Q4 2019 Earnings Call
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thank you for your patience.
We stay on the line for the next available operator.
[music].
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thank you for your patience.
Please stay on the line for the next available operator.
[music].
Thank you for your patience.
Please stay on the line for the next available operator.
[music].
Thank you for your patience.
Please stay on the line for the next available operator.
[music].
Thank you for your patience.
We stay on the line for the next available operator.
[music].
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thank you for your patience. Please stay on the line for the next available operator.
[music].
Thanks for calling maybe a conference I'd.
Thank you for corn, there had been conference I'd.
There's people would you look to enhance it or check your mute button.
No responsible disconnect.
For calling to Conferencing Center a conference coordinator will be with you momentarily. Thank you.
[music].
Thank you for your patience.
Please stay on the line for the next available operator.
[music].
Thank you for your patience.
Thank you for corn, which conference would you like to doing today.
I would love to do a rural generally call.
Person lasting please.
First name David last name Brown.
Company named please.
IRA.
[laughter] you said in Iowa.
IRA A.I.E.R.A.
Okay and your email address please.
David at IRA Dot com.
Transferring over now benefits in the immediate future.
I would like to begin my comments by discussing the global Cobot 19, pandemic and how it is impacting our business.
From the initial commencement excuse me by the from the initial announcement by the Chinese government of the Cobot 19 outbreak in December.
Identification of the first case in the United States on January 24 of this year things have moved very quickly.
I'm sure all of you have been following the daily updates with regard to the virus and the global efforts to fight it.
Government regulations and directives impacting every aspect of our lives and our business have been established over the last 60 days, including shelter in place the closing of national borders and worldwide travel restrictions.
Impacts from individuals who may test positive or who are at risk for the virus have impacted our work environment.
And supply chain disruptions are a rising concern.
The hospital environment has become very challenging.
Hospitals are canceling elective surgeries and are implementing emergency preparedness plans to deal with the rapidly evolving pandemic.
In this environment it has become increasingly difficult to speak with healthcare professionals regarding any matters that are not related to helping manage the cobot 19 pandemic.
The U.S. government has projected that depend demick could last 18 months or longer.
And could include multiple waves of illness.
We have adopted this world view as our working case, and we're adjusting our operations and business practices to capitalize on opportunities to help assist in the fight against the virus and to prepare for the tough times our society is facing.
Fortunately the big picture outlook for the company is strong and we have a positive outlook for the business as we emerge from the near term global crisis.
The tragic cobot 19 pandemic further emphasizes the need for infectious disease precision medicine solutions, such as rapid DNA and are in a testing.
Q write us recognize this need early and is now participating as a first mover in Europe supplying rapid PCR test kits.
Developed and CE CE Ivy de marked by a strategic partner BG pie.
The first shipment of kits by BTI have been received in Q right is processing orders for thousands of tests with with first shipments being made to distribution partners in Europe.
Spiritus has been receiving significant inbound interest from labs, clinicians and distribution partners in the European Union.
Middle Eastern Africa, as well as the Asia Pacific regions.
Across both of our companies we are taking steps to capitalize on this initial success by adjusting our product development efforts to bring products and services to market as quickly as possible that could help mitigate the impact of the cobot 19 crisis.
The products and services could include new rapid PCR test capabilities.
Hello, informatics and potentially DNA sequencing offerings.
Late last year Q write us received FDA clearance for an expanded labeling claim forage unit Barrow lower respiratory panel to include the use of Bronkema solar lovaza specimens or BA Els.
And testing for pneumocystis.
In addition to a broad range of bacterial pathogens and antibiotic resistance markers.
This makes the universe Arrow LR team Vale test uniquely differentiated and the first and only FDA cleared test, which includes this key pathogen relevant, especially in immunocompromised patients.
This new indications substantially increases the total addressable market for the unit Vero system in the United States.
The overall business outlook for this exciting new product is currently transforming.
Hospitals and health systems preparing for the immediate coated 19 crisis.
Appear to be focusing entirely on this matter and new unit Arrow system installations, and many new planned evaluations.
