Q2 2020 Precipio Inc Earnings Call

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Well there as a result of new information feature phones or otherwise, except as required by law now let me hand, the call over to you and then really.

'cause <unk> CEO. Please go ahead.

Thank you Sarah and good afternoon, everyone I'd like to thank you all for joining our Q2 2020 shareholder call.

It's certainly been an unusual quarter, one where the world has changed in ways that none of us good about dissipate.

Many businesses and millions of people have been hit hard by the Cobot 19 pandemic.

You don't have to learn how to interact except business the new ones Barb.

And in a very different.

So many survival has been the goal during the past six months.

So with this within that popped actually I'm delighted to share with you. Some incredible progress a company has made the second quarter of this year.

During this call I'll provide investors with a quick overview, our company core businesses and share the progress, we're making each of those businesses.

I'll also discuss similar plans going forward as well as of course address or Colby. Thanks, you initially.

But before that for the sake that many of our new shareholders. Let me begin with our company vision, because that's what drives.

We started precipio almost a decade ago division of building a complete the Bobby unacceptable problem of disease Misdiagnosis, we decided to focus on the scariest word in health care cancer attempt to make an impact on patients lives.

Well, then cancer, we focus on blood related cancers, which according to numerous fabrication reaches rates up this diagnosis hi is 25%.

Over the years, we devote the platform to combine the highest quality of laboratory professionalism advanced technologies and academic Cts world leading institutions.

The company's dedicated focus hard work has resulted in the debris that diagnostic accuracy rate of close to 100%.

Our visibility of two core areas.

First is our pathology services and the second is the cost side of business.

Let's begin with our product quality services.

We provide clinical diagnostic services to our customers World Congress in hospitals benefiting from a combination of our CLIA certified, especially laboratory and our export sales specialist academic the doctors.

We employees dedicated sales team that goes out to our customers presents our colleagues coffee I'll probably proposition.

And as you can see for this quarter results and Oculus quarter, even under the current environment. We continue to rapidly grow this business. During Q2, we successfully executed on the transition all subjects customers and their integration into our company.

The increase in our customer base, along with the addition of many new customers that impacted the growth we shared with you at all recent filings.

Going forward the diagnostic services side of our business is tasked with one goal continued rapid growth in order to scare long reach profitability.

That's the company continues to increase its volume margins will improve which drive cash to the bottom line.

We believe that the results, we see our custom only to the success of Archie sharing all value proposition and the marks the market's acceptance lobby deliberate <unk> call. This adds to that patients.

With that progress, we move closer and closer to the goal of reaching profitability.

The second part of a business is the product site.

Over the course of the years as we upgraded our logic tortured the diagnostic services. We provide were identified several opportunities to improve both the accuracy and efficiency laboratory policies by developing novel technologies.

He told me he actually in our two examples of those technologies, which we've developed patented and has been successfully used in a laboratory for the past couple of years.

Last year, we began to commercialize our I'd be selling against these technologies. They went to market <unk> donnelley of patients being diagnosed at all.

Well that there was the other laboratories could also remains the same technologies cheating broader impact both for patient care as more or less financial benefits as a company.

Like any new products being introduced to the market. There are always both those things you learn from that process. Fortunately, we are an adaptive company, we've listened to the market and address the issue I'd like to discuss some of the changes we've made over the past six months.

First I'd be so we received feedback from some of the major laboratories, Milwaukee with the market and as mentioned previously because bars on the coupled with the launch of version two of the media, we're going through the final stages of testing and expect to have a market ready product.

Additionally, we've been exploring several strategic partnerships in order to utilize existing distribution channels to bring this products to market. We believe that person to provide even more value to laboratories, we've been working but we also believe that a distribution partnership with a company that is already selling it to be Bob's laboratories.

The right way to go in terms of quickly, bringing the product to market by leveraging existing sales force distribution channel rather than building Oh.

Our goal is to accelerate the adoption of our products in the market.

Back to share with you in the near future more on the strategic partnership and I'll go to market strategy for Ibiza.

With respect to eat screen. In addition to our target customer segment of lots of George we've identified a new set the physician office laboratory.

Particularly due to cope with Nike because this is the opposite had been struggling to improve the quality of service efficiency and generate additional revenue I'm sorry, excuse me agent rental model provides the perfect solution.

Our internal sales team has already onboard to several customers how do we have a strong pipeline.

He screen as well in addition to our internal sales effort weve recognized that developing strategic partnership with a major player that hasn't existing distribution channel in the segment can be advantageous to a rapid reduction our products to the market. Therefore, much like I do show, we anticipate developing these strategic partnerships to accelerate the color.

Duration or products into the market.

We believe that the next 12 months will show alongside continued growth for both business. It's a substantial shifts in the balance of revenue between diagnostic services and products sales.

And given that the product side of the business delivered its very healthy margins and cash flow, we expect that to have a significant impact on the company's batches.

Now, let me turn to our corporate Nike testing initiatives.

I know there were many questions about the technology regulatory business landscape. So let me trying to address some of those questions that were something I've discussed our bucket bought I'll begin with the regulatory landscape.

In ordinary times when it company wishes to submit a product for after you get people difficult time life for the processing the submission it up to an including potential approval of the product FDA may take anywhere from two to five years.

