Q3 2021 OpGen Inc Earnings Call
Welcome to the option third quarter 2021 earnings call and business update at this time all participants are in a listen only mode. Following management's prepared remarks, there will be a Q&A session. As a reminder, this conference call is being recorded today November 11 two.
'twenty one before we begin I would like to caution you that any comments made during this conference call by management may contain forward looking statements regarding the operations and.
And future results of opt in including its subsidiaries <unk> and Ares genetics I encourage you to review options filings with the Securities and Exchange Commission, including without limitation. The company's most recent Form 10-K and Form 10-Q for the third quarter of 2021 that will be filed with the SEC.
Which why densify specific factors that may cause actual results or events could differ materially from those described in the forward looking statements.
Okay.
Factors that may affect the company's results include but are not limited to our ability to successfully achieve the expected synergies from the company's completed business combination with securitas.
Implement our commercial strategy the impact of the continuing global COVID-19 pandemic on our business and operations our use of proceeds from recent financings our ability to achieve shareholder approval.
The items up for vote at the upcoming December eight 2021 special meeting of stockholders the rate of adoption of our products and services by hospitals and other health care providers in general as well as in the current COVID-19 pandemic situations in particular.
Our commercialization efforts and partnering strategy the effects on our business of existing and new regulatory requirements and other economic and competitive factors. The content for this conference call and time sensitive information that is accurate only as of the date of this live call November 11 2021.
Company undertakes no obligation to revise or update any statements looks like events or circumstances. After the date of this conference call, except as required by law.
Joining the call today will be Oliver Shaw, President and CEO and options New CFO as of January one 2020 to Albert <unk>.
We will introduce Mr. Whether it's further detail later on this call.
I'd now like to turn the call over to all of our stock for introductory remarks.
Thank you operator, and thank you everyone for joining us this afternoon.
As always we value your continued support of option.
We're very pleased with our third quarter progress and the fourth quarter to date.
Well positioned for the rest of 'twenty, 'twenty, one and into 2020 two.
During this call we will highlight recent accomplishments and our portfolio of products and provide updates on our new and existing partnerships.
Option is excited by our achievements and we believe we're poised for continued growth over the coming years.
On today's call, we'd like to begin with a recap of highlights briefly mentioned on the second quarter earnings call.
Followed by recent updates on our product and R&D pipeline.
Then review the financial highlights from the third quarter and introduce our new CFO.
We'll then wrap up the call with an outlook on the company's upcoming milestones followed by Q&A session.
As mentioned on our previous earnings call curate a successfully completed development and had manufactured by a third party a Bachelor of 10 final pre series release unit burrow 830 analyzers in August.
The unit burrow 830, RQ platform is designed to deliver rapid and multiplex testing results for swabs and simple fluids in under 30 minutes and 45 to 90 minutes for more complex native specimen.
The flexible and versatile design of the cartridge technology allows us to get to Vero 830 to address various sample license requirements as well as testing for a wide range of DNA and RNA nucleic acid targets.
Additionally, the platform is designed to allow straightforward migration of third party assets for development and commercialization partners and licensees for their own assay menu and product portfolio.
We're currently in active dialogue with several parties about licensing and partnering options, which we will continue to provide updates.
All of these parties are in active due diligence on the instruments from a hardware cartridge technology assay flexibility manufacturing and software standpoint, and we have recently shipped some 830 product prototypes to some of these parties for in depth technical discussion.
In parallel we continue to evaluate our own potential future product development programs on the unit airway 30 platform, which includes rapid tests for pathogen identification for viruses bacteria and fungi and a broad range of antimicrobial resistance marker panels.
September we announced clinical data from a large investigator initiated and driven prospective randomized controlled multicenter study using the unit Arrow H P. M panel for hospitalized patients with a suspicion of pneumonia.
The study endpoint, what's the duration of inappropriate antibiotic therapy, which was significantly shorter in the PCR group.
Unit barrel decrease the average duration of inappropriate antibiotic therapy from 86 hours to 47 hours. In addition to reducing the usage of inappropriate antibiotic therapy by over 45%.
Overall, the study concluded that the results of your narrow combined with antibiotic stewardship is efficient and safe and decreasing time on inappropriate antibiotic therapy in hospitalized patients with pneumonia at risk for Gram negative loss.