I have been pushed out to free hospital and laboratory resources.
Conversely, with the expected surge in hospitalized cobot 19 patients in IC use globally, many of them on ventilators and the anticipated rise in bacterial pneumonia is unlikely complication and co morbidity in many cases.
The unit Vero lower respiratory tract test could become an important tool for hospitals combating the anticipated surge in acutely ill patients.
In Europe, and other regions hit hard by the pandemic there are increasing numbers of expressions of interest to use the universe, our test to help manage patients at risk for life threatening bacterial co infections.
As a result additional placements of universe systems are anticipated and curious is developing structured programs to help address this critical needs.
Knowing the pathogen I'd and anti microbial resistance profile is key to selecting antibiotics for these patients.
Time is of the essence in treating patients.
Bacterial culture can take days compared with just four to five hours for the universe protest.
In addition, we are evaluating the medical need for a potentially new product with Sars koby to added to the current universal LR TBL panel.
In the us the path to market would be accelerated through the recently expanded FDA emergency use authorization pathway.
I will now turn the call over to Tim deck, who will review financial results for 2019, and recent financial developments for the business Tim.
Thank you Evan on today's call I will touch briefly on the highlights of the fourth quarter and the full year 2019 financial results.
Total revenue for the 12 months ended December 31, 2019 was 3.5 million compared with 2.9 million in 2018, an increase of approximately 19%.
Fourth quarter revenue was 821000 compared with 759000 in the prior year period, an increase of approximately 8%.
Total operating expenses for the 12 months ended December 30, Onest 2019 were 15.8 million as compared to 16.1 million for 2018.
If you excluded the transaction fees associated with the cure itis business combination of 800000 and the impairment of the rate of use asset of 500000, our operating expenses for 2019 would have been 14.5 million or at 10% reduction in our operating expenses year over year.
Net loss for the year was $12.4 million or $7 in 70 cents per share as compared to 13.4 million or $44.49 per share in 2018.
Since our last call in October we have been working weekly if not daily with Securitise team on preparations to integrate the two organizations.
Numerous key executives and team members have been back and forth across the Atlantic to ensure we will be prepared to move forward immediately as the business combination comes together.
We have formalized post closing combination of the board our internal executive management team identified other key senior members of the team and identified numerous synergistic financial opportunities.
As Ed mentioned, we expect the combination to be approved by our option shareholders next Tuesday on March Thirtyth.
Monday, rather approximately 2.66 million new option shares will be issued to courageous NV as sole consideration for the purchase of curated Gmbh at the closing.
In the transaction announcement, we estimated combined pro forma 2019 revenue would be in the $5 million to $6 million range.
We are pleased to say that our pro forma revenue for 2019 would've into high end of that range or $6 million.
We have previously publicly stated that we expect our 2020 revenue to grow.
During the current global pandemic situation, we will not be providing revenue or any other guidance at this time.
For those that did not listen to our last call I would like to point to a number of key items that support the rationale for this strategic business combination.
First deritis brings a strong U.S sales and marketing team and the two companies together has significant potential revenue synergies.
Secondly, Deritis has a dedicated international commercial distribution partnership network and a strong support team.
Third Deritis has a state of the art 16000 square foot clean room for test manufacturing that is outfitted with robotic technology and that has been FDA inspected.
With historic capital investment approaching $10 million, we anticipate these capabilities will help to bring our am our gene panel market with lower incremental cash from.
Fourth curious with Aries generics as advanced Bioinformatic capabilities that can be leveraged to integrate both companies AMR databases data analytics and reporting platforms.
And finally, our preliminary annual cost saving estimates when comparing against 2019 pro forma combined actuals are in the 15% to 20% range.
Potentially even higher as we work to identify other areas of savings.
Post combination.
I would like to prepare Mike I would like to conclude my prepared remarks by updating everyone on our cash position.
During the past five to six weeks, if we have seen tremendous volume in our stock our average daily trading volume is currently over 3 million shares per day with a high share price achieved a week ago at $5.76.
