Q3 2020 Earnings Call

And gentlemen, we thank you for your patience and please could you just stand by the quotient Limited conference call will begin in just a few minutes again, we thank you for your patience and please could you just standby be quotient limited conference call will begin in a few minutes. Thank you.

[music].

Next question answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host Mr., Chris Lindop, Chief Financial Officer for quotient limited. Thank you Sir you may begin.

Thank you Jesse and good morning, everyone and welcome to caution earnings conference call for our third fiscal quarter ended December 31st 2019.

Joining me today is Francois old, our Chief Executive Officer, and Peter Bueller, our incoming Chief financial Officer with effect from February 5th.

Today's conference call is being broadcast live through an audio webcast and a replay of the conference call will be available later today at Www Dot quotient BD Dot com.

During this call portion will be making forward looking statements, including guidance and projections as to future operating results because such statements deal with future events actual results may differ materially from those projected in the forward looking statements.

Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements can be found in cautions filings with the U.S. Securities and Exchange Commission.

As well is in this mornings release.

The forward looking statements include guidance some projections provided during this call are valid only as of today's date January Thirtyth 2020, and quotient assumes no obligation to publicly update those forward looking statements with that I'd like to turn the call over to questions Chief Executive Officer Francois.

Thank you very much a creates this fall to represents the seventh in my tenure as CEO of quotient and I'm happy to report to another set of milestone achievements, we spread in line with the blend they'd be announced shortly after I began my role.

Once again I'd be happy in ready BC, both advancing the mosaic technology, while enjoying the future of our company by supplementing our already strong balance sheet [laughter] from a technology and financial perspective, we are in the based acquisition and the company's history and by the pit pants to exploit the commercial opportunity.

We cheese jumped in front of us so to speak.

So let me refused the key elements of our progress this quarter and how they fit into our long term plans [laughter] MIEFE respect to the menu expansion and market access the European filing for the initial Sds My career. He was completed in late June and be now expects to hear from our notified body we seem to see.

Two nine months expectations be retreat, or recently said full such refuse.

Having filed an application for the initial Sds microarray European CE, Mark earlier into third quarter, we completed the initial Sds U.S. field trial.

The data from the field trial showed very strong results and based on those results in late December we filed an application with the U.S. food and drug companies station four or five 10-K, a pool from for both the initial Sds migrate into Mosaiq instrument. This is a critical step because it's our first the U.S.

Markets Oxaydo filing, which once approved will accelerate a hands on customer experience, we have mosaic into important U.S. market.

Also in the quarter in December be complete at the end reported up on the third party feasibility study conducted to demonstrate the effectiveness of our molecular testing platform.

Once again this is a multiplexing solution, which using a low cost microarray.

It's the detection of any one of several target viruses in a single test environment using high throughput automation.

The study was rather than using our populate the reaction in assays on the Stendal Mosaiq instrument beef micro race manufactured in our ISO certified manufacturing environment in a sense, Switzerland.

Prototype of our properties daily extraction and amplification mode <unk> was used for the sample preparation state.

He said I was self highball by comparing outperformance to the industry, leading Roche cobas molecular testing platform.

Given where we are in development to results that's been Taco, 98% Concordance, if coal bus and hung up offend specificity. This means that we saw no false positive which points to a lack of cross talk between individual assays or on the microarray interference between.

Hi, Safe is one of the big risk spend one multiplexes in diagnostics and be Sol non.

Sensitivity on the older hand was around 95% and B note that has to improved to 99.9% in the final protocol sensitivity meshes the occupants of false negative in diagnostic testing.

It's the nature of such studies that the testing of random sample is supplemented by samples known to be positive for the talk at the disease and that those known positive offensive burying viral loads. It is also common that is known positive outpaced it multiple times over the course of to Stobie mosaic he takes it.

We didn't own positive at least two buttons, which points to our engineers to the body ability contributing to the sensitivity or pure ink in the prototype sample preparation more do their job then into my curiosity and shouldn't design.

This is then an engineering challenge, which is our developments team breadth in public.

