Q1 2021 Enzo Biochem Inc Earnings Call

The question and answer session will follow the formal presentation.

And whats your require operator assistance during the conference. Please press Star Zero and your telephone keypad as a reminder of this call participating recorded and is now my pleasure to introduce your host of Jeremy Feffer Lifesize Pfizer's. Please go ahead.

Thank you Stacy and good afternoon, and joining us today from the company are Barry Weiner co founder and President and David Bench, Chief Financial Officer.

The press release announcing the results of the update was issued this afternoon and there's the available now and the Enzo website.

I will now read the company's safe harbors the safe Harbor statement.

Except for historical information the matters discussed in this news release may be considered forward looking statements within the meaning of section 27 day of the Securities Act of 933 as amended and section 21, each of the Securities Exchange Act of 934 as amended such statements include declarations regarding the intent belief or current expectations of the cash.

And he and its management, including those related to cash flow gross margins revenues and expenses, which are dependent on a number of factors outside of the control of the company.

And the markets for the company's products and services cost of goods and services. Other expenses government regulations litigation and general business conditions. Please see risk factors and the company's form 10-K for the fiscal year ended July 31st 2020 and.

Testers are cautioned that any such forward looking statements are not guarantees of future performance and involve a number of risks and uncertainties the could materially affect actual results. The company disclaims any obligations to update any forward looking statements. The result of developments occurring after the date of this conference call.

During this conference call of the company may refer to EBITDA and non-GAAP measure EBITDA is not and should not be considered and alternative to net income or.

The only lost income or loss from operations or any other measure for determining operating performance of the.

The company has provided a reconciliation of the difference to GAAP on it and its website www dot Enzo dot com and in its press release issued this afternoon.

I would now like to turn the call over to Barry Weiner co founder and President of Enzo Biochem Barry.

Thank you Jeremy good afternoon, and thank you for joining us and our quarterly update call today.

We issued our first fiscal 2021 financial and operating results. After the close of the market today and I Hope Youve had a chance to take a look at them.

As we continue to drive forward in the pursuit of some normalcy and our daily lives, we had and so we're extremely proud to have been part of the health care response to the COVID-19 pandemic.

Despite the continuing challenges that were presented to our business by Cove and 19, we delivered and extremely robust first quarter for 2021, the results were across multiple metrics of success.

Both our revenue and accession volume increased significantly over the prior quarter, reaching the pre pandemic levels and exceeding our initial estimates by $1.7 million, which we provided earlier.

Total revenue was $28.7 million, a 47% increase over the preceding fourth quarter of 2020 Devon.

Demonstrating continued evidence of recovery and the subsequent positive impact from Cove at 19, and our business operations.

We also saw continued margin improvement leading to positive EBITDA of more than $1 million and positive to earnings of <unk> of approximately one cents per share.

Before elaborating further on the quarter, obviously, we hope everyone has remained safe and healthy during these difficult and frustrating times.

The health and safety of our employees has always been of extreme importance and we greatly appreciate their contributions to keep our business running safely.

We have been very fortunate that the implemented measures to safeguard our employees have been successful well, allowing us to maintain full operations. So that we may continue to advance the important work, we've been providing to the our health care community.

Even with the unprecedented challenges we faced this year, we were able to maintain our commitment to our core objectives [noise].

First transforming into an integrated end to end diagnostic products and solutions company.

Check and building and investing and the infrastructure for growth.

Serge implementing efficiency measures to better bring in line, our cost structure with the market needs and force building out our four key platforms and technologies to address enhanced value and the diagnostic sector.

These objectives have helped us to further solidify Enzo supposition is the comprehensive solutions provider and diagnostic products and services.

Despite the unprecedented conditions of the COVID-19 pandemic, we have mobilized our our our operational resources to address the expanding the needs of the market by servicing opportunities and new areas, including point of care and direct to consumer offerings.

Well most companies and businesses. During this period have remained partially closed if not fully closed and so employees have not only man the front line, but expanded our operational capacity to continue and see support the testing needs of the market.

We are extremely proud to welcome Dr., Mary Tagliaferri and Dr., Ian Walters, two highly respected and experienced industry professionals to our board of directors, which now number four independent directors among the five on our board.

As executive clinical fellow and former Chief Medical Officer of Nexstar Dr. Cagley Ferry brings deep business development clinical research and development and global regulatory affairs skills to our board.