We are encouraged to see the company stock price respond to our work to help address their corona virus pandemic and the increased certainty that the option for itis business combination will be completed successfully.
Because of that positive support for our stock in the business conversation combination we have raised approximately $13.2 million since mid February through both our ATM and exercises of the $2 per share warrants issued in October 2019 public offering.
Additionally, our shelf capacity has been increased by approximately $11.5 million.
We recently filed a prospectus supplement last week to increase the capability under our ATM, thus price providing additional access to capital on a selective basis at the appropriate time over the coming months and quarter.
This capacity behind can be used during calendar 2020 to support the combined operations of option and curated.
Following closing of the business combination.
With more than approximately 22.6 million of capital raised over the last six months our balance sheet is in a solid position as we look to combine the two organizations.
With that ill turn the call back to Evan to discussion additional key milestones.
Thank you Tim.
In the next part of the call I will comment on some of the key option and curators development programs and commercial activities.
Last may we submitted the Acuitas Edmar gene panel isolates five 10-K to the FDA.
The agency responded in July 2019 with extensive questions.
In what is called an additional information request letter.
In early January 2020, we submitted formal responses to the majority of the agencies questions. After which we received additional questions from the FDA in mid January.
Through the first quarter, we've continued to respond to the questions posed by the agency.
Upturn is continuing to work with the FDA to address additional questions that have arisen during the interactive review process.
The FDA shared with option and working plan to complete the FDA review the Acuitas Edmar gene panel isolates five 10-K submission.
However, we anticipate delays to the planned timeline as a result of the ongoing cobot 19 pandemic.
Consequently, the anticipated timeline for the remainder of the second interactive process review and ultimately the clearance for the Acuitas am our gene panel islands' diagnostics and diagnostic test is currently unknown.
Although we anticipate that the extensive review process is nearing completion.
We began accruing samples for the Acuitas MRG and panel urine de Novo clinical trial in December and by early March we had all nine centers accruing urine samples for enrollment and the completion of the clinical trial was anticipated by mid spring.
Given the rate of accrual.
Unfortunately, as a consequence of the cobot 19 pandemic, our clinical trial sites have notified us that they will be suspending clinical trial activities until the cobot 19 situation is under control.
We currently estimate that this program freeze could last until early summer as the clinical laboratory sites focus on efforts to bring laboratory testing and services to support the cobot 19 pandemic.
We've seen a similar situation with the New York State Digital Health initiative.
Up Gen completed plan milestones in the groundbreaking collaboration with New York State.
With the New York State Department of Health and alone Health solutions, a wholly owned subsidiary of Merck's healthcare services and solutions.
To develop a state of the art research program to track detect and manage any microbial resistant infections that healthcare institutions statewide.
In response to the Cobot 19 emergency in New York State.
Testing under the program has been put on hold by the Wadsworth Center and participating hospitals.
We have successfully completed the final milestone for the first year of the contract and we'll provide more information about the continuation of the project into year two when it is available.
Q write US is subsidiary areas genetics programs are proceeding nicely towards the achievement of the planned corporate partner milestones. This summer.
Recently, the Austrian government has implemented some of the most restrictive workers stay at home requirements to help combat the covered to outbreak.
But so far the entire Aries team has been able to continue the project work by Smart Teleworking solutions.
We anticipate there may be an impact on some programs as laboratory stuff might be unable to complete planned experiments on time.
Areas genetics is looking into several alternatives scenarios to avoid bottlenecks should this become reality.
While it cobot nine teen pandemic is creating challenges for our core development efforts, the new cobot 19 testing and related opportunities presenting themselves to the company could help offset some of the program delays we have highlighted this afternoon.
As mentioned earlier the business combination with curious is expected to be completed as we enter April.
The company is well positioned to capitalize on a number of significant new opportunities.
Even though we faced challenges with supply chain disruptions travel restrictions and stay at home policies. We are confident that we will be able to both protect our employees and capitalize on the promising opportunities for the new combined company.