Our plans call for a bit education, and validation study approximately 15 months from now and in that intervening period, our focus be on designing a scalable and reliable sample preparation modem to work beside or be feeding a modified mosaic device.

So we feel very encouraged by the results of these same in old study, which once again underpins our claim to be the only high throughput automated multi modality multiplexing solution available for diagnostics to date.

Remember, we don't invent new test be just repackage existing taste on a high throughput platform the living out to Mason and productivity, while taking costs out of the testing laboratories to help empower diagnostics.

Oh, so I have often that the first commercial menu combination will be the initial Sds microarray plus be expanded IDH microarray, and we're making great progress on that from the old So having completed the verification and validation study for the expanded I each microarray in the quarter be published at performance data just before.

<unk> American Association of Blood Banks conference.

A BBB hosts block bank of from all over the world customer feedback on the expanded IDH data and on mosaic unique automated approach to deliver a comprehensive antigen profile was overwhelmingly positive. Following this validation study we commenced European field trial activities.

For the expanded IDH menu.

I frequency to this field trials in particular it is important to remember that we are comparing mosaics out to me that result to predicate technology resolved derived from both out to me that and manual processes in order to determine concordance.

This means that the pace of the trial is limited to the speed at which Mandeville antigen testing of the expanded menu can be before in order to be compared to mosaics test results.

Even some larger labs only have to capacity to do a comprehensive antigen broke up on up to 50 donations are they therefore this field trial will take longer than previous IDH field trial.

Part of our strategy to compensate for this is to file our expanded high each CE mark applications in a model of fashion, leading me if the critical test legal files, which underpin the design of the product and then follow up or following up we have to field trial performance data once finalized.

So our plan includes an initial yeah, maybe talk about the model approach initially European filing for the expanded IDH menu into first half of this calendar year and subject to the uncertainty so for regulatory approval timeline speeches out of our direct control to have to first powerful menu a combination expanded.

H., an initial Sds approved in the market by end of this calendar year.

Our competitive strategy is a one off platform replacement beef the objective of saving.

Blackstone laboratories, scarf and valuable resources, so simplification standardization and walk Korea automation beef the most comprehensive menu of able in the market to competitive platforms in about 95% of all men will blood grouping tasting can be replaced if this initially menu combination.

Mosaic will provide a more highly correctly ice block the product and a lower cost of plots product for the health care system, We believe.

This proposition will be very attractive to block the older organizations and health care providers all over the world.

While we have made good progress on development. We also have focused on organizational alignment lift is that makes the if this next rapid growth stage. When I was a evolution in the past our organization had grown organically and it is common for independent here, let's businesses not long after that.

Taking over as CEO . It was obvious to me what needed to be dawn to create a more sustainable organizational structure, but in the first year of my steel what shape I wanted to focus on execution and also to add some key talents and skills, which wed obviously missing.

If this works dawn and with good momentum on the development side. So if the business we began to simplify into redefined the organization over the last nine month.

This work cumulated to recently, if the rollout of reflect the organization design, we've to lay offs removed in certain functions broader spans of control and enhanced empowerment and accountability for the new leaders.

This work was knocked on specifically to save cost, although their breath and will be some cost savings. It was still onto half a more agile and responsive organization in advance of commercialization later this year.

In connection with this transformation I'm very pleased to have a federal step into the newly created all of Chief operating officer to lead the day to day execution of our plants.

Lastly, our reagent business continues to shine braylon today with product sales growing almost 10% for the year to date. In addition, our team successfully moving forward with key regulatory approvals for new OEM products, triggering a milestone payment of a in total $1.1 million.

Apart from the very Belk home injection of increased operating profit from this business over time, we also benefit from its deep transfusion diagnostics credentials, both beef cost the most ended regulators around the world.

Lastly, it is with mixed feeling that we announced his retirement later this year effect rich lindahl our CFO .

Chris came out of retirement to help to put the company on a solid financial footing and I have to say mission accomplished and chop very valid on Chris.

He is not retiring from a full time employment for a second time to focus on his sport interestingly to spend more time in the U.S. berries families based.

Todays always made it clear that might this outcome was the goal he had that he would not leave us until we found a very strong successor to continue to lead the company's financing control function.