Dr. Walters, the CEO of poor cash biotech and he has held executive positions at Bristol Myers Squibb and Millennium Pharmaceuticals here.

He was responsible for the development of more than 30 drugs, which lead led to five new oncology drug approvals. In addition to his business acumen and he will be instrumental and identifying new ways and Enzo can effectively support companion diagnostic diagnostics early drug discovery and liquid biopsy technique.

Thanks.

The addition of these two new directors significantly expand the operational and commercial expertise of our company's board.

Particularly concerning companion diagnostics and therapeutic opportunities.

During the quarter, we work with our partners to provide COVID-19 testing services focused and our geographical region. The.

This includes multiple of universities, such as Stony Brook University, and Farmingdale State University, as well as urgent care facilities nursing homes and corporations.

These were implemented to our schools and institutional testing we call. It our psyche program, which we launched in June.

We are working with local government entities, helping them through this pandemic crisis as well.

We are focusing on building out these new relationships beyond coal the testing and transitioning them into long term opportunities utilizing Enzo is full menu of products and services.

[music].

Our recent go to test me no online portal is our first direct to consumer offering that brings quick convenient covert testing the individuals overseen by licensed physicians Carl.

Currently we have no over 30 convenient locations and New York, New Jersey and Connecticut.

It works as follows the patient purchases the Cove and 19 molecular serological test directly from the go Test me know website, and then goes to and Enzo clinical labs patient service center or pop of site for specimen collection the.

The results are delivered directly to the individual through our online portal.

We plan to extend this on line offering to sexually transmitted diseases and other types of testing further.

Furthermore, we are working on launching a home kit to enable self testing for certain diseases.

We also recently announced the commercial launch of a small portable micro plate reader for use with the company's immuno assay products.

This affordable device enables enzo to offer a complete solution to the academic see our ROE and other industrial customers.

It is a compact plate reader that features and open design from quick plate loading and the U.S. the connection.

The personal 96, well format micro reader plate and machine can be used for a variety of applications, including a license protein quantification essays cell based assays and more.

Ultimately, we hope it will provide new opportunities in the end point of care medicine.

And the research front and the recently published booked titled Insight to the molecular pathology and co expression analysis Enzo loop are in a technology with expanded upon is a highly sensitive approach and the development of human tapped the line human papilloma virus probes and so.

Those loop are in a what's compared against the market leader and demonstrated higher sensitivity.

We believe this technology may be extended beyond HBV from improved sensitivity with regards to other diagnostic testing.

We also have several innovations and product launches, including several logical testing and a post the vaccine environment that are in the early days of adoption, but we think will be a critical element of diagnostic testing and 2021 and.

And we look forward to updating our investors on these initiatives as they come forward.

I'd like to turn the call over to David who will provide the financial update.

Thanks, Barry here.

Here's the review of the financials for the first fiscal quarter of 2021 total.

Total revenue of $28.7 million for the first quarter increased 42% from the $20.2 million generally in the year ago period, reflecting the continuing expansion of operations and revenue following the slowdown associated with the impact of COVID-19.

Diagnostic test and sector the.

The consolidated gross margin for the quarter was 42% of significantly from the 28% in the year ago period.

On the sequential basis first quarter revenue increased 47% over the fourth quarter of 2020, driven largely by cover the 19 testing.

On the divisional basis clinical services revenue increased 66% the $21.2 million from $12.8 million and the first quarter 2020 and more than 55% sequentially.

The year over year performance was largely driven by volume growth to approximately 300000 exceptions in the period versus approximately 200000 and last years first quarter.

From a particular note we saw the gross margins increased to 39% from 14% and the first quarter 2020.

This is largely attributed to revenue from rapid expansion of our COVID-19 testing products and services as well as ongoing cost savings initiatives and.

Net revenue per access and grew to more than $69 per access and versus $62 and Q1, 2020, unimproved testing mix and the average products order value during the quarter increased 12% year over year reflective of higher value products.

Such as genomics allies of kits and the antibodies.

Enzo life Science gross margin was 49 per cent compared to 52% a year ago and experienced an increase of 3% from the previous quarter.

Due to improved product mix and the impact of the COVID-19 pandemic.

We are focused on improving gross margins and the vision for the coming quarters, aided by and improved mix of products being sold into a more stable marketplace.

