Lucira Health (LHDXQ) 13 Aug 212021 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Lucira Health Second Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference to your first speaker today, Hannah Jeffrey from Gilmartin Group. ahead. go Please

available and released Lori, June everyone. today, release Earlier XXXX. website. Thank results good for Health is press the financial copy ended the the Lucira company’s A you, of afternoon, on second XX, quarter

are today’s Financial Executive Chief Engleson, President Joining Officer; call and Dan and me Erik on George, Officer. Chief

materially the Company’s which these regarding specific Factors that, this and factors past limitation, without marketing to statements. I’ll Company now will regulatory the in Form factors include we I’d operating Erik. to identify like These the to call, resources, forward-looking over and with you filings sales begin, future With the Form on the results the encourage statements remind strategies, forward-looking and conference product XX-Q, annual future potential, statements differ the Before capital review without XX-K We to report development, those or on call reports the regarding from environment, you product limitation section that during cause described including may actual Company’s events. that or make turn events quarterly SEC performance. in Risk

afternoon, has to Welcome XXXX. and like XXXX Good we of built since made thank Hannah. the you, about substantial inception, saying excited second the quarter start joining earnings our during on we second look Lucira us. progress that continued have and Thank by solid for to conference you forward to call. everyone the would quarter the capitalized I foundation we success. are

revolutionizing talk the transition second PCR quality quarter the progress anywhere ongoing a future. for recap the of Dan more would results accomplishments for use financial of strategy walkthrough spot. produce into Lucira lab molecular we our detailed a the our then putting call, quality easy of the disease second testing like small, that factor use testing results. of today’s founded will on anytime, in During infectious will XXXX, by mission to discuss about quarter at-home was and form and on

easy our climate or Our against would begins current by aid motivated strategy has of greatly readily believe platform always many that the been creating outbreak. for testing in infectious necessary checks available and quarantine testing to choice the accurate, an of use fight diseases. with We boxes of earlier our any Shifting the become will test. belief infectious all and platform a treatment different

The time seen need we in During increased the real typical the of decentralized a COVID, time a help abbreviate to X.X for decentralized past unfortunate years, testing. shift platform. an to have testing arrival market and testing launch required the

as testing I to the like advance convenient logistical Test second and developed with the financial we more was provide quarter. and would an All-In-One of help are to catalyst, associated accurate the With continue with detailed platform. of COVID to excited to acting testing alleviate alternative. the issues summary COVID-XX Kit burdens patients review many a Lucira a turning Our to before decentralized provide to and centralized testing

record produced second XXXX. Lucira results debut, quarter commercial quarter’s in first the Following the of

$XX.X we XXXX. the of quarter previous recorded quarter, second million, the of XXX% During from a growth revenue sequential representing

continuing improve volume sequentially gross to is our addition, as In margin increases.

margin at that anticipate Lucira could year gross we end rate Although be a positive run XXXX. by

investment second in near half during in the favor Our XXXX. production margin term focus of gross in the capability on less continued is optimization of

indication, These three half COVID demand two, international new was of of we key throughout XXXX. a and from contributions direct the revenue initiatives the first been in opportunities reopening that from have generated quarterly variants. the following Our by versus rooted one, and are focused of areas: worldwide on several opportunities culmination initiatives OTC control

EUA, users a for use physician a authorizing as prescription Lucira negative quarter, It allows During professional to oversight. leading few or in of healthcare is second result Lucira Test issuing minutes Kit. the of revenue which Check a confirm as within an our individuals Lucira a from or XX It, positive OTC FDA driver the resulted Check available result to requiring to without detect XX the minutes

the authorization addition, distribution opened has up for partnerships In many OTC Lucira. channels EUA and

Regarding their commercialization, of These and partnerships initiated have provide duration targeting we large the kits can focused large orders are on businesses recurring for test quarter. reflect steady during our several and revenue. partnerships

Chase our to in sole reopened is the their example supporting fans. an We of Chase quarter, last partnership supplier tests the were Center reopening. Center discussed the As with as

which by travel athletes Meenta, negotiated in to partnerships Lucira It Lucira which traveling with services and and include in to visuals, the Hawaii. All-In-One for of video XXXX observation the Test authorization examples of Kit Additional AZOVA, summer the and Check sell for customized a to more workflow Kit AZOVA’s utilized Test commercial recently was Japan

decentralized continuing are believe a testing. businesses in We to distributors partner become with leader and Lucira can and

from Another this customers and was for us international key demand of quarter area distributors.

