Q1 2020 Earnings Call
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Good day, everyone and welcome to the Thermogenesis Holdings Conference call and webcast to review financial and operating results for the first quarter ended March 31st 2020.
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At this time I'd like to turn the conference call over to our host Paula Schwartz of Rx Communications Ma'am. Please go ahead.
Thank you operator. This conference call contains forward looking statements within the meaning of the federal Securities laws.
The company's actual results may differ materially from those projected in the forward looking statements.
Additional information concerning factors that might cause actual results to differ materially from those are forward looking statements contained in the company's periodic reports filed with the Securities and Exchange Commission.
The information presented today, it's time sensitive and it's accurate only as of the date of this call May 14, 2020, if any portion of this call is being rebroadcast retransmitted or be distributed at a later date there much Genesis will not be reviewing or updating this material participating on today's call are dr., Chris shoe Chief Executive Officer.
And Jeff Cobble, Chief Financial Officer, I now like to turn the call over to Chris. Please go ahead.
[noise] and keep all right and thank you everyone for joining the call us this afternoon.
We appreciate you taking the time to Disney.
I'm pleased to knowledge that we continued to improve our operational and financial performance throughout the first quarter off Twentytwenty.
But you could right I wouldn't that they haven't you can always true is 3.2 median.
8% increase compared to the same quarter up to 1919.
While gross profit increased to 1.5 million and 19% improvement compared to the same pure rich box here.
Cash on hand has reached 5.7, yet in at the end up first water.
Which was up 78% compared to the beginning of the year and 155 per cent compared to the same pure rich bops here.
And increased revenues gross profit and cash on hand, what demonstrate a greater financial stability of the company.
As a reminder, the companys coal business competence student was die seeing gets cutting edge ultimately gets medical devices and systems for the cell and gene therapy field.
We continue to make impacts in the field, we sell with our coal automated centered up processing products.
It's also just technology platform as a whole that helps us to make our future fight against Kobin 19 possible.
I was centered a profit same platform comps, yes, Oh.
One.
A copy expressed platform based on and innovative buoyancy activate it sell silicon technology or batch.
The backs technology is a patent protected hike efficiency sell Philippine technology using dependent Micropulse backs technology is a key component of the coffee Express technology platform, which is intended to a drastic critical unmet need for not scale.
<unk> said do that processing and manufacturing of the cell basis therapeutics, such as cocky therapies.
Two.
Our X P slash, but all caught platform for clinical Bob banking.
It is well off the bat recognize the branch in the field, which allows for automated processing and qual storage, the Cobra and kind of closing posts.
Three.
Our P.S.P. platform for point of care applications.
Which allows for automated processing autologous peripheral Brad and bone marrow drive to stem cells at the point of care to Acacias, such a surgical centers health clinics.
It also allows isolating a different itself Brac change from the Brad simultaneously for example, the simultaneous isolation of convalescent plasma and immune cells.
[noise] that robust pop the robust product line was that strong focused in the Saudis therapy has positioned similar getting it says it's a market either both sell banking and cell therapy.
Which will sustain our gross balances Colgate Nike pandemic.
As you well, that's you Oh, well know the word Colby 19 pandemic has no effect yet wasn't true hunger countries enriching.
Resulting over 1.4 million report a case, it and more than 85000 thats in the United States that at all.
The disease has spread rapidly, causing a tremendous impact on the U.S. health care system and eating treat immense societal a disruption.
The topic, how stretched post by coping non key remains extremely high.
Both seen the U.S. and grow voting.
In order to respond to the challenges imposed by this global pandemic.
During the first quarter of Twentytwenty working together with our joint venture Pops in the immune site, we began mobilizing our expertise and they'll build resources in the medical technology field to develop a systemic approach and strategy to fight against Koby Nike.
King virus.
March 31st.
We submit that notification to U.S. food and drug the ministry or D.A. Weird thing intention to register in markets that Coven 19, I'd G IDN antibody fast detection kit.
According to the section pool.
The Oh that policy for diagnostic test for <unk>.
Well Corona virus diseased dash drinking 19 during the public house emergency.
Yes, you buy F.D.A.O. much 16, twentytwenty he shops the policy D.
The test well here by the first two you asked that rapid anti body cash build up.