For milestone we would like to highlight is the initiation of the prospective multicenter U S clinical trial for options unit barrel urinary tract infection or UTI parents.
It will allow testing for a broad range of pathogens as well as antimicrobial resistance markers directly from native urine specimen.
The trial is expected to enroll more than 1500 prospective patient samples and we expect to submit data from that trial to the United States FTA for an eventual clearance and commercial launch of the unit Barrow UTI product as a diagnostic test in the U S.
U T I's are amongst the most common infectious diseases, therefore, rapid and accurate identification of pathogens and the correct choice of antibiotics is essential.
We believe that unit Arrow UTI panel will be a valuable diagnostic tool to help treat these patient populations.
As we continue into the fourth quarter, we're extremely excited about our progress in 2021 and look forward to our future milestones.
We began the fourth quarter on a high note receiving five 10-K clearance by the FDA to market. The acute is a AMR gene panel.
We've already initiated the commercial launch in the U S, which I will touch on soon.
As a reminder, the acute is a AMR gene panel allows testing for a comprehensive panel of 28, the genetic EMR markers in isolated bacterial colonies from 26 different pathogens.
The acuity AMR gene panel expanse, the diagnostics capability of clinicians to test for select drugs rapidly and simultaneously and nine classes of antibiotics to aid in the identification of potentially antimicrobial resistant organisms that might otherwise escape detection.
The <unk> panel can detect antibiotic resistance markers and about two and a half hours compared to 124 days with classic phenotypic methods.
Prior to the FDA clearance, we have prepared to launch plan marketing collateral trained the sales team and manufactured several batches of <unk> to say a markets.
Therefore, once we received FDA clearance, we were immediately able to begin a major marketing and sales campaign targeting more than 400 institutions at well over 1000 individual key stakeholders at these institutions directly.
Actively engaged in numerous conversations across the country about the acuity AMR gene panel.
Recently, we announced and closed a $15 million registered direct offering with a single health care focused institutional investors of 150000 shares of convertible preferred stock and warrants to purchase up to an aggregate of seven 5 million shares of common stock.
The shares of preferred stock had a stated value of $100 per share and are convertible into an aggregate of seven 5 million shares of common stock at a conversion price of $2 per share at any time. After the company has received shareholder approval to increase the number of authorized shares of common stock of the company, which we have scheduled for a vote at the December.
<unk> 2021 special meeting of stockholders.
The warrants have an exercise price of $2.05 per share and will become exercisable on the later of the date of shareholder approval and six months. Following the date of issuance and will expire five years. Following the initial exercise date.
We intend to use the net proceeds from the offering to further work towards achieving our milestones such as the commercial launch and rollout of acuity AMR in the United States.
So we plan to continue driving the commercial ramp of our unit Aero business in the United States and abroad in areas, such as pneumonia urinary tract infections and other indications.
To that end, we'll be able to fund clinical trials, such as the U T. I F D. A trial and the planned I J I trial in the U S as well.
We also intend to bring our offerings to the United States, which will require dedicated commercial and operational resources in 2022 and beyond.
Lastly, the $15 million also provides us with the option to repay certain outstanding debt obligations to the European investment Bank.
Moreover, we're happy to announce that Ares genetics has commercially launched its Ares cloud web application.
Auris cloud as a new commercial web application that fully automate state of processing aimed at accelerating the analysis all sequenced clinical isolates.
The software not only processes the data, but also offers insights into PGM logically and eat geologically relevant information, including pathogen identity genotype virulence plasmids and antimicrobial resistance.
Iris genetics is actively engaged in discussions with clinical expert users and is collaborating with two major U S hospitals already an independent studies to evaluate the platform for clinical routine use and for outbreak analysis.
On the corporate front, we're thrilled to announce options, new Chief Financial Officer, Albert vapor effective January one 2022, Mr waiver as a corporate finance executive with more than 30 years of professional experience 21 of which were at epigenomics.
Molecular diagnostics company with operations in both the United States and Germany.
The waiver served as their executive Officer Executive Board member and Executive Vice President Finance for the past four years.
Albert has critical capital markets experienced from raising hundreds of millions of dollars in capital. During his career. He has been overseeing the finance accounting controlling and all other corporate G&A functions and has gathered a wealth of hands on operations experience in both the United States and Europe as well as in China, which was a key factor in our decision to bring Albert to the.
