Q2 2020 OraSure Technologies Inc Earnings Call
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Ladies and gentlemen, please standby your 2022nd quarter Orasure technologies Inc. conference call, we get momentarily.
For your patience in please standby.
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Good afternoon, everyone and welcome to the Orasure technologies, 2022nd quarter Financial results Conference call and simultaneous webcast. As a reminder, today's conference is being real.
<unk> all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period, you would like asking question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound Keith.
Good afternoon with us today are Dr., Stephen Tan, President and Chief Executive Officer, Mr., Burton Kuka Chief Financial Officer.
He will provide an overview of our quarterly highlights, including an update on Ur Cobot programs Roberta will review the second quarter financial and Steve will then provide updates on or other business areas and strategy. We'll then open up the call for questions.
Before I turn the call over to Dr. can you should know that this call may contain certain forward looking statements, including statements with respect to revenues extensive profitability earnings or loss per share and other financial performance product development performance shipments in markets. This is planned regulatory filings into.
Approval expectations in strategy.
Actual results could be significantly different factors that could affect results are discussed more fully in the company's FCC filings, including its registration statement. Its annual report on form 10-K for the year ended December 31st 2019, its quarterly reports on form 10-Q and its other FCC.
Filings.
Although forward looking statements helped to provide a complete information about future process listeners should keep in mind that forward looking statements are based solely on information available to management as of today. The company undertakes no obligation to update any forward looking statements to reflect events or circumstances. After this call.
With that I will turn the call over to our CEO Dr. Stephen Tang.
Thank you Jane on today's call. In addition to our customary overview of business operations and financial performance I'm going to walk you through why we believe our antigen and antibody test under development for coping 19 are extremely well positioned to serve the needs of the testing market and to present, an enormous revenue opportunity.
For sure.
We take our biggest challenge after obtaining emergency use authorization from the FDA may very well be how to manufacture enough devices to keep pace with demand.
We will also be reviewing our segments in highlighting how cobot 19, it's helped or hindered various aspects of our business.
The net take way on our financial performance for the remainder of the year is that we believe the back half of the year is looking very strong.
As a result expect the company to post year over year revenue growth.
To further execute on or innovation growth strategy.
For those you not familiar with for sure. We are experts in rapid point of care testing for infectious disease.
For collection and stabilization for molecular testing and laboratory and bio informatics surfaces for microbiology analysis.
These capabilities position us well to respond to the global testing needs. The coping 19 pandemic has created.
We have a long and proven track record of applying our scientific and technological expertise, it's developing innovative sample collection kits and accurate test for infectious diseases.
We've been able to respond quickly to the Coca 19 pandemic working with regulators like the FDA and other stakeholders well scaling up for global markets.
We have existing broad well established channels of distribution across global public health.
Laboratories employers hospitals physician offices pharmacies and direct to consumer.
And as we discussed last quarter, some existing products or already addressing certain aspects of the coping 19 testing market.
We're leveraging our expertise to address the coke indicting pandemic in three specific ways.
First our sample collection devices are being used for the collection, both in home and professional settings and transport a samples for Copel 19 molecular tests.
In addition, we're developing two koeppen 19 tests that we believe it could be key contributors to the existing testing paradigm.
The or quick Corona virus rapid antigen self test and the orasure Sars koby to oral fluid antibody test.
Additionally, we are applying our operational expertise and experience to substantially ramp up our manufacturing capacity to meet existing and anticipated to ban on all three fronts.
<unk> Roberta we'll be providing additional details on this later in the call.
But first I'd like to take a step back to review the current state, but the pandemic and orasure as place in the international response.
The date there are more than 18 billion total confirmed coping 19 cases in the world with more than 4 million cases in the United States alone. According to Johns Hopkins University.
Sadly numerous U.S. states are currently experiencing a summer surjit cases.
Capital stations and deaths.
Central to the debate about how to best reduce the spread of the virus and alleviate the misery billions of people is testing.
Which a recent Rockefeller Foundation reports sites as quote the only way out of the present disaster unquote.
