the the three Hemodonación quarter We Castilla de Centro during to recently MosaiQ are most y a Spain, initiative. initiative. members, very on Circle joined XX have Hemoterapia of pleased León y

reminder, focus clinical generation improve efficiencies. create partners and of with Member a to of create the goal community the transfusion care evidence Quotient, Innovator's world, As laboratory to innovation experts and on and is across to who patient institutions Circle the diagnostics. a and medicine

are analysis and and the we effectiveness underline pleased announce, motion we current analyses will which the and Lastly, at studies, of These future have MosaiQ include time efficiency expect we multiple to flow solution. sites. completed

We papers submit expect to this for later publication year.

to as and executed teams our help and Steven experience business to Strategy team several collaborative institutions energy and East Global Development financial to Xst, and Boston develop expansion, post-merger Steven at Prior precision business. Officer. turnarounds. Vice market company, our Steven. Quotient Prior the global Middle broaden Steven great Steven July and Chief build growth, continuing Zuiderwijk, joining corporate Execution Group and strategic We team partnerships. in integrations for Philips, diagnostic are led served role drive Philips, strategies and and of in to experienced Business Business joined commercial to leading on across leading portfolio of Consulting the Welcome, access Development and Europe, executive President brings BCG, management an Strategy

Finally requirements on negatively system. the environment. the we qualify, validating, went for were environmental reflecting ISO manufacturing front, series Quotient to microarray a we affect operations external awarded operations facility. certification XXXXX of organizations, management certification, our meet exists This MosaiQ the audits help minimize To through

turn Ali, details Ali? me to call our financial let for on Now, more results. the

$X.X from first year Sales X.X% a first Alba OEM mainly sales The first the ordering year's down change in Thank year-over-year. Fiscal quarter X% you, XXXX, from sales reagent of $X.X million Manuel. fiscal the last million, generated quarter. quarter product of of a decrease were of by one the quarter decreased our products in in of customer. due an cycle business to

year has normalize were for XX, an in of $X.X for operating driven products million this had at by sales $XX was end. the costs CE to inventory of stock The gain compared the XXXX, quarter, other expenses quarter. roughly million of increase $X fiscal prior with XX% Suisse net trials million prior MosaiQ. to a million MosaiQ $X.X first foreign the The activities $XX.X $X.X Sales quarter on clinical increase the raw in expect the the $X.X first and were in to reported gross fiscal benefit the quarter. for fund, prior development to in This field in-process quarter write-offs as costs compared an we $XX.X up loss year-over-year. quarter, assets the sales product million we increase the The million quarter derivative and an gross $X.XX senior representing expenses the or X% fiscal gross planned in shelf million first offset in first primarily year. loss was of In for The in the royalty due the by to liabilities XX% lower our legal sales by loss costs diagnostics. the in expenses in headwind year. combination by the gross X% -- to change interest first per ramped realizable past million currencies of Adjusting upcoming first first and items primarily primarily increase $X.X expenses in write-downs costs. the and a compared share a debt year-over-year year. quarter in to decrease quarter. in margins liabilities, is costs million XX% prior the million of value marketing is million The MosaiQ used costs general first a the compared margins quarter over marketing and last life, fair for issued year to by incurred million launch the the in end and The for million compared the In Manuel and year. recorded $XX.X FX support of other the additional our compared pattern discussed, we denominated of of current May quarter, costs of was first primarily first same XXXX. with is driven for quarter, utilities $X.XX was year's Sales $XX.X margins for to last products product. modification, impairment quarter share of compared Net see on an $X.X secured value sales margins. year. increased its or costs logistics the we June materials logistics million year. and ordering activities was operating cost the year between and QX the believe million fiscal associated million quarter commercial the development estimate to by million quarter production million, transfusion expenses ordering Net first increased development been We period. and is of $XX.X in quarter to including the changed, the is cash in Research XXXX, our first $X.X notes supply to $X.X isolated increase we approval. million ended convertible million increase in of the would as the year administrative quarter of driven to MosaiQ increased Mark in increase to by product and per is in increase customer's of this increase for immunohematology not million gross so for pattern have chain were and $X.X in first $XX.X Operating UPS an post or $X.X margins a quarter. on totaled a for in in single In write-offs, were This This production the last the attributable and and XXXX. $XX.X including Net the of driven research of a in XX% prior in $XX.X Credit our in X% $XX.X

