Q1 2021 OraSure Technologies Inc Earnings Call
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Okay.
Yes.
Good afternoon, everyone and welcome to the Orange for technologies first quarter 2021 financial results conference call and simultaneous webcast.
As a reminder, today's conference is being recorded.
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After the speakers remarks, there will be a question and answer period.
If you would like to ask the question. During this time simply press Star then the number one on your telephone keypad.
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I would now like to turn the call over to Jim Bell, Vice President of corporate Communications for Orasure Jean.
Thank you operator with US today, our Doctor, Stephen Tang, President and Chief Executive Officer, and Mr. Roberto <unk> Chief Financial Officer.
Dr Tang and Mr. Cook of will begin with opening statements, which will be followed by the question answer session.
Before I turn the call over the Doctor Tang you should know that this call may contain certain forward looking statements, including statements with respect to revenues expenses profitability earnings for a loss per share and other financial performance product development performance shipments and markets business plans regulatory.
Tori filings and approvals expectations and strategies actual results could be significantly different.
Factors that could affect the results are discussed more fully in the company's SEC filings, including its registration statements. Its annual report on form 10-K for the year ended December 31, 2020, its quarterly reports on form 10-Q, and its other SEC filings.
Although forward looking statements help to provide complete information about future prospects listeners should keep in mind that forward looking statements are based solely on information available to management as of today.
The company undertakes no obligation to update any forward looking statements to reflect events or circumstances. After this call with that I will turn the call over to Dr. Stephen Tang.
Thank you gene and thank you everyone for joining us today I Hope you and your families are safe and well.
I'm pleased to report another record quarter for Orasure.
Our 85% growth in first quarter of net revenues represents the third quarter in a row of year over year double digit revenue growth.
Our sample collection devices for COVID-19, molecular testing continued to make a significant contribution to our revenues.
And our genomics microbiome and domestic HIV diagnostic businesses showed strong performance as well.
We achieved a significant milestone in March when we submitted our COVID-19 rapid antigen tests to the U S food and drug administration for emergency use authorization.
Look forward to bringing both a prescription home test and a professional tests for point of care use to market.
We are confident in the market potential for our COVID-19 products as well as the resilience of our non COVID-19 businesses.
Total net revenues of $58 $6 million for the first quarter were driven by strong revenue performance of 43.2 million from the molecular solutions business unit.
We recorded $27.4 million in revenue from our sample collection kits for COVID-19, molecular testing and expect our molecular sample collection kits to continue to meaningfully contribute to our business as touching the remains a key strategy to come to combat the pandemic.
Top of mind for investors is the outlook for COVID-19 testing given the downward trend in testing numbers.
Before providing further detail on our activities like the offer our perspective on the global COVID-19 testing landscape here on the U S vaccines of readily available and the number of cases in the U S has dropped meaningfully since the start of the year.
However, as variants continue the spread testing will continue to play a crucial part of mitigating the spread of the virus and help it to safely reopen workplaces schools and other places where people gather.
A recent Mckinsey report notes the rapid accurate testing will play a key role as the transition back to pre pandemic routines continues.
The emergence of new more contagious variants of the Corona virus underscores the importance of testing to detect the infection, even as vaccination campaigns continue.
Scientists are particularly concerned about the rising prevalence of variance.
They say it could prolong the pandemics.
When you factor in vaccine hesitancy, it becomes apparent that achieving herd immunity.
Take longer than hoped for or even the elusive.
Experts estimate that 70 to 85 per cent of the population must be vaccinated to stop the spread of COVID-19.
You had a quarter of Americans say, they probably or definitely will not get vaccinated.
In some states supply is now higher than demand.
Outside the U S. However, the vaccine rollout of this slower blue.
Number of projects will take years to achieve significant global herd immunity.
While mckinsey knows the herd immunity may look different across the world with some areas achieving it.
Who's moving in and out of it.
And some failing to achieve it do the vaccine hesitancy.