The foundation notes that widespread testing to detect asymptomatic individuals is crucial to containing the spread of the pandemic and workplaces schools and communities and specifically calls for point of care antigen tests to increase testing capacity speed and convenience.
As a leading company with more than 20 years, and proprietary knowledge and oral fluid testing self collection and rapid in home results and with our broad well established global distribution channels, we are well positioned to become a substantial contributor to reducing the spread of covert 19.
The timing too is fortuitous as we enter the fall season when students return to school, while we continue to try to reopen our economies and our communities space the compounding problems of seasonal flu.
We expect to bring important new diagnostic tools to the market.
Further while we are hopeful for a vaccine very soon it's important I understand the vaccines may not be b, 100% effective.
Some people may decide not to get back say to.
And manufacturing distribution capacities may not provide worldwide coverage.
For these reasons, we believe expanding testing options will be needed over the long term.
Damage and test, we're developing the or quick Corona Bios rapid antigen self test.
I would quickly detect active covert 19 infection at the point of sample collection with no instrumentation needed to interpret results and no due to transport samples from the lab for analysis.
Pending regulatory approvals and launch individuals would be able to obtain the tests take it on their own.
And read their own results a short time later.
This could be in bath and valuable to opening up economies, keeping them open and enabling the safe returned to work school and group of assets.
We initially planned this test to receive an D wave for testing individuals who are either symptomatic of course suspected of being affected and eventually you for asymptomatic individuals.
The test is built on the proven or quick lateral flow platform, which is a foundation for orchards current in home in professional rapid diagnostics for HIV professional HCV test.
And to a five 10-K clear the bold device.
Versions of our HIV test already use by millions of people around the world each year.
We are leveraging this expertise to bring the or quick Corona virus rapid Amgen self test the market.
When we started test development, we intended to use oral fluid as a sample type as in our HIV test.
However, as reached research and development progressed, we found we could achieve greater sensitivity and the best possible accuracy, but using samples collected with a simple fast swab just inside of industrial.
To be clear this easily and comfortably self collected lower industrial sample is very different from the use of the long nasal parents, you'll swabs, you may have seen or even experience yourself.
Our solution would be a quick painless swab that lay people and medical professionals alike can easily minister anytime anywhere.
To date, there are no test for active cobot 19 infection that provide a result short after a sample collection and require no instrumentation.
The Rockefeller Foundation report on testing, specifically calls for rapid convenient tests like the antigen test for sure is developing to help get the 30 million test per week. Many believe are needed by November to reduce the spread to cope with 19.
This massive need it is why we've been investing heavily in capacity expansion now in parallel with our clinical studies. So we can be in a strong position upon authorization.
They antigen test is currently in human clinical testing, which will provide the necessary real use data to file for FDA emergency use authorization or do you away and enable us to bring this test widely to the market targeting a Q4 and launch.
As we announced in April we have received just over $700000 from BARDA to help bring this test to be USA.
We're also developing an enzyme linked im just ormet assay Eliza for the detection of human antibody Sars koby to antibodies in oral fluid specimens.
This pes is based on our existing lives and Mike replay platform, which uses oral fluid samples to test for drugs of abuse, but the platform formulated to detect coated 19 antibodies.
To date, there are no oral fluid antibody test commercially available with automated assays.
With this test human antibodies found an oral fluid would be collected easily in clean conveniently via a want in pad and eluded into our existing oral fluid specimen collection device buffer for storage and transport and later dispense into the Elias a micro plate for laboratory testing.
Like our antigen tests are antibody test development is backed by BARDA.
<unk> from whom we received over $600000 and funding in June.
Where we now expect to file for anyway for the lives of test and subsequent launch in the fourth quarter, a slight delay from our initial timeline due to challenges obtaining a sufficient number of positive clinical samples against which to run tests.
We have six cents expanded the number of sites, we use for clinical testing.
And our confidence that this issue it has been resolved.
We recently completed the final product design.
And believe we will have an assay with expected high sensitivity.
That is currently in clinical testing.
We're working to increase capacity ahead of ft authorization and launch.
I'll turn last or molecular collection capabilities, and Tobin 19, which are ready generating revenue.
