LumiraDx (LMDWF) 12 Nov 222022 Q3 Earnings call transcript

Good day and thank you for standing by. Thank you for joining LumiraDx Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to call like McMillen. to now would turn over the Colleen I go Please ahead.

like website to the on earlier section welcome discuss everyone. Financial is and to Hello, We'd posted and Zwanziger' you at announcing are Dax's quarter the Chief of our financial CEO, results Ron us Dorian LumiraDx XXXX Relations today's release results the With issued LeBlanc, lumiradx.com. Investor today. Officer, Lunar Company's Chairman press third to call financial

annual can found over turn will in earlier may remarks. caution pursuant for to XXXX, versus not lumeradx.com. Reform today make measures at detailed as of uncertainties compliance like statements with with or financial to that on that the safe vary financial is would any is on non-IFRS facts, currently opening Zwanziger our factors. information we in which please make our in I in report begin, Securities our to a Actual now of Form Act we certain provisions substitute we Any those materially. available listeners XX, be course ended Non-IFRS must XXXX, other we -- results non-IFRS forward-looking XX, with considered XX, XX-F The filed Form involve are which be website measures. other should Also, year presented for reconciliation statements SEC. IFRS refer statements SEC that there Before that issued call risks light as filed isolation -- release Litigation in filings forward-looking call, harbor today, XXXX. a and press April make the for we and Private Ron the forward-looking today's showing may considered in to results financial December be that on aware on and historical with of the such of IFRS such than that statements the these be I was on schedule XXXX, during August X-K made the reports the from the SEC our all

We then Ron? business provide updates will financial before questions. answering and

morning, quarter call. for thank you Good 'XX Colleen. everyone, results third our joining Thanks, and

continue As new progress announced our care strategy the to this of strengthening original morning, savings At restructuring achieved diagnostics make with while to advance time, efforts rise. exceed target. further substantial to commercializing we point we've scope to from products position. same These cost our transform financial our

for we surge market of dropped at operations the the customer to needs beginning COVID has As testing after efficiently. the the year, overall realigned our address

strengthened through diversification also our market base, recognized of thanks and cost our to and advantage expansion of We widely competitors. the position customer performance

realizing materials, are the we using As of non-covered process automated strips menu single test manufacturing common we highly multiple benefit assays. manufacturing our our across begin of

Third supported and $XX about were performance era. the covered cases of mainly million, use with This in markets, quarter installed base by including revenues key expansion our sales. was

shortly. combo. non-contests cover to to of Japan test will few new opportunities enabling U.S., I'll in represent evaluate and shipments third in such I primarily These respiratory use the contribute approximately for pilot want cardio are to point-of-care metabolic platform and highlight QX, complementing the INR, customers quarter volumes as significantly Japan. testing. to the covered for X% were and in in quarters, shipped cases trip flu border shipments diagnostics. We volume New next CRPDdiamond product revenues which and Germany Instrument XXX to launches instruments Germany

XXk cost shape drive basis commercial commercialize organization and international marked Now markets in sharing our innovation on revenue CE plan. and development highly platform. portfolio success and sensitive the authorized other and assays in four financial strong and advancing our Europe troponin the our progress accelerate support our to performance we've molecular product to to progress to to newly priorities and our pipeline for to the ended of key strategy our

First, of We reduce expected to initial ensure operating overall position, advancements awareness cost reduction plans our quarter, sufficient savings base our bring in QX. is million towards reductions is this seriously XXXX. and this resources significant to targeting Company's from strengthening goal already focus, quarter. to implemented have Cost per approximately that accomplished savings strong to can financial take efforts. path we been expense resulted has the of and further $XX cost very we further $XX in necessary show the cash the a results We has throughout those million per

discussed, priorities look I've As and on the to strategic we organization strategic exploring the base skate additional cost mentioned the reshaped resources highlighted, avenues and forward and on the call, previously redeveloping as focus platform opportunities. commercializing we've are on provide updating partnerships these for you our we to to