The market research reports forecast a robust testing market with estimates of total global volumes for molecular and antigen tests in the range of two to 4 billion tests in 2021.
Secondly, we believe the need for convenient safe and accurate testing will continue alongside vaccination rollouts and our tests of molecular sample collection kits will be critical to this effort.
For sure it's dedicated to simplifying COVID-19 testing.
Our test and collection kits are all centered on the convenient pain free self collection of samples.
Easier for people to know if they of COVID-19.
The simplicity and ease of use can help increase access to testing alleviate the burden on the health care system minimize exposure risks and conserve personal protective equipment.
Our molecular sample collection kits made by our DNA genetics subsidiary continues to drive performance showing continued sequential quarterly growth.
The maintenance, but driven by both high volume repeat orders from existing customers and from new customers engaged and back to work and back to school testing programs around the world.
As a reminder, our omni gene oral and or collect RNA collection devices have received E ways from the F D a allowing for the unsupervised use of these devices at home or in health care settings. When used as part of an approved for validated at home test kit.
They are also included in eight EU ways received by DNA genetics customers.
For collect RNA saliva collection devices have been used in more than 2 million COVID-19 test developed by DNA for unitek customer Quadrat Biosciences in partnership with SUNY upstate Medical University.
Up from the 1 billion administered test SUNY announced in February of 2021.
This test has been used extensively by state University of New York campuses since the start of the fall 2020 semester.
Turning to our COVID-19 rapid antigen tests, we were delighted to announce in March that we had submitted an EUA application to the FDA for our COVID-19 rapid antigen tests for both prescription home use and professional use at point of care settings.
The concurrent submission for both products represented and the acceleration of the prescription home tests used product.
And reflects our continued focus on the home testing market.
The easy and intuitive swab swirl and see test detects active COVID-19 infection with no instrumentation batteries or smartphone needed to read the results.
Users simply swap their lower nostrils swirled of swap and buffer solution and see the result, right on the testing of short time later, it's that simple.
With just a few steps the follow we believe our tests would be one of the simplest COVID-19 tests on the market.
We expect that its simplicity will give users peace of mind that the performing the tests correctly and can be confident in the result.
Our rapid antigen tests are well suited for use by individuals at home as well as health care providers employers pharmacies and universities.
Cuz, they do not rely on batteries electricity self service or Wi Fi or test could be administered wherever tests testing is needed such as underserved communities, where vaccinations are low and COVID-19 incident his high.
We have begun manufacturing our antigen tests as we wait emergency use authorization.
We also plan to pursue an over the counter indication for our rapid antigen tests.
Given our experience selling our HIV tests over the counter for close to 10 years, we are well suited to capitalize on this opportunity once authorized by the FDA.
Turning to our oral fluid antibody test we have collected the data requested by the EF day and plan to submit separate EUA applications for the allies on microplate assay and the offshore oral antibody collection device.
This lab based antibody tests can aid in identifying individuals with an adaptive immune response to Sars COVID-19 two indicating prior infection.
Our test has the potential to be the first oral fluid antibody tests the received FDA emergency use authorization.
To date all of the FDA authorized antibody tests require a venous blood draw or finger stick.
Antibody tests can play a role in community surveillance efforts and cero prevalence studies.
We continue to sell this pioneering product for research use only.
It's been validated by the by numerous laboratories.
With this qualitative tests individuals' would self collecting oral fluid sample using the oar shore oral antibody collection device out of the observation of the health care professional the.
The sample would be placed in a buffer of bile for storage and transport and later dispense on to the offshore Sars COVID-19 two Elisa microplate for testing in the laboratory.
Each of our shores accurate easy to administer testing and collection methods in conjunction with vaccination efforts can play a key role in identifying COVID-19 cases isolated a sliding the infected controlling outbreaks in helping the world get back to normal.
We are confident in the sustained market potential for our COVID-19 solutions.
As the recent surge as around the World of show COVID-19 is still having a significant impact worldwide.
We are prepared to address this global opportunity on <unk>.