Our goal for this segment of our businesses to broaden the reach of Koeppen 19, molecular testing by enabling noninvasive reliable sample collection that can be done in a variety of supervise and unsupervised settings.
We do this by collaborating with our customers, including reference labs large diagnostic platform companies.
Academic institutions employer groups to validate our device with their assays.
Our devices are currently being used in significant population screening programs by employer groups government agencies and educational institutions.
The devices used for.
Well, I'm really chain reaction or PCR testing, which detects genetic material of the Covance 18 virus.
To date Threed devices from our DNA Genotek subsidiary, including the four collect are in a collection kit.
Omnigene oral saliva collection device and Oragene Dx device had been included anyways granted to for customers.
Nicole reference laboratory or C.R.L.
Serono T 23 labs and cost for us.
Preventing these spaces to be used for supervise and unsupervised scoping 19 sample collection.
To meet the regulatory requirements for inclusion in these be ways. We have successfully demonstrated viral activation buyer stabilization chemistry.
And consumer ease of use.
To further increase the reach a molecular testing, we're also generating data to support additional global regulatory clearances for our products.
We expect more customer you ways, incorporating our products to follow.
We joined it generated $8.5 billion in revenue from Cobot 19 use in our existing molecular collection products in the second quarter.
And expect continued strong contribution.
We're excited about these three opportunities to address koeppen 19, and expect to continue to see significant revenue from both a molecular solutions and infectious disease business units.
Importantly.
We expect the gains from these existing new Koeppen 19 products will offset any impact on our core business from declines in both genomic research and the HIV and HCV testing markets, resulting from coping night team.
We are continuing to grow by investing in Coca 19, and are putting ourselves in position to come out of the pandemic stronger with opportunities across business areas.
I will now turn the call over to refer to for teeth on our quarterly financials and our efforts to expand our manufacturing capacity.
Thanks, Steve.
Product and service revenues for the three months ended June Thirtyth 2020 decreased 24% from the comparable period of 2019, primarily as a result of lower sales of our genomics products due to the timing of orders placed by one of our largest genomics customers and due to the impact of the Covidien team pandemic.
Lower sales of our domestic HIV exceed the risk assessment and micro buying products due to reduced research and testing as a result at the cobot Nike endemic.
And the absence of kind of surgical sales all partially offset by the inclusion of product revenues associated with cope with banking testing and higher laboratory services revenues.
International sales of the company's work quick HIV products.
Crease, 28% compared to second quarter 29 keep.
This decrease was due to delays of shipments which moved to the ended the second quarter into the early third quarter importantly, even including the effect of the shipment timing on the quarter the underlying international HIV self test business still showing strong double digit growth on a year to these basis.
Total product and service revenues for our DNA Genotek. This unit were $18.1 million during the second quarter 2020, an increase of 4% in the second quarter 2019.
Included 8.5 million sales of World Food collection devices for coping 19 molecular test.
Total laboratory service revenue in the second quarter, 2020 was $2.2 million compared to $1.2 million in the second quarter 29 key.
Laboratory services in 2020 included the revenues generated by both the company's laboratory services subsidiaries, which are now operating under the diversity and brand.
As we disclosed in our press release, we will not be providing financial guidance for the full year at this time.
This is because of the unpredictability of both the negative and positive impacts. The coping then keep endemic on our operations.
However, we do want to share the following color on our expectations for the business.
With respect to the full year, we expect that excluding cryosurgical revenues from 2019, Noncovered 19 revenues in both the infectious disease and molecular molecular collections lines of business will be down in 2020 compared to the year ago period with molecular.
Impact.
However, we anticipate that revenue opportunities for Cokemaking sample collection product and sales and tests will more than offset this year on year decrease Noncovered 19 lines of business such that total revenues will be higher in 2020 versus 2019.
The majority of this contribution will come from our molecular solutions business unit, which as I. Just mentioned has already achieved $85 million recouping 19 related revenue in the second quarter. This year.
Within 2020, we expect is that just completed second quarter will be the lowest revenue quarter.
