Q4 2019 Earnings Call
Ladies and gentlemen, thank you for responding by and walk out because I can share 40 years 2019 earnings results Conference call.
Slide.
Once I always said no.
So to speak a preference I shouldn't that will be a question answer session.
The question during the session you really depressed Saar in Watsonville telephone I lots and lots of but this conference is being recorded disease states that if we're able to south and uncertainty I would now like I had the garden fresh out of the first to speak of disease. The cheetahs job. The GE in IR Officer Mr. song Kim. Thank you. Please go ahead.
Good.
Thank you operator.
Oh and welcome.
Thank you for joining us to discuss our full year 29 can result, which were issued earlier today.
You can view this presentation and the related press release on central genes website.
No not able to view the webcast you can find the relevant slides on www dot investors Dot central gene Dot com.
Our speakers today, our central Geez, Chief Executive Officer Professor aren't roles.
And Richard stolen Central genes Chief Financial Officer.
Before we begin please refer to slide two of our presentation, which provide information about certain statements to be made today that maybe considered forward looking statements within the meaning of the U.S. securities laws.
Including those regarding our strategic plan development programs and future financial result.
Statements made during this call.
No not historical statements, maybe forward looking statements and as such maybe subject to risks and uncertainties, which if they materialize could materially affect our actual results.
The forward looking statements in this presentation speak only as of today and we undertake no obligation to update or revise and you'll be statements to reflect future events or developments.
Except as required by the law.
Additionally.
You know FCC filings.
Following our presentation. We will also open up so called to QNX, we request that you only ask a maximum of three questions.
I will now have the presentation over to Arne Please turn to slide three.
Thank you some and Hello, everyone.
Thank you for joining our call today, especially during these unprecedented times.
We had to it we want is healthy and safe and our thoughts I would though was affected by the cobot 19 virus.
Before we dive into all a 29 gene performance, let me quickly update you on how Syntocinon is dealing with the cobot 19 situation.
Early March we took the necessity steps so that the approximately 75% our employees could work from home with exception of those needed to keep laboratory operations running.
To support customers that are critical to the house color ecosystem.
Thanks to everyone at Fortune to date, we have been able to operate or a business through this crisis without too much disruption and now we're taking efforts to reopen our offices in a carefully measured met up.
Now, let us to tell you about our significant achievements intervention on gene, which made the year a critical one and centered genes evolution.
There's also our first annual results call as a public company and we're pleased to share with you over full year. Two when do you know in June results, demonstrating centered gene strong execution across multiple parts of the business.
To begin I'll start pressuring an overall business update and then Richard will take you through the financials.
Let's turn to slide four.
Before diving you enjoy or 29 team performance, let me remind you what finch gene as far as to achieve.
Our ultimate goal is providing precise medical diagnosis.
Inherited diseases at the oldest possible moment.
Transforming medical expertise and analytical information into actionable results for physicians patients and pharmaceutical partners.
We accomplished this by using a multi dimensional abroad.
Otherwise patients data.
And by harnessing, our unsurpassed knowledge of rare diseases to help physicians more easily diagnosed patients and support biotech and pharma companies to develop new treatment options.
We want to centered she is passionate about achieving this goal and you will hear how we are following through this going in every aspect of our business throughout the presentation.
The oldest off into today's presentation, starting on slide five.
We would like to focus on how we have delivered on multiple fronts intervention 19 first we're proud of our strong financial operational performance. We grew our topline by approximately 21% in 2019, driven by strong performance of our farmers segments I will share some.
Additional key metrics on subsequent slides that demonstrate solid operational execution beyond the financials.
Second we have met great brokerage is expanding our pharmacy do collaboration agreements, particularly with notable industry partners.
This is an important milestone for us it's not only demonstrates our continued efforts to expand our pharmaceutical business, but also speaks to the deep expertise that sense gene has built up in the Radisys base.
Finally, we are proud of our IPO in 2019.