We of markets. results international commercial and of new a is key for at Europe AXc Europe in assay achieving priority monitoring delivers and new commercializing stick We that and to diabetes platform-cloconsolidation under which The strategy Care. seven on minutes. hemoglobin with continue products started our commenced finger Primary and market screening in shipments for our deliver other rollout

different and XX enable right six currently instruments to opportunity is platform LumiraDx now three are menu the into XX designed the to to Our single standout that to using initial months. to instruments customers a in workflow and test consolidate next

that AXc key capabilities. implant next are the despite in settings accurate by diagnosing hospitals, include additional care broader at for that scaling of heart launch the finally positive value finishing that customers few the end of LumiraDx commercial NT-proBNP congestive its We community also results from and enterprises are commenced hemoglobin this testing single to comprehensive to looking and test, CovidaFlu We're pool sample stage in platform of a a failure track proven. to this need year, patients feedback repurpose countries to COVID Ultra the pharmacies of on pandemic, delivers initial customers manufacturing test, respiratory Early the for during platform prevalent Ultra existing critical using combination these patient see advantage weeks. in NT-proBNP the convert delivers in launch a our We new Japan other viruses the products. new offering and and to to this circulating of some given easily customers from the differentiate Germany We are quickly COVID the demand testing shipments COVID on Italy, menu season. significant U.K., five-minute from cobot respiratory traditional in widely population

pipeline. of growth opportunities and season. new current with We aid portfolio In the Japan, In in will systems, respiratory and our States, for COVID respiratory test, doubled addressing and share we for especially customer value pharmacy to U.S. retaining addition, demonstrates care, across this the site gaining in are market Japan, customers seeing COVID the adoption. and United testing we're Shifting orders testing believe our and our than for diversified health more enterprise fulfilled progress in in XXXX, we food settings. our primary from now base and early innovation to opportunity customer the revenue

registration programs these studies next half season. previously rest next to first we during the and COVID-plus-flu working is respiratory XXXk and plans year. submissions of both and studies plan actively the to then As current the in We are on combination plan for on shared, year, clinical test. We initiate of that HbAXCmolecular and initiating the completing focus year accelerating of COVID Ultra clinical

the capability accelerate promote and to is commitment platform. on development tests to of our our high-value the assays Next,

we comprehensive the manufacturing improved the development enabling first performance. sized to our minutes which now strip of summary, swamp outcomes to diagnostic to to Our having true information delivers go fast, at point-of-care financial are us our test point initiating design, deeper the molecular a progress need. product mission In sample. ton at field. study our results close I'll and TB in continue XX an health costs a and just things is into finalizing in in deliver premenclinical easy-to-get lower strategic test, accurate through from We're on hand Dorian? milestones, over to Dorian for trips

Good morning.

progress priorities growth position. are Ron million. production our we the position our and for which the position the $XX.X primarily to while during us advantages scaling discussed, that $X.X manufacturing focus company in believe impact Ron experienced on our quarter, was and of grow revenues British this from our As made to said, our significant four the pandemic successfully strengthening quarter a financial We prior were quickly million pound the new euro. the decline Total to for the XXXX. product due volumes represents This versus strong quarter dollar have U.S.

foreign in the XXXX exchange, from Excluding impact XXXX. QX of declined X% QX revenues

to total were the Sales XXXX. to equal other shipped items revenues within strip of and were trips test our test quarter the platform platform $XX.X million. million volume I of and $X.X QX related within shipped trips the point-of-care point-of-care test accessories total instruments, was Our

derived million test in $X and revenues were products. our from trips of COVID-XX labs Our fast Substantially fast revenues the Labs were QX. for all

our revenues were Finally, distribution third-party quarter. million the $X.X for

the to margins were gross quarter for compared XXXX. QX Our XX% XX% in

While core included respiratory to through as million. additional review Depreciation better expense to sales COVID-related strip the reserve $X.X carrying period million in of recorded we COVID-related remain test our testing understand we inventory related inventory we'll progressing margins excess for continue cost strong, quarter, $X in for of the season. the and while this an inventory demand value items of was

gross margins exceed adjusted third-party have our gross fast Excluding We core amortization, total all lower margins sales point-of-care reduced strip period, inventory stock-based adjusted gross by from continue test in depreciation, and are over to items of the and instrument revenue and sales, The crops. our target lab XX%. distribution instrument XX%. than sales, of impact reagent of placements the as compensation such our noncash our reserves, which profiles margin the margins test Again, were