Molecular sample collection kits are already authorized in Europe and in Canada.
We are actively working on the requirements for international regulatory approvals for our rapid antigen tests and plan to leverage our existing infrastructure of teams and distributors.
If we capture just a small percentage of the global COVID-19 testing market. It will have a meaningful impact on the company.
And with that I'll turn it over to Roberto for report on our financials and update on our COVID-19 manufacturing capacity expansion Roberto.
Thank you Steve.
Our first quarter net revenues increased 85% to $58 6 million from the $31 $6 million reported in the first quarter of 2020.
Primarily as a result of strong sales of molecular sample collection kits for COVID-19 testing higher genomics product sales and increased sales of our over the counter or quick in home HIV test.
This was partially offset by lower sales of our HIV and HCV professional products and which the assessment products.
Net product and services revenues were 56.6 million and 83% increase from the first quarter of 2020.
Total product and service revenues for the Companys molecular business unit for $44 million during the first quarter of 2021, an increase of 219% from the first quarter of 2020.
This increase included $27.4 million on sales of oral fluid sample collection devices for COVID-19 molecular testing.
Domestic sales of the company's or quick HIV tests increased 26 per cent compared to the first quarter of the prior year largely due the higher sales of the over the counter or quick in the home HIV test.
International HIV and HCV revenue declined 42% over the prior year due to several large distributor orders, which occurred in the first quarter of 2020 and variations in timing of compared to 2021 ordering.
Overall, the underlying international growth in HIV, and HCV testing still strong versus prior year outside of the single quarter timing impact of Easter.
The distributor of workers.
Gross profit percentage of 65 per cent for the three months ended March March 31, 2021, compared to 51% for the same period of 2020 due to an improved product mix of higher gross profit percentage of product sales.
Net income for the first quarter of 2021 was $3 8 million or five cents per share on the fully diluted basis compared to a net loss of $7 $3 million or 12 cents per share on the fully diluted basis for the first quarter of 2020.
The first quarter 2021 results included the benefit of $806000 for the change in the estimated fair value of our acquisition related contingent consideration compared to a charge recorded in the first quarter of $2021 $1 million.
2021 results also reflect the additional product development and sales and marketing costs incurred for our COVID-19 tests as well as increased tax expense associated with the improved results of the company.
Cash and investments totaled $245 million at March 31, 2021.
As we disclosed in our press release, we expect revenue of 55 million for $60 million in the second quarter of 2021.
We are not providing full year guidance at this time, but we will revisit that option as we get greater clarity on clarity on the regulatory status of our COVID-19 antigen and antibody tests.
I'll now I'll now turn to our manufacturing capacity expansion efforts for COVID-19 products, starting with the rapid antigen test.
As of the end of the first quarter all of the equipment needed to achieve the previously communicated planned capacity of 65 million units annually is on site and either installed or in the process of being installed.
More specifically lines capable of manufacturing 42, 4 million units a year are in place with the remainder of the be finished by the end of May.
Plans are on track to achieve 70 million units annually of installed capacity in the third quarter and 120 million units by the second quarter of 2022 as previously disclosed.
These are annualized numbers of installed capacity and include our existing tests for HIV HCV and the Golar and will require some ramp up time for validation and the employee training.
For our oral fluid antibody tests. We currently have an installed capacity of 10 million units per year, including existing products. As we've previously communicated we remain on track to expand the capacity to 'twenty moving into Europe by the end of 2021.
Athlete expansion for molecular sample collection kits exceed the original projection.
We are expanding the installed capacity of our molecular sample collection devices to a rate of approximately 80 million units annually in the second quarter of 2021 ahead of the 75 moving annual units previously communicated and further to 105 million units annually by the end of 2021 of.
Of this capacity, we expect that seven to 8 million units and we will go to non COVID-19 of applications.
With that I'll turn the call back over to Steve.
Thank you Roberto I'd now like to provide some brief updates on our non COVID-19 businesses, which had shown not only resiliency, but in some cases indication of returned to pre pandemic levels in.