Two option as our CFO.
Albert would you. Please take this time to introduce yourself.
Yeah, Thank you Oliver and nice to meet everyone here.
As all of the medicine.
Previously he held roles of increasing responsibilities at Epigenomics AG. Most recently as EVP of finance and the second board member and executive offices.
During my time at that the general mix whats involved in numerous accuracy and debt financing transaction, including the listing of American depositary receipts in the United States.
I also have a solid operational and financial aspects of the commercial launches of molecular diagnostic products via direct sales teams in the U S and Europe as well and that's why our partners in China.
I have also been involved in several strategic partnerships licensing licensing deals with global diagnostic corporations and multiple M&A processes over the year, including a public takeover offer by Italian something else, though that will affect the pool bar and company and Bellevue at the company at the second.
Second premium until then prevailing stock prices.
This is an exciting time for option with the receiver with the recent FDA clearance for the unique accurate as a AMR gene panel.
Already FDA cleared anywhere or product and proposed the products in the pipeline that the company expect to get approval for in the U S as well as China and other parts of your work.
I am very excited to be joining all of us and the rest of the Optum team and look forward to working with the team and the board thought.
The next phase of our growth story and driving shareholder value.
With a significant part of my overall compensation being equity base.
<unk> interests will be perfectly aligned with our strong retail hotel base globally.
I will now turn this back to all of us to discuss the third quarter financial.
Thank you Albert for providing a brief background, we'll look forward to the future ahead with you on the team.
I will now briefly touch on the financial overview of the third quarter discuss our balance sheet and review underlying growth drivers for the business.
Back in August we decided to cancel the re convening of the adjourned portion of our annual meeting of stockholders for consideration of proposal two relating to an increase in the company's authorized shares of common stock due to simply not enough votes being cast overall, despite the fact that if all those shares that were voted around two thirds had support.
The proposal.
The company is called a special meeting of stockholders for December 8th 2021 for the approval of a proposal to reduce the required threshold to amend the certification of incorporation of the company from 66, and two thirds percent to a majority of the voting power of the outstanding capital stock of the company.
And a proposal to increase the authorized shares of common stock with the company from 50 million to $100 million.
The preferred stock is voting rights with a common stock equal to 30000 votes per share preferred stock on each of these proposals provide it.
That consistent with NASDAQ listing rules any votes cast by the preferred stock with respect to the proposal to increase the authorized shares of common stock must be counted by the company in the same proportion as the aggregate shares of common stock voted on such proposal.
To be very clear the preferred stock will simply mirror the votes cast by the common shareholders and would help get this to a decision given the required total number of votes that have to be cast overall.
Switching to our revenue with $1 million to $4 million in revenue in Q3, 2021, which was up 17% from last year's Q3, but was up 53% from the second quarter of 2021, we're now at $2 $9 million in revenue year to date.
And it is important to remember that we exited the fish business, which had contributed close to $2 million in revenue in 2020 and had the onetime nonrecurring R&D collaboration partner revenue for Ares genetics in 'twenty 'twenty.
So our products business and service business has been growing nicely and is poised for further growth.
Looking at the operating expenses, we kept our overall Q3, 2021 opex at $6 $3 million compared to $7 2 million in the third quarter of 2020.
With this quarter coming in at $2 $4 million in R&D 1 million from sales and marketing and $2 $1 million of G&A.
For the nine months in 2021, Opex was $24 million compared to $19 6 million for the same period in 2020.
With $8 1 million in R&D, $2 $7 million from sales and marketing and $7 $4 million of G&A.
All of these operating expenses in the third quarter and for the nine months year to date are in line with our expectations and track very well against our guidance for quarterly cash consumption.
Our net loss for the third quarter of 2021 was $6 1 million or.
Or <unk> 16 per share compared to $7 $7 million or <unk> 40 per share in the third quarter of 2020.
For the nine months of 2021 net loss stood at $28 million or <unk> 79 per share versus $19 $1 million or $1.36 per share for the same period in 2020.
The increase in net loss was primarily due to a $7 8 million noncash charge for the warrant inducement in exchange deal in March as well as all three quarters in 2021, including curators and Ares numbers, whereas 2020 only included six months of these post closing off the business combination on April one.
