Q3 2020 Centogene NV Earnings Call

[music].

Ladies and gentlemen, thank you for standing by.

Welcome to the sound pitching Q3 tried to tried tea and angry sells well at this time all participants are in any said already about.

After the speaker presentation, there will be a question then on secession.

To ask a question on this S and you wouldn't need to press star one on your telephone I must advise you that this conference is being recorded today, then I would now like turn the conference over to your Speaker side, Kim Chief Business Officer. Please go ahead.

Thank you.

Hello, and welcome. Thank you for joining on to discuss our Q3, Twentytwenty result, which were issued earlier today.

You can view this presentation and the related press release on centered Yumes website.

For those on able to view the webcast you can find the relevant slides on www Dot investors Dot Center gene dotcom.

Our speakers today are centered Yu, Chief Executive Officer, Andrew on Oswald.

And Richard stolen Central Jeans, Chief Financial Officer.

Before we begin please.

Please refer to slide two of our presentation.

Which provides information about certain statements to be made today that may be considered forward looking statements within the meaning of the us securities laws, including those regarding our strategic plans development programs and future financial results.

Statements made during this call that are not historical statements may be forward looking statements and as such may be subject to risks and uncertainties, which if they materialize could materially affect our actual results.

The forward looking statements in this presentation speak only as of today.

And we undertake no obligation to update or revise any of these statements to reflect future events or developments, except as required by the law.

Additional information regarding the <unk>. These statements appears in our SEC filings.

Following our presentation. We will also open up the call to Q anyway, we kindly ask that you ask only a maximum of three questions I'd.

I will now hand, the presentation over to Richard Please turn to slide three.

Thank you so on.

Before we get into our financial results, let me briefly introduce our new CEO Andrew Most world. He joined our company in early December and has brought with them a tremendous amount of energy and passion to the company.

A few points on standard.

First he brings extensive expertise in recognition from the life science industry.

He spent 10 years of his professional career at Novartis, where he was the head of the vaccines and diagnostics division until the business was divested to Glaxosmithkline.

While Andres was head of that division he helped to grow to 2 billion dollar a year business and manage it through the M&A transaction.

As a medical Doctor and brand is also passionate about helping patients and improving the health of our communities in general.

After his roles at Novartis from GSK endurance spend time in the non profit sector, where he worked at the Bill and Melinda Gates Foundation for almost four years.

When the COVID-19 pandemic broke out early this year he began working with the Swiss governance, leveraging his expertise in vaccine to help from that the strength of the Corona virus.

We are extremely pleased to bring onboard someone with such extensive knowledge of the history of the industry and will benefit from is widespread managerial experience in both the for profit and non profit sector, when establishing and maintaining relationships with stakeholders across the industry.

And then also brings tremendous specially on to everything he does where does this is dr. cloud patients or mountain climbing or traveling around the world capturing different cultures seer cutover fee in his personal life.

With that let me hand, the call over to our new CEO and renewals flow.

Thank you have weighted for the kind introduction and Hello, everyone.

It's a pleasure to meet you today and also to re present tense achieved for the first time.

Let me start on off by recognizing and thanking professor on growth and everyone. Here at change achieved for the growth cash balance to be able to such a wonderful company chief.

Since I started I have met a group of diverse and capable people, who all strive to meet the highest level of professionalism they're.

There are also dedicate to improve the lives of the many patients around the world who suffer from rare diseases railroad deducts from devastating.

At this since your passion for helping people that believe in the power of innovation.

And then on day rate strive for excellence, it's why I joined Synta gene.

Now, let us walk you through our earning results.

Please turn to slide four.

Today I will first walk you through our operations performance during Q3 year to year.

In addition to that progress on of our core business, meaning the pharma segment and diagnostic segment I will provide an update on other COVID-19 testing activities in recent months. Richard will then take you through the financials on provide an update on how we see the rest of the year.

Afterwards, we'll be open from Q any.

Let's please turn to slide five.

Let me first highlight the key messages for today.

We had a very strong quarter from a revenue per se.

Q3, Twentytwenty revenue grew by more than 200 per cent compared to the same period in 2019.

Revenue for the first nine months grew by over 70% versus last year. This is truly impressive and a record for the company.

Our strong top line growth was driven by coal 19 testing.

It has been a critical additional source of revenue for the company at our core business has not yet fully recovered to prefund any levels.

We have made progress in Bob on seems to bottom out in Q2 by re centering our focus on the core segments.

Particularly the number of pharma partnerships discussions is encouraging.

Which has been quite active since the summer in the upcoming slides I will also walk you through some key operating metrics that demonstrate the progress we have made in the last quarter in recovering our core business.

We would also like to update you on both the strong foundation and prospects for our business first we are happy to inform you that we anticipate that our full year revenue to be over 100 million euros. Furthermore, the positive financial contributions from COVID-19 testing will enable us to make strategic investments to further solidify.

Our position in the rare disease space.

We continue to build for the future and decent port investments will allow us to return to growth momentum in our core business.

As we are experiencing before the global condemning and help us achieve centre teams long term potential.

Let's now discuss these points in more detail.

Please return on slide six.

In Q3, Twentytwenty, our readiness increased 213% compared to Q3 29 team to approximately 36.3 million euros.

This increase was driven by Koby, 19 testing, which accounted for 27.4 million euros that.

On enabled us to count on our core business revenues decrease of 2.1% with the pharma segment and trade price you think diagnostic segment, resulting from the COVID-19 pandemic impact.

While the rest of the per linear appears to be behind us our core business is still recovering.

COVID-19 testing revenue has enabled us to more than make up for this difference and has driven impressive growth for the quarter.

He speaks to the resilience of the organization and our ability to be nimble I know this did not come without the dedication and sacrifice that sacrifice of the employees here essentially gene and I want to take this opportunity to acknowledge everyone for their tremendous efforts. During these last several months.

Please turn to slide 17.

Let me first focus on our pharma segment.

The first metric is the number of pharma collaborations, which remained flat compared to 12 months ago.

We signed several partnerships over the course of last year, including 72, three 2020 alone and.

Im saying that.

In saying that we also had the same number of partnerships that concluded during this period.

Value have generating the number of partnerships growth slow progress in new discussions during the first half of the year has resulted in the total number of partnerships remaining flat.

The disease areas, where we have active partnerships increased by four to 45.

While the growth is smaller than.

Prior year period. This metric is important for us to reflect on as you expand into new disease areas.

We help our pharma partners by transforming data into medical insights and move on to make sure that.

Continue to growth the number of disease areas, we are working on with them.

We believe in turn this will open up broader pool of potential partners.

Spine market partnerships also remain flat representing the outcome from the slow first houses per year. This is certainly a metric we will be focusing on and seek to improve moving into next year. Please.

Please turn to slide nine variable speak about progress made in our diagnostic segment.

The diagnostic segment is a critical part of our business as it enables us to access data that we then translate into extremely valuable medical insights as you can see from the chart on the left we have added 130000 patients to our database in the last 12 months.

This is a reflection of our continued growth and despite the Cobi 19 condemned he has been able to stay close to the growth rate of our repository that we were able to demonstrate in previous quarters. This underlines our steadfast commitment to helping patients around the world.

On the right hand side, we reported number of sample order intakes during the nine month period of 2019 and 2020.

We observed a 16% reduction in order volume during his years period compared to 2019.

While volume decline is non but we would like to see the ability to diversey capacity Cobiz 90 testing is a presentation of the company's agility and ability to respond.

Let's now look at other Koby 19 testing.

Please turn to slide nine.

Yes.

As we reported in September.

Our core 19 testing volume grew significantly in Q3, particularly in airport locations Airport.

Airport testing still accounts for the majority of our total testing volume and is playing a crucial role in providing timely and accurate testing to surrounding communities and those who need to travel.

This monthly volume growth is to pick depicted on the left hand side of the slide.

We have continued to expand our testing locations, including a tech center at the newly opened prelim branding on airport.

In addition to the expansion of testing sites. We have also added a rapid antigen testing to complement our service offerings. The ability to now provide PCR and engine testing provides travelers with the option to select to service the best meets their needs.

Please turn to slide 10.

As I conclude the business performance section, let me provide you with the latest business outlook.

As I mentioned before pharma partnership discussions have picked up since June and our business development team has never been this year. We have signed 12 new deals in H. two of this year. So far while this will not meaningfully affect our 2020 financials. It sets a solid foundation for the pharma segment to return to growth and its previously.

Factory in 2021 and beyond.

Turning to diagnostic segment, our testing volume has returned approximately 75% of prefund ending levels. While the volume has not yet fully recovered we are happy to see higher instead your numbers. Despite the recent surge of COVID-19 cases, and locked on restrictions in Europe and other critical markets given.

Given the currency situation, we are continuing to to serve our community on meeting the current demand, but also making necessary strategic investments in our infrastructure.

Financial contributions from COVID-19 testing are allowing us to investing both for commercial organization as well as slap capacity and science that we need to meet future demand fabric.