common for testing materials, We point-of-care across have strong inventory which are a test rip and reagents raw our instruments, products. position

quarters a after cash As inventories manufacturing restructuring, in revenues carry and with reduced contribution. base expense a we we the global our to operate coming our manage anticipate down high

a expenses year. non-IFRS were second this QX R&D of for $XX.X the from XX% million, decrease of quarter Our

new As discussed, incurred we of QX launching. now achieving previously that XXXX, higher marking CE expenses the products are we in European R&D

quarter implemented global In restructuring addition, the plan reduced the during third expenses.

U.S. decrease QX as expenses dollars million quarter. a base or for the reduction program European global in The expenses our SG&A was non-IFRS SG&A lower the but impacted restructuring for versus $X.X for expense partially the R&D U.S. Our from into quarter QX exchange was $XX.X second strong and our XX% both dollar translated by of rates. million from also were

portion currency our impact in the is as dollar our maintain strong pounds revenues. base and our While to exceeds Company the continued benefit of foreign U.S. a expense we a cash balances euros, net currency a of foreign

half first cautiously program, program the implement per to to expense we QX restructuring plans in guided million minimal there XXXX we our our and While realize quarter from from our accelerate were $XX fully areas able in of savings would impact our base. be several committed

we noted, Ron cost savings implemented As additional bring million. approximately that the will quarterly overall to reductions have recently $XX

take trend. existing our our XXXX. impact XXXX. of now of cash restructuring million, to As and and base million our to continue a questions. the cost improving Thank you, fund cash we our through manage can XXXX ability The end focusing loss U.S. we At throughout from commercialization and the reduction XXXX, activities to Company We move XXXX $XX.X the XXXX, operating we ready was take QX and in ensure QX near-term the program the have into $XXX.X will assay your our million, global on we're cash QX and equivalents submissions. of non-IFRS measures progress and anticipate position to continue had launches operating XXX(k) while to for $XX.X on we representing loss this

[Operator Instructions] that question have is I of coming Vijay Kumar Evercore. The first from

ramp BNP? couple [Alexandra] start reception a have at you've seen top feedback for when I questions And is with on could just of Maybe This that there can see if about we revenues the here. you the and we HbAXC the talk launch. and Vijay. for

product. have and the we Customers asking started don't before have the shipping had was including have response the we everywhere platform for even been in we registrations have excellent. elsewhere, Well, Europe we where

exceptional studies setting. We a So as we've is, land the performance. in a some provide early the regulatory performance not had with look product that that had at product standpoint the point-of-care said, showed that testing agencies and the performance, always we from performance we from

think so beyond. and the it And -- customers important expect products picking be year in most We of to to important are portfolio. going growth our next significant we up. And well one throughout it's see

I of have data the couple Dorian line we if Great. When troponin then the on And have I when the -- And financials then could time test. or a a well. then the EU filing? just can being expect And also, for we follow-ups to couple on published? is what as are see on

the implemented. It's little cost Well, affected cutting Japan we've by while. been that a partly taking is

exact outstanding can't they timing. definitive be about performance will comment seeing extremely that I we're with is the So where come. I product on the are

I'm more because that the afraid So can't but product be than we're of forward. definitive move to continuing cost I basis, the

the just on And then I financials, two Okay. guess, things.

coming $XX restructuring million around million, gross impacts. margins be $XX your that can to going in above there The that quarter. all? a at XQ to the any the that in profitability apply For change Were $XX OpEx rate XX% onetime to from to path And Is does we then from run the this jump is slightly $XX million. million? implied

we've the on dealt with reserves. issue is So the largest margin, inventory gross that the

a reserve. So million $X inventory

risk, season that. continue respiratory was largest the and at whether I think gross have that inventory will in But margin. of determine the that the additional onetime assess we'll we to the strength item

reductions, base reduction quarterly is off half expense first the from the year. the the $XX the of of million On

both going So next get those to to been we the on And expense full and breakeven measures at that profitability exit here we have impact all ramp we'd and revenue then year, completed. into as approaching and is taken see but substantially the path quarter base revenue a the XXXX. COVID, we should the that impact on of and be question these the continue fourth in the do levels of anticipate