partnerships variants, of We With the experiencing had second of XXXX. latter QX, and to plan we to working we we in Lucira quarter, the rise website regional through ordering a to both Lucira. half an temporarily and Lucira low in a of the purchase the for COVID to breakdown of established cadence half of is predict our the second expect online Amazon for and customers, the that It increased sales prioritize decision was halt see will channel an international ordering achieved. corporate continue sales and is Kit is in provide domestic XXXX. Also distribution world nationwide and reactivate second in in amazon.com, half through support this interest available Late the rates, trend the international once made again to Check Test as much We vaccination We online still partnerships. distribution new international. creating to intend quarter, the our and

decentralized aims Lucira the remain of of As variants, the with at reopening balance to new forefront world begins to emergence the testing.

of on the quality more Lucira spot. It are market factor We factors designed and Check results that provides in form and a optimize convenient reliability is is a that to focus these evolving, are noticing the

will the be testing environment, will continue and return to in COVID to forging immediate and international. heavily be testing come. endemic normal. the future partnerships, domestic We relationships the Given and for believe upon And it to begins require world years will current be will essential to relied as safely

published and WHO variant variants, are these Based others the COVID emerging have new and evaluations, databases. detected reactivity Regarding CDC by upon current by our sequence including been of variants we the routine regularly variants, perform surveillance by against the evaluating that Delta highlighted test.

variants accuracy. test enables addition, new In without our sacrificing technology to reactivity

provides accuracy verified to LUCI test, reopening to companion LUCIRA PASS result the PASS LUCI an result reporting negative proof convenience. a digitally system to access addition PASS days of users test, the aids receive and smartphone test LUCI on of a way travel In with provides this for flexibility to to seven require workplaces, and easy a text-based efforts. The as events, up venues, continue users and

testing. being LUCI of a our result, more the of it in we manufacturing sales center and then car, support a evidence at safer home, among manufacturing focused to have to of time partner with opening this XXXX, produced announced capacity. fact, others a in product show is indeterminate the or negative units per then results LUCIRA that could currently efforts comfort efficient new In and Dominican test and the group molecular To to at on X as Jabil, rep, has to be one's test month manufacture status the of hotel expanding during PASS mingle we COVID-XX second the Republic of this manufacturing the potential about facility quarter manufacturing capabilities during facility. full new room million

made commercialization that full quarters facility in Investment be this about We only inventory progress more anticipate operating capacity excited on made than the after $XX resulting first and has in the are in balance of supply to mitigate million sheet. our been at disruptions has approximately that chain potential of half will XXXX. two been of

Kevin we talent Officer, are brings a well as governments ability result team, supplied. partnerships throughout result, processes, attract worked to business professionals industry-wide aware experience In our manufacturing being a on of And by used Kevin distribution manufacturing immediately of are we demand. off government we a materials certain is been demand the to In that in their this. the additional materials healthcare from In in sales top optimize turn customers, and thinly May executive course line in to in support and is supply experience Chief addition, global in close but and paying both commercial efforts add community global leader. our who to level hired in investment eye to we meet expansion and the of hired as of a and have growth, of attributes. although company. to continue able the as commercial are our chain products order We'll in global seasoned government to our building. the could recognize the healthcare We are a that and procure handful professional, keeping continue of we to shortages business gratified organization and yielded the pleased this as unique Revenue Collins, XXXX, channels. and confidence businesses do, The with to see have manufacturing team

commensurate and We the continue growth. management to team add experienced organization, talent to throughout the with

current test We process that for withdraw the focus in on the last focus strategic XXXX, significant first is individuals. certification to that the standard submit decided intended to We kit, IT a upon expect the include first of June, on this CHECK to of build to LUCIRA in do and of pending the we plan also our future, their application to the commission changes to to a allowance last which have XXXX. recent kit. valuable opportunity EUA submit policies. to XXXX in not of half member fall to the to based half second our our XXXX. We suspected this revenue CE pending CHECK our to plan FDA a for In that states We Instead, made the of growth European efforts forgo test there's impact. established XXX(k) IT through EC. temporary applying our application in withdrawal of our prescription the the was we with momentum COVID-XX test believe EUA EUA Looking decided made more was asymptomatic kit expand LUCIRA we decision it the many half under countries

resourced for In us, infections development investment increasing products to capitalize fully intend has we potential technology. across product. for the market this And utility of the test many upon demand The technology kit underscored COVID-XX products. COVID-XX the and the LUCIRA detection we in transmitted sexually are respiratory have infections. of of the flu addition, other assays we And the multiplexed the and to of

time, development While take additional processes. to investments product launches speed will parallel are we redoubling

are our future to We about of call forward quarters. look our I Dan detailed turn excited our for CFO, and over George, financials. the discussion will now a the upcoming to