Bob will COVID-19 testing business, we are well positioned to provide services to enable the roads to overcome the spending.

While you had recently had some encouraging news on that exceeds from we know it will take time for the vaccine to be widely available beyond that it is uncertain for how long and what types of testing will be required in different settings. Recognizing these uncertainties I will COVID-19 testing platforms and locations provide us with enough flexibility to offer necessary.

Testing capabilities, while communities remain in need.

While we are committed to providing the code 19 testing as you move into Twentytwenty, one I want to emphasize that our focus is on the core business segments Stcs the long term future of the company.

Let me stop here and hand, you back to Richard to walk you through the financials Richard over to you.

Thank you Andrea now please turn to slide 12 from.

As Anders mentioned earlier in the presentation. Our Q3 Twentytwenty revenues grew by an impressive 212% compared to the same period in 2019. This.

This is largely driven by the COVID-19 testing revenues, which did not exist in the prior year.

As mentioned on the core business segments are yet to recover to pre pandemic levels.

While diagnostics segment decreased compared to the same period last year. It did exhibit growth compared to Q2 2020.

In the pharma segment, while this activity did not translate into revenue for this quarter active partnership discussions leading to new deals point towards a robust recovery as we go into 21.

As mentioned, we believe the core segments will continue to recover and that financial resources from COVID-19 testing will allow us to grow those segments as we did before the pandemic and achieve central genes long term potential.

The slowdown in revenues translated into a decrease in adjusted EBITDA for both core business segments.

As mentioned new deals in the pharma segment will only translate into revenue in 21, leading to a decrease in adjusted EBIT EBITDA margin this quarter.

While diagnostics segment showed revenue growth compared to Q2 fixed cost elements month, adjusted EBITDA margins also declined compared to Q3 2019.

COVID-19 testing shows a healthy adjusted EBITDA margin and we expect it to continue to do so while we offer our testing services and volumes remain at current levels.

Now, let's look at the first nine months of 2020 to get a more comprehensive feel for the full year performance of 2020.

Please turn to slide 13.

As you can see in the graph on the left we record at 58.1 million euros in revenues during the first nine months of Twentytwenty exhibiting 73% growth compared to the same period last year.

While the core business declined compared to last year COVID-19 testing has more than offset this decline and has driven overall growth.

Looking at the adjusted EBITDA, both core segments exhibited a lower margin compared to the same period last year.

These results reflect the same trends I discussed on the previous slide.

We look forward to further recovery in the core business and believe we are well positioned to do so in 21 day.

Before we move on let's look at the revenue breakdown in more detail on slide 14.

On the pharma side each quarter, we provide a breakdown of the revenue that comes from new and existing contracts as it is typically a good indicator for future growth in the pharma segment.

As you can see all revenues in the pharma segment came from existing contracts, where Q3 and let me explain why that is.

Typically there are a few months between signing a contract with a partner and getting the collaboration up and running.

This means it takes time for revenues from new contracts will be recognized.

Therefore, we believe that this result reflects the challenging environment, we saw in Q2, where our pharma partnership discussions fold.

As mentioned earlier I believe we are well positioned for a robust recovery on returned to growth in the pharma segments in 21.

The revenue breakdown for the diagnostic segment as demonstrated in the middle graph of per page.

Revenue in our core diagnostic testing, excluding anti PD decreased compared to Q3 2019.

We believe that the decrease is reflective of the decrease in sample volumes that we discussed earlier.

On the right side of the slide you see the revenue growth that we have been able to achieve with October 19th testing.

We are pleased to have used our expertise to ramp up testing so quickly and this speaks to the organizations ability to adapt to a challenging environment.

Let us now finished discussion other key financial elements of this period.

Looking at our financial statement, we have already mentioned the increase in revenue both in the third quarter and year to date.

That increase in revenue drove an increase in gross profit of approximately 5.3 million euros in Q3, 20 compared to last year and an increase of approximately 4.2 million euros for the nine month period.

As our expenses increased by approximately 6.9 million euros for the third quarter compared to Q3 2019, there was a small increase of the negative operating result to date.

Let me comment on two biggest factors driving such increase.

Firstly, our R&D expenses for the quarter were up by 2.8 million euros, which is reflective of our continued commitment to improving our biomarkers databases and technology platforms as well as continued efforts in executing our long term strategy for the company.

General admin expenses increased by three and a half million euros as mentioned last quarter. These costs were primarily as a result of being a public company such as Deno insurance.

In addition, we incurred cost related to our COVID-19 testing efforts, including continuing to internally test our employees to keep the company operational as well as from upfront costs because of test site expansions there.

The continued revenues from COVID-19 testing in Q4 and beyond will help offset such cost increases.

Now please turn to slide 16.

Let's have a closer look at the cash flow on balance sheet cash.

Cash flow use on operating activities increased compared to the same period last year. This was due to the lower revenues from our core business and purchase of inventories in response to the COVID-19 pandemic early year.

I would like to remind you that cash flow from investing activities included nearly 20 million euros in cash received from the sale of our roster headquarters last year, which was a onetime event.

Excluding that sales cash flow used on investing activities increased by 4.8 million euros, which was mostly driven by investments in laboratory equipment and intangible assets.

Cash flow received from financing activities increased significantly largely driven by the net proceeds from our follow on equity offering in July and lower repayments of loans compared to the same period last year.

As of September Thirtyth, Twentytwenty, we're 28.8 million euros of cash and cash equivalents regarding our outstanding debt I would like to remind you that this value includes more than 21 million euros of lease liability in accordance with Iris 16. Please.

Please turn to slide seven.

Covert lighting testing revenues will continue to drive our topline for the time being we recognize that there are uncertainties around how this margin environment will evolve, particularly with recent news on vaccine progress having said that I believe we are well positioned to meet society's demand regardless of how the situation unfolds.

We have seen our core business make a steady recovery from its Q2 trup. While we are still recovering to prefunding levels. Both segments are holding steady. Despite the recent searching COVID-19 cases and locked on restrictions around the world.

Although our societies have learned to operate more effectively in the pandemic environment. It is difficult to foresee the effect of this week's looked on announcements, including the one in Germany.

Putting these factors together, we anticipate that our 2020 full year revenue will be in excess of 100 million euros.

Such a result would be a good representation of sensing and how we have been able to adapt to this unique situation demonstrate financial resilience and secure resources to be well positioned to drive further growth in the core business as we move into 21.

With that I will turn it back to Anders.

Alright, let's now go to slide 19 to summarize today's conversation.

Firstly I will COVID-19 testing offering has demonstrated how we can leverage our expertise of providing precise medical diagnoses varieties needed it.

We will continue to do so as long as necessary.

One thing that we should not forget however is that the expertise that allowed us to be agile in quickly building to COVID-19 business is also the same expertise that will help us growth our core business.

You should on lose sight of the strong foundation that we have.

The second point is that it's time now to bring back to focus on our core business.

We never lost sight of along on our long term vision, we did have to divert some resources as the core business slowed down and we saw the opportunity to build up of COVID-19 testing business to support communities with a reliable testing option.

We recognize that it's now time to bring to focus back to our core business, while our core business has not yet fully return to prevent any levels. Its underlying fundamentals are stable and encouraging.

Next year, we will see the impact of sales new pharma partnerships that we have already signed in H. Two this year and additional record number of partnership discussions even when compared to people at any times are also good indicator of that momentum.

Lastly, let us look ahead as new CEO recently coming on board I'm very proud of the dedicated efforts that entire team has made in a challenging year, we anticipate achieving triple digit revenue for the full year 2020, which would be the first time in our company's history.

On a global condemning year full of uncertainty and challenges this will be a significant achievements no doubt.

This achievement brings with it an added benefit of cash in greater financial resources that we had that we had anticipated.

Pairing the financial resources on hand, with the competencies, we have demonstrated in such a challenging year leads me confident income further accelerate the growth of our core business for the future of this company.

We're investing in assets, such as research capabilities and accelerating biomarker development. It confirms the strength in center teams long term prospects I'm hopeful for whats entered gene can continue to do for the rare disease community and if we can accelerate that we will be able to amplify our impact on the many patients and families waiting answers from real medical.

Options.

With that said I look forward to the next period.

We continue to learn and engage with the team at same to Jean I also look forward to meeting you our investors and welcome your thoughts on feedback I.

Thank you for joining us joining us today on initial safe and healthy upcoming holiday period.

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I will now turn the call over to the operate deposits unit peer portion of our call I would like to kindly remind your son's requested the beginning for every onto only ask the maximum the questions. So that we have enough time to address as many of them as possible.

Thank you.

Hey, gentlemen, we will now begin the question and answer this question.

Their mind, if you wish to ask a question. Please press and on on Yeah, Talison and wait for your name.

Dan.

On silently combined the cash.

Hi, Tim.

Consequently quest distressed high speed on.

Again, ladies and gentlemen that is.

On on your cash.