He was a therefore delighted earlier this month to be able to announce b to b or look at Skouries successor, as CFO [noise].

Peter is a Swiss national based in our own backyard. So to speak we fell 20 years experience in the financial leadership of healthcare and technology companies around the world.

After an extensive international search you found Peter right next door. He will take over his responsibility on February 15 increase will transition to serve as an executive Vice President reporting to me and working on various strategic priorities until his retirement at the end of me.

Postretirement 'cause. This also has agreed to be available when it comes out and see basis has needed.

With that let me hand over that call to Chris outgoing Chief Financial Officer, Chris.

Thank you France.

I'm happy to report that third quarter product sales were $7.6 million, an increase of 13.6% from last year's third quarter and exceeding our original guidance range of $7.1 million to $7.5 million.

Other revenues of $300000 were also recognized in the third quarter. Following achievement of the final product approval milestone related to certain liquid reagent products for sale in the United States and there were no. Other revenues earned in the third quarter last year.

In the first nine months product revenues grew 10% to $22.9 million, while total revenues were $24 million, an increase of 15% from $20.9 million in the first nine months of last fiscal year.

The increase in total revenues is attributable to both OEM customers and to direct and distributor sales and to a $1.1 million of other revenue related to three milestones earned in connection with the application and approval of the liquid reagent products.

As I noted earlier.

The prior years first nine months total revenue included other revenues of only $19000.

In the quarter OEM sales of $5.1 million grew 7.5% year over year and represented 66% of product sales, while direct customer and distributor sales of $2.6 million increased 28% year over year and represented 34% of product sales.

Product sales from standing orders in the quarter was 72% versus 67% last year.

For the first nine months of the fiscal year OEM sales grew 4.1% and direct sales grew 23.9%.

[noise] shifts in the timing of Red cell reagent, or just can cause quarter to quarter variability year over year, which tend to average out over longer comparative periods.

Gross profit on product sales of $3.1 million increased from $2.5 million last year in the quarter gross margin on product sales was 40.6% compared to 37.7% in the prior years third quarter.

Product gross margin in both years.

He is adversely impacted by roughly $600000 of noncash expenses associated with bringing our new A.R.C. manufacturing facility online and as we've observed in the past.

This relocation to air Sea as an investment in future growth and efficiency opportunities.

In the third quarter, the operating loss was $22.4 million compared to $19 million last year.

Operating expenses increased by $4.2 million from last year to $21.6 million. The majority of the increase relates to $1.3 million of termination and transition benefit costs accrued in the quarter legal and advisory fees in connection with the LCD contract termination and dispute.

And higher than normal payments to an R&D collaborator partner collaboration partner totaling $800000 and about $400000 of clinical trial costs related to the first U.S. field trial.

Stock compensation expense was $1.2 million in the third quarter compared with $1.1 million and the same quarter last year.

In the third quarter net other expense was $5.1 million compared to $7.2 million in the same quarter last year. Net other expense consists of $7 million of interest expense and $1.9 million a foreign exchange gain arising from the revaluation of monetary assets and liabilities.

They didn't foreign currencies.

Interest expense payable currently in cash of $4.4 million increased $800000 over the prior year as a result of incremental borrowings in the first quarter of this fiscal year.

Accrued noncash interest expense related to an estimated future royalty payment to the note holders also increased as a result of incremental future royalties under the senior note facility. Following the first quarter note issuance.

Overall, our net loss for the quarter was $27.5 million or 37 cents per ordinary share.

Moving to the balance sheet following a funding through an underwritten public offering of 13.8 million ordinary shares at a price of $7 per share available cash and other short term investments were $138 million on December 30 Onest.

The net proceeds to the company from this offering was approximately $90.4 million at the end and at the end of the quarter Senior notes outstanding were $136.3 million net of an offsetting long term cash reserve account of $8.7 million.

On December 30, Onest accounts receivable totaled $5 million, an inventory totaled $19.8 million capital expenditures totaled $1.4 million in the third quarter.

Moving to guidance, we expect product sales of between 30.7 and $31.1 million for the full year.