may cash other million recall, higher a XXXX quarters renewal Of you paid quarter. premiums. Of operating our on and annual these million, annual annual Normalizing due first million to million for cash $XX.X fiscal annual out pertains than insurance remaining is our $X.X operating debt. incentive As interest in during little our outstanding flow operating million the items pertains costs, the the cash quarter $XX month $XX.X to to over in semiannual underlying per of the plan QX. our was or $X employee

company. on to the engaged We actively continue aspects for and all spend vigilant of remain headcount

recoveries. cash and million Suisse million million Credit litigation $XX.X the first the chain by will balance $XX.X In in and impairment an Suisse updated Suisse of cash, in of Moving relates investments required sheet. cash to further million costs equivalents as investments June of of Credit XX, XXXX Credit be compared $XX.X which deducted supply XXXX. held investor we funds. a to future projected to the estimate $XX.X XX, March Available was determined communicated from as was million quarter Of $X investments related to

year Our XX, June total XXXX fiscal This guidance. morning, XXXX our debt as $XXX.X was million. we of confirming are

sales $XX million We current the year $XX million. will total in the of fiscal expect in to range be

fiscal for to XXXX $XX $X be the of million to expenditures capital expect million. range in We year

$X.X cash Manuel. Finally, operations million back XXXX be expenditures. range for in million year me costs that, of debt the fiscal excluding per And and for we used capital with service to expect now will $X.X to turn the let call month

key our pleased for priorities the am making are I we Ali. you, Thank progress with fiscal on XXXX.

expand our We number growing our MosaiQ steadily through have of globally. vision conversations to of commercial awareness strategic further in network validated and active activities. partners solution We're increasing distributor our are our distributor and the

into and Our quarters. the new base are to installed in distributors production poised territories geographical broadening up new our we ramp coming are

Turning to tender our donor opportunities. European immunohematology

We actively the decisions we final in tender in expected to immunohematology tenders months. outcomes. communicating to European look continue When participate the next XX successful forward are XX made,

progress, microarray end US continues in and the for commercial as extended transfusion to we microarray panel by on extended Our EU pipeline submitting year immunohematology to bringing diagnostics XXXX. launch approval the SDS an calendar year focus

scientific will year. microarray presenting Extended annual of at the immunohematology donor be on meeting performance this our medical CE team and Mark October affairs Next in AABB data MosaiQ

accelerate of time to diagnostics, energized our cost Regarding successful our we and Theradiag partners MosaiQ with are our by market to reduce clinical platform. collaboration our innovative

agreements communicating further will other collaboration partnerships R&D strengthen We our to and be pipeline.

our like past their for quarter. Finally, this contribution teams thank I would global to

team all look our whole our Thank their on commitments now and to questions. on you forward your today to laser-focused stakeholders needs. to taking time customers Our delivering meet is and for we to your empower

you. will time, Instructions] Thank conducting question-and-answer [Operator Thank we a be you. At this session.

of Our Jennings your with from Cowen. from proceed Please Josh the first question line question. comes

the to the on and development gentlemen of to track thank Good team with US just is just moving the where was field the Hi. around is by your But completed the US FDA think, is in expanding understand of June it year. questions. mean, morning, to wanted hear or the you of I of into with I start to the wanted were more end some color great performance the for be just you specificities. the process in that -- better submit on that number some you're there specificities you're improving terms months? on And the trials the send coming that gave taking I done, call that to work and you in progress. in right earnings

Thanks, you. for Josh Thanks and from good hear to question. the

that protocols that and pre-FDA. our to have I'm completed. also say clinical actually the We verification with look we happy process the validation So made is development completed drive

clinical our the are up OQs So Currently, qualification working live trial. the in the sites as the with conversation is FDA and start which IQs, and are a teams with process going. we

as we're perform then and with yes, end. the we're previously in we by very we're communicated shape have So, good year excited progress to making -- submission

very a for it's exciting So time us.

you the specificities… And terms share on Okay. anything Manuel can in just of some increased performance on

Yeah.

evaluated …where the menu trials? going to field in US of the be the build-out that is

Yes.