Hi.

I ask a question.

Your first question comes from the line of Puneet Souda from the beginning is asking a question.

Yes, hi, thanks.

First of all welcome Mandarin really glad to have you on board.

So.

First question if I could.

The color with both new and rich on the guide on looking at over $100 million in diet for the full year and based on the comments you made on pharma is that fair to say that the Cobrand volumes continues to step up in the fourth quarter, while EPS being remains a stable on them. The pharma growth is largely expected to.

The.

Our first quarter inside essentially at only 21 phenomenon in given what you are seeing in the marketplace right. Now just wanted to circle understanding mature I would characterize it that well.

Yes. Thanks. Thanks for the question on attended on over to do Richard.

Thank you very much on drill 10-Q, two new trials going on now allow me to add on to be little bit more specific on.

You listened very carefully and adequately indeed, we expect the cobot revenue still extend further in the fourth quarter and we expect to the pharma revenue still only really pickup as of 21, whereas we're very happy with the base created with new contract signed on as well as the enormous spin.

And then in the number of contracts with pharma partners like we had alluded to already early.

Earlier, when we presented Q2.

And on the I just want to clarify on the pharma partners.

Is that a metric that you are still providing in terms of.

In the third quarter can you remind us where the pharma partners are I know you provided incentives and the number of collaborations you have.

So on would you please respond to that particularly.

Yes, the pharma metric operating metrics that we provide is listed on slide seven.

In terms of a number of pharma collaboration as well as the disease on diseases on the partnership and and Biomarkers partnership.

I will state that this is as of end of Q3 figures and while the we have.

Hi.

Signed seven new partnership during the quarter Q3 same number of collaborations ended and Thats why the the total number of pharma collaboration is kind of stays.

At the same on number of 63.

Okay. Thanks for that.

And then Andrew on that.

Looking at.

You know how things are progressing in Germany right now.

And knowing your own.

Our extensive experience on the vaccines and.

Efficacy data that we have seen so far.

On the vaccines what are your expectations for covert testing volumes in Germany in the airports.

The significant expansion here are expected to come in.

Could you elaborate maybe do you expect moderation than the covert testing by second quarter next year or could that happen even before.

Good. Good question then of course I don't have to.

[music].

The crystal ball here, but and I think that we can per surely expect that in Q1, they will not be enough fixing to make any significant impact on any governments.

And with regards of how he wants to contain this pandemic and we would expect hence also widespread testing to be part of any meaningful response on the in the second quarter, he becomes a little bit less so.

Certain I think at that time, you would expect that day of IXYS volume.

At least.

Thats clearly at the hope that the cost per head that you had music seems would be at the level. They are in a broader population could be vaccinated and I think then the question is what's the response to that.

You could imagine that over certain period of time, when travel restrictions east, but vaccination levels may not be at the level that they were completely avoid the third spread that testing volumes could actually go up dramatically.

Eventually I think by summer when hopefully in a vaccination rates are at the level, where the value starts to be contained I think thats. The biggest uncertainty day I mean, how many governments will the German government.

On testing in place for example for old people, who want to come back into Germany, while the other governments doing in Europe would you need to be tested it took an airplane to goes on routes. You're on you know the certain airlines are pretty explicit and strict on that others may say, a vaccination certificate is enough.

So I think it's just too early to know exactly which way just will go.

Go and more important I think from a business perspective is that we are.

Remaining flexible so I think we are setting up in operations that allows us to really benefit at least when you look at the commercial perspective from the situation as long as it makes sense, but also remain flexible to be able to adjust volume or potentially reduce our offering to that eventually.

It will be the outcome.

Okay, that's very helpful and if I could squeeze one last one on I mean ended on wondering what are some other disease areas that you are interested in looking at I mean, obviously metabolic disorder, so being really strong therefore core force versus the first on touching but wanted to see other areas of interest where you think business could accelerate.

Thank you.

Yes that I think you will have to bear with me delegate I mean, I've been with the company for two days at two weeks or three now of course have a long list of ideas and questions that I have discussions with the team have just started.

On coming in as a new CEO and on that keeps you are privileged to have a fresh look at things ask questions.

And I have lived without that is after the first three months, which I think is probably a reasonable timeline on that I will have some answers in that regard I would say above all.

And fascinated and impressed by that.

The vast amount of data in the bio bank and that exists here and compared to some other let's say companies will do similar things that may be limited geographically I think we havent a huge global footprint than I mean that Aps syntactic additional.

Scientific and patient insights and so the key question clearly in my mind, I mean, how do we maximize that value.

Short term on long term and how do we develop the right.

Tools and offerings to really make sure that we.

We can create impact with that of course will patients, but also financially.

And I have little doubt that after three months on me and I will have from.

Few ideas on how we can accelerate that that growth going forward. So bear with me hope.

Hopefully we can meet in the next couple of MSB interest virtually and we can discuss that further and I can also get your thoughts on that.

Okay, great. Thank you.

Yes.

Yeah on next question comes from the line on him from BTG.

Cash question.

Hi, Thanks for taking the questions on.

Congrats to Andrew on your new role.

So a couple of questions on Kobe testing on one on pharma I guess kind of going back to the question regarding.

The durability of Cobiz testing longer term and on.

And any other sense of you know I recognize.

They will be declining.

As the vaccines are broadly deployed but do you think that there will continue to be a baseline of testing at these airports and other side even after the.

Tobacco sales have been deployed.

From kind of other enough for the next few years.

Yes on that.

Well I mean, I I really don't know the answer I mean, they are of course in our EPS by which you can think this is possible right you could go.

Into the wondering whether.

That vaccine has the potential.

To mutate, you can wonder whether or not the vaccine in the virus you can wonder how geographically around the globe to situation is going to evolve I think most experts still believes that this virus is going to be here to stay and even with widespread vaccination will not disappear completely on.

So.

Some testing you can argue will absolutely be needed.

Even though the long term now the question is where it's going to happen and then who is the best company per to provide such a solution and we are definitely.

Looking into it also from a strategic on your view on this ends of which way could this goal and then what would be the best response from the company to ensure that.

What ever behalf provides long term.

Value going going forward.

That said I think as I initially mentioned.

The core of the company is rare diseases.

And this is clearly what you're going to focus on going forward, we're not ignoring or just letting cobi 19 goal not at all but we are not.

On and make a compromise on on the clarity and their resources on a go with regards of building. The success of this company for the loan growth.

Great that makes sense just one more question on non core the testing I recognize it's not acquire.

Part of the EBIT net but on you guys also rolled out antigen testing so curious about the rationale of sense.

Centralized testing for on X and day testing in a centralized fashion on.

And what the economics look like for vantage in France from testing I guess in terms of margin.

Yes, just one to two points I'm happy to handle on Richard afternoon. One is I think we we really look at.

PCR risk antigen testing as.

The service offerings that just keeps in her travel is a choice and we do not really care, which of the two day choose and we don't anticipate that it should have a massive impact on our bottom line, depending on which day, which way it will go.

[music].

Whether you go from PCR or an antigen of course me too obvious.

Differences, our PCR is somewhat more reliable rights of governments may decide that they want to stick to PCR up just because of the accuracy of the test I doubt that end, each and we'll get to that level in the foreseeable future.

On the other hand of course antigen can be faster. So its more convenient from that point of view and for an airport location that could of course makes sense. If you go there get tested new you have your results lets say within a certain period of time that would allow you to board an airplane afterwards, I think thats more challenging with them.

PCR, but then as you may know there are also better PCR test somewhere on the horizon. So PCR time may be short further I think we are.

Really.

Building up our offerings such that we can be pretty relaxed with regards of what governments advice on about consumers prefer because we can offer both at similar call it pricing or financial.

Levels with regards to how it is we would look at it as a business for us and Richard do you have anything you want to add there.

No Wonder I think you per captured it well, we just want to provide that testing that is required by the market.

On the speed is of the essence to someone there for antigen and margins are quite similar on rate.

Gotcha, Great and then lastly from me just on your pharma partnership obviously, you guys have a pretty rich pipeline of.

Feel prospect pretend that net so just kind of curious as you look out.

Thank you see on.

They are very productive discussion. It has the composition of that pipeline you had before the end on a change or I'm just kind of curious as to if this is just kind of a delay right on in terms of.

Partnership materializing from dialogue.

Our son, you on and take that.

Sure. Thanks for the questions on the.

There certainly has been a delay I think theres been a block of.

Our partners in Q2 part in particular trying to figure out what they're going to do but there also was.

A prioritization on their part and where they're going to dedicate resources to especially within the year of 2020.

As the Companys on.

Understood sort of figured out what they're sort of near term financial plans are and where they're going to prioritize their resources I think of our cash.

Conversation have really picked up from the summer and we.

Have been quite active in discussions but there.

As.

As Richard referred to during the presentation much of the the conversation that in addition to the delay that we had much of the.

Financial impact from this discussions on won't really materially country factor until 2021.