In closing we are pleased with our results for the fourth quarter and full year 2019.
We look forward to completing our exciting business combination with curators and are encouraged by what will be our integrated business pipeline and growth opportunities for 2020 and beyond.
We appreciate your support and your time this afternoon.
I would now like to turn the call back to the operator for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone.
To withdraw your question first the power.
Please standby, while we compile the Q and a roster.
And our first question comes from the line of each Chen with HC Wainwright.
Thank you for taking my question could you please comment.
The specification sub PGS test kits for Colby 19, and was the volume of ship among thus far and how the economics will be accounted for in terms of.
Revenue recorded for Deritis. Thank you.
Thank you gave for.
Your question and interest in the company I'm going to hand, this went over to Oliver shot to answer.
Hi can you hear me as this offline open.
Yes.
Okay perfect.
Well thanks.
Look the BTI test kit is a.
Standard.
PCR plate based assay works on a b. So it's a thermo Fisher platform AI 7500.
Fairly simple reagent kit art works with any standard on a extraction protocol.
Specified or recommend the Cajun one, but we also know it works with other other on a perhaps.
In terms of volume of shipments I, it's really early days as as Kevin pointed out literally last week, we were sheet, we received our very first shipments.
We've gone from let's say.
No single digit thousands our second order, which we received yesterday is the first five digit number of tests, we're processing orders daily what I can say as we have shipped several thousand tests in these past 48 hours.
Quite literally by the hour there is expressions of interest, we just got to walk through and figure out.
How to best and most efficiently and effectively leverage our existing European distribution network. Because if you remember we had great. It's no longer have a direct sales and customer presence in the European markets.
We work through various distributors such as many rainy.
Oxon lab, Ocho, Matt and others.
So that's our primary goal that said.
We've also be.
Now, let's say inundated, but we've also been receiving a lot of inbound calls and requests from hospitals.
Existing universal customers across Germany, France, Benelux, where we'll of course also willing to stand by and provide.
These kits to anybody who has an ABL is 7500 system.
In terms of the accounting it's fairly straightforward we purchased these kids at an agreed upon transfer price from BG.
Are they shipped to our warehouse here in Germany, and we then sell them at a transfer price to our distribution partners.
We've not guided to any specific pricing, but I'd say, it's fair to assume that were working off of standard molecular diagnostic industry distributor margins there somewhere in the call it 20% to 40% range. So there's definitely a positive gross margin at again, we don't we as of today have no direct and customer.
Channel here. This is all a buying in bulk from BG and then reselling to our distribution network to make sure. These tests get straight into the hands on labs, and doctors, who meet the most urgently.
Cross initially Europe, but we've also been given the greenlight from BG.
To expand beyond the strict boundaries of the European Union.
We have inbound requests as Kevin pointed out from a number of countries across saw.
The Northern Africa, and Middle Eastern and Asia Pacific regions of the World as well.
Thank you and could you also common on the.
Additional cemig GT, if theres any between between about using both the PGTI Koby 19 test to end the unit barrel test system.
Thanks.
Absolutely.
If you look at some recent data thats come out of China. There has been a retrospective study of about 200 patients are showing very clearly that in intensive care unit patients you have a.
Prevalence of about 15% to 20% of patients also getting a bacterial pneumonia co infection.
If you look at the mortality rates on mortality cases.
Almost half 50% of all deaths in the coal prices have been attributable to bacterial pneumonia.
So while of course it is critical initially to treat patients diagnosed them for krona virus as soon as you have them in an intensive care unit in the specialty ventilated. It's also critical to make sure you get a rapid diagnosis of all the potential pathogens and Thats really the the core a follower our product portfolio.
And pipeline at greatest with fee pneumonia and at lower respiratory panels in Europe in the us.
So being able to detect 20 different pathogens and.
10 different resistance markers in the US sub 19 of them have been cleared in Europe.
Clearly also gives doctors the ability to then select the best antibiotic treatment discourse. The good news is.
As opposed to a virus, we do have effective drugs for bacterial pneumonia, we just got to make sure we pick the right ones for these critical care patients.