Our estimated fiscal 20 operating loss is $70 million to $80 million and includes increased investments in our plan development goals estimated full year operating losses include approximately $18.5 million of noncash expenses, such as depreciation amortization and stock.

Compensation and $2 million of nonrecurring termination and transition benefit costs.

Adjusted for noncash or nonrecurring items are operate operating loss run rate net of noncash expenses is expected to be roughly $60 million for the full year.

Capital expenditures are still expected to be around $5 million to $7 million for the full fiscal year.

[noise] for our for fiscal fourth quarter. Following a very strong performance year to date, we expect product sales in the range of $7.8 million to $8.2 million compared with $7.8 million in the fourth quarter fiscal 2019.

So now let me turn the call back over to France. Thank you very much as crazy as we think about our plans for the next year.

Excited about the opportunity to engage with potential customers to me if an ever increasing microarray menu. Our strategy is all about told lab automation with each additional microarray menu for meeting our custom of to more fully automate and standardize what they do our value proposition clearly response to the.

Acknowledged neat Intel infusion diagnostics for real innovation, which addresses mounting cost pressure skilled labor shortages and improved blocks product through the use of a high throughput automated multimodality multiplex approach to don't know screening.

Menu is going be the key to market penetration and by the time next year, we expect to be in the market. We have our first disruptive menu combination expanded IDH and initial Sds in Europe , we estimate market awareness of mosaic is probably over 95% in Europe in India, U.S. and we know.

But what we have developed is very much aligned with the needs of transfusion diagnostics as they have been explain to us by our expert at twice the park panels.

Following behind our initial commercial menu weebly will be the expanded Sds microarray, which we expect will enter the U.S. sorry, you fill trial later this year.

In addition, as mentioned earlier, we will continue to advance our molecular disease screening capability sharing further sensitivity data once it's up a useful later this year.

So in summary, we made a lot of progress delivered on all the milestones under our control in the last seven quarters and have solid plans in place to execute on.

On going forward, but let me repeat once more that we have design mosaic. So it allows for multiple tests across different modalities and BBB believe it has the potential to transform transfusion diagnostics and beyond in both the commercial plasma industry and for screening panels into Central laboratory.

Last but not least we are in the based financial position in the history of our company and well positioned to enter into the full commercialization of mosaiq in the near term.

With that I'd like to think all our employees and partners for their tremendous contribution towards the continued success of closer than Weve special things to crease for his leadership and his pivotal contributions over the last three years I would also like to welcome Peter Bueller enough came to provide a show.

Self introduction Pete.

Thank you, France, and good morning, and good afternoon to each of you listening to this webcast.

As Frans mentioned on Swiss National living in a Geneva area near to where quotient is headquartered.

After career in public accounting I have spent 20 is focused on the financial management and leadership of healthcare technology companies.

After starting at global pharma and biotech I had a variety of leadership roles and medical device diagnostic and IP business, including serving as the CFO expansion Grier PRC listed company.

Excited to have been selected to join quotient and look forward to working with the whole team to continue to deliver on your expectations.

As we move into mosaics commercial phase.

With that brief introduction, let me hand back two fronts.

Okay and thank you very much a Peter I will now Oscar Jesse do being to begin to Q in a session place absolutely ladies and gentlemen, we will now be conducting the question and answer session. If he would like to ask a question. Please press star one on your telephone keypad. The confirmation indicate that your line is in the question Q.

You May press star to if he would like your move your question from the Q.

For participant disease speaker equipment and may be necessary to pick up your handset a far pressing the star. He's one moment please poll for questions.

Thank you. Our first question is from the line of Brandon Couillard with Jefferies. Please proceed with your question.

Thanks, guys. This is Matt on for Brian . This morning, I. Appreciate you guys, taking the questions, France, you discuss a little bit in your prepared remarks, but just wondering if you could touch a little bit on how the reason organizational changes you've undertaken.

Better position the company for the commercial launch as we approach that in the in the back half of this year.

Yeah, so depending on the department the beat took a around the two in a certain case and even the three layers out. So it's a flatter organization. We are creek in the faster to respond. It's also a functional say top across the entire business, which would allow us to have more tons.