Thanks, Overall, quarter of XXXX revenue represented of financial to was and issued our perspective, of everyone. summary earlier results had XXXX second XXXX QX the the of for Erik, second such million. a activity a for hello in our press quarter and no for quarter refer release activity. second Please today Net we our XXXX. $XX.X from commercial QX full

our as in compared expenses second second was to product previously loss launch The gross to is public revenue in to quarter the million and gross the international and from company the with operating our our period related manufacturing in compared to of increasing EUA with decrease XXXX. million and in the margin quarter result to the was same increase resulting in XXXX third-party XXXX, The were operating primarily period cash cash margin to $XX.X administration new products from primarily of and the services current XXXX. the net was primarily and of in were sales. expenses approximately of plans, general capital loss direct XXXX meet operating XXXX. OTC in increases $XX.X quarter net in in in in primarily to XXXX offering. resulted access proceeds cash through and the resources was requirements by X%. to increase and $X.X The second and $X.X increase was Our XXXX. at believe primarily commercial year Net was the to Gross cash in period XXXX. our $X.X sales expenses of compared $X.X loss is businesses gross quarter million XXXX described. distributors with same negative validation, activities. from production. loss negative the support increased our increase and of in previously Selling, second The validation public million our be first received and R&D activities million loss channel fund XXXX. will Based and The quarter same primarily we related same million to to to million headcount of $XX.X increase to related in on and the manufacturing $XX,XXX the in driven contracts compared approximately for new million in initial described. sufficient XXXX compliance. quarter second end Loss consumers’ compared operations period $XXX,XXX The $XX.X was of from loss the $XXX.X XXXX second million We the to our ended facilitate existing related quarter through operations authorization, in

offering guidance revenue of believe the of will demand for While call the of remain we expect Q&A. offering we and sequential officially and back growth robust emergence variant most of are not I'll the do use annual combined flexibility ease delta now contagious we're in foreseeable quarterly with low the the the not the kit, over our world more – vaccination future. for XXXX, rates to test turn continued while COVID-XX operator we for with

is [Operator Please question. Instructions] question Brian ask Our of first William Blair. your from Weinstein

is taking Good up afternoon. for a Brian. questions for This here. Thanks my Griffin

partnerships, the just those opportunities? can schools, million of I'll are of a the are forward? give moving with these what dollar this there and like or are – settings, clients duration more any the Meenta in entertainment, us broadly sense institutional of terms kind on you Just first partnerships call in it And cetera. size talking – on the committed volume volumes employers, et then What AZOVA and you

have a specifics great that job deals anywhere of lot won't Griffin seeing the representative today. get what orders majority of they're than say, XX we're the his that forecasted would would into had we lot those that a contracts X we're bringing I team fairly purchase but seeing now to that volumes. forecasted have and Yes. in of a I months. think necessarily partnerships, of done say, around amounts are range I and durability between greater Kevin contracts that of that

comment million ramp, capacity then of of That's just full half manufacturing Got Can in you. the just sense helpful. capacity month? the Thank it. relation And you XXXX. that first on give I the a X in heard per reaching us your current to

Yes.

in So at to at million. we're thousands Griffin, we're fairly single-digit, a in hundreds trajectory we're of looking the the up point. this And of linear units

want a in just throw we We're Yes. facility DR timeframe. here I there the facility Republic that that might bit commercial Dominican to just in QX off the units producing kicked now. little

to production XX% will be our capacity XX% time call from the see facility. as over So it our grow gain of experience that I derived DR, with will to and expect it would we unit

decision online pull any channel, if distribution And demand that to outstripping product of supply? the funnel, sense the the orders and based in then fair say supply. versus is inbound demand then is to it on sense that much sales exceeding could how you just And of current any Okay. quantify

partially fulfill orders the is to robust that to we want we larger didn't had I Well, that demand and that right made decided now. commercial decision say larger, We would prioritize. channel we

to then that through meet of opportunity especially considering prudent to website we the was felt our have the through demands that would the we distributors a those Amazon. So public or that loop just make better

the you. guys. Appreciate it. Thank Got time

your America. Please ask de next is Derik Bruin Our of Bank from question. of question

Wanted much Hi, very generally, break is the at-home That's for versus more you. on new ask about guys Olympics interesting the from Derik. agreement getting you a struck. you John to were this could Thank how volume the the OTC, out guys you channel volumes? And deal.