What's the P. bode well milestone in our evolution and sits up syntocinon for further growth as a partner of choice for the industry.
Please turn to slide six.
[noise] 2019 revenue grew by approximately 21% compared to 2018 drew approximately 49 million Euro. This was achieved for approximately 24% growth in the pharma segment with significant progress made an expanding over a key partnerships.
Well, let Richard walk through this in further detail and the financial revenue section.
I would like to speak about the operating performance that drove the strong financial performance.
I want to share with the you'd given the matrix to consider for both our pharma and clinical diagnostics segment over the next few slots.
Please turn to slide seven.
Let me first focus on our pharma business.
These operational metrics help expand the strong financial performance what 2019.
They also leading indicator for what to expect going forwards.
The first major against the continued expansion of our client base.
We are listening the number of pharma collaborations as the metric to focus on going forward, because it's more and more companies are coming to us to expand existing partnerships. We believe this better reflect our operational growth.
In some cases, we expand an existing collaboration to new therapeutic indications.
In other cases, we expanded the scope of collaboration to include new activities.
We can't 28, new partnerships during 2019, demonstrating a significant acceleration on this front.
The second metric I would like to introduce the number of disease areas under our partnerships. This is an important metric because only 5% of rare diseases have an approved therapy, we need to accelerate our knowledge in order to hot develop and improve therapies.
With expand into 11, new rare disease indications that is 11, new groups of patients for which we could provide a potential life changing treatment option.
The third metric I would like to percentage number of bio market partnerships.
Biomarkers are crucial element of how we can help pharma partners because they generate the molecular insights that can be used to inform the development sockets that treatment options.
At Center Gene, we're working on the discovery of numerous Biomarkers and the number of biomarker partnership speaks to the potential utility, but all pharma partners once developed.
Some of these partnerships are related to the utilization of Biomarkers already developed and some are related to development activities themselves.
We entered into seven mall biomarker partnerships in 2019, bringing the total to 35.
We will continue to focus in this area and to expand further.
Please turn to slide eight well I will speak about the brokers made in key strategic partnerships.
First I want to speak about our research partnership with Pfizer.
As a reminder, this agreement is that research collaboration agreement leveraging centered genes data base and repository to potentially discovery and validation of mobile targets for new therapies in the rare disease space.
While we have been working with Pfizer for a number of years. This new agreement is a much broader partnership and Thats, a testament to the depth and robustness of center MD into our medical knowledge and this fields.
Center MD with more than 400000 curated cases is what we believed to be worlds largest database of rare disease cases, with genetic proteomic metabolomic and clinical information.
Also the concentration of rare disease patients from a wide range of ethnic backgrounds cross over hundred 20 countries.
The structured men off clinical information, allowing for easy quality of the data and the multi omnicam position of the day, there makes into MD truly powerful.
Look forward to the crate innovation to come from this collaboration for rare disease patients.
Our partnership with Takeda, which stems from the Shadow relationship has been one of the longest and most important partnerships percentage and more importantly, it's recognized all value in helping to bring therapies for rare disease patients in recent years. We expanded this relation to include hereditary angioedema gemar.
Well AJ Eve.
This is a strong endorsement from our key partner and complements our longstanding partnership with Takeda and lysosomal storage disorders, which extends over multiple years.
Let's turn to slide nine.
Now shifting gears to our clinical diagnostics business.
As we continue to emphasize our clinical diagnostics business is a critical part of our offering.
It plays a fundamental road that enables us to gain access to data center from which we then gain extremely valuable knowledge.
That is why while im sure so meaningful for us.
You can see from the chart on your latch with added 120000 patients to what we only believed this largest database of rare disease patients.
Some of this growth comes from the pharma segment, but we are all expanding our reach with the traditional clinical diagnostics business in order to keep expanding the breadth of our database.
The acceleration of all volume short is better depicted on the right 10 sites.