I don't see on on the flow us as we go along and so our reaction is bad. We also had have done an analysis of skills needed to get the chalktown than theyve ever Comped low fat gaps, which we have successfully field. So we have everything in place now to execute so it was not the about cost saving but of course behalf.

Realized and we'll realize cost savings if that as well, but it was more about responsiveness agility and being faster than the right people into rights responsibility and I'm also very happy that except that his role as chief operating officer. He is a driving force behind the mosaic and I think it's the best Chief.

Operating officer, we could get.

So there what's the thinking and I wanted to do it you know before we start extra commercialization and we didnt want to do it earlier, because we really had all hands on back to get them a lot of the R&D worked on so this was the last at least disrupt the timing.

So from now on going forward with all hands on day Concord for commercialization and no disruptions that anticipated anymore. So the structure should be solid enough for the next a couple of years, yes.

Thanks, and then in terms of RCD, what do you get out of the recently severed relationship and then I guess have your midterm views changed at all around the patient testing market more generally until you find a new partner.

I would say you know there are two parts of this relationship we have a very good and solid relationship before toll on the our reagent business alibi reagents.

Everything is fine there, but we felt that ortho is seeing a breach fourth is limited distribution contract on mosaic. That's why we terminated the contract. So as you know we know about the house hold for year. The hearings will start to and you have an arbitration right now and because it's an.

Ongoing legal process I don't want really to comment further on that except to say that we are very confident a fair. This is heading to.

Regarding the patient aside of the market. The as you know the donor site. These highly concentrated we conserve feed our self patient is extremely fragmented. So it's not like to cost and looks like 90% of the business in the U.S.. It's literally thousands of hospitals you need a lot of feats err on the street and the if you don't pay.

And the other businesses with those hospitals it the my to very bad will be a low profitability opportunity. If we do disinvestment our self.

In addition, a enough yeah and in addition to that we think there may be all the low hanging fruits like a moving into the commercial plasma market.

Which is the 750 million opportunity. So I would say our focus right now with razor sharp the door unified of the business. Because this is highly concentrated we don't need a lot of resources. We have all the resources in place to succeed there we have older contact with them. There is 95% of ravenous up all of our product before.

We started the launch so whether it's really extreme so we expect that we will be very valid received in this segment.

Alone not to the hospital.

But I don't think I will comment further and further on that I think if we are on our own. The next step will be the commercial plasma business.

Okay. Thanks, and then finally released a concurrent sooner from the molecular feasibility study back in December curious if you could walk through you know next steps from here in any future milestones, which should be aware of outside of the kind of 15 month timeline you mentioned in your prepared remarks and that anything you can do on your end to further optimize performance from.

Thanks.

I mean, a fair I mean I was quickly referring to the during my prepared remarks, I think what I could add on here is that admitted this comparison will be for coal buff and be processed respectively. The custom of processed over 900 samples.

I think the target is very clear to get to a state of the art analytical sensitivity and the because this is all working the pro and progress it's too early to comment on day, so, but we think that we will have an update on the analytical sensitivity of the endo for this year towards the end of this.

Yes.

And we're working on D. ultimatum aspect as I mentioned already in my remarks, so it's the upfront and the here we have to make a decision better it said that they indicate that the part.

Separated from the Mosaiq instrument or battery integrated either way a longer term of course. The goal is to have everything integrated so it's a lot of engineering work needed 10th in of course microarray opt optimization, but we are extremely let's say a positive on this oh for these costs.

Concept study has a proven to have studied works and the results were.

Much better than you would actually expect at this stage of the development, but it looks like.

Proof of concepts to and it worked exceptionally well.

Somebody found out you know, it's kind of an awkward, but we found out that the starting point Immunohematology was that most difficult Harold can take rates of Microarrays class into put into it a block sale on glass is much more difficult than straight form of the chemistry.

So we are hopeful and we are confident mds or be level for a very well and we'll keep you.

Updated as we go on.

Thanks, appreciate it and Chris Congratulations and best of luck on retirement to point out.

[laughter]. Thank you.

I'll try to do better this time.

Yeah.