In fact, our molecular non COVID-19 business rebounded beyond first quarter 2000, Twenty's pre COVID-19 levels.
Signaling the COVID-19 headwinds in the molecular market may be subsiding.
Non COVID-19 molecular product revenue in first quarter grew 32% over the prior year.
Our total genomics business was up 32 per cent for the quarter.
With signals of recovery driven by momentum in the disease risk management ancestry and companion animal markets.
Our academic markets for genomics is also showing signs of resilience with a 9% growth over prior year quarter.
Our microbiome collection kits business rebounded in the first quarter with a 32% growth over the same quarter a year ago.
Driven by demand from our commercial customers.
We expect our commercial microbiome business will continue to recover as investment continues in the microbiome industry.
Driving growth potential for both diversity of services and DNA gene the tech kits.
Turning to our diagnostics business unit overall domestic diagnostics revenue was on par with first quarter 2020, Despite COVID-19 headwinds.
Sales of our over the counter HIV in home test grew by triple digits over the prior year as public health HIV testing programs in the U S continue to use our over the counter product.
For example, the centers for disease control and prevention is distributing our or quick in home HIV tests the a partnership.
With insignia building healthy online communities and Emory University.
Cdc's, let's stop HIV together campaign is leading the marketing efforts and sending consumers two of unique website link to order test.
This large scale and targeted distribution of self test kits the populations disproportionately impacted by HIV AIDS will assist the D C and future efforts related to in home testing strategies and contribute to the ending the HIV epidemic initiatives.
International diagnostic revenue was down from a year prior of largely due to unusually large orders from initial program stocking in first quarter 2020, and variable timing associated with restocking.
The underlying growth in Q1 outside of the stocking orders is still strong and we expect international diagnostics revenue in the first half of 2021 to show strong growth versus 2020.
Finally, before we move on to the question and answer session I would like to share with you a few summarizing thoughts.
Our business is strong and we expect our momentum to continue in a balanced manner.
So you've seen our non COVID-19 revenue is beginning to return to pre pandemic levels and our COVID-19 related revenue remains a robust.
We believe the collective contributions from our rapid antigen tests and oral fluid antibody test will be substantial.
Subject to receipt of E ways for these products and we're confident we'll continue to make significant commercial strides with our molecular sample collection kits.
Lastly, we will leverage our strong balance sheet.
With more than $3 per share in cash the maximize the COVID-19 tailwind for.
On the R&D on a non COVID-19 businesses and fuel our business development activities for these reasons. We think we are in an excellent position to capitalize on multiple fronts and drive further growth in the coming quarters.
With that operator, please open the call up for questions.
As a reminder to ask the question you will need the press star one on your telephone.
Two of drawing a question press the pound key.
Please stand by all the compile the Q&A roster.
Our first question comes from the line of Frank.
Kinnan from Lake Street Capital you may begin.
Hey, Thanks for taking my questions a couple for me today.
Starting with the guidance I was hoping you could help us understand some of the components into the $55 million to $60 million guide looks.
Looking at the COVID-19 molecular revenues and the growth trajectory they've been on was hoping that you could maybe just tease out directionally.
That specific line item to give us a better feel for the pieces of guidance in Q2 'twenty one.
Sure Frank Thanks for the thanks for the question.
So for the second quarter guidance of $55 million to $60 million. We did not include into that any contribution from post EUA sales of either of our antigen antibody tests because of the operation because of the authorization timing is uncertain.
For that $55 million to $60 million will reflect revenue similar to or sorts of similar to what we saw on the first quarter of 'twenty one.
We haven't broken it out more granularly by.
A line item or sales contribution.
So I can't give you any additional guidance on the COVID-19 contribution.
<unk>.
And the other questions on that.
No I'll just ask my follow up given the international market is becoming more and more important. It seems like can you just refresh us on the approval process and potential timing for getting your antigen test on the international market.