Looking at our cash position with $25 $4 million in cash as of the end of September and the recent $15 million financing, we had just under $40 million in cash in October. This is the strongest balance sheet that option has had in years.
Well, we have refrained from providing specific revenue guidance in 2021 due to the COVID-19 situation with recent developments, we would expect full year 2021 revenues to be in the three and a half to $4 million range.
Let's not forget the almost 2 million in prior year fish products revenue and the more than $1 million in nonrecurring R&D collaboration that partnering revenue that Ares head in 2020, which goes to show that in 2021 of our products business on the unit of Aero side and services on the Ares genetics side have been growing nicely and we expect to continue that growth trajectory in 2012.
One with the added acuity <unk> EMR product expected to start contributing to revenue generation in 2022 as well.
Okay.
Now I'd like to talk about the company's recent and upcoming milestones.
As discussed earlier on this call. We're thrilled by the recent FDA five 10-K clearance of our acuity AMR gene panel, which we believe to have the potential to aid clinicians in the diagnosis and treatment decision, making for patients with severe life threatening infections were suffering from multi drug resistant organisms.
We were proactive in our preparations prior to approval. Therefore, we were able to have a swift commercial launch in the U S. We're currently engaged in many conversations across the country.
Is part of our launch campaign haven't reached out to over 400 institutions in over 1000 individuals in those and we look forward to the progress and initial commercial traction in 2022.
While the New York State Department of Health Project was successfully completed at the end of September we are looking to convert some of these pilot users in the state of New York to the now FDA cleared IBD kit off the acuity AMR gene panel and we have decided to discontinue the offering of the research use only product as we cannot attach any diagnostic claims.
Aims to such are you old product and it creates significant operational burden in overhead as from a regulatory standpoint. It is a completely separate product with different software and different results reporting from what the FDA is now cleared.
So that's looking forward the way to think about the New York State Department of Health project is that the individual sites and users would potentially become users and customers to our acuity Samar gene panel as FDA cleared, but there will no longer be a state sponsored research research project here.
But that was the intention behind the pilot phase all along generate the data needed to demonstrate the value and clinical use for such a product, which we can now actively promote with confidence based on the data from the FDA trial and the entire package insert to any possible user across the entire country.
We're also in regular dialogue with the Chinese N M P. A via our strategic partner Peking clear buyer.
The Chinese N P. A has requested supplemental clinical data to be generated and submitted in China.
We've defined the details of the clinical study to supplement the decision the submission in China. We're working out final details on the control concept in logistics and are expecting our partner BCB to place an order for the required pneumonia cartridges in due course.
Our partner has already obtained IRB approval from the Ethics Committee if the first of three hospitals to participate in this small scale study.
To be clear our partner currently expect such a study to take six months or longer overall and the start date will be driven by the N M. P E and our partner signing off on the clinical study design. Once we have a purchase order in hand, we should be able to deliver cartridges into China within about eight to 10 weeks from receipt of the purchase.
Order to having product on site in China. So.
So a regulatory approval and commercial launch in China is expected to be a 2022 milestone.
Also our partner R&R in Colombia has been successful to gain preliminary registration for unit of Arrow in Colombia, just a few weeks ago in October we have sold the first unit arrow system and kits to them.
Vietnam is still very much in lockdown due to Covid and we currently do not have a clear sense of regulatory timelines there.
But we also continue to work on several potential new distribution deals in additional countries and markets for our unit variable portfolio.
As we previously mentioned we're also pleased to have successfully completed the search for our new Chief Financial officer to join the option team and we look forward to the positive impact Albert will add to the option team.
A clear area of business focus and expected revenue growth for option globally, as our Irish genetics, Nextgen sequencing and artificial intelligence powered bioinformatics suite of products.
We have integrated the data from our lighthouse into our STB and the latter will be our core bioinformatics platform moving forward.
So the acute as lighthouse, which was its own Standalone research use only software tool for a research collaboration with the state of New York is not a platform that we plan to continue taking forward.
The Argus cloud and <unk>, our state of the art and superior both technically as well as commercially and have seen significant initial customer interest.
We anticipate growing the Irish business, along with software and services and longer term kitson products as well.
To that end Ares genetics has recently strengthened its commercial footprint by hiring an experienced European business development manager and we're looking to add and Ares executive team member for commercial operations in the U S for 2022 as well.