We do all wall of the 27% in 2019 compared to 2018, but I also want to add to this 27% growth is mild temperatures given the reduction in our non invasive prenatal testing volume as we shift focus to our core genetic testing business.
I still think it's a good reference point, just think about the testing volume growth going forward.
Now please turn to slide 10 for a closer look at our key milestone event or IPO in the U.S.
As you all note centered gene completed this initial public offering and lifted its shares domestic on November seven.
As the founder of this company in 2006 I view this as one of the most important milestones percentage gene because of what it means going forward.
First we are able to in west IPO proceeds in places, where we can accelerate future growth.
As a critical juncture in making the necessary investments will enable us to continue sangeen strong momentum and allow us to take our company to the next level.
Another important aspect that the IPO prints dissented gene is that with the ability of being a publicly listed company.
We will already getting more active in our conversations with prospective pharma partners.
And the increased visibility will only further fuel this trends. In addition, the credibility that comes along with the meeting U.S. FCCL requirements will go a long way in its happening after the partner of choice.
Turning to slide 11 for other recent achievements.
In February of this year synergy inspire repository and Russ Duck, Germany receive prestigious accreditation from the college of American pathologist capped.
Well the first by a repository to receive such equitation outside the U.S., which demonstrates how we are racing industry standards.
We believe our achievements to the high quality standards sets us apart from other players in the global markets.
I also want to briefly mentioned the global rare disease day event that we hosted on February 29.
This was our Thirteens rare disease date, this time with similar tennis event in Lahore, Pakistan, the lean and Mexico City.
Thank you Jim joined hands with patients physicians researches politicians and other partners to improve our knowledge and identify solutions for the challenges that dreaded diseases post patients their families and our society's.
He felt compelled to raise awareness around the world about the immense burden that rare diseases kind of half this particularly the case for societies with a high come sanguine energy rate when a large number of undiagnosed patients coexist with a lack of diagnostic infrastructure and.
Targeted medical training.
This is something all of my colleagues and I essentially gene a passionate about and we were thrilled at the level of excitement from those who participated.
Now, let's turn to slide 12.
At the situation surrounding cope with 19, Bruce since syndication felt the need to support the CLO become unity and do its part in preventing further spread of the virus where possible.
Earlier last month, we announced commencement of testing for cobalt 19, using our advanced technical equipment and expert medical knowledge.
We set up a cross functional team all of whom I must prudently comment on the efforts and commitment to get into testing up and running.
Following testing authentic gene employees, we expanded our efforts by providing testing to essentially workers, including five men and women and Thomas Kehl, Ruckus, and rust took and the local region.
That's very important to us at centered gene that we do our approach and helping our a community deal with this global crisis in April we further increase testing first by working with multiple partners to support commercial testing across the Europe region segment by adding or a new handbook.
Flat location, which will now we'll host our covet testing.
It is too early to provide to potential financial impact on the commercial testing, but it goes without saying that we're extremely pleased to be able to leverage our capabilities to help the global community.
Let me know handed over to Richards, who will discuss our financials in more detail.
Thank you aren't now please turn to slide 14.
Looking at our performance in 29 team, we have grown our topline by approximately 21% compared to 2018 looking more specifically the individual business segments. The diagnostics business grew at approximately 18% and the pharma business grew approximately 24 cents compared to 2018.
This is in line with the guidance we gave for 2019, when we stated our combined total grow at approximately 20% driven by a fast growing pharma segment.
On the profitability side, you'll notice that the diagnostics business profitability remained relatively flat.
Yes, the pharma segment profitability came down by 10% this point in 2019.
Well the pharma business is clearly a profitable segment, let me provide a reasons for the decline.
In 2018, where some revenues from upfront fees associated with the one of transfer of center genes existing intellectual property, which did not happen at 29 team.
Our pharma business profitability will always be a balance between the revenue coming in and the mix of serves that we provide and this may fluctuate to a certain degree.
I believe we are at a steady state at this point in time the to profitability could fluctuate depending on how fast we accelerate topline growth.