On the consolidated the expense side research and development expenses decreased 29% less than $800000 or 3% of total revenue from $1.1 million or 5% the total revenue and the year ago period.

Selling general and administrative expenses of $10 million or 35% of total revenue decreased substantially from $11 million or 55% of total revenue and the year ago period.

GAAP net income was zero point $3 million or one cents per share versus a loss of $3.3 million were negative seven cents per share last quarter, and the loss of $7.7 million or negative 16 cents per share and the year ago quarter.

Adjusted EBITDA in the quarter was a positive $1 million compared to an adjusted EBITDA loss of $5.7 million and the previous year's first quarter the.

The significant improvement was driven mainly by increased gross margin from testing mix lower reagent costs reduce SDMA expenses from efficiencies and reduce intangibles and amortization costs and travel.

Cash and cash equivalents totaled $46 million as of October 30 Onest.

Slightly lower than the $48 million at the end of the fiscal year due to increases and accounts receivable inventory and capital expenditures.

Working capital improved to $37 million from $36 million at the start of the fiscal year.

As of October 31, 2020, the company had 47.9 million shares outstanding.

We remain committed to investing in our key growth areas as we expand our product and platform capabilities as an integrated solution provider of product and services and molecular diagnostics immuno assay cytology and immunohistochemistry, we expect this investment yield significant gross margin improved.

And the normalized post coping environment.

The combining continue revenue growth from our PCR based testing platform and.

And improve margins and operational discipline, we believe Enzo will benefit significantly from its position as a leading vertically integrated and 10 diagnostic company.

I will turn the call back over to Barry for closing remarks.

Thanks, David.

Both revenue and profit margins have increased dramatically as you can see and the recent months, but perhaps more impressive is the company's transformation.

We are one of the few companies to incorporate a biotech entity diagnostics division and the CLIA certified clinical laboratory.

Moreover, our integration has yielded advanced technology and products and platforms that are more economical provide in most cases proof and heightened sensitivity and compatibility with existing open systems employed throughout the diagnostics industry.

What is particularly evident.

In this most recent quarter has been our flexibility to adapt existing procedures to safely and effectively meet the demands for testing, resulting from the pandemic.

The advent of vaccines that hopefully will enable the world to deal with the COVID-19 virus and return to normalcy will not and most expert and opinions lessen the need for taste testing or safeguards. This will present, an opportunity for Enzo, but it will also underscored the vital role of diagnostics and how they will play.

And the future in terms of satisfying medical needs.

Regarding corporate governance, we were able to attract knowledgeable and capable of new independent directors to add value and and take advantage of our assets and opportunities as we grow Enzo.

Our comprehensive end to end solution from modern clinical diagnostics and our ongoing developmental programs make us uniquely positioned within the broader molecular diagnostics market, both now and in the post covert environment.

With that I will turn the call back to the operator, and we're happy to entertain questions.

Thank you we will now be conducting a question and answer session.

I would like to ask the question. Please press star one of your telephone.

The pad the confirmation total indicate your line is and the question queue. You May Press Star two if you would like to remove your question from the Q per participant using the speaker equipment and May.

The necessary to pick up your handset before pressing the star keys.

Our first question comes from Kyle and extend with Cantor Fitzgerald. Please go ahead.

Thanks, Hi, Barry David Thanks for taking the questions.

Congrats and all this oh, he the updates here and the impressive quarter. The net revenue per assess and increased nicely year over year of just was wondering how successful you are and expanding or kind of on the cross selling your core offerings to customers, who initially and the.

Oh, the tests and and it will just be that if you could provide any specific examples and how that kind of us and trend over the past couple of months.

Thanks.

Yeah, So we worry and announced the ESI T program, our school and institution testing program and that particularly was poor covance, but has extended beyond that with many schools asking us to help them with their health centers and specifically with regards to sexually transmitted diseases, but also other things with.

And the Health Center also with regards to.

Other areas like nursing homes and urgent care. We're also finding that expansion, where they we opened the door through.

Implementing our Cove and program, but then were almost.

Expand beyond that within all the other testing that we're able to do so it is a very interesting.

The model for US is that we're able to you.

You know come in with the co bid and then get the breadth of services across the play in many respects the Cove and scenario and situation has been a showcase for enzo to be able to demonstrate its capabilities in terms of providing.

And services that were timely and effective in most cases for these providers as you may be aware of.