April 15th that's a company and received <unk> and knowledge that too.
F.D.A. comfort means that the similar again. This is colvin 19 rapid antibody test that's being a property validated for distribution under that policy de guideline.
As of May the company has already started to ship out to our rapid antibody test to feel pre orders and incoming orders.
Additionally, we have also compete gets submission of additionally, information to the F.D.A. <unk>.
Requiring the views of the co benign king rapid antibody test and that the emergency use authorization pathway.
And we are still awaiting for the agencies response.
The rapid antibody test is designed to uncover anti koby Nike I'd M.I.D. antibody using 18 go dropped it up flat and can't you'd ever results under it came minutes.
Yeah, I can expect it cost for less than $30.
If the entire nation he has to be tested sand, we estimate that.
Over 330 million tests could be needed in the U.S. alone and global demands continue to increase.
We currently have manufacturing capacity to produce wouldn't find yourselves in past per day and can't scale up manufacturing to screen time stopped them out if needed.
Yes.
The Colvin 19 drop antibody test detach the antibody impatient in response to Koby 19 infection.
The test can be used well prescreening for Colby 19 patients.
And also for identification of individuals who have encountered virus in the past and developed an antibody response.
The antibody response is pops up the personal protective immunity, it's up fight against the virus.
Our rapid antibody test stands apart from other DNA based attached on the market.
As it does not require sophisticated laboratory instruments and the task or is it results can be available yet and there are 10 minutes.
The format of this past resend, both at home pregnancy test that many people opt for me they wish.
The ability to quickly I think it by industry users, who have developed antibodies all protective immunity is essentially inflammation as we look to open our society or our economy.
The second part of our cold in 19 strategy is to develop a multi tiered antibody approach.
Along with our immune site joint venture partner.
To address critical unmet medical needs in both prophylactic means preventive and therapeutic intervention of that disease.
[noise], taking advantage updated rap racket antibody test, we have along with the pie tolerate centered a processing plant Pat will we have developed and the fact trade hit over the past decade.
We are able to bridge and yet your new achieved with immuno doggett called know how to develop various therapeutic approach that may help fighting just disease.
Just multiday as this multi tiered interbody approach is synergistic with I went back diagnostic tools and also differentiate us from other test the manufacturers for Kobin Nike.
The areas that we are working Oh, yes, the coal convalescence, Pos, but and therapeutic antibody field.
Convalescent plasma therapy is seeing exploratory approach, so I involves giving patients and ink injection of the past not from people who have the coverage from Covina King.
Convalescence process my therapy has been used in the past against several other non viruses such as a bold.
Sops, Myrisk and friends on H., when England virus.
And have demonstrated with their Medicaid improving improving survival rates and lowing hospital space, both patients with stops in the past.
Our plan is to screen and identify people was high tightness of anti Colby 19 antibodies.
For all by using our company is proprietary automated cell processing platform to simultaneously isolate convalescence pop but immune cells.
The convalescence price not can be used alone or to produce polyclonal antibody therapy with further which further mitigates that don't have variabilities among individually or convalescent plasma.
Just a reminder, our immune site joint venture has also recently acquired words Wyatt intellectual properties for the development of 40, human monoclonal antibody therapeutics for cold benign key including full high affinity mono call.
Antibody drug candidates against the Kobe 19 virus.
This monoclonal antibody drug candidates and the development by our 19% owned joint venture immune site, well, whereas or come per month, the convalescent plasma income up and polyclonal antibody approach that our company is undertaking.
In summary, our comprehensive koby 19 strategy, combining our rapid antibody test, our convalescent plasma and polyclonal antibody therapeutic approach using our established a proprietary cell processing technologies.
And our joint venture immune sites recent acquired technology to develop 40 human monoclonal antibody during the monoclonal antibody drug cat drug candidate differentiate us from many other tests manufacturers.
And put us at the forefront in the fight against the girl will cover 19 pandemic.
With that.
Let me turn the call over to Jeff to share that chief financial results from the first quarter.
Yeah.
Thank you Chris.
Net revenues for the three months ended March 32020.
Good point 2 million compared to 3 million for the three months ended March 30, Onest 2019, an increase of 200000 or 8%.