Another really exciting way to think about leveraging the Ares DB asset is providing access to and commercializing subsets of this data asset.
Ours is currently working on finalizing an agreement to do exactly that and one sign that deal would of course be announced right away.
We believe that this specific deal provides a tremendous opportunity to crystallize the underlying value of the RST b asset, but also putting a value on price tag on a small subset of its overall content.
We currently expect to finalize the deal in the fourth quarter of 2021.
On our universe or UTI clinical trial, we expect to do an interim data analysis. After the first few hundred UTI samples tested.
And then proceed with full enrollment with a clear objective of completing the trial and data readout in 2022 in order to prepare the product for our next FDA submission.
On our unit variable I G I.
Invasive joint infection trial, while we're ready to go with our clinical trial design and have identified the study sites. We really believe there would be a tremendous benefit in getting some FDA feedback and input and a pre sub meeting format.
Due to the continued overload from Covid related submissions. The FDA. So far has not been open to such pre sub requests or pushed them out into 2022.
We have therefore decided to postpone the trial start for a few months to see if we can elicit a response from the FDA as otherwise we believe we would take an undue risk with the trial design and might not benefit fully from our large set of already banked patient samples and data already available to us, which would be a shame and potentially very costly change.
And trial design.
We will provide updates as soon as we hear back from the FDA and our advisers, allowing us to finalize on that Iga trial design.
In closing, we're pleased with our R&D advancements in key regulatory milestone achievements over the last few months.
We'd like to thank all our employees.
Along with the rest of the management team are deeply appreciative of your continued commitment.
Your dedication is integral to our success and our mission to fight antimicrobial resistance in any way, we can using all of our platforms and products.
Together, we have to find the core values of option to be ownership performance generosity enthusiasm and a keen sense of urgency in the mouth.
I see our team live and work by these values each and every day that is hugely gratifying to see.
To our listeners we're looking forward to updating you as we progress on our partnership strategy R&D pipeline and continue the Swift commercial launch and rollout of Kyoto say AMR gene panel in the U S in parallel to conducting the universe.
U U T I, a clinical trial during the fourth quarter of 2021.
As always thank you for your unwavering support and for participating in this afternoons call.
I would now like to turn the call back to the operator for questions operator.
Thank you we will now begin the question and answer session. If you do have a question. Please press star one now to be placed in the queue.
Our first question is from Max Jacobs with Edison Group.
Hi, guys. Thanks for taking my question. So I was just wondering in terms of the bacterial isolate launch.
What metrics should we be focusing on.
Good question with a typical sales cycle in our industry in the six to 12 months it'll be a 2022 metric of new installations of the acuity AMR instruments setup, which consists of the qiagen easy one for sample prep and an option quantified there.
Fisher Quant studio five.
Overtime.
During the year at the metric of installed systems will be to look at average utilization rates and reagent pull through.
From our past experience in New York State, We would expect a typical account once they go live and go into full clinical and commercial routines will run anywhere from maybe 50000 to $150000 worth of tests on an annual basis once fully converted so that's the sort of metrics I would look at.
Great. That's very helpful and I know you probably can't answer this question, but since you gave 2021.
Revenue.
Guidance I was wondering could you give.
Give a sense of what revenue and maybe expenses might look like in 2022.
I wish I could at this point, we're not going to provide guidance I would say on the operating expense side. If you look at our last couple of quarters, we've been very consistent with the sort of $5 million to $6 million net cash utilization per quarter.
It would say, we'd certainly want to keep that operationally and in that ballpark and we're clearly anticipating 2022 to be a year of substantial growth but.
As there was a lot of moving parts right now on the one hand, the the ongoing launch on the other hand, a you know a number of these partnering conversations.
I would probably defer to our full year earnings call at which time I believe we're going to be in a much better position to provide some meaningful guidance, but clearly entering into an exciting phase of both product sales growth as well as you.
You know services.
Collaboration revenue stream, so that we believe will put us on a nice growth trajectory.
Wonderful. Thank you so much that that was very helpful. That's that's it for me.
Thanks for taking my questions.
Yeah.
Thanks Max.
Our next question is from Ben Hayner with Alliance Global.
Good afternoon, gentlemen, thanks for taking the questions.
First off for me you know I found it kind of interesting that he came out of the gate in the prepared remarks are addressing the 830 RQ opportunity I guess, you know what should investors take from that and you know now is that these devices are going out to potential partners. How quickly might you expect proposals to materialize in.