And we are witnessing today with the resurgence of the virus and the increase in testing the demands out there. Many labs, specifically some of the largest labs and our country are now running of very extended return periods for their testing.

Some labs are now, suggesting three to seven days return on of Cove, and molecular and as we all know of getting a result in three to seven days doesn't necessarily.

Fit the bill for exacting diagnosis or containing the spread of the disease, we have been able to ensure our turnaround time for the most part between 24 and 48 hours and that's been our goal I think that it's been extremely well received and it has a low.

Well just to pick up new clientele and the clientele, we have been working with and extending into is being targeted for also and moving.

Moving their testing the routine testing their existing testing the on covert testing into our services capability and we believe that will serve us well and the post covert environment as we expand both the nature and type of businesses were servicing as well as the breadth and scope of the testing that we're providing.

And expand our revenue line and service provisions.

And the in the future of period.

Got it and that was perfect and slot.

For that and I want the move to the at the farm and Dell facility two as one of the but and update there when could the doubling of the facility to be completed I got it and then just remind us of the annual run rate revenue of the would affect of achieve yes kind of regard and episode and next.

Right. So we've already has expanded our facilities and with regards to.

Our co the capabilities on the agenda and.

And we continue to expand that as we move forward and so.

That that doubling of the capacity is being achieved as we speak.

The bringing on new machines, new resources and new capabilities within our.

Molecular diagnostic.

Areas.

The full of 21 example of our new build that is a one to one and half of your project and that's going to take some time to get there, but that is really a all encompassing project for the company from the Capex perspective, as well as an expansion perspective.

I think the acquisition of our third structure, which we announced the I would say about a year ago was had tremendous foresight and Oh and.

In light of what is taking place with the Cove it.

We have been shifting our physical facilities around to meet the changes of let's of structure of our employees in terms of keeping them safe.

And the whole covert period wasn't extraordinary logistical challenge for us where we had to move out of back office staffing that could work from home where possible we had to expand our production floor to bring in new platforms, new instrumentation to meet.

The accelerated demand and the demand for rapid turnaround timing of we were fraught with issues in terms of bring.

Bringing a new employees.

We have quite an extensive.

The search out for bringing in strategic positions today to help us and our expansion the new facility, which is under construction.

Has already been utilized by certain groups that we've started to bring back from home work. So the.

That facility has proven invaluable and our ability to meet the demands to restructure the facility.

Facilities production up options and the capabilities.

And we see over the next year, we will one by one the re shifting different departments and expanding our production floor to me, even greater demand that we anticipate even in the post cove it environment when we see the.

Advent of Suralco GTIS stepping in to validate immune response based on the vaccine.

Got it and makes sense and that and kind of like similarly saw the and the new run rate revenue is hotter and 15 million up from 109, and so I was wondering if you kind of talk about the dynamics that drove that increase like the delta there and then as were thinking about the the focus school year do you expect to reach profitability of got.

For the full year I know its probably tough the kind.

Kind of on the feature of this but what should what should we be thinking about quarter to quarter as it relates to operating expenses and maybe gross margin.

[noise] right. So the the as you know were and turbulent times right now so it's very difficult to provide quarter by quarter guidance.

But what I can say to you is that we are expecting over the next few months continued.

Increases and the Cove and testing, even pre everybody getting a vaccine right. So that that in itself should obviously lens of the comfort of our under $15 plus million dollar.

Run rate with the.

In regards to.

And our product.

And services mix, we don't really speak to that yet and the real.

Granularity, but obviously the covered was the significant.

Impetus to the the growth that being said as we mentioned our account growth also helps and ER and has been as we open those accounts, we moved from two other things for them and the last thing I need to point out, which I think is very important is the margin expansion is not just based on kind of it.

Theres also margin expansion as we moved the rest of the the molecular platform overcharge and flex platforms and that's important because I know historically, we've seen these very low margins and the lab of 15% to 25%, we expect that margin to grow the.

And that even in the normalized area now, we're showing 40 plus percent margin and in our labs and so that helps grow the game of profitability that you are talking about right now.

Within the company and just to emphasize that point because it is a very important point.

The improvement in margin certainly.

It is partially attributable to the cove and testing but.

But the uniqueness of our corporate structure, having both the of the product development and manufacturing side.

Side of our business support the services side of our business has allowed us to utilize our own equipment, our own manufactured product and thus we are able to extend the margin and even on the what I would call non cove and testing areas and we're seeing that within our numbers.