The increase was driven by XP disposable sales, which increased by 8.9 million in the first quarter of 2020, approximately 400 more cases sold as compared to the same period last year.
The increase was offset by a decrease of approximately half a million bioarchive devices and slight decrease in manual disposables and hard to express sales.
Gross profit was 1.5 million or 47% of net revenues for the three months ended March 31, 2020, compared to one point threemillion or 42% of that revenues were three months ended March 30, Onest 2019.
An increase of 200000 or 19%.
The increase was driven by revenue recognized from the Corning exclusivity fee and the first quarter of 2020, which added approximately two point to the gross margin percentage and increased gross profit from XP disposables.
Sales and marketing expenses for three months ended March 31, 20, 20.4 million compared to point Threemillion.
Three months ended March 31, 2019, an increase of 100030%.
The increase was driven by higher salary expenses and benefits in the first quarter of 2020 as compared to the same period in 2019.
Research and development expenses were just over a point sixmillion. The three months ended March 31, 2020 compared to just under 8.6 million for the three months ended March 31, 2019, resulting in an increase of 46000 or 8%.
The increase was driven by higher employee benefit expenses in the first quarter of 2020 as compared to the same period in 2019.
General and administrative expenses for three months ended March 31, 20, 21.6 million compared to one point Threemillion for three months ended March 31, 2019, an increase of approximately 300000.
The increase was driven by legal and other expenses related to the Mavericks lawsuit employee benefit expenses and increased expenses related to the filing of the company's 2019 10-K.
Interest expense for the three months ended March 31, 2020 were 3.5 million, that's compared to 1.1 million for the three months ended March 31, 2019 and increase of 2.4 million.
The increase was driven by 2.5 million accelerated noncash amortization of the remaining unamortized debt discount associated with the portions of the Boyalife revolving credit agreement, where <unk>, which were converted in the first quarter of 2020.
For the quarter ended March 31, 2020, the company reported a comprehensive loss to common stockholders, a 4.6 million.
Or $1.11 per share based on 4 million at 135644 weighted average basic and diluted common shares outstanding. This compares to a comprehensive net loss of 1.9 million or 76 cents per share based on 2 million 461415 wait it out.
Average basic and diluted common shares outstanding for the quarter ended March 31 2019.
In addition to the results reported under US GAAP. The company also uses a non-GAAP measure adjusted EBITDA to evaluate operating performance and to facilitate the comparison up versus historical results and Trent.
The company uses the metrics.
The best approximate operational cash flow.
Adjusted EBITDA loss for the quarter ended March 31, 20, 21.9 million, that's compared to <unk> point Sixmillion for the quarter ended March 31, 2019 at Duke decrease of 300000.
The primary driver of the lower adjusted EBITDA was at 300000 dollar increase in general and administrative expenses.
At March 31, 2020, the company had cash and cash equivalents totaling 5.7 million compared to 3.2 million at December 31, 2019, an increase of 78%.
Working capital also improved up to 6.9 million at March 31, 2020, that's compared to 3.2 million at December 31 2019.
This concludes our prepared remarks to now we'd like to open the call to your question operator.
[laughter].
Ladies and gentlemen will now begin the question answer session to ask a question you May Press Star and then one using a touched on telephone.
If you are using a speaker phone we do ask you. Please pick up the handset before pressing the keys.
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Pause momentarily to assemble the roster.
And our first question today comes from Sean Lee from H.C. Wainwright. Please go ahead with your question.
Oh, good good afternoon, Kristen, Jeff and thanks for taking my question.
I shot life forms.
My first question is on the Companys.
Existing business.
So 21 team that's fine date, goalpost Conklin, Connie and does lakes package become a big driver how many schools overtime. So I was wondering how has that turned down so far has that being significantly impacted by the Kobe 19 pandemic as well or is it progressing as planned.
Yeah. Okay. Thanks shot at fault brings it a brings his question so as a people our knowledge that and 29, King and we signed a global distribution was called need to distribute our ex cirrus up products.
And Ah Ah, we expect to launch its product at tree as this year.
But just like everybody as they impact by the southern Coven 19 pandemic Connie being had bought there again that stayed up New York, It's indicative I guess pretty hot so so when it's all of that social dispensing and home office seeing a ongoing.