We expected non cope with 19 revenues will be flat when improved for each business unit in the third and fourth quarters compared to the second quarter and coping 19 product sales will add to this performance.
No at the time of our first quarter earnings call on May six we announced that he had line of sight to be a purchase orders to $3.6 million in molecular collections Cobot 19 revenues.
We ended the quarter with $8.5 million will be sales.
This suggests sales were ramping with in second quarter and in fact, we expect revenues for these products will be materially greater in the third and fourth quarters.
With that let me turn to manufacturing capacity, where as we disclosed previously we're making investments to significantly significantly expand number tests and collection devices will be able to provide to help combat pandemic.
First we are currently able to manufacture the three product lines being used for cobalt 19, molecular sample collection at the rate of approximately 35 million units a year.
Of these seven to 8 million units are expected to be used for non coupon 19 applications.
Capital expenditures that are underway and the molecular solutions business unit should expand its capacity to a rate of approximately 75 million units annually in the second quarter of next year and further to 80 million units annually in the third quarter.
Next I'll talk about our in development antigen test based on our Oraquick rapid test platform.
Today at our sites in Bethlehem and kind of in Thailand, We're able to manufacture approximately 35 million to work with cast a year, which around hack are expected to go to HIV each CB enable the test.
We have initiated the installation of new lines at both sites that will expand capacity to about 55 million annually by the first quarter of next year and further to 70 million tests annually by the third quarter 2021.
Finally for antibody test our current capacity is approximately 10 million units a year of which about 3 million units are devoted to existing products.
We plan to double its capacity by installing line for the third party site.
This work required to longer lead time, we expect that will be completed by the fourth quarter 2021.
To support these capacity expansion activities, we're planning to higher over 150 additional full time employees to manufacture the additional borrowing but products.
We're also continuing to investigate the possibility of partnering with where sublicensing to third parties to further expand their ability to meet anticipated demands in all areas, which will be adequate capacity because I just outlined.
Summing up we ended the second quarter and a strong financial position with no debt and $265.8 million, we cash including $95 million in net proceeds from an equity offering in June and are well capitalized to support future growth.
With that I'll turn the call back over to Steve.
Thank you ever Bertaux as Robert mentioned, we're seeing both headwinds and Tailwinds in our core businesses due to the coping 19 pandemic, but continue to exit execute across our diagnostics sample collection in service business lines.
Taking a deep dive deeper dive into our HIV business.
Pandemic has had a negative impact on HIV testing nationwide as in person testing programs have been forced to pause or shut down in an effort to comply with social distancing requirements.
Overall professional HIV testing in the U.S. declined 50% to 70% since of the pandemic began according to the centers for disease control prevention.
However, our over the counter HIV in home test has been able to offset declines in the professional testing in professional testing to some extent as public health agencies are providing our in home self test to their clients.
Consequently, our sales decline of 28% was far less than 50% to 70% estimate by the CDC.
During the past few months several government agencies have recommended that organizations established HIV self testing programs to immediately address the challenges posed by Coca 19 and in person HIV testing.
Agencies, which include the CDC and the department of Health and Human services have also guided federally supported organizations use grant money for HIV self test kits.
For sure is working in collaboration with government agencies and public health organizations to ensure that those who need HIV test are able to get them.
The federal government initiative, ending the HIV epidemic a plan for America has set a bold goal of ending the HIV epidemic in the United States by 2030.
We've been encouraged to see bite to see proposals to significantly increase federal funding for this initiative in fiscal year 2021.
Accessing the difficult to reach populations will be key to achieving this goal and rapid testing that can be brought into communities. It seems that as an important tool.
With the only at the approved in home self test in the market for sure is well positioned to play a key role and the planned for America and capitalize on the market opportunity represents.
Watching innovative efforts like rapid HIV self testing programs will be critical and are continuing fight and HIV epidemic, particularly in the face of Carbonite team.
Augmenting our efforts and the HIV market as our <unk> recent acquisition of your sure Inc.
Company, developing and commercializing products that measure it here instead medications that prevent and treat HIV.
This cash transaction closed in July and supports our strategy of expanding our core offerings to include additional diagnostic products, particularly point of care tests to complement our current infectious disease portfolio and pipeline.
