Q2 2020 Chembio Diagnostics Inc Earnings Call
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Good day, ladies and gentlemen, and welcome to your Kinda Bio second quarter 2020 earnings conference call and webcast all lines have been placed into listen only mode and the floor will be open for your questions and comments following the presentation.
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Thank you operator, thank you for joining and welcome to come Bio second quarter 2020 earnings Conference call. At this time all participants are in listen only mode. Later, we'll conduct a question answer session and instructions will follow at that time as a reminder, we're recording today's conference call. If you have any objections you may disconnect at this time.
Hi.
Before we begin today, let me remind you that the company's remarks made during this conference call. Today August six 2020 include forward looking statements within the meaning of the Securities Act of 1930 Greek concerning the current beliefs and expectations of the company.
Forward looking statements are subject to numerous assumptions risks and uncertainties many of which are beyond can buyouts control, including risks and uncertainties described from time to time income Bios FCC filings, including those under risk factors and elsewhere and combine those filings with the FCC.
Moving its annual report on form 10-K for 2019 and its quarterly report on form 10-Q for the first quarter of 2020.
Ken Bio's results may differ materially from those projected kenbei undertakes no obligation to publicly revise or update any forward looking statements made today I encourage you to review all of the company's filings with the FCC concerning these and other matters with that I'd like to turn the call over to Rick Everly, President and Chief Executive.
Officer.
Thank you all for joining us this afternoon.
We're really good I must recognize that we continue to work amid a challenging times.
Recoveries nights he has done there for says that our communities.
Thank you for frontline helped her work remains steadfast in their server and sacrifice.
During her those directly affected by thus far.
For our revolver with all of it.
Thank you all through our core I applaud your resilience and dedication and driving her Ferrari.
You know cartons literature to the public health crisis, we grid.
Today I will provide updates on the initiatives we have undertaken.
Driving new strategic direction for our business by bringing new products through cost of her initially for the development of her covered and I think testing products.
I will review, our legacy infectious disease business and already services vertical before turning the call over to deal for detailed financial result.
I will provide concluding remark and open the call for questions and answers.
I'd like to start really briefly reviewing key quarterly financial results and.
And then second quarter as we previously described in our preliminary results release.
We executed the initial stuff.
<unk>, new business model and focus our resources on the development and commercialization coordinating testing products.
I'd say on the customer of our legacy infectious disease to.
All through the focus much of that their resources on Cosan They see Matt.
And the second quarter at 22 way, our total revenues were $5.1 million.
This equipment product revenue of $3.8 million and license royalty and R&D and grant revenue of $1.3 million.
Yeah.
Okay, sure or the emergency use authorization or eat away for our DPP Cosan magazine idea I seem to be system at a significant negative impact what our product revenues and gross product margin in the second quarter.
Replication triggered a recall of unused today from customers in the United States.
And we are aware that it was notified international regulatory body.
Based on that we determine that was not appropriate to recognize revenue in the second quarter for service shipments to the code and they seem system outside the United States.
The cost of it shows product is included in cost of sale and together with the impact of before on revenue, resulting from the U.S. recall, resulting in our reporting better gross riding work in the second quarter 2020.
Neil will provide further comment on this accounting treatment.
Like I said there were only up like so during the July 7th Conference call, we stand behind the real World clinical data and performance of our original Cokemaking system.
I can assure you that we're working closely and collaboratively with our customers would be intends to bring exposure to these should that outside the United States.
Including ultimately recognizing the revenue associated with that.
Probably want to send out a we recognize our proprietary DPP technology to provide value across several Walker was 19 related testing application.
The DPP technology in combination with our micro readers provide specific competitors.
We usually make it well suited to point of care tested.
[laughter] portal provide the ACA resolved in 15, but from a finger stick blood or other samples and is designed to protect them all biomarkers simultaneously indiscreetly.
At the same time to easy to use testing workloads schedule.
It was can run multiple data at the same time, because it's kind of cartridges are only required at the inserted into the my career for 15 seconds dropping result fall when discussing the integration period.
Our technology facilitates the decentralization of test away from quarter last.
Moving to diagnostic resolved closer to patients and providers allow the treatment and patient management decisions to be they more rapidly while also bring a hospital and central Laboratory resources.
Additionally, operating costs, a doctor's offices and urgent care centers that require only simple sample collection.
Maybe higher frequency testing were reasonable inefficient.