Now, let's look a little more in detail at the revenue performance in 29 team on slide 15.
On the pharma side, we want to give you a breakdown of the revenue that comes from new contract discussed. This gives you a sense of how much new business, we are bringing in and how the existing partnerships continue to grow.
Looking at the past year, we brought in 7 million euro of new business, while the existing business grew at approximately 20% compared to previous year.
You will notice that the new business grew at a much faster rate of approximately 35% in 29 team.
As arent had mentioned before and speaking about what the recent IPO means for US I think this is the area, where we can benefit the most in terms of making necessary investments and gaining further visibility in the market.
On the diagnostic side, if you focus on the core genetic diagnostics, excluding an IP our growth rate was approximately 24% in 2019 compared to 2018.
As we've mentioned before you an equity business is not the core of our business north central to our mission of generating medical insights around rare diseases.
Well, we previously entered this space for certain strategic reasons, we have now shifted our focus to growing our core kinetic diagnostics business. In summary, we are growing even faster in areas of focus for future growth, which is a great message for the company.
Now please turn to slide 16 for our fourth quarter performance.
Our fourth quarter 2019 revenue grew by approximately 52% compared to the fourth quarter 2018, driven by approximately 110% growth in our pharma segment.
Caveat this by reiterating the Lumpiness of our pharma business when looking at quarterly performance.
Therefore, I would encourage you to think about a pharma segment growth more on an annual basis. As you have just reviewed our pharma business growing at a healthy rate supported by good fundamentals.
What are a big contract to sign before or after the quarter close is less important to us.
On the profitability side, you see the tale of two city.
Diagnostics business profitability saw an increase due to the reduction of the anti PD business.
Pharma business profitability, while still having a healthy margin declined in line with what I explained for the annual performance. As a reminder, this has to do with contracts, we signed in 2018 with certain upfront fees.
Please now turn to slide 17.
Slide 17 shows our Q4 and full year PNM.
Our results for the full year 2019 were impacted by few drivers, which I'll briefly review now.
Firstly DNA expenses increased by four and a half million euros, which consists of investments in infrastructure and security organizational expansion and share based payments.
Secondly, an increase in R&D investments of 3.3 million euros represents an acceleration of efforts such as biomarker development and data generation, which is directly linked to the future growth of the company.
Third the real estate transfer tax expense of 1.2 million euros that we incurred were a result or to sale and leaseback of our rustic headquarters building as previous as previously discussed in our Q3 earnings call.
In summary, our cost base grew faster than our top line for the year as discussed previously in regard to the time ever IPO, we're making investments to accelerate our growth and we're confident this is the right time to make these investments now please turn to slide 18.
On this slide we're looking at key cash flow and balance sheet items 2019 was a very positive year from the perspective of cash flow. We at 14.2 million Euro cash inflows from investing activities, representing the proceeds from the sale of to roll stock headquarters and the net of investments in intangible assets and laboratory equipment.
The cash flow from financing activities was driven in large part D. IPO, but also reflects the repayment of loans and additional interest due to early repayment.
On the balance sheet as of December 31st 29 team, our cash and cash equivalents include the proceeds from the IPO.
As mentioned in the Q3 earnings call the increase in depth does not actually means that our debt increased but rather that we must now account for the lease liability for the next eight years. According to I for 16, and accounting policy effective from January one of this year. This is roughly 20 million euros, taking all these factors into account you can see the dark.
Balance sheet is quite robust.
As a CFO, having a robust balance sheet as a reliable assets, especially during uncertain times as these.
Before handing it back to aren't I did want to make a comment about our outlook for 2020.
As with many companies around the world given the uncertainty stemming from the current covert 19 crisis, we will not be providing guidance for the upcoming year. As you may recall, we have previously provided a general guidance at our revenue is expected to grow by 20% to 30% for the next few years.