We will be able to offer a full HIV portfolio. The covers the spectrum from screening to treatment adherence to pillars to the plan for America initiative.
Beyond HIV, we are the first and only after FDA approved CLIA waived rapid H.C.V. test.
Our revenue in this area was affected significantly in the second quarter as a result of Coca 19, but we anticipate an eventual returned to more normal levels of revenue. After the pandemic begins to resolve and test sites are reopened.
Similar we see long term opportunities in our substance abuse testing business in future periods as federal guidelines now progress oral fluid drug testing.
Moving onto our sample collection products and laboratory services businesses outside of Koeppen 19.
We are seeing a continual increasing demand for saliva collection devices, among customers, who Stewart historically used a mix of blood and sliwa samples.
As in clinic sample collection, a blood remains difficult.
We continue to launch new collection devices, expanding our range of sample types and analytes to meet the needs of research and academic institutions for example.
Them that got collection kit for Metabolomics, Washington June is the first and only commercially available research use only device for in home self collection fecal samples for four metabolomics.
Despite year over year growth our service business remains challenged by the shutdown a university labs and by other sample access delays due to cope with 18.
However, there are some encouraging developments that will set the stage for future opportunities.
We continue to build our relationships and execute clinical studies for farm pharmaceutical and biotechnology companies.
Additionally, we have several small ongoing pilot studies in the direct to consumer wellness area and believe this will be growth opportunity.
From an industry perspective, several microbiome therapeutic companies.
Including re Biotics and then downtime.
I have reported positive results from their current clinical trials.
And serious therapeutics is expected to report in late.
Q3 2020.
These are all considered bellwethers for the industry as positive results will continue to drive investment in Microbiomes research.
Given our industry, leading capabilities, we are well positioned here.
I'd also like to give a brief update on our Nova Santas subsidiary.
We continue to see advancements in the validation of first void urine as a valuable tool and detection of various cancers.
And recently achieved see IBT, marking for our new small volume probably be devices compatible several large automated diagnostic platforms.
Complementing our internal growth as a strong business development strategy.
We are aiming for significant increases in revenue through organic and acquisitions.
We are using our robust balance sheet to create revenue and shareholder value.
Coping 19 has certainly complicated the business development picture.
It's also opened up new opportunities and technology that in infectious disease for us to explore and pursue.
So let me assure you that we're not sitting on the sidelines, we continue to engage and the pursuit of business development opportunities that are accretive to our innovation growth strategy.
And we remain committed to doing the right deal for the right price at the right time for our company and our shareholders.
In closing we are honored to be part of the fight against Cobot, 19, and deploy our expertise to filling unmet need and in the testing paradigm.
Well continue to execute across our core business.
Given our ongoing initiatives to scale up our production capacity. We are confident that we will be able to deliver substantial increase volumes to cope with 19 collection and testing products.
While ensuring they meet the highest quality standards.
As we contribute to fight against this global crisis.
We wish everyone.
And their families could help and look forward to providing future updates and with that I will open the call up for your questions.
Thank you.
As a reminder, asking question unique press star one on your telephone to address your question press the pound Keith Please stand by we compile the kuni roster.
Our first question comes from Frank Taconite with Lake Street Capital You May proceed with your question.
Hey, guys. Thanks, taking my questions and congrats on all the solid progress this quarter so far.
Thank you Frank.
A couple of question couple of questions from me today, starting with the antigen tests just curious if you could take a little deeper dive on why you decided to switch that to national collection from the original oral swap collection and then as a follow up to that assuming on development stays on track from here on our can you give us a little background on dip.
Milestones you're looking for between now in the fourth quarter launch, whether that's eway submission.
That will be it announced and then how long you take how long you expect easy way to take given not hi influx of Eway submissions.
Sure.
Let me start to answer that Franken, if I Miss any pushing your question. Please re ask it.
First of all we had originally set out to have an oral fluid test as noted.
And then we simply filed the science.
And what signs let us to is the fact that.
Nasal swabs, which are.
Still pain free silicon being in and still able to be self administered.