Well the deepwater deeper understanding of this virus many public health officials have determined that the better manage the health as a general population. The question, there's no longer or whether we should be testing or what else I could tell should be youd, rather how often we should be testing.
A recent increases in case volumes has highlighted the need for work.
And test that can provide resolves much sooner after the onset of symptoms then a long waiting period being experienced in parts of the country right now we believe our point of care as it's been addresses these market need.
The demand for go to 19 testing products in the United States extends beyond our current customer base that utilizes our rapid HIV test.
We believe that it provides us the opportunity to build a broader base of customers as we felt like a reader of analyzers to clinicians at hospitals physician offices urgent care centers and other locations that provide health care.
As we diversified our customer base.
We intend to serve these new customers over the long term by expanding our menu a DPP tied to meet initial needs in the market for the detection of Biomarkers that help identify respiratory gastroenterology and neurological condition.
We feel there are many tests, we can develop over time to competitively is rather high value in high demand there.
Then the strategy represents a significant shift and our focus and business model in the United States, we will be focused on driving recurring revenue.
We will derive more frequent irregular DPP assay orders from many customers with micro readers as opposed to go large discrete and in many cases tender orders placed by governments an entry goes that we've experienced in our legacy infectious disease business outside the United States.
We feel this model represents an opportunity to grow revenues over time in a stable and predictable Matt.
Now I would like to discuss our plans to leverage kind of wireless technology to develop a portfolio of companies 19 test.
We are encouraged by the exponential market rose observed as a result would be a minute demand for various places covered Nike test across a wide variety of setting and providers.
This interest includes demand from areas outside of traditional healthcare verticals, such as companies seeking to establish back to work programs.
We feel the advantages and versatility provided by our DPP assays and likely readers creates an opportunity for us to take take share and build a meaningful position in this market.
Our success here is dependent on three backers product development regulatory clearance and commercial execution.
In product development, we are working on a complimentary set of Cobas 19 test with unique capabilities to assist clinicians and all phases of fire detection and infection monitoring.
We are two tests currently under development the revised BPP covert Nike an idea on how would you be system for antibodies. This action and the DPP colder than 18 antigen systems for viral proteins detection.
Further along in development is a revised BPP code 19, I see I could be system through allergy test.
For the detection of two sites that covenant I see an antibody.
In June DFI identifies new performance criteria, that's or allergy test must now need to achieve you weigh.
These criteria, including test performed as evaluated under a protocol that as part of a national Institutes of health National Cancer Institute oriented <unk> study consisting of antibodies detection across a tad all the preselected samples.
The final standards have provided us with clarity and direction for our development objectives, the scientific and clinical knowledge base, along with our understanding of the virus and how it interacts with our technology at both expanded significantly.
Initial eat away please refer to recede.
We were optimistic that with a clear definition or these required it combined with the expertise with our scientists and their profitability of our platform. We can complete revised system at a short period of time.
We remain on track to submitted this revised system for anyway, and this third quarter.
At this stage, we are their process revising the test to meet or exceed the idea is performance criteria, including the N C I pad.
The next steps include completing preclinical and clinical studies and then provide the performance meets or exceeds their criteria submitting and eat away to the FDA for approval.
The second separate operating in are coordinating testing portfolio will be the DPP Covidien 18 antigen system.
This has been designed for use in identifying viral proteins are active infections in patients as a point of care in 15 minutes using either a nasal for nasal apparently old swap sample a DPP assay day and our like for reader.
We refer that to assist in the development and pursue 70, you waiting list that we were awarded a 628000 dollar contract from Florida.
The biomedical advanced research and development authority of the U.S. Department of health and human services.
Funded is being provided periodically over the coming month.
Thus far results or from our feasibility studies have been positive.
Our next step is to begin pilot studies from which we will implement any changes before ultimately beginning clinical trials to generate the data frikkie way submission.
We were very excited about our future testing systems and believe that collectively they are wide range of clinical utility could provide us with an opportunity to offer clinicians are highly efficient convenient and comprehensive point of care approach, while using a single portable analyzer.
11, 5800 dollar investment in a micro reader combined with a suite of our DPP assays could help clinicians identify activists actions.
Yes infections in fashion progression research community that is as vaccines or develop and finally conduct population surveillance research.