Although we are still.
Keeping that I open to facilitate already a marketing preparation and needs. So its any we can't see a start with all in the in the activities that rent.
But I think sit back, but I think where's that.
We're all bought a a the entire business start to it reopens through different bridging we are cautiously optimistic about this ER visits a entire collaboration.
No. Thanks for the additional color.
Oh, no moving on to the Kobin 19 diagnostic so oh, Okay, Yes, yes approved as for marketing in April I was just wondering whether you see hi, then orders come in or whether you see a lot of inbound interest and what exactly is become company. So commercial strategy for the product.
Would you be.
To try to marketed yourself or would you be looking for regional distributors.
Yeah, Okay with regards to our coven 19, a diagnostic kit our strategy, it's mainly done that gets to be which is through a distribution channels. So at this moment, we do not anticipate to view the eight.
Direct skiing house team on is that we do have received whereas the interest and a from various different size of.
Ah potential orders. So yes, we are as we add Rudy.
That's a reducing the end to assist earning call. We start to ship in early may and that we start to feel some of this disease that pre order, saying incoming orders.
Or just said reminder, through to a everybody I think oh, there's always the potential market size. We can you can't see could be significant but also as this is Ben this is impacted by various risks and is that I, including some up we quote for.
Oh for C. and also some risks that we cannot [laughter] initially foresee that I, including the availability of labor.
Workforce, this and availability of our global shipping Logistics center. So all so when we are getting close to two market change. This within the U.S. also grow Wally we Ah we.
We got to mitigate through all those that impact throughout the world and some up does that we're seeing Pat including shipping logistics, Oh, we see could potentially impact on what the temporary aswell.
But the good thing, yes, we already I shifting out [laughter].
Yes.
Those hopeful.
And my final question is on.
What hopefully you Ben So I was wondering.
One or would you consider to be the major milestones that investors. We look forward to over the next six to 12 months from somebody.
A full modes astute our diagnostic kit because a lot of people see this as a key twod, we opened our society and reopened our economy and we want to satisfy that and though we think the demands will be high so that's our number one.
Well go.
Well the next six months, we also want to look beyond that the diagnostic kit and as we said we are looking to various different systemic approach to fight against its coping 19 and is that we'll be including some uptick convalescent plasma imparted on the antibody.
Does that address a significant unmet need in the set reputed side.
So so we're looking at this at the sheer based strategy, where we are launching different products around away.
Thank you that's all.
Your next question comes from Charles Putman for who is retail because you have with your question.
Hi.
You mentioned that you're filling preorders, we've begun to fill preorders can you give us an idea of you know maybe the volume or number.
Can you also.
Speak to what you expect to hear from the F.D.A. and what the timeline on that it.
Sure.
We have a.
In in we start to ship out my we are as I said, there are more complicated global shipping logistics, because the U.S. most of the state, whereas do coast or send micros, we're not do a fully opened in the in the space here. So so.
There's availability of FFO working.
A force here in the state. So we still are dependent quite significantly oh oversee manufacturer.
Which we're dependent not only on manufacturer and also shipping logistics. So so we are just start to get all where orders feel it because we need to get that the product Jean <unk> at this moment. So so we oh, we have I guess I found the beginning of the May we ship.
More than 10000 or testing kit, but I think the realistic number should be bigger because a which they need and on the FDA site.
Oh, we the product is a available to sell and their policy D, which I described gain the and the script to Andy but we also filed for and the additional pass which is a emergency use authorization.
And that's the we have already had received the a a pre assigned number for that but we are aware waiting for a at the age to give us a fair as if it varies a feedbacks, we don't have a timeline because snowy FDA is having a pretty long debt at two deal.
With various different fronts.
So routine deals that will be two weeks, but at this moment, we don't have a time.
Okay. Thank you.
And ladies and gentlemen, it and showing no additional questions I'd like to turn the conference call back over to Dr. shoe for any closing remarks.
[noise]. Thank you. Thank you operator, we look forward to updating you on our progress this in the coming months and think she she everyone participating on today's call and for your interest seeing someone Dennis as Cody.
Ladies and gentlemen, with that will conclude today's conference call with you. Thank you for joining.
You may now disconnect your lines.
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