Thank you as a reminder, ladies and gentlemen, if you would like to Cuba question. At this time. Please press star one on your telephone keypad.

Our next question comes from Josh Jennings with Cowen and company. Please proceed with your question.

Hi, Thanks, good morning.

Craft side, you had some nice progress.

How are you doing congrats on the progress and a.

Second the good luck on the the returning to the retirement chapter, Chris and congrats to Peter on the on the new seed and add on the new title.

Just wanted to start off on maybe just a question on the hyper care launch in Europe and just.

Here, what type of feedback you're getting from those sites and what's what are the next to actually increase could we see you getting out to 10 hypercare sites before.

Before launch in Europe .

Yeah, so for high for clarified a half already completed a there hypercare trial and that takes more are planned for her for the rest of the year.

The feedback we get out very positive they mostly relate to work flow. We've been does expect that obviously I'm not in the business of introducing new tends to be just provide existing test in a better work flow.

The best remark I have heard for me personally is that's the best year I have seen in 27 years, which means which means he has not seen anything in 27 year fab and confirms that there was no two innovation for at least two decades in this specific specific market. So it's all about work flow improvement and convey.

The Indians there like a also some of the quality check capabilities.

All they stop of things domains to get everybody up and ready to go takes only two days Synta told us it takes about a week if a competitor a instrument. So it's a kind off a very user friendly.

Then of course, we also tried to get feedback on how could be improved further into them and software and everything for the and we get the multiple recommendations and execute on them incorporate that go back to the customer so with again and off premise is now exactly as you have expected. So the plan is that once we are.

Opened the flopped gate, who have authority thoroughly field test.

System in place and and we have to have Friday, the nerve spend restrain our self to with orderly test is in real life.

Because internally in the company you know what you're under laboratory condition, everybody loves the instrument a it's a different story then if you give it to technicians, who are not so close and it's kind of robustness of taste and so far extreme good feedback then the planned for US is going forward also too late to the.

Micro race Buitrago development like IDH, two a taste of Baidus creative feel their bodies hypercare.

A custom of.

What we need is left and then the CE marked product any additional initial microarray. The ISO certified the factory that's all in place, but now for a not for a court testing, but the for applied finds they can use those mitral race, which I'm up through the regulatory process, which gave south and also additional input.

And helps the customer to understand but the technology can do because when we enter into.

Into attained.

Basically you win or lose the thing that already before the team to start entertain those start it's kind of acquired period. There very limited things you can discuss with the customer. So it's all about making sure the cost of knows this technology and that the customer is writing the tender specifications in the way that we are.

Qualifying to participate and I have a chance to win but it's an important step of the overall commercialization value chain you know if that answers your question.

Well, that's that's great and just on the U.S. hyper care strategy.

Can you just help us just given an update there I know you're you're waiting on approval for music system and and the initial STS one microarray, but she is going to be the same path.

Taking in Europe in terms of building out I procure sites and and all the advantages that you just cited for the hyper care strategy in Europe .

Actually the sale it will be the same concept, but in order to do that we need an FDA approval first and that's also why we have talked really talk particularly selected STS one of our first microarray because it's only a five 10-K and a five 10-K, we can get in up to six months with.

Bank and the old you auto micro raise our be delays in take much longer up to 18 month, so will that be happy not relative quick quick time, the instrument and the first microarray FDA approved with that we can give it to their customers and they can play around with become familiar exactly the same until the.

Expanded IDH is available and then be Epocal the product solutions.

Which would allow them to save like 95% of them and we'll work. So I think the resistance level to adopt this technology. If you take costs out of the system. That's a very different discussion than there when you come if a new technology any day its costs through a system, which is already on the budget constraints.

So that's what it's the same play and then the meat. We had also very positive fields back if I feel.

Feedback from the field trials for STS wanting to U.S.. So we don't only have customer feedback in Europe . We also have feedback from customers in the U.S. and they're pretty much the same.

So the next exposure will be then also the commencement of the IDH two field trial in the U.S.

We will start about in the Euro first.

Three sites, we have already selected is already ongoing.

Then once we have confidence in the performance in Europe , we will start the field trial in the U.S., then as well because the regulatory hurdle.