Got it thank you.
Thank you and our next question comes from the lineup Ben Haynor with Alliance Global partners.
Good afternoon, gentlemen, thanks for taking the questions and congrats on reaching a quorum for the for the vote.
Just first off for me is there any supply chain impact for for you guys and then in the prepared remarks, you mentioned that there's some.
A universal structured programs, if I, if I heard that correctly what are those and.
Is there any potential impact does also the supply chain on.
On those.
Yes.
Hi, Joe had Oliver.
Sure.
I'll, let any comment on the supply chain in Europe, where I can say so far knock on wood, we on the greatest side of not being impacted by any immediate supply chain issues.
That of course can change going forward, but we have supply of instruments, we have supply of.
Any components plastics as well as reagents, we need to manufacture all cartridges. So so far so good.
In terms with the structured programs.
You are obviously facing a very very interesting conundrum on the one and there is significant inbound interest from hospitals to bringing in additional Univ arrow systems for what I outlined earlier this.
Parallel testing for bacterial pneumonia on the other hand, theres virtually no way physically to send anybody into these hospitals.
At Northern Italy, Austria, the borders are closed across Europe.
Even inside Germany, frankly, with a lot of the travel restrictions, it's literally impossible. So part of the programs we've been working on with our distribution partners, but also with.
Some of our former direct end clients is sort of virtual.
Video based Skype and Whatsapp based.
Video tutorials, where we have staff, so virtually standing by and assisting in the installation training, it's and that goes to show how easy the universal platform is to use it doesn't take necessarily somebody on site as much as you'd like to be there for the first installation on initial training.
So thats just part of the programs we've also.
Offered to our.
European partner Mary.
An increase we have a pool defined across Europe in all the 11 countries that.
That they serve for us.
We have a pool of universal instrument systems, which we have agreed to potentially increase in size.
Make additional units available very uncomplicated fashion and again, we've received several several additional installation request in in Italy in Southern Europe in places like Greece again, right now the key challenges that menarini being headquartered in northern Italy is effectively.
Quarantined as a company.
Nobody able to go from Asia B. So we're trying to figure out smart ways of working fleet that but at some of the just the hands on real world challenges that we're facing but we're going to find smart solutions to those.
Okay.
That's very helpful embedded added on segment does this go ahead sorry.
Third largest going to say.
Oliver mentioned, maybe we'd have some additional comments on the supply chain side of this.
We have no immediate impact on the supply chain for our business, but as we look to capitalize on these emerging opportunities in the Corona virus area.
You'd be probably aware that even things as simple as getting a nasal swab are very difficult in these times and.
When you start to get into more specialty regions, such as the enzymes required for PCR.
We think we're in good shape, but we want to sensitize people that our ability do.
Ill do open field running with new product is also gated by our ability to.
Good.
Produced the products and there's a run on everything you could imagine by all producers trying to get to market.
Okay that colors very helpful. Fortunately then last thing.
Go ahead.
So Kevin go ahead.
Okay and then.
Just on the New York State program in I understand that that's on hold the no surprise, there I guess, but im just thinking about it in Q1.
Will there be or was there any revenue recognized during the quarter.
For that program.
Go ahead.
Yes, Ben.
Yes. Good question. If you remember there was one final milestone in the first year I'll, let Evan touch on maybe potential out years, but.
We will be recognizing that last piece of the final.
Milestone in Q1.
Okay and back to the programmatic side of this.
The full system was up and running.
Including the real time.
Evaluation of patient records are am our pathogen detection showing some very promising.
Data.
And certainly as you can imagine.
The New York Metro area being at the FFO side of the Covance situation.
It's all hands on deck for that with in terms of resources, but one of the things that this has shown is that whole infrastructure and capability.
May be re purpose in interesting ways to help.
The stayed as they go to phase two of this meaning after we get passed this initial surge how do we manage co bid 19 patients through the rest of this year and beyond.
And.
As things potentially develop their we'll keep you posted.
Okay. So thats kind of flows in the my.