Had a higher viral load and led to better accuracy for our test and so we've taken that into clinical trials, where it is today.
And so we simply follow the science to get the most accurate.
Analyte type along with.
Buying buyer principles of easy to use and convenient and pain free.
So that is that's why we settled on the nasal swap.
We're currently in clinical trials as I mentioned I think the next.
Milestone for US internally is prototype block, which I think we are just a few weeks away from at this point and then we have accounted for.
The cycle for approval, perhaps the way and that's why we settled on fourth quarter launch there were some still some latitude.
Provided that.
The timing so Holt.
So I think we are extremely confident we've got to an excellent product.
In the process.
Having done this before.
Our.
Heavy product moving from professional products.
In home product to a self test.
And.
Moving along the BARDA funding.
Funded the Ebola rapid antigen past I think.
We've been able to leverage all that expertise into this antigen test. So I think we're very confident which is why we've also announced the.
Increases in capacity for our various products, including the damage in product.
What will allow us to build product at risk to have a supply on hand, we actually launch in the fourth quarter.
So if I didn't get all your questions all aspects of the questions. Please please re ask one Frank.
So that's great I just one more question on the antigen test I guess, a two parter on antigen test.
Could you talk about some of the different end markets you are in communications with and if there's been any.
Contract sizing Bend discussed it hits, whether it's back to work or back to school I sound with some of your.
Different ways, you got on the collection side, but some of the end markets and then could you also touch on how you're thinking about pricing.
[noise] certainly so we have not disclose pricing as yet, but we believe it will be in line with pricing of our current portfolio products and competitive in the marketplace.
As far as.
Use cases and applications.
It's those discussions that have been effectively informed.
Our production capacity increases really for all the products.
Not only the antigen tests, but our.
SAP collection for saliva or fluids nasal swaps as well.
As well as the antibody test and so that's why you're seeing such a concerted effort for us too.
To move those that capacity has been forward into share with you today.
As far as the use cases, I think it's pretty clear that bed.
This will be a first first of all time product the rapid engine test.
It really.
Solids, two key dimensions that it's convenient and it's accurate.
And it enables self collection and immediate results.
So the combination of those factors lead us to exactly what you said back to work back to school applications.
So we received inbound interest from.
Large employers from schools, both K through 12 and universities.
Government agencies, there's there's a wide distribution.
Of potential large buyers and so that's why we've ramped up and I think it's everything you would expect that solves the current testing dilemma, which is the timing between when you get actually sampled and when you get the test result back.
So what we're finding that and dealing with the inbound demand in the coming months.
Great and then if I could just moved to the collection side of the business could you talk a little bit about the.
Size of the different.
Testing or the testing capacity of the different companies that you have gotten E ways with bias, there and up 23, phosphorus and CRL just kind of curious on which one of those are driving.
A lot of that cobot related collection revenue and if its CRL, how do you expect that to inflect the revenues going forward.
Sure. So CRL is by far the biggest one of our customers its amounts in any way, they're one of the biggest private reference labs and again the country and so I think that bodes well for how we are looking at revenue for the rest of the year or molecular sample collection kits. So I can't really.
Beacon detail about how the size of the way I sizes of lancet receive you ways plays in.
But I can share with you that there are several more airways and process.
As well as strong working relationships with labs.
That are using.
Our Sep collection device that may or may not need anyway. So.
Thats a bottoms up revenue build that has.
Caused us to look for additional capacity overall and project those revenue favorably for the rest of the year.
Perfect and then if I could just squeeze one more in here and I. Appreciate all the time actually if you could if he could to reenter the queue. So we can get some other question from Oh, absolutely great.
Thanks.
Your next question comes from Jacobs Johnson with Stephens You May proceed with your question.
Hey, Thanks, maybe just a quick follow up on that last answer.
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From a housekeeping perspective did did you recognize any revenues from CRL in into Q or is that kind of a streaky opportunity.
Well I don't think.
Please.
So thanks for question Jacob So typically we don't identify which customers have been contributing to our revenue.
As Steve mentioned, one of the important point there that we are actually selling a lot of product to customers that haven't announced you ways.