I'm also.

Not to discounted at all over the last year, we have gone through and extensive cost containment program, which we spoke to just about a year ago and we have drawn out of of the cost structure of close to $10 million, which is what we are targeted back.

And then and we have successfully delivered on that promise and that is now also being reflected in the in the and the numbers. So we have a multiplicity of contributions that are driving the margin improvement and the performance.

And we hope that will continue on.

Awesome. Thanks for all that detail that was perfect and then just kind of switching gears here. So obviously, the new directors habits like therapeutic kind of focus and it sounds like the will be kind of episodic and and diagnostics and liquid biopsy going forward on the.

And so I got it sounds good Kevin obviously can you just discuss that strategy or maybe the plant and with that a little bit more detail maybe your goals with respect to the pending dx of the liquid biopsy I guess offering around the I want a thought.

We are we are looking to extend the capabilities of our company into areas that we think we can make a material contribution and produced products and or services that will be contributory for higher margin returns and the diagnostic sector.

Obviously, one of the key areas is the extension into liquid biopsies as we see the area of cancer diagnostic start to evolve we see the opportunity.

To extend our our technology platforms into the area of drug discovery and the area of supporting CR ROE work and new drug development, we are already providing certain services to see our Roes of currently.

The new directors of we're are really very focused and knowledgeable in multiple areas specifically in the area of drug discovery of drug validation and the utility and need for companion.

And diagnostics with the evolving new biologicals that are coming forward.

Enzo has a significant technology portfolio, we spoken about it in the past the wealth of our intellectual property state.

It is not that well comprehend and by the average of investor or even the average of pharmaceutical company and we believe we can mine our technology base and apply it in areas of product development, which will give us the significant edge and.

And we are looking forward to these new directors.

Who have really of very different and I would say significant.

The experience space, then directors, we've historically had a to be able not only to guide into that but to make the appropriate introductions and contacts to allow us to build a presence in the pharmaceutical industry that will drive not only our support work, but help us per head.

And our own therapeutic efforts to bring forward opportunities that can create shareholder value.

All right, great, Yeah that sounds pretty promising and I just wanted to ask one more question kind of and Big picture question recently, we saw that just given the reef and increasing number of and testing process. There is a significant shortage of.

Of the supplies needed for I see the diagnostic tests, including the reagents and so that's sort of wondering if you could comment on that and then the potential impact on Enzo and I guess ultimately given that I see the U.S are commonly AMAG do you expect there could be potential bolus of patients for your test over the next few quarters or so.

The answer is yes, I mean, the issue of shortages in our industry has been one of the key challenges from the minute. The cobot issue was recognized I don't know if you go back and then and you know.

The initial shortage that we all.

You know faced back in March and April we couldn't we couldn't get enough swabs of the specific type that were required for the molecular test I mean this is a this is an area I have a particular passion on because every day to make this facility and this operation work and to be able to price.

By the services our customers are.

Demanding and and begging for in the early periods required daily.

Daily review and and.

Challenges to overcome the supply chain shortages that were coming forward not only to Enzo, but the every every laboratory and the country as we know it.

What is the unique about Enzo is that Fortunately, we manufacture most of our own molecular reagents, and that's really what differentiated us and the early part of this pandemic and today is it is what gives us that edge that vertical integration is now fulfill.

Selling its vision and giving us the economic edge as well as the supply edge now that is not to say that we still don't witness supply chain shortages. We are all witnessing it and the shortages are initially were in the swaps and it was in the reagents recently and the last month, it's been in the consumable sales.

Plastic tips that go into the machines.

What you have to appreciate there are a limited number of global suppliers and they are being demanded on by every labs around the world and so where.

Where we can be self sufficient and we have been extremely self sufficient and very creative and our processes to be able to manage a it has been and incredible challenge and I think the ability that we have shown and the fore sight in our own of product lines and our own design.

And and strategy and putting forth our own platforms and producing our own reagents has really is really starting to show itself.

Itself as a strategy that is was viable.

And important and fulfilling its you know its design.

But still going forward of.

There are daily shortages and.

Every level and it will be a continuous problem as the demand on testing continues to expand and it looks like it will continue to expand.

Okay excellent. Thanks for the comprehensive answer there on the and the leave it there but on the guys. Thanks for the questions and congrats thank you.