You know what what could those potentially look like.
Yeah.
Sure.
I mean first off the reason we put this right upfront is a key part of options portfolio and strategy looking forward I mean, as we've met some key development milestones here over the summer and as we said on the.
Last call. We we've since continued the full verification validation testing of the instruments, they've undergone full lifetime testing at least the last metric I heard.
We've literally run 850000 PCR cycles on these 830 machines and they are performing as if they were new so they've kind of done multiple times life life expectancy very robust very nice and in parallel we have been we've been talking about this for a number of months. We have continued these dialogues.
It's still tough because travel has continued to be a challenge now literally this week is the first week, where the United States. After literally 20 months of Lockdown, a lockout of European South since March 10th last year have let people and this is the first time this week that our chief operating officer has been.
Able to come to the U S. He was on the first flight out of Germany on Monday, He's been here all week.
And as you can appreciate some of our partners are in Europe. Some of our potential partners are in the United States. Some of our potential partners are in Asia.
So.
I believe we certainly have a platform that is ready for partnering.
What we have made possible is providing.
Hands on ability to you know.
Look and feel and touch product, which is always key if things work out and stars align literally over.
Over the course of the next the next week or two we will have.
Our first delegations actually meeting a meeting the team and getting getting a firsthand.
In person live experience of the platform at our at our German facility now with the caveat that if you follow the news on Covid metrics, Germany in the last week has not turned for the better and the numbers literally today are the highest they've ever been in terms of incidence rates.
So it's a moving moving target.
Certainly our objective we believe the platform is ready for partnering the cadence and rhythm of getting a larger more significant strategic deal down it's still a.
Multi month endeavor, but again these conversations and that's why I, specifically pointed to due diligence so it's not.
High level informal conversations we're in deep dive diligence right down to the nuts and bolts of.
What can the platform do what can the cartridges do what's the specifics on putting assays on it what's the manufacturing specifics a fair to say so what could've deal look like.
No I'd say conceptually.
And again, we've talked about this in the past I would look at a deal and let's look at it in a in a classical licensing sense.
Imagine some fordham upfront either license our technology access component.
Under which we would then.
Provide.
Either specific geographic scope or or specific indication scope for a partner to develop their own.
Content and potentially even their own their own brand of this platform and and manufacture product. So it's not just a a a kind of serve as co development. It could go all the way to transferring technology, and knowhow and enabling a potential partner to develop manufacture and commercialize.
Products on the 830 platform.
So you know again I would caution that these deals are complex and have a nature of taken awhile, but given where we are you know again, we believe that some of these conversations have matured have gone a lot deeper have gone a lot more specific and you know the.
The rest are there's always two to the party, where we're happy and ready to move as fast as as needs be but if you have much larger corporations on the other side. There's so much you can do to make their timeline, so moved the way you'd like but.
And then the I guess another question I had on that is the targeted assays that some of these that these partners are looking at you know as it all human diagnostics is there in our it guys looking and gals looking at it for veterinary applications or food safety or some other types of testing or is.
At all.
Kind of human infectious disease diagnostics.
There's two elements to human in infectious disease. So I'd say the primary focus of conversations has certainly been around human.
It has been with a heavy focus on infectious disease that said at least some of the parties that we are talking to are actively engaged in diagnostics across the full spectrum from you know environmental food safety testing too.
Veterinary to other human disease indications beyond infectious disease oncology or are there other forms of testing so.
Our core expertise as option as greatest has been and continues to be in human infectious disease testing, but remember one of the projects that we talked about in the summer Ah Grant project that we have ongoing is in veterinary applications. It does involve the 830, so even internally we have certain certain capabilities.
On the veterinary side.
If you look at our Iris genetics team and again, it's on a different platform, but we've also done studies and actually done service work on environmental a pathogen identification and testing so you know.
We're certainly open to make this as broad as required by the respective party at least some of the parties that we're talking to you I would clearly believe to be actively looking at a platform from a holistic across the full spectrum of potential applications.
Okay. That's helpful. So it really runs the gamut.
Yes.
Okay. So then.
You kind of mentioned in the in the press release that you know you kind of have moved beyond the kind of mainly R&D.
You know functions and now are moving towards more.
More towards commercialization.