Ladenburg Jeffrey question Tallman. be we next Cohen will that coming The have of from

and out those of shipping three U.S., called into platforms. on Ron, of think types Japan more were that us tests in? And QX tell you was And countries? talked I about you shipments front Germany and specific specifically the going X/X what were you metabolic to had that

for better Dorian, answer? were Japan the they into and were shipments and non-COVID, you do probably primarily you and more Dorian, flu have preparations other detail, by AXC driven in a tests. AXc by Germany but driven the or have

the the by Yes. with AXc with then leading D-dimer can were Germany our Japan selling for single really driven the it solution combining The by multi-analyte in in is of displace respiratory a competitive INR location And we that area a three largely of stuntPro, solution. flu single the instruments of test. CRP, Europe, strategy customer

launch is So take the hold very and of here really of been into being instruments starting that with to performing momentum commercial displace that's take hold what with value competitive waiting to able beginning XXXX really in and higher particular. multiple has excited and adopt in to QX able the proposition heading about end QX, cost just to and us content AXC that the to we've strategy of that adopt at

front? million any million the And OpEx reduction expenditure? it. on out color Got call on an forward-looking then of $XX OpEx on Okay. Dorian, Was QX's $XX your off further

The of $XX million is half expense the off from the of base first year. the

within QX, exchange. of foreign we So of we realize a have that portion and the did benefit the did

But off it is, the stays the dollar So of half it year. of reduction obviously, the if the of you base $XX where as that think first in an -- million if should that expense will endure.

quarter? taken the Got on labor further any that and it it. fair know related And the then expense I color staffing. amount for finance of a was third

The below Yes. income, finance expense that operating is

in QX none out may costs operating was the the expenses that core balances. internal we between related group are finance substantial. The of break those balances We within in weren't just and QX, in restructuring. So the expense to expenses, long-term the revaluation largest those of intercompany included is that they

revaluation we will currencies And dollar just any pound balances the functional adjustments. cash the as they have Company. intercompany call lead move, We for a out entities. and entities. impact that's internally we of our never that to a And with -- currency So noncash U.S. have lot IFRS

be little Got it. get that whether can other bit number metabolic respiratory faster the platform. for to they it there, And as about a of And far us, the now with out talk tests then the or you of finally on Ultra test as you Ultra platform plan currently? any

the increased Well, become and over the of our product considerably our performance, test going for because Ultra is gradually achieved the the performance reduces platform, which already time. even standard first time Labco to though even test

the our the on And beyond on time, will going but cover be on is so And over flu to be it. we tests currently -- but and it, Europe have flu all it.

Okay.

So test we'll hear I about more happening that going suppose? by forward, test

Yes. We'll update. constant give you a Sure.

that Okay. the And the outlook COVID-related, That's labs revenue colocation. this through follow faslo? lab for perfect. should more Or quarter. might one year fast balance year general primarily of And with regard question were on on any to the path and on there look the how largely of that next the then kind fast

complicated the a additional put to because platform. onto we question it's Well, tests starting are

it's So into brings in was countries. to pandemic, originally But in that a it in play the taken bunch process the but on we fully are to procedures. through turning tests there'll help we be line, into and by placed hold labs of are product supposed a that what going issues the regulatory a assessment an turning of of other product usual the it a was such be

Mark BTIG. coming next question is have of I from Massaro

This on is Mark. for Vivian

you revenue revenue? contributing if endemic thinking? in could COLET wondering of of at that revisit XX%-ish revenue. your a still $X or to share on Is exiting the XX% the of billion view run long-term could First, rate target And to XXXX flu updated we any your for thoughts range

the taking early pandemic that taken be recently I'm your part respiratory that question XX%, thought term question that endemic the there's outcome most part don't of that. that likely first. of pretty seen the to -- move the which the view. the would changes an we And range more talking about of we would last anything think to second in XX% XX% on XX%. have Well, XX% I your in our essentially changed long view phase, our business has maybe we've from about view

pretty much same. the that's So

So much question the on have in that making U.S. get sure the haven't of about because next at we first very changed. will test are short part is the a year. launched because focus many current we that our your Europe those On of the -- term us -- our the in target your revenues, and of moment launch,

programs hits some R&D cost-cutting Our focus the those of impact is very on part much the term. and of inevitably of longer