We have to take their if the F.D.A. is significant and we have to make sure.

That everything is a perfect. The before we do this it's our most important field trial, so no shortcuts notaries whatsoever.

Let me back.

We did very well in the past by taking things that very accurately and kind of slowly and sequentially. So this will be an additional exposure in the U.S. and additional feedback or possibilities and old all the accounts involved in Europe in the U.S. are also late obtained the customers.

And the related to the tender cost the mostly if I may just at this information I mean over last 12 months, there 17 tend us which have been postponed or so we did not miss out on a single attained the participation.

If that answers thanks.

No that's that's great.

Hello, Thanks, and then just on the expanded H. micro your age too and the VNB data you demonstrated and there's solid.

I know we've talked about this but maybe would be helpful. Just to review just see the differences in terms of the potential results and the concordance in the field trials versus what you experienced maybe in the corn instead, a young why that field trial data could get even better.

Yeah. So so let me start by pointing out there that we showed this.

Also in performance to our customer stop the a BBB and they're absolutely thrilled that couldn't believes that old Allstate thought automated I mean today. It's like 10 12 faced everything else is men will test.

Of course, the challenge now also for us because old amendable tasting takes much more time. They cannot do then more than maximum 50 in if they have a lot of internal real work of course, we have for the second priority and Thats a fourth slowing down the field trial, which are also convinces us the positioning is just perfect ethanol.

Resources, it's a very expensive very slow and they can only do within about 13% of the case, it's probably if our in hundred percent of the cases all bank of lots are comprehensively characterized so they get much more like nostix information for the customer for a lot about it they're very happy also beef.

The result, and this V and VI data the interruptible, one we had to do be for block, we got from the donor lapse.

So there are transport that they are in the logistics a lot of those samples came from the U.S., sometimes those samples there like three to five days old and of course, the performance goes down with every day in real life and our customers have confirmed that they will do it as close as possible to the donation so it will be refund.

One day maximum today and the fresh would applaud the better the results. So our expectation is and I don't advocates football here, but we have seen that in the past that in the field trials to performance goals are actually actually up and it's not because the system is performing differently just because the samples afresh.

Last question, that's great and then just an expanded STS my career and then it sounds like you're making progress there will be studies slated for the second half.

Maybe you could just tell us whether the remaining steps before you move to be NV.

Trial, and and then also just to sanity check. It's my understanding that just from an engineering standpoint. The biggest challenge was just getting the H one microarray.

You know through the through the channel.

But just wanted to make sure that because yes, yes expanded menu is the last one a development that it that the the biggest design challenges are actually in the rear view mirror.

Thanks for taking all the questions gentlemen.

Yeah.

The the work right now is on optimizing the algorithm.

To enhance the performance and we are we are also focusing right now on the big three first so that is HIV, it's a happy in hepatitis C and ER for your information like what we'd be if molecular disease screening, we're planning a comparative study versus the old.

School bus system for immunoassay testing as well and generally recognized as the big free obviously test. So these are the gold standard test and we will do this in the next couple of weeks, we're very confident that the product is performing extremely well hold wise.

We wouldn't do these comparison at that stage and I I really hope, but that in the next earnings call I can give you the performance data. So that's all up in the making then of course, when you'd envelope off face or Microarrays. Every single test is difficult to do you know, but everyone was difficult to do and we have overcome all those.

Challenges.

Me personally belief that highway in Mds is.

Easy, it's nothing is easy but easier than the IDH programs. We have developed we really have started with the most difficult and most comprehensive from Icore. That's not for no reason they all know the automated out there I mean this industry exist for so many decades and nobody can be found out to me to process.

So I think Thats all Ike I can tell you underperformance at this stage everything else will be pretty much too, but we are progressing well and that we will have a comparative results are very soon.

Thanks Ross.

Thank you.

Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back over to Mr. Walker for any final comments.

Yeah. Thank you everybody for joining us on this call today and I see quotient continues to make considerable progress on mosaic and we look forward to its initial commercial launch next year. Phil. Thank you very much for your attention to have a good day. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. Again, we thank you for your participation and you may disconnect your lines at this time.

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