we performance and the some teams most will three incredible. later So ready the points then previously of to had bring for you time fact sites is a of we Mark completion in and clinical also then exciting the data trials EU. that that beyond we to FDA. different ones specificities the the we've is that clinical and better for then the the us again very successful certainly will mean are what are on say US EU the good we product, I'm to be back the the lots some that can the a XXX% had that to the the solid or then CE everything and back ones approvals including And if enter like. are bringing with and other market trials completed as is the we've submission thing ready the additional our mean share I required in in market. current back the performance as into have one-on-one later added which happy communicated But gaining which is which specificities of additional expect we'll data I that would we that I

for FDA I meeting good agreed think clinical the forward. the us outcome and completed really to key verification they pre-submission pre-FDA all for which us we a validation the was this protocols. going trial get with and That's have did confirmed and and

again about and expect process expedite excited that part that. we as of So, approval

if one and for you and contribution just on guys lead Excellent. other potentially share was balance could Theradiag have some the sheet channels it. that question. you with wondering front? to InfYnity. some Thanks discussions there active taking are Appreciate whether partnership on they success could with I non-dilutive capital last that any And the just had any follow-up partnerships to

Yes.

So, the question. I think for -- -- the that's thanks

So, regarding really R&D it's the the the partnerships working communicated partnerships are it's working faster save we InfYnity, saving about towards more -- because costs I commercialization think other the and Theradiag that development much and quickly. and then we've time really

capabilities of able have ongoing. strategic to type the aspects of with that some communicated gain one or markets of be past we're then evaluating the terms or specific terms like Ortho, access of In in either collaborations that's in collaborations other to we

to and speak the We we as in and have months we great explore come. will conversations some continue weeks those next to

have as soon be or R&D markets months of next capabilities we'll around on and it's whether or or agreements to collaborations type we come. communicating on relationships investments, partnerships the in as our other So, place, other in these collaborations weeks those then

again. Thanks

Thank you.

you. Thank

Our next Jefferies. with the of question. Couillard proceed from your comes question Brandon line Please with

morning. Good thanks. Hey

of And systems far. Stratec of you're inventory? curious and how I'm on initial you what to curious quarter getting levels I'd like? Do those of got the And reach of end hear still kind channels per of with or partners kind Just month kind stocking from so XX you inbound Are per the look next? a be to question many just year? the by kind distributor expect you've what XX happens

to Good Yes, thanks from Brandon. you. hear

going conversations well. So, the distribution extremely are

exceed that achieve and to against to I this XX able ability goal communicated XX. I but shown think end, already our by that. with guys you think goal, that. milestone that to is our be I is execute our success the not think in to that have quicker year this and we're we've And We strategic we've in -- to target probably than much going

In to to some have not of of us commitments distributor terms in expect what accounts. into necessarily terms we relationships there these but customer on -- that are minimum to go market for into revenue means opportunities, stock to that

ongoing. that's So,

putting those. then a to we're level conversions again that with accounts. There be in tied that's standpoint. these So, Circle. also will some be And timing of some of evaluations of customers working start occurs Innovator's then of the through determined from can up customer we some That's sort going

in As Spain Two that and additional release folks. the who Niederhauser, successfully site remarks high-hitters in able you Centro press my our are signed Advisory he's basically Board. actually, our been them has Bern de Swiss in Innovator's matter for Europe, and also also main the to saw suisse who Castilla really León Croix-Rouge Scientific y in center we've transfusion the enlist which up in Dr. y is Cross, Circle, of that as Hemodonación Hemoterapia de Red Christoph fact a a of joined also

think I going are distributor of these it's the meet the and we distributor Innovator's expectations of in the activities the be, that all the So creating for Circle the to whether sites that some to evaluations half second we this have momentum activities, year. these place, believe things then

the to for rate? of XXX continue had maybe or then, expect it those mentioned few pick basis or the then the just be point we into And quarters margin Thanks. Okay. Should is larger on small line, trickle headwind. where had it to that logistics XXX inventory I in to production here, in on And expect one sort costs, Ali, line? from Should some run and we up a write-offs. cost you've you've here question gross think you

Thanks.

that things, said, launch the our imagine yeah, of to gross line. the So, -- starting we closer already margin Part the you we as going through of you've is we are change, seen because as a actually get can couple of have launched IH. to

my booking has over that the margin the going big the part write-offs you're important to the That's on for like been so we last costs think calling of what and of that some to items. we're net line. going utilities nature, would them also think cost we're red there earlier where we to what other logistics that's inputs those on which like three this been well one-time And last are We What really been seeing. And a items in which And that of quarters Those one in is blood seeing understand through is the one side. seeing comments. thought part we're through I realizable line we've value we're did be that out. on as then, seeing And the maybe we there. buying. we're quarter X% we us headwind that the things increases for and see is quantified cells X% in gross

that that value the that well. as in thought over least our to X% that continue realizable picks said the expect previously, that as that we writing just to inventory that continue expect to that to some important on been but components. out net this X% process down commercialize as continue, get really in the expect of will to scale MosaiQ. X% will value and to it in time. and near-term, those call The as And to headwind was one We continue we've we've up as near-term, number near-term in But work net of we at we will change start realizable X% we I'd

Got you. you. Thank

You're welcome.