However, due to an unprecedented level of uncertainty in the markets. We have decided to refrain from providing a forward looking statement at this time, we understand that the covert 19 situation is weighing on investors mine and we plan to update you once the potential impact on our business becomes clearer and more quantifiable, we look forward to providing updates once we gain more clay.
With that I'll turn to pull back to aren't.
Thank you rejects please now turn to slide 20.
Let me briefly summarize 2019 and our expectations for the year ahead 2019 was a transformative year for since June.
We expected well against our priorities and our strong financial operational performance last year provides a solid foundation for growth and Twentytwenty.
We achieved 21% revenue growth driven by our delivery on all key operational metrics in 2019.
2019 was also an important to you in terms of setting the right foundation for future growth.
Some key achievements included the expansion of strategic partnerships and our successful IPO.
Finally, I would like to leave you with an expectation for Twentytwenty.
Richard only noted that we will not be providing any financial guidance at this point in time.
I want to emphasize that while uncertainty exists in the markets. We will continue to be focused on executing against our strategy. As we always have I think this is more important than ever doing such challenging times. In addition, I also want to emphasize our crane position as the partner of choice.
In the rare disease space. This is increasing recognition by biotech and pharma companies that then switching is the strategic partner that can help them bring target treatments to patients with rare genetic diseases.
We appreciate your support and we'll continue on our lifelong commitment to patients.
I personally want to thank you for joining our call Jones, such uncertain times I know this pandemic is taking a huge toll on all of us but it also note that we will get through this and come out stronger and more resilient on the other such.
Thank you again for all the actions through our each taking to support the wellbeing of all of US with that I will now turn the call over to the operator for the Q and a portion of our call. Thank you.
Moving down to the men will not be the question answer session.
My question.
And your telephone.
Operator.
GAAP grass.
Once again, if you wish you asked a question deep spreads sorry.
And they have you questions on the line and your first question comes from the line of Sanjiv Yang.
Thanks, Jonathan.
Question.
Hello Suji Your line open please ask your question.
Okay.
Next question comes from Florida, Sachin Shah from Baird. Your line is open. Please ask your question.
Okay.
And what are your expectations for how that membership trends over time any number you're targeting in terms of new collaborations that you'll add 2020.
Catherine I apologize, but in the beginning you were not being heard at our and over the line. So two could I kindly ask you to repeat your question.
Yes, absolutely and you just noted that the number of collaborations will be a key metric to pay attention to you. So any expectations on how that membership trends or what you're targeting in terms of new collaborations that you'll added 2020.
Thank you for asking that question, indeed, a very important metric to us yet as we just mentioned we refrain from exact guidance. So trending is a network. So there will be new partnerships that will be additional partnerships. The exact number we are not quantifying at this stage.
As you can also see from our cost even the exact number of partnerships business not necessarily reflect the revenues per partnership Peter.
But it is trending upward as we as we speak.
Okay, and maybe more qualitatively from what we can tell on clinical trials that are that it doesn't look like any of your matrix trials.
Formally suspended is that the case and even so how does corporate impacts your thoughts on enrollment timelines for clinical trials here in Boston.
Thank you for asking that question and indeed, many of the author releases in the press regarding clinical trials in general, but also affecting rare diseases, which indeed to point at a slowing down.
Yes, the current.
Information, we're sharing as regarding year end. So it's a it's very hard to give you any clear indication at this point about what's happening in twentytwenty other than echoing what you see in dose those markets announcements that indeed, we would we would expect a an impact from the clinical trials in general slowing down and then I hand over.
Who aren't.
Richard Thank you.
I guess synergy in is still doing a very nice job and the topic of to clinical studies, which is based on the one side on the huge expertise of our clinical study team and on the other side all of the technical solutions. We have developed in the last years like the simplicity in plots drawing.
The simplicity of logistics for sending the DBS this into cards all over the slope and also the standardization of the Aquarius and the question as we are addressing a labeling all clinical programs are the basis Weisinger gene is still doing very well in this actually crisis.