And just thinking about the light house in the pathogen tracking that you're already doing on the bacterial side is that something that could be expanded it to attract viruses as well.
And if so what are you what are the what are you guys doing there.
So I'll answer this and then hand it over to Oliver if he wants to add anything.
Clearly opportunities there Ben I think the.
We just don't want to get have things and if there's more to describe we will.
Bring it forward in the coming month or two.
I'll just add I mean.
We obviously with a light house on the option side and the Rsvb in Austria with ours genetics technologically.
In nucleic acid as a sequence so far.
Individual letters, whether its DNA or in our ne.
Bacteria or a virus to the software to the algorithms per se is neither here nor there. So is it technically doable the answer is clearly yes.
[music].
In many ways you know a single virus.
As a much simpler beast van having Doug.
Of different.
Bacteria.
Then also get resistant, but again as Kevin said, we Havent made any final decisions at this point on how to best approach. This not just from a technical development standpoint, but also from a collaborative standpoint, with New York state or other potential out laboratory partners.
In the us and or Europe arms, So we'll update folks as we as we move forward.
Okay, Great fair enough, thanks for taking the questions gentlemen.
Thanks, Ben Thanks.
Thank you.
Our next question comes from the line Maxim Jacobs with Edison Group.
Hi, guys. Thanks for taking my questions.
My first one is just I understand that the the testing landscape for coated 19 is rather fluid, but I was wondering if you give us a sense of where the cure at us.
Over 19 test stands compared to others that are available in Europe.
If you're talking about the cure rate of speech, you talking about the BG Ike test kit or you're talking about a potential future unit barrel of the BTI test kit.
Okay understood I am sure look.
I mean, the one thing to realize is as you said, it's a very fluid very dynamic situation.
There is a substantial universe of opportunities for Covance 19 testing.
Be it.
At.
Almost.
Hold testing for four antigens, there's more and more tests coming out that way all the way through the ultra high throughput.
Roche Cobas cobas platforms.
Which.
Honestly those those types of platforms are likely going to take the bulk of the sheer volume when you look at central labs.
Processing.
Thousands of not tens of thousands of tests in a very short order.
Where the BG test kit fits in.
It's really that that middle segment. The Thermo Fisher Apiay 7500 is really a war course off the PCR landscape, it's a well established widely distributed platform.
Both in Europe, and the United States, but in Europe, it's been around for a long time, it's got a lot of fans a lot of labs.
There's sort of in the.
Lower to medium volume.
But it's a simple platform doesnt require the capital outlay, if you go farther out into.
Eastern Europe southeastern Europe.
Where you have fewer and fewer lapse that have sort of the latest and greatest Roche cobas tockman platforms, but they do often have fees A.B. I 7500.
Of course platforms. So we're playing in this let's call it medium volume throughput again to standard 96, well played so it's not one of these into these but it's also not all designed to 10000 tests in a single shift so in that mid range.
And again Thats thats, the sweet spot and Thats really where the focus is getting getting those tests in the hands of all of those labs, who have that platform readily available.
If you look at the the pack insert and the instructions for use and you look at it from a technical standpoint.
Frankly, there's also no reason to believe these these reagent kits and this is true for the BG kit, but also many others that are out on generic PCR equipment would not also work on many other Pcr platforms.
Of course, this being a regulated CE mark diagnostic it has been validated on the BDI 7500.
Now if.
Folks are looking at this from a getting getting cute and looking at other PCR platforms I would not be too surprised if it works equally well on on a bunch of other platforms I can.
We know it works on other thermo Fisher platforms as we have some with both in our own labs were not promoting it actively for those but it's certainly something that as things evolve can be looked at in terms is expanding the the universe of instruments. This can run off.
Great and that was very helpful.
I was just wondering what's the prospect of developing a test for the U.S. market.
Well the BG test kits has been FDA cleared under the emergency use authorization.
Given our long standing strategic partnership with BG.
Is this a conversation we're having with some absolutely now BG I also has its own a direct commercial channels in the U.S. So no decisions have been made there but the test is in principle available in the United States by now.
