Q1 2021 Precipio Inc Earnings Call

Good day and welcome to the precipitous shareholder first quarter 2021 shareholder update conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Note that the conference is being recorded statements.

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Forecasts continue or the negative of these terms or other words or terms of similar meaning risk and uncertainties that could cause actual results to differ materially from those set forth in any forward. Looking statements include but are not limited to the matters listed under risk factors in our annual report on form 10-K for the year ended December 31st 2000.

And in 'twenty, which is on file with the Securities and Exchange Commission as well as the other risks detailed in our subsequent filings with the Securities and Exchange Commission. These reports are available at Www S E C Dot Gov.

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Require by law now, let me hand, the call over to Ilan Daniela recipe O C. E. O. Please go ahead Sir.

Thank you very much and good afternoon, everyone and thanks for joining our Q1 'twenty 'twenty 1 shareholder call.

On this call I'll provide a recap of our Q1 activity and an update on the progress. Our company has made since the start of the year, our thoughts going forward in 2020.1.

Let's start with pathology services.

All of the doubling of our annual revenue in 2020 from the previous year Q1 shows continued growth with an increase of approximately 50% in Q1.2021 revenues over the same period last year in 2020 from 1 to move from 1.8 million.

Losses, and an increase in the number of patient cases received of approximately 70% in Q1.2021 over the same period in 2020.

Now, let me give you some color behind those numbers.

Although the situation regarding the pandemic appears to be easing up in several regions many of our existing customers and certainly potential new customers have maintained their policy of not allowed visits by sales teams, which continue to make it challenging to both maintain these existing relationships and create new ones.

Within that context, our team's ability to continue to grow our revenue is a testament to its ability to deliver our value proposition to our customers.

But what are the key drivers that enable us to continue achieving this growth.

Several factors I'd like to highlight for you today.

First and foremost we have a dedicated team that believes in our vision and deliver that message from customers every day.

Our sales team we have CASM survivors, we have people who have experienced the tragedy of misdiagnosis, how it can derail patients battle against cancer.

Bar from 1 of my favorite speakers the talented pilots today. This is our why this is the reason why we get up for work every day that passion resonates throughout the team and its power is felt by our customers.

We have a strongly differentiated value proposition.

While our last compete well other labs compete from price cost exceed that result, we focus on accuracy. We believe that at the end of the day, the only thing that matters when you're living with diagnosis is to get it right. That's our duty to the patients and that's why our exists in our field force mistake is made an approximately 1.

And 5 patients we've achieved about 99% accuracy. Unfortunately, we have a terrific lab operations day of that enabled us to deliver that level of accuracy without compromising on other factors of course the speed of results.

Our customers get the best of both.

The third aspect of our success is the value we create for our customers the tradition to.

Through the various programs we offer we ultimately have helped the doctor's practice to be more successful growth and improved financial strength.

After all a doctor that's arguably work diagnosis will likely take better care of their patients and with technologies such as our heat screens per physician office labs, we are now providing them with a program. Both helps them provide unparalleled unparalleled patient care through rapid turnaround time, as well as a new and profitable revenue source.

These are just 3 of the many factors that drive our success and our continued growth of our pathology diagnostics business.

Moving forwards as we see states moves me up restrictions, we expect to continue to see organic growth in oncology remedies.

In addition, we intend to grow our sales team as new members of the team, which will allow us to expand into new regions complementing our organic growth.

From a product side of our business teams screen continues to be 1 of our Golden bullet product as we continue to add practices from a program. We are seeing solid traction within the market and we continue to believe that by the end of the year in screen will be substantial components of our revenue and a handsome contributor to our margins.

With the recent launch of our Haynesville AML panel a panel that provides an unparalleled capacity capability for doctors and laboratories to identify and get the patients with acute leukemia. The right treatment from the same day, we expect to see the increased organic growth within our customer base. In addition, we also expect to see.

Increased interest from prospective customers.

As we continue to grow and broaden the offering the startup of <unk> within their lab becomes a more and more attractive value proposition.

We're also focusing on expanding our market penetration is just free additional markets that complement the physician laboratory market, we launched our offering.

The first is the hospital market.

There are approximately 6000 hospitals in the U S.

Moving to smaller hospitals that may not may not may not have sufficient volume and the larger institutional hospital.

We estimate there is a total market of approximately 4000 hospitals it could be potential candidates running here in house.

Most of these hospitals either run the same tests using alternative technologies, resulting unfortunate around time, and even poor economics or they send them out this evening for turnaround time no income on it.

We believe the heme screen is changing that landscape and can enable hospitals to bring the technology in house, improving both from the on time and providing economic.

The second segment is large commercial laboratories.