Okay and last one from me understand you don't want to guess potential revenue impact for cobot testing, but any color on current testing capacity in Europe.
Where that could ramp to over time.
We clearly see that we have been able to ramp up the testing capacity also by opening the new facility in Hamburg.
The exact numbers are not to distributed yet.
And we also see more and more commercial interest as soon as we have more information on that we will lift we will brief the market when it becomes at the level that we that we can actually communicate any expectations to be raised.
Great great. Thank you.
Thank you Catherine.
Your next question crosses the line of money.
Your line is.
[music].
Yes, hi aren't rich. Thanks, hopefully you can hear me.
Yes, we can put needs me. Thank you okay, great great. So.
First question on the Centime do database, what's your expectation of expansion of the numbers in there given the impact we're seeing from Covidien and number of countries, where patients are not able to visit that physicians and.
And what is the what's your expectation obviously, having a center card makes it easier, but just help us understand what should we expect similar growth that you have seen in past continuing in the center MD database.
Thanks for that question I guess, you addressed near really important topic I can only repeat what I have.
Usually drafted also for the clinical studies, the very well develop logistic the simplicity of the logistic and also the easing that how to sent the material all over the CLO is obviously, a very strong basis, while we're still doing very well, we do not see significant effect on our business.
Actually so we still believe that we are exactly following what we have mentioned and planned for the Twentytwenty.
Okay. Thanks, and then on covered 19 testing, but can you actually providers.
We don't have a great view into.
How the pricing is working in Germany in sort of what sort of benefit there is per test.
Could you elaborate on that and just help us educate a little bit about sort of testing that's worked relatively well in Germany compared to most other countries and and and generally and couple of other European geographies as well. So could you. If you could just give us a high level view, there and maybe.
Something around pricing as to if you if you expect to see some benefit from so from that pricing.
Without being able to disclose any concrete pricing at this stage because it's a it's still developing on a daily basis I can't comment based on all the commercial contracts that were having.
We do know that once we once we wouldnt disclose any such a contract they will be at a positive gross gross margin.
And that's as far as we can go at this stage for need as soon as we know more in that respect we're happy to disclose we understand the need from the market to start modeling, but we're not at the at the stage that we can disclose that that at this moment.
Richard Thank you and let me just at printed this is not just the Germany based business. We have started to do well up this isn't the Meanwhile, kloeppel business because as we will all over the needs to have access to a higher numbers of testing capacity is a general and global neat therefore the position.
Thing of synergy and even though starting for sure and the German markets is clearly focusing on the European also the U.S. markets.
Yes, but my question was more specifically on uncovered 19 good.
Testing wise can you give us more into in terms of where Germany as stands it seems like that managed testing better versus other countries and.
Europe in some markets in Europe advantage those better what is your expectation sort of going forward. Because is that is that testing algorithm is that testing or is that testing going to have a longer.
Productive tail to this or is the testing expected to decline and sort of the second half as as the pandemic where epidemic in into individual countries as as managed better.
It's a very interesting question as it is an unprecedented situation as disclosed also into 20-F in our risk factor. It is very hard for any government. We notice to take the actions that would be in hindsight consider to most appropriate you see big distinction how every country is dealing with it even though some had a much early.
We are warning than others, because the the first people noted with the infection. We're only found or identified much later in certain countries.
On being the place where it surfaced initially.
If you look for example, at Sweden versus Denmark versus Germany versus UK again very different responses.
And quite some similarities as well.
Very very similar press releases about the testing would be necessary to get your hand around the expansion of the number of patients and to make sure that you control, particularly the number of I see bets being occupied by such a patients eventually if turned into a severe stage of the disease.
Everybody seems to subscribe to the concept of more testing being the more appropriate response, yet that doesn't mean that that is effective at the same speed that such things entered the press and then I hand over to aren't.
Richard Thank you and but let me just remind you I guess it will be definitely a situation, where we will need the virus detection tests based on differentials sampling.