Sure Frank we are exploring.
Exploring right now on the regulatory requirements.
Requirements for our rapid antigen tests outside the U S Inc.
Including a which of the most attractive markets.
For and the timing of those.
The regulatory processes.
That will come shortly after.
We receive hopefully favorable word from the FDA on a rapid antigen test and our current submissions. So it will happen as quickly as possible but of course, our first focus is to get into the U S market, but I think you are rightfully focused on the outside U S market, because that's where the.
The pandemic is still raging in places like India and elsewhere. So we are very mindful of that so of course, we have widespread experiences.
On helping to test for Pandemics, including HIV.
And I think our experience will serve us well on those those markets.
Perfect. Thanks for the color.
And our next question will come from the line of.
Vijay Kumar from Evercore ISI you may begin.
Hey, guys. Thanks for taking my question.
Steven maybe on the antigen side.
I guess Sam.
Yeah.
I submitted on March 30th it looks like six weeks of for when we put them.
Some point in Mcmahon.
Potential approval.
Given that average price of $5.
What is that I guess that can you talk about the opportunity for you guys can you sell.
He completed of that those price points.
And then I had a couple of follow ups, yeah, let's start with the.
How do you see the opportunity in the U S.
Sure Vijay I think is as we know the five dollar price for that particular product was I think the price of the government and it was for a professional product.
Since then pricing has been updated I think for the developments, particularly in the OTC market. So we're very conscious of that.
We're going to have an extremely competitive product.
Regardless of the domain. So that's professional a prescription self tests and even the OTC at some point.
And I think that we're looking at the pricing right now on the OTC side in particular, and I think we can be competitive, particularly since our product I think is well differentiated for its ease of use of simplicity, which I think will become increasingly important.
As self tests get used more often by a wide range of people. So I think for US we remain very confident even though the testing of the excuse me the pricing environment has changed.
Gotcha, So just to be true Steven the I guess when you look at the retail pricing Cvs Walmart think of Abbott selling the Coupe pack tests for a roughly around 24 of $25, you'll be able to match those of you know those price levels.
I think we will be very competitive in the marketplace, considering what the current pricing is and considering the value proposition overall for our product yes, absolutely.
Okay and then.
Two quick follow ups one on <unk>.
What trends are you seeing in collection kits on some of the molecular testing companies, we've seen some pretty big cuts to the numbers and now on the antigen side.
How low I guess the.
Is this still of meaning meaningful opportunity because the question I'm getting out of stock.
Is for assurance of late.
And how should we think about the antigen.
Contribution in the back half.
Sure. Let me let me just give you some perspective on the overall market, we absolutely have a tremendous opportunity. So we're not too late.
The.
Market research firm Kalorama information says that the total global antigen.
The testing market for COVID-19 is about 19 billion of year $5 billion of that is in the U S.
We have a product I think that is going to be one of the simplest use on the market of that Oh, I think it will be a.
Useful to consumers and to health care professionals have confidence on the test results.
So I do think of that opportunity is large b.
P. J, you know us well enough to know that we're a relatively small company compared to the.
Makers of tests of the currently have OTC approval of at least two of them.
So we can.
Can do very well for us as the company and for our shareholders.
Even with the capturing just a small portion of that antigen test market.
And I think we're gearing up our manufacturing capability.
And looking forward of our product launches accordingly.
On the molecular side Callaham of says of the global molecular testing market is about 17 billion of year.
I think the the slowdown in lab based testing has been well documented by you on others.
We believe there is going to be the oxy of its still very strong for us.
And the self collection area, we noted in our prepared remarks.
One of our customers quadrant Biosciences has now surpassed 2 million tests within the state University of New York system, I think there'll be a need for ongoing tests are those customers that are you know.
Well on trust and entrenched in testing modalities like Sony is for their students and their staff will continue to buy.
And we are monitoring the situation very carefully.
We've tried to be on the conservative side of our projections for testing overall and we'll continue to do so so.