Our next question.

Comes from Thomas So with the Evermore Global Please go ahead.

Hey, Barry and David.

Good afternoon.

Hi, and just wanted to say congrats on the quarter great job on quickly ramping up on the Gen flow platform to deal with because of 19.

Oh look you guys are working on a lot of the initiatives concurrently and it would be helpful. If you could kind of walk us through on how are you thinking about next phase for Enzo.

As it relates to the priorities post pandemic.

And it's very very good question.

We we are wishful and hopeful that the vaccine will.

Kemper this virus and get us all back to normal so the obviously it has allowed Enzo to showcase itself I think it is provided the environment for Enzo strength to become visible and not only visible on.

An observation of level, but visible on a production and product level to multiple customers around the world.

That being said post Cove, it and we are acutely aware that at a point in time, there will be a shift of potential shift and necessity and need in the marketplace right now molecular testing is the gold standard we have seen the introduction.

Of the number of rapid tests, I think the sensitivity and specificity of those tests has now demonstrated that they may serve a purpose, but they certainly are not the answer that the molecular test gives in terms of accuracy and AMEA.

Do you see for a.

The contagious of.

Issues here that being said, what we are witnessing what we believe will happen.

In the post Cove it environment as the vaccine begins to become.

More extensively applied will be the need for testing to validate and verify immunity that means the serological test will be one that we think will have to be employed by those who are vaccinated to validate.

Whether they have antibody production the sustainability of that production I mean, you have to remember that the vaccine still is yet unproven in terms of its durability.

It's interesting as recently as this morning I was reading.

A scientific study on one of the vaccines, which said that they are hopeful it has the six month antibody sustainability and they don't have enough time, but they were already seeing it fall off.

That means that testing will be predicated and necessary.

As long as this viruses proliferative and.

We believe that our program to address that is.

His comprehensive we currently are running IBG tests for the.

For the antibody.

But we think there will be the need for GM.

Okay and another series of more rapid types of test for people to say I've been vaccinated and the immune and I think when you look at the numbers that that might drive of the numbers of people that will be vaccinated.

I think it will be another leg to the Cove and testing story, we also see and we're very focused.

And building our business.

And capitalizing on the goodwill of the large number of new accounts that we have been able to bring in house because of covert testing.

And I I mean, I do know we have taken.

The business from many of the larger labs because of our rapid turnaround time because of our service levels. I mean, it's interesting to see the universities and the school programs that we've put together.

And at the universities, we have teams of.

Of Swampers that are there every day on campus, taking samples from the students and.

We're not just the process of we're facilitating the testing capability of the universities.

And that has.

By word of mouth spread and were getting new business because of the quality job that we're doing in our existing institutions that were servicing to the point that we're actually has to be measured in terms of us being able to be able to manage the volumes that are being presented to us.

So we see the future is leading not only to co. The testing, but we're we're now taking specimens from school health services, obviously, the STD market. There is high and that's one that fits very well with our molecular platform and.

We had approval for Sdd panel pre Cove, it and now were able to extend that into the higher level academic institutions nursing homes and other interesting model for us.

Pre co of it we did not do a lot of nursing home business.

Post Cove it we not only feel that we will be able to do ongoing cove and testing.

We will hopefully be able to get the other what I would call legacy of routine business, which is quite significant from these nursing home clientele, because again, we provide a level of service, which is special in our industry.

So I think there are programs in place.

We're looking at new types of tests, we're looking at service provision that I think is unique in the market and we hope that will extend and grow this business significantly and the next six to 12 months.

Also just one is really helpful. The comment it's on the direct to consumer initiatives and the point of care testing of the direct to consumer is just starting now I mean, the we're getting from.

Interest and activity on our website people are now taking the direct to consumer test to our portal and the point of care test will be very interesting because it will dovetail with that program. So I think there are many initiatives of the technology.

Development cycle is aggressive of but.

But we're we're addressing it a very readily now.

Great. Thanks, Gary and I just had one more question.

You mentioned the launch of this new portable Microplace reader.

Just a question twofold, one how should we think about the ones in terms of the timeline the commercial lines and.

To the currently and existing technology out there where your product is looking to effectively displaced.

Of the launch is ongoing as we speak right now.

This device is a very very.

It's a very unique and clever device it actually looks like a day.

So of five inch by eight inch.

Or a cell phone type device that fits a little.