We will be a test there will be necessary at least for the next 12 to 18 months.
Because at least in Europe in the U.S., we cannot expect that we have the very rapid conversion of this year a positivity for the virus number one number to Germany. Indeed is drilling a rather well job regarding the numbers of testing for the general population. However.
If we are thinking about in solutions power to restart economy into how to protect basked, especially nursing homes in elderly so at a higher mortality. It's very clear we have to further upscale the testing and that's exactly the responsibility on the one side to the market on the other side then judging has.
Addressed and again, we feel very well positions with the simplicity of the solution and the simplicity of the logistics, we have developed their rapidly with our R&D team to address that topic, maybe maybe to echo on that I guess, what we mentioned earlier about why an IP T was strategic to us was to demonstrate.
We can ramp up very quickly and thats exactly what we have just demonstrated again in a market situation, where everybody was and is struggling to find all the resources necessary, including consumables like to swap material and or the reagents we.
We've actually been able to demonstrate to the market that we did pick that up very quickly even though we were another lab outfitted to do such a massive testing at to begin with in that field. So I guess that that should be considered a contribution or an exemplary of how we respond to.
Two specific situations, where they have become applicable.
Okay, that's great.
Then last one if I could on the.
In terms of business development activities, what are some of the changes that you're seeing.
From from some of the pharma partners or new pharma partner recruiting or former partner conversations.
That you're entering into hows that progressing is is that as effective to do that virtually now versus doing it in person before and help us just understand how that pipeline as potentially looking.
Thank you for that question.
It's it's very obvious that what we're doing here right now as in a virtual compensation amongst people around the globe is what we are applying also to these pharma business development efforts. We've very recently had for one of our major partners a virtual team meeting, where we had as many of their sales staff there bisson develop.
One stop on the phone as we had ever had before so on the one handed is much more difficult to get people.
Yes to face if not impossible, yes, it is possible to do it virtually and depending on the quality of for relationship existing before it is easier or more difficult.
I can't give a generic answer there, but having so many of for example of that partnership salespeople available in that coal that was unprecedented we would never have had that number of people in one meeting if we ever had done that in the past because those people would have been on the wrote and now they Rowland our home office and Dusty were available so.
It's a it's advantageous its disadvantageous we cannot tell you yet how that balance so we'll be stricken overtime, what effect will be under revenues that we will be able to it to put into our books.
But we do see everybody picking up this virtual reality in a very positive way and trying to see the bright side instead of just looking down into the dark.
Hi, good alright, that's very interesting thanks for the color. Thank you.
Thank you for next year.
And your next question comes the line Sargen your line.
That's your question.
Great. Thanks, Good morning, I agree.
I appreciate how are you guys.
I appreciate how you guys are focusing on the metrics of the collaborations and and going to give us that going forward can you give us an idea of those 28, new collaboration is just give you a little more detail on how are the how many her new relationships, how many of those new collaborations or extensions.
Pass relationships and the growing in scope and size of the contract.
Some type of pacing and how it.
How it shook out over.
Over the year like how many did you guys book and for Q3, Q and how that's you know stacked up against 2018.
Thank you for asking the question Luke.
We have not started up here now in preparation for this call on a quarterly basis.
But we will go up going forward, most likely a report on that.
As we have started doing in this in this 20-F for the first time. So please bear with us and give us some time to together that detail in answering your question.
Okay great.
Yes.
And then I guess when you look at your 2019 targets is what we're talking about double year here.
Can you give us an idea of how you performed against those internal metrics.
Yes, the internal metrics, we make have have different aspects. One is obviously a cost control measure I'm the CFO I'd like to see that and the other one is also to revenue growth, which is both aren't and mine that together, so we actually developed metrics.
Where we say we want to exceed the revenue once and we're happy to to undercut the cost control ones.
In general the cost control once we've been very effective in managing both towards execution, but also as in cost control regarding a revenues we have outperformed the the 20% target that we had given so we have outperformed that obviously, we also make a a very much a a higher upside potential a case.