But expanding knowledge of resources that helped her system is entering the next phase of the testing. It was just focus will stay had beyond symptomatic patients the asymptomatic patients as well we feel we were very well position to capitalize on this expanded opportunity through our platform, which we believe has the capacity to become one of the most kinda.
He has his offerings and point of care testing.
Transitioning now for the build out of our commercial infrastructure in the United States.
As part of a broader corporate strategic shift.
We will be targeting new customers in different health care markets.
Addressing a much broader and de centralized market will require investment the increased our commercial footprint.
The growth most efficiently, we will employ close and expanded direct sales force and partner with distributors.
The initial focus for both of these teams will be only hospital laboratory physician office laboratory and local and state health acquiring.
The leader direct sales force, we hired Chuck case, though as vice President President of sales and marketing.
Throughout his career Chuck has achieved success and launching new diagnostic products and he brings the industry relationships to the team.
We also remain engaged with Fisher health care, and we'll continue discussions with other distributors, who focus on other channels beyond physicians offices in hospital labs.
To support our commercial effort and support future growth, we're also adding to our marketing and customer service teams in a manner that is aligned with our growth expectations.
Considering our our prior experience in the market with our strategy fast we anticipate the watch where the revised citizens to ramp up border quickly once regulatory approval has been obtained.
There are many reasons, we remain optimistic about our near term opportunity for the modified throughout the system.
These include.
We received over 2000, Lees, representing interest and purchasing systems based on our initial eway prior to replication.
The team at Fisher has already been training and we have developed stronger poor as our team will aid is fuel sales support.
We experienced no with markets pushed back when the pricing for either the assays for my careers.
Customers confirm reimbursement has been implemented like with CMS and commercial payers for GM and I see test results further increasing the value proposition about multiplex test.
Our mid quarter direct sales run rate outside the United States shipment schedule demand indications from Fisher and other opportunities together implied second quarter sales in the range of $11 billion to $13 billion prior to the way replication.
On the manufacturing and logistics problems, we were prepared to accommodate this level demand with additional capacity to scale accordingly.
From what we have observed in the market similar opportunity exist for the antigen test.
Right now and testing manufacturers' cannot keep up with the demand for test.
No describe whats regulatory approval has been okay. We plan to we plan to offer a complimentary set of test both utilizing DPP assays and micro readers to fill unmet needs and de centralized testing and the market.
Before turning the call over to deal I will touch on our legacy business in terms of in terms of globally infectious disease vertical and the R&D services vertical.
As we mentioned demand for our HIV and fever, and tropical disease tests have slowed as our government and energy MTO customers also focus their resources on efforts to combat coordinating.
In a positive sign units out of place an additional 1.5 million dollar order under the previous long term arrangement for the purpose of multiplexing does chicken Gadea and Dan gay idea I, usually assay and like careers.
Also notably we receive five 10-K that'd be a clear enough for the DPP Zika I am system.
This represented the first at the approval for a micro reader that will be used with our 2018 test that.
The development of this test was also assisted by a word from BARDA.
Regarding the DNA of our DPP HIV syphilis multiplex system, we continue to dialogue with the FDA regarding their review of our reproducibility study.
In the R&D services vertical 10 violent had been selected to conduct a second research and development services program for Takeda Pharmaceutical company limited.
The program utilizes Ken Meyers DPP technology, and my career analyzers.
I do likely know Takeda is the largest pharmaceutical company in Asia, and one of the largest in the world.
Now I'll turn the call over to deal with the detailed for second quarter financial results.
Thanks.
I'm going to start with an overview of the result for the second quarter 2020, Ben as Rick indicated I will provide some comments on how the way revocation impacted our financial results.
For the three months ended June 30, 2020, total revenue was $5.1 million, a decrease of 48.3% compared to the prior year quarter.
Net product sales for the second quarter 20, $23.8 million, an increase to me a decrease of 56.8% compared to the prior year quarter.
License and royalty and R&D and grant revenues combined for the three months ended June 30, 2020 were $1.3 million, an increase of 19.7 per cent compared to the prior year period, R&D revenues related to the timing and cadence of program performance obligations, which do not always occur in a certain period, but we.
What we continue to incur certain of the expenses.
Compared to the three months ended June 30, 2019, net product sales experience gains of 134.7% in the United States related to TPP Cobiz 19 idea my Gigi systems that were sold and utilized by customers.