And just if I, maybe add one thought to that.

Which is important in my mind that in our pharma partnerships, we look at them really as a large extend those on strategic partnerships I think we don't want net.

Go into short term solutions on deals by which we sell off our other value to create create revenues and and I think it's a testament again of the company's business the company and its ability to stay.

Focus on the long term that we didnt have to do that during code 90 interest to somehow.

Other revenues, where they're supposed to be so when we look at these fields.

We want to make sure and that's definitely very going to spend some time on the next couple of months is that these set them up such that they generate long term value on and not just kind of.

Creating a revenue over a couple of quarters because that is not what we think would be justified given the tremendous database that we have and what we think we can do with that and how we can build that know how index in the years to come.

Great. Thank you so much for technical assistance.

Your next question comes from the line of Catarina hedge from Baird. Please.

Go ahead.

Good day, everyone. Thanks for the questions and welcome to Andrei on.

I guess, maybe first you mentioned sample volume set back to over 75% of pre pandemic levels. What do you think the channel look like there over the next couple of quarters and do you think it takes a widely distributed vaccine kepcos back to pre crisis levels.

Yeah, I think Thats a.

Good question I wonder did quite difficult to answer because.

There is a multitude of things that are happening here right in certain areas.

You have lockdowns enhance.

Patients on chose to not going to the hospital and from other areas doctors need to prioritize and on our two inserting certain testing in certain areas.

Clinical studies on trials on our slowed down just because.

Lets travel and ability to execute on also some of the operations, So and I think step by step we will get back to.

To normal it really depends a bit on how the pandemic growth plowed into first half of the year I mean, I I do believe personally whether said previously will translate into normalization on the tasting basis, which is you know Q1 will be challenging in Q2, I think things will get.

Rapidly better and then we have confidence that in the second half of the year things could be looking pretty pretty good. So overall next year is not going to be a normal year, that's clear, but I think quarter by quarter It should get close.

Clearly better and then we would expect Twentytwenty tool we are definitely.

Back to.

On a normal healthy marketplace that you're used to.

Okay that makes sense and how should we think about the revenue potential from these 12, new partnerships. He signed on the back half as we head into 2021 and anything you can comment on for on island than PTC specifically.

John.

Yep.

So sorry.

Could you could you repeat the question about the PTC and the an island partnership.

Yeah, I was just asking how we should think about revenue potential for these 12, new partnerships as we head into 21 and if there are any specific comment to make on on the island and PGC yeah.

Right on Unfortunately, I cannot provide the financial details on our partnership.

Our forward looking statements.

But what I will say is that both our partnerships are quite interesting partnerships.

Particularly with the PTC partnership.

Being able to work with our partner to better understand the prevalence of.

DC deficiencies in patients that will.

Help there, they're our partners on development program going forward and helping other rare disease patient I think that would be great I think our partnership with an island on the TTR.

Patients in being able to.

Prospectively monitored the patient.

And a validated biomarkers will have.

It will certainly help the patients going forward, but also this is this I think will validate the power we have with our deferred being able to develop and validate our biomarkers that can really provide value to our pharmaceutical partner. So I think both both our partnerships are.

Have carry us more long term impact on just the financials I hope that answers your questions.

Okay great.

Clearly are having on you know really strong up on this Chinese new partnerships on the third and fourth quarter and just given the level of conversation you have going on sale, how should we think about the pace of signing new partners going forward.

So on.

Maybe I can continue on the response I.

I think.

As as we pointed out in the second half of this year, we have signed up 12, new partnerships and normally.

And our active discussions have certainly picked up but generally the cycle within the year normally our.

Beginning of the year is when we really start.

Having initial conversations and normally our sort of new partnership signings starts to pick up from the second quarter of the year. So.

I would assume that this new year with would follow that cycle as well as the other our pharma partners are really finalizing their budget for the year and look we're planning on the here and start initial starting the initial conversations and and we.

And if the pandemic subsides with a vaccines being.

More available throughout the.

Globe I would think our second quarter will be.

See the starting point of when we actually start seeing a lot of these deals are coming to fruition.

All right great. Thank you.

Our next question comes from the line of on excluded from that.

Yes.

Hi.

Thanks for my question.

Let me just a couple on the on.

On covered and then on the.

The core business.

With respect to overall are you looking to add antibody things as they are offering, especially as we transition to kind of post vaccination world in nature.

Happy to answer that I think it's a question that we have been discussing you're looking a day, but there is no decision, yet where do we vote or on.

We do not think it is critical for.

For the business to focus will remain most likely on the test that we have on but it may be complimentary thing to add on.

Got it.

On the as a follow up to that so appreciating the sort of the knowledge and capability to build four to offer carbon testing over this year.

Are there any opportunities you see to develop price that.

Both Corbett.

In terms of perhaps selling the business or leveraging on on kind of the technologies and capabilities there.

Yeah, well I think that's not really our focus right now I mean, our focus is to ensure that this business.

Runs effectively I mean demand is.

Is high and.

As we said it may increase further in the coming months. So I think the key priority now is really make sure that we can deliver against what we have set up to do and I think thats all I could say at this point in time.

All right then.

Maybe one more more exciting other interest to take Pharmaco operations.

I'd like to highlight this as sort of key wants to keep an eye on in 2020.

Strength anyone Sir.

Sun.

I guess I know, what the answer EPS, but you could hear me.

You may still enter it.

Sure sure no I mean.

I think the the.

The question per prior question that came up among the our new partnership certainly an element PTC they both.

Emphasize our strength in terms of better understanding the prevalence of the disease state and also being able to show that demonstrates the power of our biomarker desire I think good partnership but if.

Looking at a more broader picture.

As as you.

You may be well aware, our key partnership along with our Takeda Pfizer's R&D partnerships and Denali.

The.

Co collaboration on the clinical development of the lock two mutation Parkinson disease. Those are the key partnership that I will keep my eyes on thank you.

Hi.

Thank you.

Your next question comes from the line of Ehrenreich from.

Please ask your question.

Okay. Thank you hear all cold, let Kathy Kathy now.

Income from here in terms of physical based related initiative do you still think has noticed the capacity infrastructure can you believe it too.

It will not be able to be re purpose in any way on there.

There's some way that you can kind of reset.

I think on health care.

Richard you want to take that.

Yes, I'd be happy to take that question, yes, it's a it's a very good question Aaron that we embrace ourselves on a regular basis.

We are still contemplating how best to repurchase.

We might we might not it's too early to make that decision at this stage.

So yes, we contemplated on a regular basis, but no decision has been made in that respect yet.

Okay.

Did you break out testing volume on the revenue by category yet.

And on the DAC family fell in key growth.

I guess the other category.

What categories are you, referring to it within within cobot or.

Within the segment our outside.

Yeah. There is there isn't India mdna, you'll find some other photographs that Aaron.

Okay, all right. Thanks, and then lastly on.

Transition.

We intended.

Hey, what's next but I'm curious.

Any change in strategic vision here at this juncture and also any other TV from a leadership perspective or any one tenant that you would anticipate bringing on more thanks.

Yeah. Thanks, Thanks for that I mean, I would repeat what I said before I mean did.

Coming into the new CEO with.

John So.

Have a fresh look.

Hi, I'm personally excited and then joined because of the.

Tremendous.

No how and capabilities percentage enhancing the registered on space on the night.

I'm intrigued by the fact that it is a real global knowledge database and not just one driven by one or two mark.

Markets and I do believe that there is a tremendous potential there not just to give you know better and better diagnostic and early diagnostic but also to leverage that.

In the discovery and.

I would say R&D of rare disease space now and.

How exactly and you know how we could somehow shape the strategy for the future to really capture that value and.

Get into what I think will be the next day growth cycle off day Comping Index evolution Bear with me I think our you.

Take the usual hundred days.

To talk to other people, including hopefully many of you and then come up with my my thoughts on it is also true that.

Of course, an organization.

That went from.

50 to 500 people.

We may not be the same organization that you need to go from 500 to five.

Sales in the 2000 or whatever the next growth cycle will show. So we definitely are also having a look at the at the organization and think through with the team you know what we need to get in place to make sure that we have to realization that we'll be able to deliver and on and against.

On the strategy that we set ourselves. So I think you can expect that some thoughts on that.

Water from now as well.

Okay. Thank you so much.

Yes.

Our next question.

Please go ahead.

Alright.

So I think that brings us to the end of the of the call.

Robert Sun, you wanted to add something or can I conclude.

Please feel free to conclude please go ahead.

So thank you all from making the time available. Thanks for your interest in there in the company and things for the best wishes for me.

Personally.

We are fully dedicated here and I speak for the team as well did I met.

To ensure that seem to Jean will deliver against the high expectations that patients per dose investors have on us in the in the time to come and I'm looking forward to meet.

As many.

As you as possible in the next couple of months, it's not physically then hopefully virtually and you know I.

I'm grateful for.

What you have done and are doing to support on us.