But we do have.
A broad footprint to customers, which gives us a lot of optimism for the second half of the year.
Okay. That's helpful. Thanks, Robert and then last week I think the FDA or at least some guidance for non laboratory testing thats required, 90% sensitivity and 99% specificity.
How did that impact your rapid test.
Does it not really impact what you're trying to date.
So tickets are you referring to the template for over the counter products.
I believe so yes, there's something that takes at least lastly.
Yes, so weve, obviously digested that because that's sort of key to our overall product strategy for the rapid antigen test, we don't see anything in those guidelines that surprises us and they're all issues that we tackle before with other products in particular, our HIV at home cast.
So I think we're well that's it's squarely in our strike zone.
Got it I'll leave it there thanks for taking the questions.
Okay. Thanks taken.
Thank you. Our next question comes from Andrew Cooper with Raymond James You May proceed with your question.
Thanks, guys, maybe first just as we think about you know you mentioned back to school back to work as we think about what that looks like in terms of before Q launch.
Obviously schools will have have largely gone back how do we think about I guess, one where in Fourq you timing might be a if you have any more detail you could give on that as to how you think about addressing you know.
That end market, given the timing being a little bit after when most of schools are at least as of now hoping to return students to campus.
Yes, it's an interesting question because usually we would see students back in school right after labor day rate or if not earlier in some parts of the country.
The key here is not only back to school, but staying back in school and that the presumption. There is that there won't be any infections and effects shipments effectively shut down the schools.
That would cause them to move to another claims the reopened.
Using.
Better ways of Ascertaining, who is.
Infected who is not.
In some parts of the country, notably.
In Philadelphia, The school District logo virtual until November and then make a decision whether to come back. So I don't believe we're missing significant opportunity because I don't think there any better solutions out there to mass test students page 12 students as well as higher Ed students undergraduate and graduate students to bring them.
Back safely to campus and keep them safe on campus and so.
Our launch in the fourth quarter and of course fourth quarter begins in October when we're trying to make it get full exposure to the quarter as much as possible.
I think gives us a sweet spot in the marketplace. So there's a bit first of the time product.
In instrument free rapid test and so I think there's plenty of room in the marketplace.
Two.
To have in some very exciting opportunities of size for us.
Okay, Great. That's that's really helpful. I guess, maybe one on the collection side, asking a little bit different way.
Last quarter, you talked about 3.6 million line of sight, turning into eight and a half or so.
Can you give us the number for sort of what you feel like you have good line of sight to in this quarter. Even if it's just you know just with the ways or or kind of all customers. Combined is there any sort of number you could give us to give us a little bit better sense of how things are tracking.
Yes.
So we havent provided specific business unit line guidance.
What I'll tell you we expected to be substantially greater than the 8.5 that we achieved in the second quarter.
A lot of what the actual number becomes will depend on the timing of our manufacturing and of orders coming in.
So.
For the same reasons that we're not providing full year guidance.
I am unpredictability around that.
We can't give you a specific number.
Sure and maybe just one more.
But as we think about the template that was referenced in sort of the decisions where this product is being sold.
Is there anything you can share in terms of you know how you think about.
The launch in pushing us into market, especially as capacity ramps is it more of a a clinical setting to start or more of a a professional setting I should say and we should think about ASP that sort of that level.
Before you really ramp and then have that capacity to sell more to the broad consumer or or is there a different way to be thinking about this.
So let me take it from the perspective of how we'll sequence the ways. Okay. So.
We're going to we're going to follow the update requirement for the initial you away, which is typically start with authorization per prescription use that followed by over the counter authorization.
So given the latest discussions with FDA.
And the latest home use template.
Can have a phased approach. So our initial launch will be ended the professional market protesting systematic individuals or individuals that have come in contact with people in fact, as we go to 19 or suspected of Carbonite team infection.
The second phase will be a prescription prescription use self test for the same intended use population as the professional product I just mentioned and the third base will be in over the counter product will be looking to obtain the cleaning per asymptomatic individuals. So the goal for the year ways for the first two phases, so thats the price.