Net product sales were relatively flat in Europe, the middle East and Asia and were down 76.4% at 84.1% in Africa, and Latin America, respectively related to the shift in our focus from HIV to cobot 19 tests.
Gross product margins during the three months ended June 30, 2020 declined by $3.7 million compared to the prior year period, the reduction in gross product margin and indeed, the negative gross margin figure in the quarter overall resulted from two things first cost or product sales.
Includes the cost of Cobot 19 systems that were produced and sold to customers in the U.S. and then were subsequently returned by those customers following the FDA replication of the way.
Second cost of product sales also includes the cost of covert 19th systems that were produced and shipped outside the U.S., but for which revenue was not recognized in the quarter.
This scenario is due to the requirement of U.S. generally accepted accounting principles for gap that we have a high degree of confidence that it is probable that a significant reversal in revenue will not occur.
Many factors could affect that consideration, including as examples things outside our influence actions of third parties and evidence from similar situations.
After considering all the information available to US we decided we were unable to recognize the revenue from those shipments in the second quarter due to the hurdle that requires a high degree of confidence that is probable that a significant reversal in revenue will not occur. We're certainly hopeful that in time the factors that affect consider.
Duration will be satisfied to allow us to recognize this revenue on a future date.
While recognition of the shipment revenue could happen in the third or fourth quarter 2020. Similarly, it is possible that recognition might not happen at all and that is reflected in our accounting treatment at this time.
One final point on the accounting implications of what I had been describing.
Because we were required to recognize the cost of the product shift to the second quarter in cost of sales if the sales value of that inventory is recognized as revenue in the future. It will be a 100% gross product margin.
As Rick said earlier, we stand behind the real World clinical data and performance of our original Coven 19 system and it we were working closely and collaboratively with our non U.S. customers with the intent to bring closer to the shipments, including recognizing the revenue associated with them.
Now I'll continue moving down the income statement.
During the quarter, we made progress implementing project Renaissance, which is the expense reduction program that we previously announced.
We have taken measures to right size the organization reduced operating expenses and remove other non essential costs as part of this evaluation, we've taken steps to retrench, our Malaysian facility and the workforce there.
We're preserving our corporation, Malaysia at a product registrations will remain active allowing for continuing operations if needed in the future at this time investment there does not and able to profitable growth upon which we are focused.
Other expenses, which includes research and development and selling general and administrative expenses combined were $6.7 million for the three months ended June 32020, compared to $6.2 million in the prior year period, R&D costs declined modestly by zero point $3 million excluding severance.
During and other related costs to zero point $4 million related to project criticized selling general and administrative expenses increased by zero point $3 million or 7.3% for the three months ended June 30, 2020 compare to the prior year period.
Net loss in the quarter ended June 32020 was $7.8 million or 42 cents per diluted share compared to a net loss of $3.2 million or 19 cents per diluted share in the prior year period.
On the balance sheet cash and cash equivalents as of June 32020 totaled $36.4 million, including net proceeds of $28.4 million from our public offering of common stock in may.
Net working capital as of June 32020 was $39.6 million.
Now I'll turn the call back to Rick for concluding remarks.
Thank you deal to wrap up in summary, we were driving towards creating a high value point of care diagnostics company by expanding the menu a DPP assays that utilize our micro readings.
As we had a proven our leadership internationally with infectious disease testing, we're excited to pursue a number of opportunities described today to do the same in the United States, starting with our Cobiz 19 test we plan to gain regulatory approval from the FDA and then expand the pace of customers using like readers across new health care.
Markets that can benefit from point of care testing over the long term.
Look forward to growing these relationships with subsequent additional high value test in areas like Gastroenterology Enterology.
We are progressing along to define strict strategic path and are confident that with our technology and team we could execute on our priorities to diversify can expand upon our legacy business to drive sustained long term growth increased profitability and create value.
Again, I would like to thank our employees for their hard work dedication and thank you all for joining US today, we look forward to updating you on our next call.
With that operator, please open up the call for questions.
Thank you the floor is now open for questions. If you do have a question. Please press Star then one you're supposed to keep had to join the queue. If you're using speakerphone. Please pick up your handset to provide the best sound quality again, ladies and gentlemen, if you do have a question or comment. Please press star one of your telephone keypad at this time and.
First we got any Catherine Schulke with Baird. Please go ahead.
Okay. Thanks for the question.
First just to energy pass that has the lease but truthfully settings.
Ladies.