I think we will for sure here each other again no value we present, the full year results and next year. So with that said I'm wishing you a happy holidays as stay safe and healthy during these turbulent times and God bless you bye.

Thank you came back on potential. Thank you for participating you may now disconnect.

Yes.

[music].

[music].

Thank you.

Hello and welcome.

Thank you for joining us to discuss our Q3, Twentytwenty result, which were issued earlier today.

You can view this presentation and the related press release on central genes website.

For those unable to view the webcast you can find the relevant slides on www dot investors Dot central gene Dotcom.

Our speakers today are centered on his chief Executive Officer, Andrew in Oswald.

And Richard stolen Central genes Chief Financial Officer.

Before we begin please.

Please refer to slide two of our presentation.

Which provides information about certain statements to be made today that may be considered forward looking statements within the meaning of the us securities laws income.

Including those regarding our strategic plans development programs and future financial results.

Statements made during this call that are not historical statements may be forward looking statements and as such may be subject to risks and uncertainties, which if they materialize could materially affect our actual results.

The forward looking statements in this presentation speak only as of today.

And we undertake no obligation to update or revise any of these statements to reflect future events or developments, except as required by the law.

Additional information regarding these statements appear in our SEC filings.

Following our presentation will also open up the call to Q anyway, we kindly ask that you ask only a maximum of three questions.

I will now hand, the presentation over to Richard Please turn to slide three.

Thank you so on before.

Before we get into our financial results, let me briefly introduce our new CEO Andrew on US World. He joined our company in early December and has brought with them a tremendous amount of energy on infection to the company.

A few points on Android.

First he brings extensive expertise and recognition from the life science industry.

Spent 10 years of his professional career at Novartis, where he was the head of the vaccine and diagnostics division until the business will divest its to Glaxosmithkline.

While and brand was head of that division he helped to grow to $2 billion to your business and manage it through the M&A transaction.

As a medical Doctor and brand is also passionate about helping patients and improving the health of our communities in general.

After his roles at Novartis from GSK and spend time in the non profit sector, where he worked at the Bill and Melinda Gates Foundation for almost four years.

When the COVID-19 pandemic broke out early this year. He began working with the Swiss government leveraging his expertise and vaccines to help from us the strength of the Corona virus.

We are extremely pleased to bring on board someone with such extensive knowledge of the history of the industry and will benefit from as widespread managerial experience in both the for profit and non profit sector, when establishing and maintaining relationships with stakeholders across the industry.

And then also brings tremendous specially on to everything he does where does this is drive to help patients for mountain climbing or traveling around the world capturing different cultures fear photography and his personal life.

With that let me hand, the call over to our new CEO and been Oswald.

Thank you Richard for the kind introduction and Hello, everyone.

It's a pleasure to meet you today and also to lead present tense achieved for the first time.

Let me start off by recognizing and thanking professor on gross and everyone here at Santa Gene for the book to have strong to be able to such a wonderful company [noise] chief.

Since I started I have met the group of diverse and capable people, who all strides to meet the highest level of professionalism they're on.

On to dedicate to improve the lives of the many patients around the world who suffer from rare diseases grabbed it often devastating.

They seem to your passion for helping people that believe in the power of innovation and.

And then on bakery strive for excellence, it's why I join interest into gene.

Now, let us walk you through our earning results.

Please turn to slide four.

Today I will first walk you through our operations performance during Q3 year to year.

In addition to that progress on.

Core business, meaning the pharma segment and diagnostic segment I will provide an update on other COVID-19 testing activities in recent months. Richard will then take you through the financials on provide an update on how you see the rest of the year on.

Afterwards, we'll be open force you anything.

Let's please turn to slide five.

Let me first highlight the key messages for today.

You had a very strong quarter from a revenue per se.

Q3, Twentytwenty revenue grew by more than 200 per cent compared to the same period in 2019.

Revenue for the first nine months grew by over 70% versus last year.

This is truly impressive and a record for the company.

Our strong top line growth was driven by coal 19 testing.

It's been a critical additional source of revenue for the company at our core business has not yet fully recovered to Prefund Emmy levels you.

He has made progress in upcoming seems to bottom out in Q2 by re centering our focus on the core segments.

Typically the number of pharma partnerships discussions is encouraging.

Which has been quite active seems to summer in the upcoming slides I will also walk you through some key operating metrics that demonstrate the progress we have made in the last quarter in recovering our core business.

We would also like to update you on both the strong foundation and prospects for our business first we are happy to inform you that we anticipate that the full year revenue to be over 100 million euros. Furthermore, the positive financial contributions from call. It 19 testing will enable us to make strategic investments to further solidify.

Our position in the rare disease space.

We continue to build for the future and decent partner investments will allow us to return to growth momentum on our core business.

SV are experiencing before the global can day, Meek and help us achieve sense a change long term potential.

Let's now discuss these points in more detail.

Please turn to slide six.

In Q3, Twentytwenty, our rates increased 213% compared to Q3 2019 so.

Approximately 36.3 million euros.

This increase was driven by COVID-19 testing, which accounted for 27.4 million euros that enabled us to comment on our core business revenues decreased 21% the pharma segment and trading price, we think diagnostic segment, resulting from the cold 19 pandemic impact.

While diverse of stuff and then you can appears to be behind us our core business is still recovering.

COVID-19 testing revenue has enabled us to more than make up for this difference and has driven impressive growth for the quarter.

He speaks to the resilience of the organization and our ability to be nimble I know this did not come without that education sectors that sacrifice on the employees here essentially gene and I want to take the opportunity to acknowledge every once a day of tremendous efforts. During these last several months.

Please turn to slide 17.

Let me first focus on our pharma segment.

The first metric is the number of pharma collaborations, which remained flat compared to 12 months ago.

Sign several other partnerships over the course of last year, including 73 Twentytwenty alone I'm.

Im saying that.

In saying that we also had the same number of partnerships that concluded during this period.

But do you have generally seen the number of partnerships growth slow progress in new discussions during the first half of the year has resulted in the total number of partnerships remaining flat.

Did you see there is very few have actually partnerships increased by four to 45.

Other growth these smaller than.

Prior year period. This metric is important for us to reflect on as you expand into new disease areas.

Our pharma partners by transforming data into make on insights and move on to make sure that continue to growth. The number of disease areas. We are working on with them we.

We believe in terms this will open up relative pool of potential partners.

[noise] value Mark the partnerships also remain flat representing the outcome from the slow first hospice per year, you certainly metric and we will be focusing on and seek to improve moving to next year. Please.

Please turn to slide nine variable speak about progress made in our diagnostic segment.

The diagnostic segment is a critical part of our business. It enables us to access data that we then translate into extremely valuable medical insights as you can see from the chart on the left we have added 130000 patients to our database in the last 12 months.

This is a reflection of our continued growth and despite the Cobi 19 condemned we have been able to stay close with a growth rate of our repository that youve are able to demonstrate in previous quarters.

Underlines, our steadfast commitment to helping patients around the world.

On the right hand side, we reported a number of sample order intakes during the nine month period of 2019 and 2020.

We observed a 16% reduction order volume during this year's period compared to 2019.

While volume decline is non Bud light the ability to diversey capacity Koby 90 tasting his presentation of the company's agility and ability to respond.

Let's now look at the other COVID-19 testing.

Please turn to slide nine.

As we reported in September.

Our cash 19 testing volume grew significantly in Q3, particularly on airport locations Airport.

Airport testing still accounts for the majority of our total testing volume and he's paying a crucial role in providing timely and accurate testing to surrounding communities and those who need to travel.

Monthly volume growth is to pick depicted on the left hand side on the slide.

We have continued to expand our testing locations, including a test center at the newly opened brilliant brand before airports.

In addition to the expansion of testing sites, yet also added a rapid antigen testing to complement our service offering the ability to now provide PCR and bench testing provides travelers with the option to select a service that best meets their needs.

Please turn to slide 10.

And that concludes the pieces performance section, let me provide you with the latest business outlook.

As I mentioned before pharma partnership discussions have picked up since June and our business development team has never been busier.

We have signed 12 new deals in H. two of this year. So far while this will not meaningfully affect our 2020 financials. It sets a solid foundation for the pharma segment to return to growth and its previous trajectory from 20 between Q1 and beyond.

Turning to diagnostic segment, our testing volume has returned to approximately 75% of prefund ending levels why the volume has not yet fully recovered you happy to see higher instead your numbers. Despite the recent surge of call. It 19 cases and locked on restrictions in Europe and other critical markets seemed.

Given the currency situation, we are continuing to to serve our community on meeting the current demand, but also making necessary strategic investments in our infrastructure.

National contributions from COVID-19 testing are allowing us to investing both the commercial organization as well as slap capacity and science that we need to meet future demand for.

From a cold 19 testing business well positioned to provide services to enable the roads to overcome just spend maybe.