So that's our that's why we remain very confident very optimistic that we can maximize our opportunities for COVID-19 for the rapid image of tests for the molecular collection kits and.
And somewhere down the line even the the antibody test so I think the the prospects for us or it remained very strong.
Alright, thanks, guys.
Thanks P J.
And once again net style once for the question Star one on.
The next question comes from the line of Andrew Cooper from Raymond James You May begin.
Hey, guys. Thanks for the questions.
Maybe ill start.
On the on the collection side I guess, firstly has there been any sort of change in the competitive landscape and you think about pricing or sort of options out there now that we're a little bit past the point where <unk>.
Swabs and choose where such of constraints earlier in the pandemic of any any comment there would be helpful. And then when we think about big customers like quad range or some of the others.
Can you give us a flavor for how much of the sales in <unk> or maybe contracted what the duration might look like or any color there to think about sort of a contra.
Contracted durability as things progress through 2021 and beyond.
Sure Andrew.
We're not seeing switching.
From our product to other products first of all so I think we've got a very reliable set of collection kit one of which is of Sliwa collection kit. The other is a swap.
Swab of sponge swap kind of configuration that swab and the nasal swab.
So I think that the the opportunity is very durable.
And so.
So we're not seeing a substitution effect there.
On the buying behavior of customers I think.
Is remains strong.
That they are looking at variability and their needs and demand as well I think that's the macro issue with all of lab based testing.
But the story does hold together for us very.
Very well I think because of our close customer relationships and our expanding relationships elsewhere, including outside the U S.
Okay. That's helpful.
And then maybe just on the agent side, when we think about OTC I think.
The FDA has it really sort of lowered the bar for folks I think the progression, we think about the serial testing and what day, requiring for asymptomatic positives and things of that nature. So what what do you need to do to get that.
Particular claim that the OTC claim.
Two of the FDA, what's what's left on the docket for you to get the package together and make that submission.
Well, Andrew I think that's an important question because much has changed in the OTC COVID-19 rapid antigen testing world. Since we spoke on our last earnings call in March of two new products that come on the marketplace.
And I think your observation that F. The AIDS.
The requirements of shifted over time as is true.
I think that.
We're fortunate to have had a close relationship with F. D. A dating back to 2012, when we launched our or quick in home HIV test.
So we're a known entity to them, particularly for self tests for infectious disease.
That's going to help us quite a bit I think we have a clearer sense today than ever before what we need to do to get a submission for OTC and so I think we are determined to do so we're not projecting a win but I think that we're very confident that we have the pathway well in hand, and well understood. So.
There are a number of things you have to do above and beyond the submissions for the prescription self tests for the professional tests, which are already underway.
But are we have been encouraged by our close working relationship with FDA and hope to get that OTC product.
In the submission and all of the market as soon as possible.
And just as a quick follow up to that should we expect debt. It is a an authorization for a standalone use or for serial what's the kind of current thinking on the strategy.
From that perspective.
Yeah. So one of the things that FDA has made clearer in the past couple of months is the difference between the diagnostic tests in the screening tests. So of diagnostic tests is one for those who are on infectious and the screening tests.
Is tests for asymptomatic and others and the screening tests.
All of our lend themselves to serial testing, which is what you're.
Calling attention to the packages of have more than one test in them, we are very well aware of that.
I think that can be a good use case for us and we're working towards getting that use case firmed up and.
Getting a through F D a.
Great I'll stop there thanks.
Thank you Andrew.
And our next question comes from the line of Brandon Couillard from Jefferies. You may begin.
Hey, guys. This is Matt on for Brandon Thanks for taking the questions.
To start you guys indicated you started to manufacture your rapid antigen tests will you wait you clearance and clearly a lot is dependent on timing of approval, but any color you can give on how many you expect to of manufactured at launch and then.
What portion of that is already spoken for or do you expect to be spoken for at launch across the number of different potential customers and use cases from back to work.
A number of health care settings as well thanks.