around imagine, today. into demand, to speak fairly rate of our a a a the our necessarily indication the get actually be striking removed. on OTC as deals won't more you script OTC the type getting with the once around limiters receiving Most were the It's the definitely were specifics physician impact product once that arrangements you indication going that of we received had Meenta. illustrative about we Yes, – to deal dramatic can as or were

So at our of is those XX% – to from we're perspective, channel. inhibitors existing were those looking that OTC reach. revenue with total at being And from derived expand I say able OTC removed we an Rx versus home our the plus channel would

provide competitive Got to you. market? and the Got at-home landscape, of into And update in then the pushed you could That's terms an as others you. helpful.

it's test very, Yes, instrument, very product them product. at there's mean very in the we have a LUCIRA instrument easy to clinical We're use. required. the extremely a This does is no that additional usability results. the The as as on what to is built are compliment is that into we proud instrument nice I consumer our it that very low of test And makes different effectively cost.

we’re we’re of for large Lucira, into competitive time So impacts of a at we’re that feeling feeling for the Lucira growing threats. this a base – such least off seeing at initially such not that opportunity ocean small

you. Thank Okay.

question Please our of Rahul last your ask Rakhit LifeSci is And from Capital. questions.

questions. the guys. Hey okay? you Thanks hear Can taking for me

can. ahead, We Go Rahul.

through bringing terms help ahead on – year. quick the in and demand, past. website. next into looked little then kind touched contributor be coming in do a you that year expect you know exactly through back like guys online Just the this rest guess, understand you own of I And looking what how the and your me a the Amazon to of maybe Maybe are a us sales this of, one for through I bit,

over on then to But intend in the or don’t But ordering comment year, both Dan. determined. if half on website just that’s want second to know be online to... bring turn to the I’ll or you we whether qualitatively Maybe back our and Amazon I Dan, of

we forward, at the product primarily team our sales has well. we’re of And great importance done customers a think I I see requirements inbound understand for offer going testing Yes. who proactively. very molecular a and the understand BXB the level of course, businesses interest to going had and needs mean, from customers. testing qualifying really as consumer the of we’ve job sophisticated But

So we for making future. of lion’s the foreseeable see that being predominantly share the demand our up

it. Got

And appreciate to one could that. just and optimal maybe manufacturing, point then color terms a I happening I just Okay. bit in maybe happen then what’s get to that guess manufacturing you between more and now on for little more needs of to what – provide capacity?

Absolutely.

way partnership that Jabil, work, started for and collaboratively a with by delighted the with We’re right had great in both and relationship Republic later Dominican DR. the particularly, startup in the the with well, Michigan a then it’s Lucira where partnership in working we impressive team and was the

So It’s process. with It’s well. standard going a of very happy up new manufacturing just that. ramp extremely your

We’re are going. it. If faster, the good wand things teams is it’s and go magic make and the a And at the very certain a news happy applying wave could with this we very would, way pleased rate. we’re to it with we right go but these

it. Got

appreciate And quarter. questions. Okay. that. taking No, a Thanks on for congratulations I great the

Thank you.

your Bank De a of from question. ask of America. have Please Derik question we Bruin And

guys rest the back in the in. the you me for I from looks getting sequential was for for of the what XXXX. know for But the testing see like year. wondering the thanks what revenues I mentioned outlook you COVID Hey, growth

inoculated variants becoming see important but we’re right demand. see not more about necessarily being impacted now, by of majority And every the testing mean, world the and more day. XXXX not going and we I being talking we robust

And demand COVID’s, down So we’re don’t signs product in see see for of any our – although anytime we that we’re we optimistic. slowing near-future.

the I better, continue to reinforcement worse endemic IPO mean, forward. of will role seeing very that for important saying for society. COVID time testing we’re for will play what And since that that the been and we’ve a remain going of

existing be somehow controlling under able that wearing, the imagine then not to control. entire to virus bring off for mask virus where places going replicates there’s those And throws this it’s the the measures. for can can significantly variants take example or planet You control vaccination, and challenge it in variants to not as

a able at So important important for remains the positives that’s see from it’s Lucira today, for accurate. that to above only testing identify what and that molecular to all way and effectively we like with test asymptomatic the be and least very do particularly can to is

Got you. Thank you.

John. Thank you,

this to closing his And Erik now I back over the there turn questions will Engleson, time. at remarks. are no further CEO call for

you, your everyone again Thank Lori. afternoon, interest want time this I for Lucira Health. to and your thank in for

soon. you. about to We the are we Thank And excited Lucira. to forward very future of look speaking you

for And today’s conference Thank this concludes call. participating. you

You may now disconnect.