And.
We have done 20% plus we've not done 30%.
Okay. That's helpful and I guess on the last one here.
The 4 million milestones from Denali and able to tech can you give us an update on the progress should those relationships. When we can expect any other milestones and any other new collaborations that over the next couple let's say.
Six months, where we can expect a more milestones from new collaborations.
As you can read into 20-F, we had about 1.9 million in a similar fees throughout the year 2019 in comparison with Q3 2018 of 4 million.
So thats the only metric I can give you dare the other one as as you would appreciate in the final negotiations search terms often change.
Towards more favorable upfront type fees and revenue recognition opportunities as well as more more backward to pushing so it's extremely hard to give you that guidance I would like to reiterate what I said earlier, the lumpiness as well as the exact signing of a contract is not that relevant to us we do.
I want to make sure that we are predictable over that annualized figure, which we have demonstrated again.
Might recall, the Q3 coal, where we mentioned that we were expecting some but didnt get them, yet and obviously the at the high upsides, we realized in Q3 2018, what was done above our in comparison with the let's say more normalized Q3 2019, yet in Q4 2019, we've demonstrated a very nice growth to compensate for that.
Lets call it shortcoming in this now in in Q3 2019 and.
Alright, great. Thanks.
Thank you thanks look.
Yes.
Once again, it's a rich asked the question Brad SAR and won.
Question comes from the line of sight.
Your line open.
Okay.
Hi, Thanks for the questions apologies might you might call it got dropped.
I missed some of the question spot.
Was wondering one on the Colgate testing did you guys talk about what type of platform you're using currently for that is that TCR.
The TCR or are you able to leverage some of the next gen sequencing capabilities.
Thank you great question, what we're doing is detection off the virus. Our name. So we start for sure first with the virus isolation, followed by the RT PCR and the detection on a very simple light Cyclo Cross platform technology, we have decided to take.
This platform because there is no limitation in the equipment. So we would not expect to realize any shortage on the one side and on the other side, it's a very well established technology and its very easy to get upscale. It's one of the Massachusetts centered gene is communicating to the market that we should not limit ourselves by.
The limit in some of the consumables actually specifically developed for the covert testing. So our expertise is using their knowledge in the molecular biology, and molecular genetics to easily upscale it for the Ngs detection of coal, which we do not believe that business at least per today.
The ideal platform, because especially in the cobot testing, we need to 100% sensitivity knots to Miss an individual patient and especially in the early stage off the infection is so critical DAF brought to have the highest sensitivity and detection one of the reasons why we strongly believe that the.
PCR platform is actually the basketball on for the identification of the patients.
Okay great.
And then apologies again, if I Miss it but you have a pretty global business. So was wondering from be carbonite impact. Thus far so far this year are there any regions that are less affected potentially from your customer standpoint, and then you also alluded to starting to thinking starting to think about reopening the economy.
You know obviously slowly on could you kind of talk to you, but that looks like kind of which parts of your.
Fitness you may see.
Beginning to return to.
More normalcy kind of over the next several months.
Thank you that's really an excellent question I guess, we have access to all of the officially away a little epidemiological data and these data are demonstrating that the middle east area seems to be less affected at least based on the officially away a little data regarding the co with 19 pandemic.
What do we are already realizing indeed is the number off.
Officially communicate it affected patients and also patients patients passing away goes down significantly in the middle East. So we strongly believe that there is a good tenancy already put today to expect that there will be some normalcy in the middle East area very quickly, maybe even faster than in Europe.
Okay, great. Thank you I'll get the raskin.
Thank you.
Thank you thank you Cindy.
There are no further questions Brian please.
Great. Thank you operator, let me take this opportunity thank all the audience.
For joining us and ask everyone to stay safe and thank thank you once again for joining our full year 2019 earnings call.
And that does conclude that conference for today.
Okay.
Your next speakers please.
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