Yes, sure, Matt we have not disclosed how.
How much manufacturing we've done at risk, but we are doing so as we speak.
And as you've noted the approach is to have product ready to go once we have EUA for.
The F D. A so that is absolutely what we're aiming at.
You know we have different requirements, depending on the use of the products of the professional test the prescription self test and somewhere down the road. The OTC will have different labeling and box requirements. So we're taking that in the cat also but.
When we get up to full speed in.
In terms of manufacturing and whats way of approval, we're very confident that we're going to be selling as much product as we can make over time so.
I think we have designs on.
A steady stream of business over the coming months through 2021 and into 2022 and that's what we're focused on.
Great. That's helpful and then quick one for Robert.
Gross margin of 65% this quarter the guidance kind of calls for similar revenue basis or anything of call. It on mix.
Or can we kind of expect gross margins to continue to trend in kind of that mid sixties range.
So for the first quarter gross margin was driven very much by mix. So if you look at the tables at the end of our press release Youll see that.
The COVID-19 collection devices.
<unk> were up substantially over the prior year, where the.
The sales were mostly nominal and we've talked about how all of the COVID-19 testing.
Testing opportunity products are at the higher end of the margin range.
On the other side of things are international sales of our HIV kits were down pretty substantially just due to some timing of shipments and so those two things together combined to drive the 65% gross margin percentage.
So depending on how exactly those two things shake out proportionally with regard to each other in the second quarter you could see some change to that gross margin percentage from the first of the second quarter.
Super Thanks, I'll stop there.
And once again Thats star one for questions.
The loan for questions.
And I'm not showing any further questions in the queue.
Yes, we do have one question for on the line of Patrick Donnelly from Citi You may begin.
Hey, guys. Thanks for taking the question Youre squeezing me in.
I just wanted to ask on the demand side, obviously, you talked a little bit about U S for <unk>.
And it seems certainly that O U S is a little more compelling long term, but in the U S side I mean, how much have you guys talked of before approval to the employer side travel.
I'm just trying to think of what the demand could look like as you get to the market here and if there was anything in place in terms of contracts maybe for you.
Could just talk through with the U S piece a bit more of would be helpful.
Certainly Patrick.
Inbound interest has been strong and remains strong.
Particularly buyer groups are universities employers physician offices public health and government buying entities, obviously, we cannot promote and contract until we have an EUA.
We've advanced those discussions progressively as we've been able to share more of.
About the product design of the use cases and so.
We are very confident that those domestic use cases remain intact.
I think it's testing moves.
Two more self testing options in the marketplace of.
The attributes of our product and their competitiveness versus existing products will be easy to see so.
The demand remained strong interest remains strong and.
We're hoping to to confirm.
All of those interest into sales and contracts once we receive our UAS.
Yes, Stephen maybe on that point, you kind of touched on on the competitive side obviously.
He is getting more competitive as we go here.
When you think about the differentiation pieces out there I mean, how much when you think about first mover versus the data itself versus the ease of use how do you rank those things in terms of what you heard from folks you've chatted with us being the most important when several market several products are on the market.
It moves the needle for for the potential customer base.
Well I think based on our experience with HIV in home testing and we've been on the market.
Close to 10 years with that product the ease of use of the product gives people confidence that their results are accurate and that's the value proposition.
So I can't really speak to how that shapes up with other products on the marketplace other than to say if those are the differentiators in our case is very strong.
So we recognize we're not the first the market.
But there are some attributes of our product in terms of ease of use in terms of the integrated swap into the product design, which I think are going to be extremely helpful to us and so that's why our outlook remains very strong on the product in the U S.
Understood. Thank you guys.
Thanks, Patrick.
And I'm not showing any further questions in the queue I'd like to turn the call back over to the speakers for any closing remarks.
We'd like to thank everyone for participating in today's call and for your continued interest in offshore have a good afternoon, and evening and stay safe and be well. Thank you very much.
This concludes today's conference call. Thank you for participating you may now disconnect.
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