We intend to how's the data packages available for Oh, you're antigen and antibody test to enable you used to cover testing in lead study. They get go like do you plan to submit for high complexity first and then proceed I definitely <unk>.
Yeah. So I'd say for the question, we are pursuing the antigen and antibody test it target and eat away submission of four point of care.
Application.
So to the test will be right on Hussein like careers. Both my career one in my career to what we are what we're planning is the Suralco. These tests will have the identical features and benefits of our original crowded which will include data.
To support Fingerstick claim as well as a point of care applications.
So that is what we were pursuing and that will be a the revised.
Throughout the test and turn to the innocent data.
We were also pursuing a point of care claim or for that assay. So for a customer who acquires either that my career, one or the micro read or to a will have the option to run either they antibody test or the antigen test depending on the clinical need and what the inclination is ordering.
So it will provide that flexibility for the user and Ah that way I will have a portfolio of products offered to the customer and.
Hopefully that answers your question.
Okay, Great I, usually talk to the past about the potential for us lizards until they all types like how are you still planning to pursue not application like.
Mission time right now.
Yeah. We are currently under discussions internally, we're doing in market research on that we're also looking at fighting relative to the flu season. So we are in the early stages of planning.
But we have not committed resources to.
Execute upon that product developments. So are we continue to look at the market and look at her options.
Certainly we make that theres a a competitive.
Position for a multi flex products like that we certainly think the DPP technology. Since we've demonstrated we can multiplex up to eight different targeted one at a single device a we've got the technology and the ability to do it but at a career at the career stage, we're still evaluating the market.
And.
We will announced that at some point of the future once we make a final decision.
Okay me, one for Neil I'm, just giving them and something that you talked about ramping up.
Commercially nation, how should we think about the magnitude of an opex [laughter].
Yeah, Hi, Kathryn.
So thanks for the question.
We're not giving guidance at this time in terms of the a forward looking in terms of the numbers. So I'm I'm not in a position to characterize that for you, but what I would like to refer you back to is the comments at Rick shared a as it relates to the fact that we are indeed.
Investing in our sales and marketing infrastructure, and our and our rightsize way to reflected the demand opportunities. We see in a marketplace also as Rick as stated in the prepared remarks, Oh, we believed that based on the positioning a that we've achieved through the first pass.
Of other product launch we're in a much better position to.
To step off of when it's time to commercialize assessment in due course.
Okay. Thank you.
[noise] next weekend tile about Alister when Colliers Securities. Please go ahead.
Hi, good evening.
Maybe I'll start with the coal that antibody test I know, the NIH and sea ice pretty focused on.
Despite being a the target rather than new killer capsid, which is what she targeted in the original test.
But there were a couple other companies that targeted newco capsid and were able to achieve.
95% plus accuracies from that they independent group. So can you talk about how their test differ from from your initial testing and will you be targeting.
They newco capsid and the spike protein in the new version.
Hi, Kyle this is rare or potentially question.
In terms of the.
The NC I study as we as we've talked about and in her opening remarks.
The samples that were pretty selective decided methodologies that the N. C. I study group is using a guy this focus on a slight protein and when we developed the original brought it back in I would say that first quarter. This year with limited reagents a week they choose the N P protein.
Oh, and and that what we pursued and serves as the original Eway submission a relatively DNC IDE study. What we have done is we have revised the system or was that targets the protein dislike protein in the strategy assays.
And yeah, we did it adds to assure that when or product is evaluated busiest biting into <unk> that we will have a correlation to the methodology used by the against the IDE study evaluation group.
So that's the only change to the system or all the other components are the same in terms of the cartridge the components that go into the Kid. So.
The revised system largely is aimed at protecting human antibodies to the spike protein a which is how the samples are free slackers five against the IDE study group.
Okay. So I guess just for clarity.
You said the competitors that also targeted new to capsid initially that did achieve.
Favorable results was that a function of then just doing internal validation with a larger sample size.
I guess I'm just a little confused about how are those companies were able to use that target and still.
Kick out acceptable accuracies.
<unk>.
So to apply all we Oh, we do stand by our original clinical data that we submitted to the way or to the FDA pretty eat away. So you know I can't speak for other competitors are good in terms of what they did it.
How they designed to raspberries, but I think is deployed is that Oh, we decided we're going to revise the system and to ensure that when we are evaluating by the NCR.