So and looked of you specifically utilizing of sort because cash more in the nature effectively the impacted say, we being I have what although cash in on given at focus haven't much that a being we specific very as cash. in investing -- careful on of focused of question through R&D asked, of in us I I sort haven't it more about the term. detail. will But our particularly short be thought to think result

Okay. Understood.

the R&D development following what priority when outlook of So you the of development And pipeline stage highest they're restructuring, resume remind just the Amira? assays just might on could in? are us, updated near-term you any

Amira, we're on not that. rushing into running Well, in

don't date a Europe, because of fastest testing. that that in revenues certainly get don't -- bring as go business will to short focus Europe which imminent, course, But the on in have pandemic related we cause we not the now back would on in have launch in up, is very the the the term, we've now and way community-based it. that. the NT-proBNP -- That's test to more is hard to recur we So to think of for base to pandemic doesn't I have because we certainly -- hope terms vigorously let's us -- only

replace set they instruments at have we wonderful three so moment. And tests the that a of

in that's why some of U.S. So on, aspect on that very well. focused the we're missing that's molecular items as in general I Strep, items working the regulatory we're those that to into of terms think on year our and But of mentioned the portfolio. bring focused in is we our term those we next are focused are Strat which pipeline one the in that near focus, the

So that. we're pretty focused on

already focused on in of So that but the launch. short example in that's term, something immediate we're the it's one not

question Raymond And coming final we will have Andrew of Cooper be our from James.

the questions first the priority about slow a on circling cuts, that way When of kind these for you doing so the Thanks language Maybe there. down on higher here. launches. just didn't the talked in necessarily trajectory pipeline back was some and the cost of

about little bit So coming we're that. here potentially later of Troponin because today sitting thinking and a

season. I you Strep, said think these had respiratory you were to going run Group A trials as

I major today what guess, difference there just versus case? the think of shouldn't And -- do slip the outs how impacts least we're on a of So on potential that more couple between different we some there combining exciting or the about of still of hearing some be items. rectifying then is at kind near-term

the about to way settings have we it's it in those so is think offices what's the settings, real relevant solutions doctors' community-based So pharmacy. in that in or whether

our point have And vast target. to -- and of the installed to we let although the don't the remains heading base need number we're willingness so a separate troponin you It's where it slip it's ER-based our in majority ERs, community. And doesn't test. because of community. quite testing Obviously, a in

as that's the a you So that careful, called test, strategy, it slip. community of case -- groups but in And base. tree, of being let group-based can we the we're

we're for short short which term. community-based are that. And on term working on working as we're So in other well, tests the the

you helpful. strategic That's said more. something think maybe the you talked And the of Ideally, for have had you'd ongoing like Okay. about had partnerships. then I I Last think call, to potential end year. one by discussions

what we can expecting that a around you communication standpoint gone, of sort initiative. on us different give an update those you're in conversations and should where focused of geographical the from conversations, whether be parts how or So market those in just have

of but or because We -- year strategic full where finalize them have remain then details on strategic to stage obvious the narrow now the we're one particular down exactly field two complicated talking end We the won't into a for thereafter. all. of the more got to be at I working Well, to we've they're But and the several acquisition. go to we where and reasons, got hope with the actually nature most relationship. by soon the two interested in three a focused of something

and go call like to now to would remarks. over the I turn Ron for ahead CEO, Zwanziger back closing

Lisa. Thanks, Okay.

took right Indeed, conclude business year, action just We as the continued size coming an our as to advanced we strengthening your to to we're near the and the year point saying operations and our the Company's looking of much. and me demand efficiently. strength market our market by and position care our you forward and financial customers timely address cover for pipeline support. reinforced appreciate $XX product Thanks position, a very we in of stage updating progress customer of on shifted focusing financial while Let position market. with to end we've ahead billion look the this and endemic in which to opportunities strategy our transforming

today's in participating call. for all you for conference you Thank

have a may Everyone, all day. disconnect. great You