Where they are in terms of inventory I have visibility on their European operations, because their European affiliate is.
Is in Germany and ended in Denmark, So we have good visibility on the.
The bulk volume that's coming through there are out of China, I don't have that visibility on any available test kits in the United States as in our they physically available there today, but from a regulatory standpoint as of last week. This has been emergency use authorized by the FDA.
And and Max Evan here, just want to wanted to add that.
On the call.
Script earlier, we talked about the potential of adding the Corona virus test to the unit Vera LR TV panel.
If that goes forward that could be moved into the north American market under the emergency use authorization.
Fairly quickly.
And then we're also looking at other opportunities, but one thing we don't want to do is duplicate some of the activities that have already been done by other so I think you'd look to the company to make.
On a smart strategic moves here, while a capitalizes on its position on the two products that I just mentioned.
Okay wonderful.
That was extremely helpful.
My last question is kind of a.
Minor one for Tim.
So just wondering so.
After the the amendment that was filed last week, how how much is left under the ATM right now.
So there is significant amount left in excess of $11 million.
Okay.
Yep.
It's everything.
Let's say and thank you guys.
Now that that's all my question.
Thank you.
Yes.
Thank you.
Our next question comes from line of Bruce Jackson with Benchmark company.
Hi, good afternoon. Thank you for taking my questions.
Wanted to start off with the M. The five 10-K for the Acuitas device can you give us a sense of what types of questions. The FDA is asking are they questions that are easy to trust are these questions that might take some time to work on.
Bruce Thanks for the question Evan Jones here I'll answer that one.
First let me just say that the near term delays are primarily a function of.
The state of Maryland, having shutdown all non essential businesses and so even though the FDA is.
Capable and is working remotely.
That's causing anticipated understandable.
Near term delay there.
Termed of the remaining questions.
Without getting into a lot of the details I can tell you that they're the type of questions that.
Related to product labeling and things like that.
Okay, Great that's something that's very helpful and then.
In terms of the supply of the BG.
Sorry to test you said, you've got some visibility there do you have any.
And type of relationship in place, where if you get if they get supply constrained you get preferred status and the the product can continue to flow to your customers.
That's a very good question I would like to believe so.
Is it contractual in writing no, but I've been dealing with Chinese partners for many many years.
We were the first ones they called in January.
In Europe, we were the first ones they offered.
Commercial partnership opportunity to now understandably, they're not relying on curators alone here in Europe.
So we are one of several partners spot.
We have a very close dialogue with the European Representatives and we also have a direct communication channel to corporate headquarters in Shenzhen in China.
So far they've been very good they give us heads up on volumes inbound.
They proactively ask what's what's your next week stake if only I knew I can tell you literally we've been in a mode. These last 48 hours, where we've been short selling product I'd I've sold kits that I knew we were going to get did we did actually receiving this morning, but I sold some of those kits last Friday so [laughter].
So far today again, they have made us a preferred partner.
We hope that stays that way and we obviously do all our utmost to justify that that trust and that relationship by getting those kits in the hands of distribution partners and into the market as quickly as possible.
What I can see from.
Again, it's only been a week.
First shipments.
Second shipment was 10 times the size of the first one.
The safe assumption that the next shipment were getting as yet again going to be larger so we're definitely getting a feel for what's the weekly what's the weekly volume that we can safely put into our channels and that number is likely going to be increasing.
And so yes, I think we will continue to benefit from this.
Personal but also corporate relationship between greatest on BTI as things get even crazier and even more hectic here.
Okay, great. Thank you very much.
Thank you and I'm showing no further questions at this time with that ill turn the call back over to CEO, Evan Jones for closing remarks.
Yes. Thank you everyone for attending today and those of you from analyst community. Thank you for your questions.
As you can see there's a lot of excitement around the company right now and the work we're doing in.
Things are moving quickly.
We look forward to updating you as we continue to progress things and.
Thank you very much.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program can you may now disconnect.
[music].
Yes.
[music].