We got greater assurance that we're going to pass the I feel like study evaluation.
Got it okay.
Okay and it maybe just switching a little bit on this the scene application how have you been addressing the cross reactivity issue that test as well I mean, if we you know move on from the Spike protein. It looked like the cross reactivity with HIV was quite high which was surprising since.
You know HIV assay is or Kevin can buy as a bread and butter. So kind of what happened there and are you confident that 40% reactivity number will come down.
Yeah, Hi, or are you I can't speak to the cross reactivity from the original last eight at this point.
But in terms of the revised assay that we have that were in the process of completing development. We had gone extensive cross reactivity studies are not only for HIV, but for also all the other required a target is a 40 way submission.
Okay got it and then just done last if I may what what.
What's the process for resubmitting here do you do you do they do centered on for independent validation with NIH before submitting that that application pack, a T.F.D.A. or is that down after you've submitted that and then you know what is timing for the antigen approval I know.
Down the road, but you know what are your internal estimates for that thank you.
Yeah, Hi, all of the first question relative to the submission of this reality product, it's no different than our original Eway submission.
In that we have the notification process followed by E waste submission followed by against the I study evaluation. So that sequencing, we're not expecting to be in different than what it was with our original submissions relative to the antigen test Kyle we're still in the development phase of the antigen test as I said it.
The opening remarks, we're encouraged by the Big initial positive results in our partnership with BARDA I can tell you that BARDA has been a great partner for us.
And our scientists are working with us literally one a day in and they'll stay out basis to accelerate the development of the antigen test they see a great need in the market as we do and as you see with the other management companies when the markets. So we're optimistic that was part of his assistance and their funding that we.
We'll accelerate that product development through an easy way submission as quickly as possible.
Okay got it I'll jump back in queue. Thanks for taking the questions.
Mhm.
Our next question comes from her split with Craig Hallum Capital.
Thanks, Good afternoon, guys like there.
<unk>.
Hi, I'm do you want me to start with you would seem to dovetail into a into probably a richer.
No I assume we look at the balance sheet, we see the spike in deferred revenue up towards $4 million that that's really what that spike represents is the revenue sitting there for those or U.S. shipments.
That you haven't recognize the revenue for is that correct.
That's part of it.
Okay.
There's a different part is another I call it a bit.
We already have it Harris <unk> Harris, sorry, the just to be clear the majority of it relates to a different programs that are where the customer is pre paid for that program will be shipping over a period of time and there's more details about in the queue that you'll see when it's filed.
Okay, Okay fantastic.
Nevertheless, I guess relating to those O U S sales, they could turn around and come back into revenue in the second half of the year.
What are the gating factors I guess to having that convert into revenue was era is there a formal acceptance process for.
Oh, U.S. jurisdictions, where they just kinda have to say hey, we're not going to return this to you or.
What's going to go into that decision, making process, where you know the couple of million dollars of of or are those all U.S. shipments can find their way back into revenue in the second half and then broadly speaking.
Is there any O U S activity on going today or is everything outside the U.S.
Essentially in the holding pattern as you work through this resubmission process.
Yeah Fair. This is Rick thanks, Thanks for the question I'll turn it over to needle.
Handle the accounting measures in terms of how we're dealing with that or would those shipments I just like you know at a high level our shipments outside the United States.
We did for coated and I see a we've made a decision.
Not to recognize that revenue largely due to what we saw has a heightened awareness among the regulatory bodies around the world relative to the FDA decision on our original serology system.
Yeah, so that heightened awareness you know.
We were we were aware ROE as to what we decided to do was to continue to work with our customers, who we have shipped product to to work with them very very closely to.
To collaborate on answering any one going questions and or issues around the FDA decision to revoke the ASR allergy products in the United States. So we continue to work through those questions.
And you know I think given the factors that we're monitoring.
You know, we're gonna have to make that decision based on a number of criteria, which the orkins or go into a little more detail.
Yes, so and.
And you know respectfully pair that we can only go to a certain level of detail as you can imagine so getting into the started mix of particular transactions or otherwise just just isn't appropriate to get into.
Hi, good consistent with the vertical with what we're saying it's around monitoring what's going on in the environment and in the a and then the underlying transactions and what's going on in the relationships with the customers. As I described there was a variety of factors that go into that you know I talked about.