Just wondering if you could share some some of the figures on you know universal installs out there as it stands today you know what does the utilization look like how has it been trending you know what portion of our revenues.
We expect from distributor stocking orders et cetera, just so just trying to get a better grasp of what that business looks like now now that you've kind of.
Ramp that up to replace some of the fish business in other areas of the business that have declined.
Yeah, I mean, I'd say as of Q, we havent really split it out into individual products, but I'd say I mean, one as I said one of the key growth drivers has been the universal business and specifically here in the United States. The key growth driver in recent months on let's call. It. The last couple of quarters has been a.
A lot of interest and added new installations of Univar O U T. I, a we now have more.
More than a handful of labs that have gone full blown commercial routine.
And that means you know, there's there's labs that are doing.
Anywhere from you know, let's call. It 60 tests a month on a month by month by month basis, So very consistent sort of in that 678 hundred total year per year and we have the first the larger labs that have gone live and anticipate doing significantly larger volumes.
UTI has grown install base you know on the.
UTI side over the last.
Couple of quarters saw we've grown that installed base, specifically to somewhere in the 16 to 20 analyzer range I know Archie shipping some additional ones.
Here between now and the end of the year.
And then you know again it's.
We have grown the team we've added.
New members into the sales organization over the summer Ah we yeah.
Got them up to speed and trained and they're now getting to a point, where they have the first accounts, they're ready to move and put a new unit Arrow systems and we'll provide specific updates on our you know kind of where we are with a total installed base, but it has grown since the beginning of the year our net.
Net net the growth has essentially come out of our out of the U S.
With you know, but the incremental pieces, we talked about Colombia et cetera, so on the distribution side.
That's sort of been the probably the key growth driver going forward on the unit barrel outside of the existing distribution business in Europe and in the U S. It's clearly going to China and that those metrics stand on changed its a question of when the NFPA clears. This as the numbers of systems that have been committed to we're all in the public domain.
Since since early last year and have not changed.
That should be the key driver.
Got it and then.
Just if you could provide any more color on the early reception on read all the hundreds of institutions and I don't know I think you said the.
Folks that you've contacted on a queue of this so far.
It's been it's been generally positive I mean, it's a lot of folks that have told us over the course of a year.
When we were waiting to get FDA clearance is they all come back when you have FDA clearance, we can only bring in tests once their FDA cleared so certainly falling on Oh on open eyes and ears that the challenge continues and that's just the reality out globally and certainly here in the U S as well as Covid cases, and if you go to New York City, and you see tense being sprung up left.
Right and center across the city again for Covid testing.
A lot of labs are once again preoccupied with a lot of Covid testing that said you know outside of New York State, We've actually seen additional states pick up the <unk>.
And you know start.
To start looking at ways, they could bring the acute as EMR into their state labs for sort of epidemiology testing etcetera. So a lot of fruitful conversations but again is it is a one one of its kind first in class product the broadest ever FDA cleared panel of genetic atmar markers. So theres a lot of education, there was a lot of clinical.
All conversations and.
Digging deep into the value proposition.
I expect to be a key key element here and you know, we'll we'll we'll make the exact announcements I expect that early in January we're going to have data from the acute us.
F D a trial being presented along with some clinical our clinical value that that folks see.
And again I think the early reception has been very very positive, but these conversations before you bring in a you know a brand new system.
And and implement a first in class assay. These sales cycles are very traditionally in this space in that six to 12 month range with potentially faster of course for existing users up in the state of New York, but everybody else. It would be a brand new net new installation. That's why I said, that's going to be a 2022 story to unfold.
Okay. It makes sense well, thanks for taking my questions and welcome aboard Albert It sounds like you and Oliver or getting the band back together so to speak.
Yes of course of course, that's a it's not the first time that that's common [laughter].
Thank you.
Thank you. Our next question is from E Chen with H C Wainwright.
Hey, How's it going this is kate on behalf of <unk>.
Just a quick follow up on the E M R gene panel.
I know you said you spoke about your initial conversations could.
Could you, perhaps maybe elaborate on the kind of feedback you're receiving from various stakeholders any any pauses do them any any red flags that we should keep looking out for.
I mean at this point, it's basically there's a lot of that's kind of like Whoa. You know. This is this is truly broad panel so by and large very positive in the sense that the panels coverage is unparalleled unrivaled it as a true one of its kind. So you don't run into any obstacle at it.