The little plate that you put samples and too and you plug it right and to your computer.

And it will initially have applicability and an academic setting and in a research setting because it allows scientists are researchers just the plug right into their computer and run their specimens very quickly and efficiently without using equipment that might be shared or have you know of located.

And difference from what they're doing it's a very very clever device. The whole purpose of it is to drive her extensive allysa kit the.

Program I mean, we have we are a marketer of of.

Many kits that are targeting.

All sorts of developmental interest for researchers and academics. If you look on our our catalog on our website you will see hundreds of these tests and this device is to provide us a complete solution.

For the researchers and its a sense to drive the utility of our Allysa offerings. So it has both uniqueness in size and convenience and cost and at the end of the day.

You know a life of readers are prolific throughout the industry, but it's it's almost like a new model of your cell phone that can work with your computer and give you independence and autonomy from your laboratory.

So we think of it has some legs to it and we're very excited about it it's just beginning now.

That's great.

Thanks, Barry has really helpful. Thank you.

Next question comes from Paul Nouri with Noble equity. Please go ahead.

Hey, good afternoon.

Hello, Paul.

So the products that you got anyways for are you actually saw and most of the market are you primarily using those for your on line.

And our own labs has been the major customer because of supply chain requirements, we have interest and of from other entities and institutions for our platforms, but because of the supply chain needs. We have been slow in of.

Providing those because the utility is being absorbed by our own lab and thus the margins they are quite or quite good for us and doing that but were looking forward as we have both of us and international interest.

And over the next few.

A few months or so we hope of that as the supply chain eases, we'll be able to start to each of those products into the market.

Okay and the press release said that the company was and the process of evaluating.

Business opportunity as I was wondering if you could expand on the areas that you're.

Most interested in or what exactly this man's I mean does it mean more of that Youre looking to make tuck in acquisitions and areas of technology that you're looking to expand and or perhaps divestments and then I guess related to that.

One of the activists investors and brought up the that the company had engaged the Lazard and I was wondering if there was any update on that or any information related to the.

Sure the.

The statement applies to a variety of different opportunities. Unlike many companies we have multiple developmental options to exploit.

Specifically, we have four [noise].

We have four.

Major platforms.

Of that have been under development each being developed to provide unique.

Capabilities to the market the Gen flex, which we speak about for our molecular platform is the most developed and long as being worked we have multiple platforms running every day and our labs a price.

Processing, not only coated but a variety of molecular tests.

We have the program in the area of the Immunohistochemistry, we have one in the area of cytology and we have one in the area of immuno assay development.

Our goal is to fully develop each of these four platforms into independent value centers and to do such we have a limited number of areas on our own that we can fully exploit particularly in the hectic environment that we're dealing with.

Today with Covance and the statement really applies to dialogue with potential partners co developers.

Of our platforms to establish them as independent value centers, and we believe that the intrinsic value that sits within each of these platforms.

When broken apart from the overall of the totality of Enzos work can be brought to light and that's where we're looking to leverage our assets and to apply them and those areas in terms of the relationship with Lazard and the Covance.

Environment, certainly has created diversion.

There's not much to say on that as of this point in time, and but we will if anything developed certainly report that the in the market in a timely fashion.

Okay, and then is.

Is there any update on any of the lawsuits that you guys have pursued against industry peers.

Nothing I mean everything that the of the current update will be provided in the 10-Q, but there you know it. These are ongoing issues as you know the courts during the Cove issue.

Have been somewhat limited and their execution. So the whole period, it's been stunted by the coated environment.

Okay. Thank you.

Thank you.

I would like to turn the floor over to Barry for closing remarks.

Well. Thank you so much for joining us today and while we are very proud of our revenue growth and profitability achieved this quarter. It is really only one step and transforming enzo into an integrated and 10 diagnostic products and solutions company and building and investing in the infer from the infrastructure from.

Growth.

We look forward to the next quarter or two quarters, as we drive and much of the developments and the opportunities that we've reported on today.

We are looking forward to a.

Very exciting period, though challenging period I have to tell you. The work force here has been pushed to its limits and they have actually responded well to the challenges, but this is an ongoing scenario. We have a lot on our plate I believe we will be able to deliver a lot go.

Going forward and we look forward to reporting to you. Thank you for your time.

[laughter] today's teleconference. You may disconnect. Your lines of this time and thank you for your participation.

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