During the Koby 19 pandemic utilize the emergency use authorization process you weigh.

Greetings and accelerated process to grant authorization to companies, which is about rapidly introduce so well see a adjusts to the market.

During the first few months it up and then Nick break out early this year you issued several eway permits the various types of diagnostic tools for detecting either the president of the virus or the presence of antibodies.

There are too many types of diagnostic test for cold in IP. The first is the steps are the present. The virus. This is usually done by collecting a sample of using and they just well at least we better bid a few new products that use as to why this.

No samples are collected insights into a lot of Detroit, which typically loved because you'd be it must be platform called Pcr.

[laughter] indicate whether the person has contract expires at the time to the test it does not indicate what the person will develop system system or get say it only indicates the person that's contracted the buyers.

The second peptide is the antibody.

This is the one we took interest.

Once the body has been exposed to a virus. It begins developing its defense mechanism, which includes the creation antibodies.

Both initially the anti bodies of works to get rid of the virus president and the person's body, but after that Bobby Creek antibodies that for a type of proposed to the cheap if you will.

It's a person is ever exposed against that lets say virus. This field he's the buyers out not allow for infection.

This is basically the so called unity.

Researchers show that the everybody's typically appear in the body anywhere from one to three weeks after exposed to the bars and that they remain in various levels in the body true.

So in theory cousins anti bodies indicates that the person is immune and therefore will neither contract nor trends.

Needless to say this information would have fast implications on the side with the ability to open the economy and Brazil, some form of norms.

The tests conducted by blood sample and as of now yes, yes authorized testing only in laboratories.

Therefore people wishing to be tested musket blood draw.

So essentially the lab for testing.

So our test the testing time from starts to get it covers all is approximately 10 minutes.

That's what designed to be used both in the laboratory environment in a point of care or for self use it's important to exercise as of now BFDS authorize it only used to use it was a lot.

We initially began working with a company what filed for Eway approval with the FDA breakthrough allergy test.

That's the problem is proceeding we began to realize that question marks around that product you see a anyway and so we've doubled the plan B, which we recently executed.

As we recently announced we partner with 80 of biotech. So I think in agreement with them to distribute Yep Yep I spoke with 19 Sovaldi everybody just in the U.S. and as long as arc other markets worldwide.

As mentioned, yes, it's currently to by the way off or they should only for tests that are conducted strictly laboratories.

Therefore, our first there was to offer the test work RV customers because its customer base, who will provide access to their patients coming into the practice every day.

The first up is launch a couple of weeks ago has received strong except.

However, it's no secret, but there's a huge gap between laboratory capacity in the U.S. and the number that's needed in order to enable economy in the U.S. worldwide to reopen.

All of us to resume normal course of life.

We strongly believe that the next natural logical steps to reopen me, calling it will be for the matrix Yep Yep anyway authorization to book point of care and ultimately to allow for self use of these tests.

Our serafini test of design ultimately serve as a self administered tests, we believe our pockets is well positioned to serve that demand.

Over the next few weeks, we will be completing the study that we began a couple of months ago in order to demonstrate the quality of our cash in a point of care and self use environment.

We are confident in our products ability to meet the necessary standards to be if you outlined for these applications.

Many of you've asked why we haven't shared the results of the study part of the reason isn't studies I didn't complete but initially DFT also frowns upon companies publicizing results for Lowery yesterday to through the first.

Therefore, we want to make sure we follow the processing outlined by the FDA and then we comply with their requirements before which provides additional information to the public offer study results.

We don't know when they ask Dave will extend the utility. These tests allow companies to submitted applications for expanded use for point of care itself use. However, we believe based on the dialogue with the FDA and this is the question of whether or not if.

Our goal is to be to position to have the data from our study baby and to hit the go button as soon as the FDA opens up this option.

From a production capacity, we're currently able to generate 1 million tests per day.

In parallel we will be lining up very distribution channels for these new potential uses of the testing so both point of care as well itself.

So that once you expanded your way for these applications received we will have distribution in place and ready to go.

In many ways to cope with initiative can be viewed by some as a distraction from our core business.

You can see from our quarterly results by the ongoing growth. This quarter is well I hope our shareholders. Appreciate you have not taken off the ball with respect to our core business and continued to grow those areas of our business alongside our corporate initiative.

However, we also believe that this could be a huge opportunity to generate value for shareholders. Furthermore, we feel that as a member of the healthcare humidity and diagnostic company, we ever responsibility to contributes the battle given the tremendous tested deficiency in the U.S.

In summary, I feel we because this is our company not only to overcome the challenges we face the new World. We live it. We're also to position to capitalize on situation gained market share and bring our products to market and economically advantageous Matt.

Midway through the summer we continue to see the same growth level and we feel that the contribution with Cobra testing will bring to our business and your bottom line, maybe a tremendous opportunity. We will continue to work hard throughout this quarter and all going to deliver the expectations of our company into reality retention of good revenue growth and shareholder value.

I want to thank you for your ongoing support which you and your family's health and safety. Thank you haven't actually.

The conference is now concluded. Thank you for attending today's presentation you may now disconnect.