Well you had recently had some encouraging news on didn't exceed from you know it will take time for the big seem to be widely available beyond that he just on certain far along and what types of testing will be required in different settings. Recognizing these uncertainties have a COVID-19 testing platforms and locations provides us with enough flexibility to offer necessary.

Testing capabilities, while communities remain you need.

While we are committed to providing the COVID-19 testing as you move on to Twentytwenty, one I want to emphasize that our focus is on the core business segments Stcs to long term future of the company.

Let me stop here and hand, you back to Richard to walk you through the financials Richard over to you.

Thank you and now please turn to slide 12.

As Andrew mentioned earlier in the presentation. Our Q3 Twentytwenty revenues grew by an impressive 212% compared to the same period and 2090.

This is largely driven by the COVID-19 testing revenues, which did not exist in the prior year.

As mentioned on the core business segments are yet to recover to pre pandemic levels.

Other diagnostic segment decreased compared to the same period last year. It did exhibit growth compared to Q2 2020.

In the pharma segment, while this activity did not translate into revenue for this quarter active partnership discussions leading to new deals point towards a robust recovery as we go into 21.

As mentioned, we believe the core segments will continue to recover and that financial resources from COVID-19 testing will allow us to grow those segments as we did before to pandemic and achieve central genes long term potential.

The slowdown in revenue translated into a decrease in adjusted EBITDA for both core business segments.

As mentioned new deals in the pharma segment will only translate into revenue and 21, leading to a decrease in adjusted EBIT EBITDA margin this quarter.

While diagnostics segment showed revenue growth compared to Q2 fixed cost elements meant adjusted EBITDA margins also declined compared to Q3 2019.

COVID-19 testing shows a healthy adjusted EBITDA margin and we expect it to continue to do so while we offer our testing services and volumes to remain at current levels.

Now, let's look at the first nine months of 2020 to get a more comprehensive field for the full year performance of 2020.

Please turn to slide 13.

As you can see in the graph on the left we record at 58.1 million euros in revenues during the first nine months of Twentytwenty exhibiting 73% growth compared to the same period last year.

While the core business declined compared to last year COVID-19 testing has more than offset this decline and has driven overall growth.

Looking at the adjusted EBITDA, both core segments exhibited a lower margin compared to the same period last year Detroit.

These results reflect the same trends I discussed on the previous slide.

We look forward to from a recovery in the core business and believe we are well positioned to do so in 21 day.

Before we move on let's look at the revenue breakdown on a more detailed on slide 14.

On the pharma side each quarter, we provide a breakdown of the revenue that comes from new and existing contracts as it is typically a good indicator for future growth in the pharma segment.

As you can see all revenue in the pharma segment came from existing contracts, where Q3 and let me explain why that is.

Typically there are a few months between signing a contract with a partner and getting the collaboration up and running.

This means it takes time for revenues from new contracts to be recognized.

Therefore, we believe that this result reflects the challenging environment, we saw in Q2, where our pharma partnership discussions fold.

As mentioned earlier I believe we are well positioned for a robust recovery on returned to growth in the pharma segments and 21.

The revenue breakdown for the diagnostics segment as demonstrated in the middle of growth with the page.

Revenue in our core diagnostic testing, excluding IP decreased compared to Q3 2019.

We believe that the decrease is reflective of the decrease in sample volumes that we discussed earlier.

On the right side of the slide you see the revenue growth that we have been able to achieve with October 19th testing.

We are pleased to have used our expertise to ramp up testing so quickly and this speaks to the organizations ability to adapt to a challenging environments.

Let us now finished discussion on other key financial elements of this period.

Looking at our financial statement, we have already mentioned the increase in revenue both in the third quarter and year to date.

Net increase in revenue drove an increase in gross profit of approximately 5.3 million euros in Q3, 20 compared to last year and an increase of approximately 4.2 million euros for the nine month period.

As our expenses increased by approximately 6.9 million euros for the third quarter compared to Q3 2019, there was a small increase of the negative operating result to date.

Let me comment on the two biggest sectors driving such increase.

Firstly, our R&D expenses for the quarter were up by 2.8 million euros, which is reflective of our continued commitment to improving our biomarkers databases and technology platforms as well as continued efforts in executing our long term strategy for the company.

General admin expenses increased by three and a half million euros as mentioned last quarter. These costs were primarily as a result of being a public company such as Deno insurance.

In addition, we incurred cost related to our COVID-19 testing efforts, including continuing to internally test our employees to keep the company operational as well as from upfront costs because of test site expansions there.

The continued revenue from COVID-19 testing in Q4 and beyond will help offset such cost increases.

Now please turn to slide 16.

Let's have a closer look at the cash flow on balance sheet.

Cash flow used in operating activities increased compared to the same period last year. This was due to the lower revenues from our core business and purchase of inventories in response to the COVID-19 pandemic early new year.

I would like to remind you that cash flows from investing activities included nearly 20 million euros in cash received from the sale of our roster of headquarters last year, which was a one time event.

Excluding that sales cash flow used in investing activities increased by 4.8 million euros, which was mostly driven by investments and leverage our equipment and intangible assets.

Cash flow received from financing activities increased significantly largely driven by the net proceeds from our follow on equity offering in July and lower repayments of loans compared to the same period last year.

As of September Thirtyth 2020, we have 28.8 million euros of cash and cash equivalents regarding our outstanding debt I would like to remind you that this value includes more than 21 million euros of lease liability in accordance with our 16. Please.

Please turn to slide seven.

Golden I think testing revenues will continue to drive our topline for the time being we recognize that there are uncertainties around how this market environment will evolve, particularly with recent news on vaccine progress, having said that I believe we are well positioned to meet society's demand regardless of how the situation unfolds.

We have seen our core business make a steady recovery from Q2 truck. While we are still recovering to prefund dynamic levels, both segments on holding steady. Despite the recent searching COVID-19 cases and looked on restrictions around the world.

Although our societies have learned to operate more effectively in the pandemic environment. It is difficult to foresee the effect of this week's looked on announcements, including the one in Germany.

Putting these factors together, we anticipate that our 2020 full year revenue will be in excess of 100 million euros.

Such a result would be a good representation of sense gene and how we have been able to adapt to this unique situation demonstrate financial resilience and secure resources to be well positioned to drive further growth in the core business as we move into 21.

With that I will turn it back to Andrew.

Alright, let's now go to slide 19 net to summarize today's conversation.

Firstly, our code 19 testing offering has demonstrates how we can leverage our expertise of providing precise medical diagnoses various needed.

We will continue to do so as long as necessary.

One thing that we should not forget how there is that the expertise that allows us to be on Giles in quickly building. The Cobi 19 business. He is also the same expertise that will help us growth our core business you.

We should not lose sight of the strong foundation that the.

The second point is that it's time now to bring back to focus on our core business.

We never lost sight of our along other long term vision, we did have to divert some resources at the core business slowed down and be sold yet, but you need to build up of COVID-19 testing business to support communities with a reliable testing option.

Recognize that it's now time to bring to focus back on our core business on our core business has not yet fully returned to pre fund any levels. Its underlying fundamentals are stable and encouraging.

Next year, you will see the impact of sales new pharma partnerships that we have already signed in H. Two this year and additional record number of partnership discussions even when compared to people at any time.

Also could indicate to us that momentum.

Lastly, let us look ahead.

New CEO recently coming on board I am very proud of the dedicated efforts take entire team has made in a challenging year.

We anticipate achieving triple digit revenue for the full year 2020, which would be the first time in our company's history in.

On a global condemning year full of uncertainty on challenges this will be a significant achievements no doubt.

This achievement brings with it an added benefit of getting greater financial resources that we had that we had.

Based on it.

Pairing to financial resources on hand, with a competencies we have demonstrated in such a challenging year leaves me confident you can further accelerate the growth of our core business for the future of this company.

Investing in assets, such as research capabilities and accelerating biomarker development you can further strengthen same to achieve long term prospects.

Im hopeful for whats Entergy income continued to do for the relative ease community and you see can accelerate that we will be able to amplify our impact on the many patients and families awaking answers from real medical solutions.

With that said I look forward to the next period I will continue to learn and engage with the team at sales of gene.

I also look forward to meeting you our investors and welcome your thoughts on feedback.

Thank you for joining us joining us today on an issue a safe and healthy upcoming holiday period.

I will now turn the call over to the upgrades deposits unit per year portion of our call I would like to kind to remind you of sums request from the beginning for every on to only off the maximum three questions. So that we have enough time to address as many of them as possible.

Thank you.

Hey, gentlemen, we will now begin the question and answer this question.

So on line if you wish to ask a question. Please.

On on yet.

And we try and keep in mind.

Please stand by while income I think unique.

Yes on how you take a few moments.

Consequently question Keith.

On second ladies and gentlemen that is.

Lyme sales.

I ask a question.

And Jeff from question comes from Denials Puneet Souda from the beginning.

Ask your question.

Hi, Thanks first of all other welcome Amgen really glad to have you on board.

So.

First question if I could.

Cover led the book value and rich on the guide.