National News and then the prescription use self test to happen in the fourth quarter and the LTC claim to happen soon thereafter so.
Once were authorized to so the rapid tests to healthcare.
Professionals.
Public health institutions will follow as well as employers schools, and then consumers and so you can see that phased approach opens up the market for a lot of different segments market segments, and we will address the pricing and volume issues from there.
Okay, Great and maybe just one more on that when we think about.
Obviously, we've seen the template, but when we think about sort of that process of getting that that last phase over the counter.
Anyway, you know as it.
The main sort of thing that you feel like the FDA is going to look for that somebody you know.
The average Joe can do this with without a mistake and can get a correct answer and they know what did you didnt do did that answer or what are kind of the steps that you need to do it should be able to show that to give the FDA comfort. If you have a a sense for that that'd be great.
Sure, it's very similar Andrew to the process, we went to in 2012 to get our then.
HIV product.
From professional use to over the counter use.
So I think we're one of the few companies.
Actually done that poor diagnostic product for infectious disease. So I think that we understand those challenges and we understand.
Basically what the FDA is looking for so I think thats why were very confident.
Okay I'll stop there thanks for the time.
Thank you.
Thanks, Andrew.
Thank you and as a reminder is asking question you will need to press star one on your telephone. Our next question comes from brand coolant.
Jefferies. You May proceed with your question.
And then.
Maybe one for you Robert you you pointed to.
Expectations for positive revenue growth in the back half the year, you sort of speak to the to the level of visibility there.
Was that a true statement for both the third and the fourth quarter and could you quantify the magnitude of the.
HIV self test order out so that moved into the third quarter.
Sure. So on what we said that so we expect the second quarter to be the lowest revenue quarter over the year and we expect the third and fourth quarters to be either flat or up for each of the two business units.
And then and Thats in non in the non coping banking business then layered on top of that obviously, we have the collections business, which we've achieved the $8.5 million of revenue for the second quarter and antigen antibody test businesses, which we expect to be launching in the fourth quarter, which is what contributes to our expected growth for the.
Year.
With respect to the HIV shipment.
One of the I think one of the dynamic that's going on that.
Our HIV order lead time or international order lead time is longer than for our domestic orders.
So what you saw that in the first quarter, there was very little disruption to our HIV International business.
So what I'd say is that the sizes that order that hit in the second to the third quarter would have gotten a very close to flat versus 2019 for the second quarter and.
And then you did see we did see some disruption from Cowen 19.
Which.
Tap the brakes on growth, but the second quarter, but we expect some of that to be turning around in the third and fourth quarters.
Okay.
Then my second question its really just broadly around the utility of oil fluid for Coca 19 testing.
To your existing digging AG customers, who probably know more about a fluid than anyone helix and color genomics have both wrote out their own koby testing services that don't use world fluid collection devices on just sort of speak to the level of visibility or sustainability of.
Uh-huh those customers that are used in those.
Collection devices.
And.
The utility of that is.
Best case.
Collections sample.
Yes, so in the case of.
On the customers that you mentioned for our molecular sample kits.
Please keep in mind that the challenge of stabilizing DNA for genomic analysis.
Is quite a different challenges and stabilizing our M&A for infectious disease analysis. So I don't think as any read through on the fact that we've been successful with our customers.
You with saliva for molecular analysis. So there's there's no real way to translate that having said that we believe that workload is an effective appropriate sample type for many types of cobot related diagnostics and screening test.
And we've noted that.
We've locked in a prototype for antibody test it showed strong performance for oral fluid there and we've also repeatedly seeing that technically saliva collective with devices from dealers unitek.
Excellent sample type or collection transport detection for.
The Sars koby too.
Analysis, and that's supported by those multiple ways from independent laboratories.
The vast majority of publication supports alive as a good sample type alternative to nasal fragile swabs and support that you fly, but for self collection, which has the opportunity to significantly increase testing opportunities. So.
Well, obviously, we're very bullish in this area, which is why we're investing capex to increase manufacturing.
To the numbers that were burned a shared earlier.
Great. Thanks.
Thank you.
Thanks Brendan.
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