Goldman Thank your line Sachs. with proceed Please Instructions] comes the Matt [Operator you. of Our Sykes next question question. from with

agreements. Hi off Maybe good on taking distribution just lines along my kind Ali. Thanks start the, Brandon's Manuel of and morning for questions. of question

Yeah.

this … end by the of targeting year. XX

end and But do optimize overtime particular close have plan look agreements agreements are sales. about actively success obviously given out could regionally that to In Or that lead spread distribution distribution And terms of overtime? the you to manage the you of you to managing that you're those few thinking how by those you kind region? wondering, those meaning, particular to I'm have optimize about you agreements regions? of be how those how how think it'll managing relationships year? potentially so more more XX per relationships might just

Yeah. Thanks about your questions.

So have Officer Chief is look, a Commercial up Mohammad our set what of internal folks. Khoury, nice El we network he

So somebody that's leading who's an that it's the And way for Africa, we also start-up order a we leading commitment is leading they're going start with distributors going who be and Asia-Pacific, just that there up throughout is then is that who not to now The initial through like have East agreement person going then manage select. distribution, distribution and to the years. America. one thought person but is somebody going is have support to in geography, service Middle we setting that Latin it's along there order exclusive rise that that the is for different commitments to

and course, per on, market that geography donations donor it more those know should Now, and the work deliver. sizes, demand. going to We to centers. contracts the related we're then we donations what are know the of And when

on that So visibility we the good with distributors. have

then achieve then target incentivized we're then So, putting in develop ramp be will others able we place opportunities be incentives up and as and to to resourced. appropriately those and short-term it the in

that's So at of way the looking it. sort we're

completed mentioned attached going MosaiQ then excited workflow the which in workflow these we very and earlier able have expect And there I all our sources to completed the Innovator's remarks of being press like about, course, that because today further proof are sort of are my we're be before, as I I in some up commitments also studies ramp as studies, to we've not the Circle. that, we to site. these of value some said. that show then evaluations these to at Of those sales from some mentioned only release in are

initial these one a in technical us some so we Innovator's perspective compare MosaiQ that the user two -- shows our we one -- -- we have that Circle, Europe, sites scenario. against sites current their that from significant from just So The US. -- one we actually in solution, actually a workflow is study, in of those data with of as our benefit did

We're think to that again significantly what on papers finalize I whether or more the this publishing of at the as we publications data. is going official be the So, MosaiQ sites. see. is be development in But is efficiency effectiveness more papers, valuable some to initial that data white going it's as we indication look those is we

the growth strategy all going also the to together So, in we to again, distributor to speaks strategy of and the win tenders. course, is allow this to then network, distributor us as continue participate

Great. Thanks Ali you. Manuel, one much, for maybe and very

You outlined if sort of balance it. I the missed the apologies of your year, and OpEx for trends

the this CapEx that year. the MosaiQ over course done, is than trends? lower to Just first perhaps sort the could ramp in came a for what you bit Could how versus I lower we little you've of maybe come of of given and talk historical. assume CapEx down thought just fiscal about that than previous wanted CapEx just quarter year. sense last trending I of get a

Matt, from line terms through builds we've are talked everything we've that to talked So doing in other the manufacturing improvements guidance we've given, of doing. about investments really what that second we around the to

we've we've here prudent near-term, how is year. it the been that's right it now. we or in our can you outlook spending see of we're as things through about that as the it not thought in the But balance will So, consider

year the be the I I So how upfront later would is CapEx. size in it, here to that's would Matt. It's probably going than think how about

where are what even of the given are the And we've and But we towards with it's I more see guided that we high-end say today. going way low-end we what so, probably the would forward.

Got it. Thanks questions. very Appreciate much. the

guys. you, Thank Yeah.

session. final any comments. the concludes to turn I'll this Ladies for you. question-and-answer floor our Thank gentlemen, and management back

support our quarter. to want just look Well, and the I the say questions, again against we forward in thanks goals to guys you and updating your listening for for next

So have Thank a nice you. day.

conference. concludes This today's Thank you.

participation. lines disconnect your you may your Thank for at You time. this