Looking at over $100 million and died from the full year and based on the comments you made on pharma is it fair to say that the Covance volume continues to step up in the fourth quarter, while EPS being remains a stable on them. The pharma growth is largely expected to be.

First quarter and so essentially a 2021 phenomenon in given what you are seeing in the marketplace right now just wanted to share to understand make sure I'm texturizing, but well.

Yes. Thanks, Thanks for the question on attendance on over to do Richard.

Thank you very much on trend. Thank you Puneet trial, asking on the allow me to to be a little bit more specific.

You from that listen very carefully and adequately indeed, we expect the cobot revenue still extend further in the fourth quarter and we expect to be a pharma revenue still only really pick up as of 21, whereas we're very happy with the the base created with new contract signed on as well as the enormous a spin.

And then in the number of contacts with a farm apartments like we had alluded to already early.

Earlier, when we present at Q2.

And on the I just wanted to clarify on the pharma partners.

Is that a metric that youre still providing in terms of and the third quarter can you remind us where the pharma partners are I know you provided is on the number of collaborations you have.

So on would you please respond to that particularly.

Yes, the the pharma metric operating metrics that we provide is listed on slide seven.

In terms of a number of pharma collaboration as well as the disease on diseases on the partnership and Biomarkers partnerships.

I will take that this is as of Sept end.

End of Q3 figures and while the we have.

Hi.

Signed seven new partnership during the quarter Q3 same number of collaborations ended and Thats why the the total number of pharma collaboration is stays.

Stays.

At the same number of 63.

Okay. Thanks for that.

And then and from there.

Looking at.

How things are progressing in Germany, right now and.

Knowing youre on.

Extensive experience of the vaccines and.

Efficacy data, but we have seen so far.

On the vaccines what are your expectations for a covert testing volumes in Germany in the airports.

The significant expansion, they're expected to come in.

Could you elaborate maybe do you expect moderation than the covert testing by second quarter next year or could that happen even before.

Good good question of course, I don't have to.

[music].

Decreased the ball here, but and.

I think that we can for surely expect that in Q1, they will not be an optic seem to make any significant impact on any government's actions.

Action with regard to how we'd wants to compete on these pandemic and we would expect hence also widespread testing to be part of any meaningful response on the in the second quarter it becomes a little bit less.

Certain I think at that time, you would expect that day of IXYS volume.

At least.

That's clearly the hope that the cup has that you hadn't he succeeds would be a day level. There are broader populations could be vaccinate than anything then the question is what's the response to that.

You could imagine that over certain period of time, when travel restrictions east, but vaccination levels may not be at the level that they would completely avoid that forward spread that testing volumes could actually go up dramatically.

Eventually I think by summer when hopefully in a vaccination rates are at the level. They are divider starts to be contained I think thats. The biggest uncertainty day I mean, how many governments will the German government keep on tasting place for example for old people, who want to come back.

On to Germany, while the other governments doing in Europe would you need to be tested issued who can airplanes to go somewhere else you're on.

Certain airlines are pretty explicit and strict on that others may say, a vaccination certificate is enough. So I think it's just too early to know exactly which way just flow.

Go more important I think from a business perspective is that we are.

Our remaining legacy book, So I think we are setting up in operations that allows us to really benefit.

When you look at the commercial perspective from the situation as long as it makes sense, but also remain flexible to be able to adjust volume or potentially reduce our offering that eventually.

It will be the outcome.

Okay. That's very helpful. And then if I could squeeze one last one on.

And and wondering what are some other disease areas that you are interested in looking at I mean, obviously metabolic disorder. So being really strong therefore core force force force sensing, but want to see other areas of interest where you think the business could accelerate thank you.

Yeah that I think you will have to bear with me delegate I mean being with the company for two.

Two days at two weeks already now does of course have a long list of ideas and questions.

To have discussions with the team have just started.

On coming in as a new CEO I mean that keeps us the privilege to have a fresh look at things ask questions.

And I have little doubt that you know.

After the first three months, which I think is probably at a reasonable timeline that I.

We'll have some answers in that regard.

We'll take a bulk volume.

I am fascinated and impressed by.

But the vast amount of data in the bio bank and that exists here and compared to some other let's say companies from the scene, where things that may be limited geographically I think we have a huge global footprint that I mean that adds some past seek additional.

On T. Seacon patient insights and so the key question clearly is in my mind I mean, how do you maximize that value.

Short term on long term and how to be developed the right.

Tools and offerings to really make sure that.

We can create impact with that of course will patients, but also financially.

And I have lived without that after three months on me and I will have.

A few ideas on how we can accelerate that that book going forward. So bear with me here.

Hopefully we can meet in the next couple of months TV, It's just virtually and we can discuss that further and I can also get your thoughts on that.

Okay, great. Thank you.

Our next question comes from the line of Tim Gene from BTG. Please ask your question.

Hi, Thanks for taking the questions on income.

Congrats to Andrew on your new role.

So a couple of questions on Cobi testing on one on pharma I guess kind of going back to the question regarding.

The durability of Cobiz testing longer term and on.

And then do you have a sense of.

Recognized.

There will be declining.

Volume as the vaccines are broadly deployed but do you think that there will continue to be a baseline of testing at airports and other side even after the.

Tobacco sales have been deployed from.

We're kind of at the end up for the next few years.

Yes, so on that one I mean, I I really don't know the answer in there of course scenario by which you can see this is possible right you could go.

Into the bundling better.

That vaccine has the potential to.

Mutate, you can bonder better so not to exceed them into virus you can wonder how geographically around the globe to situation is going to close I think most experts.

Still believes that this virus is going to be here to stay on even with a widespread vaccination will not disappear completely on.

So.

Some testing you can argue will absolutely be needed.

Even though the long term now the question is where it's going to happen and then who is the best company to provide such a solution.

Definitely.

Looking at the doses from a strategic on your view on this ends up which way could this go and then what would be the best response from the company to ensure that.

Whatever behalf provides long term.

Value going going forward.

That said I think as I initially mentioned.

The core of the company is rare diseases.

And this is clearly what we're going to focus on going forward you are not ignoring or just letting cobi 19 goal not at all but we are not.

On that make a compromise on on the.

The clarity and their resources are going to go with regards to build into success of this company for the loan growth.

Great that makes on just one more question on not called the testing I recognize it's not required.

Part of your business, but on you guys also rolled out antigen testing so curious about the rationale of sense.

Centralized testing for on Ensign day testing it isnt.

July fashion on.

And what the economics look like for vantage in France from testing I guess in terms of margin.

Yes, just one or two points I'm happy to hand over to Richard often I think we we really look at.

PCR risk antigen testing as.

The service offerings that just keeps in to try.

Travel us a choice and we do not really care, we took the two day choose and we don't anticipate that you should have a massive impact on our bottom line, depending on which day, which way it will go.

[music].

Whether you go from PCR or an antigen of course moving too obvious.

Differences, our PCR somewhat more reliable right. So governments may decide that they want to stick to PCR just because of that curious you have to test I doubt that end, each and we'll get to that level in the foreseeable future.

On the other hand of course average and can be faster. So its more convenient from that point of view and for an airport location that could of course make sense. If you go there get tested on you have your results lets say within a certain period of time that.

Would allow you to board an airplane afterwards, I think thats more challenging with a.

PCR, but then as you may know there are also better PCR test somewhere on the horizon. So PCR time may be short further I think we are.

Really.

Building up our offerings such that we can be pretty relaxed with regards of watts governments advice on a bunch of consumers prefer because we can offer both at similar color on pricing or financial.

Levels with regards to how this was income would look at it as a business for us and Richard do you have anything you want to add there.

No under I think you captured it well, we just want to provide that testing that is required by the market.

On the speed is on the absence or to someone there for antigen and margins are quite similar to us on rate.

Gotcha, Okay, Great and then lastly from me just on your pharma partnership obviously, you guys had a pretty rich pipeline of steel.

Feel prospect pretend that net so just kind of curious as you look out.

Thank you for me on.

They're very productive discussion.

The composition of that pipeline you had before the pandemic change or I'm, just kind of curious as to if this is just kind of a delay right on in terms of.

Partnership materializing from backlog.

A sudden you want to take that.

Sure. Thanks for the questions on the.

There certainly has been a delay I think there has been a a block of Hawk, Colorado.

Our partners in Q2 part in particular trying to figure out what they're going to do but there also was.

A prioritization on their part and where they're going to dedicate resources to especially within the year of 2020 as the Companys.

Under sort of figured out what they're sort of near term financial plans are and where they are going to prioritize their resources I think of our conversation.

Conversation has really picked up from the summer and we.

It has been quite active in discussions but there.

As.

As rich had referred to during the presentation much of the the conversation that in addition to the delay that we had much of the.

Financial impact from this discussions on won't really materially come to effect until 2021.

You know just maybe add one thought to that.

Which is important in my mind that.

Our pharma partnerships, we look at them really as.