But what we've experienced the challenges hurdles lengthy timeline it takes to produce incorporate the technology into a large laboratory, we believe him screen presents an opportunity to deliver value to that segment as well.

We will be exploring this market, which comprises of approximately 25 large laboratories in the U S.

Hope to see some success in that field as well.

The third segment is the international market.

Now that we've seen in the initial success in the adoption of gene screen domestically in the latter part of this year, we intend to begin exploring the potential of expanding our offerings internationally.

After all presumably most if not all laboratories worldwide face the same challenges that U S Laboratory.

As travel restrictions due to COVID-19 gradually ease we anticipate that some of the laboratories outside the U S.

Contact with will be more open to exploring bringing this valuable technology into their own.

Our R&D team continues to work on building additional paddle and expanding the haynesville suite of products to provide.

Diseases.

Net AML paddle is an extra ordinary product, but it's not the last 1 and we are working on a strong pipelines from additional people each of them strengthening the overall offering of the heaps being product line.

We will keep our shareholders updated on these developments.

Progress, we make and the impact that we expect Houston will have on the market and for <unk>.

Now outside of yourself.

Its many challenges is bringing IV sales the market none of those uphill battle and discover just normally reduce our belief in the value of that technology.

We believe that the main roadblock had been a sales process issue, it's not a market need issue nor is it a technology or a product performance issue.

I believe this year because this will finally bear some fruit from late last year, we've been working with several laboratories, both in the U S from overseas to introduce IV cell and have them bring it on board.

This is not an easy sell in a normal environment and while I hate to even pandemics excuse. The reality is if the sales that does require face to face interaction and we've been extremely limited.

Furthermore, from other laboratories, we've been working with have experienced either staff shortage or SaaS channel.

The reason this inhibits our sales process is at these sort of exploratory evaluations of new technology always take a back seat to the day to day patient samples within a lab as they should.

Unfortunately, this means that as internal projects evaluating IV so baidu.

Oftentimes it gets pushed to the back burner until the labs can refocus on it.

The combination of inaccessibility due to the pandemic plus the lack of focus from laboratories due to internal operational issues has made in the sales process is slow and difficult but not impossible.

We remain optimistic as to the potential IV. So the first day. It was always a doctor flow, but I'm confident that we will get there. We will of course continue to update our shareholders. When we win our first Patrick.

Lastly, let me give you an update on where we stand without COVID-19.

Well that wouldn't haven't heard me say this previously and I know there we have many new shareholders again I'd like to reemphasize. The Covid testing is not our core business.

Contrary to other companies in the industry at no time did we ever abandoned our core business to refocus on Covid tests.

However, we were delighted to reach a major milestone accomplishments couple of weeks ago by getting approval to offer devices Covid antibody rapid test of the largest retail platform in the world Amazon.

This is a complex undertaking that involved overcoming business and regulatory hurdles and we've been working on this for quite a while.

So we were delighted to finally be able to announce publicly.

Certainly nice to see the strong market response, I believe we I believe that that day, we were among the top 5 most heightened cleaning companies.

For a small company out of Connecticut, I must admit that was neat.

So what's next.

First of all to be clear.

As per the FDA approval the product currently sold on Amazon is 4 point of care only and is not yet available for retail we will of course be spending resources to ensure that we maximize the opportunity Amazon has given us the places product on their platform and make it available to physicians and the other point of care facilities as.

As we've stated in the past, we believe that the true value of this product is the ability for anyone to test themselves within the comfort and safety of their homes and we will continue to work with our partner to -2 weeks at Needham.

Needless to say as with the previous approvals we are at the behest of the SBA and while it would seem clear to all of us, but there's a few niche huge need for the test to be available for at home usage, it's really impossible to predict when the FDA will grab every day.

Yeah.

As I've stated before the way we look at it this initiative might deliberate nice to bonus to our company and to our shareholders, providing additional revenue and cash.

But whether that happens in the magnitude are difficult to control or predict.

So we prefer to look at it is just that a nice book, which may or may not happen and which will celebrate if it does and if it doesn't we won't Miss a beat.

As we continue to make progress we will of course update our shareholders Accordingly.

In summary, despite.

Despite the tough year of Covid, we have strong wins.

The foundry business is growing at a healthy clip.

Our products are showing traction slow or would I be so solid progress with history, we continue to invest resources into the highest growth revenue and profit potential areas for the company and I feel fortunate that we have several of these areas.

Rather than putting all our eggs in 1 basket, we believe a diversifying risk weighting alternative avenues.

Fortunately, we managed to do that while remaining true to our vision of battling cancer misdiagnosed.

I think we're going to have a very good year and make lots of progress and I look forward to sharing that with you every step of the way.

Thank you all for your support and have a great evening.

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

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