Okay, you know I'm just.
It's not going to come down to well, what's the what's the price what's the throughput because I've got three other options that do the exact same thing.
But you know it is a product that will require input from not just the laboratory it'll require deep involvement of the the microbiology side as well as the clinical and.
Pharmacy, and antimicrobial stewardship side, so you know I'd say multi stakeholder conversation.
Yeah, I'd say from from that vantage point.
There's a lot of people, who now start digging into into the data, which is also why we pushed hard for getting the data from the FDA clinical trial.
Into a mold words, it's now slated for hopefully getting published in a peer reviewed right.
Reputable journal of the paper has been submitted or expecting to hear back from the from.
From the reviewers.
And that's being done through our external principal investigators Oh, you know.
These large clinical trial sites and that's also why we want to get that clinical data set out there in a public forum are right at the at the beginning of Q1 of next year to make sure that we can you know broadly share the data and its clinical value proposition.
So far I mean, there haven't been any asked me a minute.
Red flags other than of course, you know like always you got to bring in a new platform that.
And you always compete for space you always compete for attention.
And the Cove at.
Ongoing right now as we speak existing Covid situation, it's probably the single single biggest obstacle for getting attention on getting people to focus on what they know to be the underlying silent pandemic of antimicrobial resistance.
I'd say that that's probably the biggest our biggest.
Biggest challenge right now is getting people's attention sit them down and but yes overall, but those conversations have gone.
Uh huh have happened they've been they've been very positive.
Oh, that's create some momentum.
And then get it into real World time, there's nothing nothing better than real world clinical users that generate data publish it and talk about it and that's that's really the key objective here right out of the gate.
Awesome. Thank you Soma that makes a lot of sense and then lastly, I know you spoke about a few upcoming data readouts.
As it relates to the UTI study and also the gene panel.
Publication, but are there any other catalysts that we should look at keep an eye out for as we are.
Close this year and head into <unk>.
<unk>.
Yeah, absolutely the one that I I hopefully emphasized very clearly on the call is the potential partnering deal that we have underway are with Ares genetics and leveraging some of their RF DB database assets, that's a deal that.
We anticipate will help significantly crystallize the true value that resides in the hours of <unk> data asset.
As I said you know as soon as that deal is done we anticipate issuing issuing a public communication.
As we set our current expectation is to be able to close on the amounts that deal here in the fourth quarter. So in terms of near term catalysts, that's probably as close as it gets.
There is also in that we're already actively.
Actively.
You know getting getting folks in there are there's a webinar, which will present new data from Ares genetics here on December 9th I believe.
That that again is going to highlight some of the the latest.
New data that Ares Ares genetics has been has been putting out there.
You'll you'll find in our 10-Q.
That we'll file tomorrow I mean, we've grown the hours database saw from earlier. This year. We were at 50000 isolate steep sequenced. We're now at 78000, so we've substantially grown our CB as an asset.
So anything that we do on that front is going to be key and then on the U T I D.
Given that yes. The trial sites actually we have won one clinical trial site that literally is being initiated as we speak and so we hope to wrap up all site initiations here you know later this quarter.
That first interim data readout should be and the front end to fall off next year. So Q1, I think that that's going to be.
First our first glimpse at the data.
And again to remind everybody we would've liked to have had an F. D. A pre sub meeting which didn't happen. We went forward with a trial design that we had but basically said the way to Derisk. This is for us to do an interim analysis. After the first couple of hundred I'm, So sorry to 300.
Samples enrolled will do the interim analysis and then.
Assuming that that data looks favorable will move into full swing too.
Complete the enrollment.
The later readout. So our objective very clearly is to complete the sample enrollment patient sample enrollment into the UGI trial.
And have full data readout from the trial next year and get it ready for FDA submission towards the back end of next year. That's that's the plan.
Awesome. Thank you so much and congratulations once again on all the amazing work.
Thank you I appreciate it.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Oliver Shack for closing remarks.
Thank you everyone for joining today. Please visit the investors section of our website or our SEC filings for updates on the company really appreciate all the support and thank you very much.
Thank you. This concludes today's conference you may disconnect your lines at this time.
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Okay.
Yeah.
Uh huh.
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Yeah.
Okay.
Yeah.