Things that are outside our influence, but we can certainly pay close attention to third parties and and other evidence in the like so as you can imagine is as we are certainly doing it as I described a we're very focused on getting these over the goal line, but as I said there can be no assurance that we will which is why we treat.
It is the way we have but you know wassa and we work hard and we try to make things happened. So obviously, we're focused on it so fair thing I would add to what in the old said is that a we had a number of international customers at different stages of evaluating the product and buying the product.
Up into and shortly after the reputation. So Ah we are working with those customers. Some are continuing to look at the current products.
Others have decided to entertain the revised product.
And as we publicly announced the antigen test on the same flat for a we're beginning to add dialogues with them to as to their interest in distributing that product. Once it is a pass through the FDA eaten away into or any other international regulatory approval. So we're in that we're sorting that stays where we're taking array.
Early customers through the process and are evaluate what's best for their particular days and there are countries.
Okay, that's that all sounds very reasonable.
Turning outside of coal bid and realizing that the pivot cure is largely to call bid, but acknowledging that there are some other high value diagnostics in in the queue here for you.
Can you give us an update on the HIV syphilis submission I know that reproducibility study.
But you had to resubmit that fell to two loss I think like a bit of a perfunctory step, but I don't know how much DFI is just simply waiting overwhelmed with with other things right now.
But if you have any updates there its appreciate it.
Sure I have to do so we continue to be at an active dialogue with the with the FDA. The review to see today as you made though is being reviewed by both fever and CDR age two branches of the a of the FDIC. So we continue to be a dialogue with.
Those branches of the a sta for the DNA submission.
And we continue to answer their questions relative to the reproducibility study.
And you know, it's really going after a dialogue back and Ford relative to their continued questions and we think we're making progress in those discussions and what we can't estimate at this time is you know to review process timing and ultimately what the yet.
He is going to view relative to they believe their final question is being answered and so we'll continue will continue to answer questions and ER and hopefully moving closer to pay approval.
Okay, that's fair as well one last question for me.
I suspect, they're not going to be a lot you can say to elaborate on the second Decatur program, but clearly that's interesting to see that another one has has gotten its way into the hopper.
Yeah I guess the question is can you say anything about it whether it's <unk> program type duration size that sort of thing and then maybe secondarily just how much of that was catalyzed by the successful initial development of the first.
Yeah Fair you know I think one of the things. We we were proud of is that certainly the second program.
It is building off the success of the first program and the collaboration we had a with the Takeda team. So we're delighted to announce the second program.
Due to the nature of the program and the confidentiality others were limited in terms of what we can say about the the scope of the program the biomarker and Ah you know any funding levels, but.
You know, we're we're certainly excited to take on the second program with Takeda and I think it really demonstrates.
Capability that DPP technology, and the platform and the ability to drive a enhanced sensitivity and specificity and get a point of care at that.
Very good thank you.
We take our final question or comment on the line Bruce Jackson Jackson with the Benchmark company. Please go ahead.
Hi, Thank you for taking my questions in terms of the or the new test that we owe height. So in terms of the the other new tests, you've been watching out for the M.T. you see initial test for the asthma that you didn't work out Astra zeneca.
What's the status of that program.
Hi, Yes, Bruce if you go and take a look again, our our first quarter 10-Q, when you'll see this a again in the in the table in the second quarter two in the Mdna section, we are able to where we talked about the various products in development and you'll see there's some document.
Patient there that does as you said the a the test just got through the process went from zero in the CE Mark inside of 12 months and is now available for research use only and Ah. That's a similar to describe where I'd say a qaeda that's all but what else we can say about it at this time.
HM Okay.
And then and then just a quick question on linear Dx can you comment at all how that program is moving along and if you can read any other details on on the types of things they work and that'd be great.
Yeah, Bruce [noise].
As we read now still doable Mira agreement was a strategic relationships. So given the fact that will mirror as a private company and no. We can't speak to their development program. A were very limited in terms, what we can say oh, but generally Bruce you know we've had a very very.
Positive strong collaboration with will mirror, the U.S. and ER. So we continue to move forward and that strategic relationship.
And you know.
We're hopeful that we'll continue to be in that relationship.
Okay. That's it for me thank you.
Yeah, There's no question Terry.
Please go ahead.
So thank you for your time today, we appreciate all the questions and your interest.
And have a good day. Thank you.
Thank you. This does conclude today's teleconference. We thank you for your participation you may disconnect. Your lines at this time have a great Dane.
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