A large extend also on strategic partnerships I think.

We don't want net.

Go into short term solutions on deals by reach we sell off our other value to create creek revenues and and I think it's a testament again of the company Thats not the company and its ability to stay folks.

Focus on the long term that we didn't have to do that during koby 19, just to somehow.

Other revenues, where they're supposed to be so when you look at these deals.

We want to make sure and that's definitely very going to spend some time on next couple of months is that set them up such that they generate long term value on I'm not just kind of.

Creating a revenue over a couple of quarters, because thats just not what we think.

Justified given the tremendous database that we have and what we think we can do with that and how we can build that know how in the in the years to come.

Great. Thank you so much for taking the questions.

Your next question comes from the line of cash tween hedge from Baird. Please.

Please go ahead.

Hi, everyone. Thanks for the questions and welcome to Andrei and I guess, maybe first you mentioned sample volume set back to over 75% of pre pandemic levels. What do you think the channel look like there over the next couple of quarters and do you think it takes a widely distributed vaccine kepcos back.

Precocious levels.

Yeah, I think Thats a.

Good question I wonder did quite difficult to answer because.

There is a multitude of things that are happening here right in certain areas.

You have locked down some hands.

Patients on chose to not going to the hospital in some other areas doctors need for party Tyson on not doing certain things certain testing in certain areas.

Clinical studies on trials are slowed down just because.

Lets travel and ability to execute but also some of the price.

Duration, so and I think step by step we will get back to.

To normal it really depends.

Based on how the pandemic growth cloud into first half of the year I mean, I I do believe personally whether say previously will translate into normalization on the tasting pieces, which is you know Q.

Q1 will be challenging in Q2, I think things will get a relatively better and then we have confidence that the second half of the year, you know things could be looking pretty pretty good. So overall next year is not going to be a normal year, that's clear, but I think quarter by quarter It should get.

Clearly better and then you would expect Twentytwenty tool we are definitely back.

Back to.

A normal healthy marketplace that you're used to.

Okay that makes sense and how should we think about the revenue potential from these 12 partnerships you signed on the back half as we head into 2021 and anything you can comment on her on my arm and PTC specifically.

Sam.

Yep.

So sorry.

Could you could you repeat the question about the PTC and the an island partnership.

Yeah, I was just asking how we should think about revenue potential for these 12, new partnerships as we head into 21 and if there are any specific comment to make on on island and PGC yeah.

Right on Unfortunately, I cannot provide the financial details on other partnership.

Our forward looking statements.

But what I will say that both our partnerships are quite interesting partnerships part.

Particularly with the PTC partnership.

Being able to work with our partner to better understand the prevalence of.

Hey, DC deficiencies in patients that will.

Help they're our partners on development program going forward and helping our rare disease patients I think that would be great I think our partnership with an island on the TTR.

Patient in being able to.

Prospectively monitored the patient.

And validate high Biomarkers will have.

Yes, well certainly help the patients going forward, but also this is this I think will validate the power, we have with deferred being able to develop and validate our biomarkers that can really provide value to our pharmaceutical partners. So I think both both our partnerships are.

Have Kerry.

More long term impact on just the financials I hope that answers your questions.

Okay great.

And clearly you're having you know really strong levels as Chinese new partnerships and the third on first quarter and just given the level of conversation you have going on still how should we think about the pace of signing new partners going forward.

Some.

Maybe I can continue on the response I.

I think.

As as we pointed out in the second half of this year, we have signed on 12, new partnerships and normally.

And our active discussions have certainly picked up but generally the cycle within that year normally our.

Beginning of the year is when we really start.

Having initial conversations and normally how are sort of new partnership signings starts to pick up from the second quarter of the year. So.

I would assume that this new year with would follow that cycle as well as the other our pharma partners are really finalizing their budgets for the year and look at planning on the here and stuck initial starting the initial conversations and and we.

And if the pandemic subsides with a vaccines being.

More available throughout the.

Globe I would think our second quarter will be.

Be that starting point of when we actually start seeing a lot of these deals are coming to fruition.

Alright, great. Thank you.

Your next question comes from the line of on excluded.

Yes.

Hi.

Thanks for the question I made just a couple on on.

On covered and then on the.

The core business.

With respect to overall are you looking to add antibody things as they are offering, especially as we transition to kind of a post vaccination world in nature.

I'm happy to answer that I think it's a question that we have been discussing.

Looking at day, but there is no decision, yet whether we vote or on.

You do not think it is critical for.

For the business.

Focus will remain most likely on the test that we have on but it may be complementarity thing to add on.

Got it.

And then as a follow up to that.

Appreciating the sort of the knowledge and capabilities to build for the offer called investing over this year.

There any opportunities you see to develop price that.

Both cobot.

In terms of perhaps selling the business or leveraging on on kind of the technologies and capabilities there.

Yeah, well I think that's not really.

Our focus right now in other focus is to ensure that this business runs effectively I mean demand this is high and.

As we said Youve may increase further in the coming months. So I think the key priority now is really make sure that we can deliver against what the.

Net set up to do and I think thats all I could say at this point in time.

All right then.

And then maybe one more more exciting other income specific pharma collaborations.

I'd like to highlight does.

He wants to keep an eye on in 2020.

So Anthony wants Sir.

Sun.

I guess I know, what the answer EPS, but you could hear me.

You may still answer it.

Sure sure no I mean.

I think the the.

The question from prior question that came up among the our new partnership with certainly an island PTC they both.

Emphasize our strength in terms of better understanding the prevalence of the disease States and also being able to show that demonstrates the power of our Biomarkers. These I think good partnership but if.

You're looking at a more product picture.

As as you.

You may be well aware, our key partnership along with our Takeda Pfizer's R&D partnerships and Denali.

The GAAP.

Co collaboration on the clinical development of the last two mutation Parkinson disease. Those are the key partnership that I would keep my eyes on thank you.

All right. Thank you.

Our next question comes from the line of hearing right.

Yes.

Okay. Thank you each year on haul coldly testing capacity now.

From here in terms of physical based on.

Ladies and do you still think head of most of the capacity infrastructure and it related to you.

It will not be able to be re purpose in any way on there.

There's some way that you can kind of reset.

I think yes.

Richard you want to take that.

Yes, I'd be happy to take that question. It's a it's a very good question, there and that we embrace our sell side on a regular basis.

We are still contemplating how best to re purpose.

We might we might not it's too early to make that decision at this stage.

So yes, we contemplated on a regular basis, but no decision has been made in that respect yet.

Okay.

Did you break out testing volume and revenue by cash.

Yes.

And the damage.

Thank you break out the other category.

What categories are you, referring to it within within cobot or.

Within the segment our outside.

Yeah. There is there is India mdna, you'll find some sort of drops that Aaron.

Okay, all right. Thanks, and then lastly on.

On we intended.

Hey, good to hear from your point.

Net but I'm curious.

Any change in strategic vision here I think some share.

Other TV from a management perspective, or any one penny that you would anticipate bringing on more thanks.

Yes, I think things so that I mean, I would repeat what I said before I mean did.

Coming into the new CEO what.

John So.

Have a fresh look.

I'm personally.

I Didnt and then joined because of the.

Tremendous.

Oh, how and capabilities the same to gene has in the registered on space I mean I.

I'm intrigued by the fact that you've you said Reid global knowledge database and not just one driven by one or two.

Markets and I do believe that there is a tremendous potential there not just to give better embedded diagnostic and early diagnostic but also to leverage that.

In the discovery and.

I would say R&D of rare disease space now.

How exactly and you know how we could somehow share.

The strategy for the future to really capture that value and.

Get into what I think will be the next day growth cycle off day Comping in evolution Bear with me I think out.

Take the usual hundred days.

To talk to other people, including hopefully many of you and then come up with my my thoughts. It is also true that.

Of course, an organization.

That went from.

50 to 500 people.

May not be the same organization that you need to go from 500 to five.

On the 2000 or whatever the next growth cycle will show. So we definitely are also having a look at the at the organization and think through with the team what do we need to get in place to make sure that we have to realization that we'll be able to deliver and on and against that.

The strategy that we set our sales. So I think you can expect that some thoughts on that in the quarter from now as well.

Okay, all right. Thank you much.

And now.

At this time.

All right.

So I think that brings us to the end of the of the call.

Robert something you wanted to add something or can I conclude.

Please feel free to conclude please go ahead.

So thank you all from making the time available. Thanks for your interest in the in the company and things for the best wishes for me.

Personally.

We are fully dedicated tier and on I speak for the team as well that I met.

To ensure that seem to Jean will deliver against the high expectations that patients per dose investors have on now seem to be the time to come.

I'm looking forward to meet as many of the sales.

You as possible in the next couple of months, it's not physically then hopefully virtually and you know I am grateful for.

What you have done on doing to support us and I think we will for sure here. Each other again no. We present the full year results next year, so with that said dishing Youre happy holidays, a stay safe and healthy during these turbulent times and God bless you bye.