Q3 2021 Centogene NV Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to city centers any Q3, 2021 and you go. So at this time all participants are in listen only mode. After.

After the speaker presentation, there will be a question and answer session.

I'd now like to hand, the conference always Big State Linda cycle. Please go ahead Sir.

Thanks, Roberto and Hello, and welcome. Thank you for joining us to discuss our third quarter 2021 results, which were reported earlier today.

You can view the presentation of the related press release on Central teams website for those unable to view the webcast you'll find the corresponding slides at central gene our investors, both centrally and dot com.

Referring to slide two before we begin I would like to remind everyone that statements. We make on this conference call will include forward looking statements within the meaning of the U S securities laws, including those regarding our strategic plans development programs.

Future financial results.

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

Forward looking statements in this presentation speak only as of today November 24th and we undertake no obligation to update or revise any of these statements to reflect future events or developments, except as required by the law.

Additional information regarding these statements appears in our SEC filings.

If you turn to slide three it is my pleasure to introduce you to today's because our chief Executive Officer, Andrew Oswald in Green They used our chief financial Officer.

We will first begin with a general business update followed by a summary of our financial results for the last fiscal quarter ending September 30th. We will then open up the call to Q&A session before closing remarks.

Kelly request already that you're asking Mexico three questions.

I would now like to turn the call over to Endrin, Please turn to slide 400.

Thank you Lynn.

Hello, everyone. Thank you for joining.

Atlanta that I will start with that.

Based on our.

Our core business.

And also some updates on the progress we're making on our strategy as presented at the Investor.

That's great.

And as it relates to our Kobe statement and our plan would that run going forward.

So how do you plan to restructure the car.

We need to be feet, there for future growth those two elements.

Financial review and then we will aim to outlook and of course to the Q&A.

So.

Q3.

Our performance reflects progress.

Execution, making meaningful strides on that was strategic.

Priority <unk>.

Basically.

As mentioned and we are continuously expanding our data driven approach to reinvent the way he described with Covid.

In this last quarter, we saw solid revenue performance delivering core basis for the second consecutive quarter.

Our business, which is I would like nothing farmers, taking together grew 30%.

Yeah.

Yeah.

And we're very happy to see that our core business is back to growth.

COVID-19 patients I mean, not contribute to over overall topline.

Sheepskin Colby.

And our exiting collectively.

Our efforts are focused on our core business in <unk>.

Thank you.

In line, what we had communicated previously.

Hormone you're excited about any close up our core diagnostic business segments absorb those.

And that's the reason he added approximately 22000 Teu eco scrubber extensive body of data bank and continue to demonstrate our commitment to superior diagnostic offerings for rare diseases.

You can see steady increase towards our goal of having 1 million patients now abided for banks.

Next caller.

And I don't know the cost a bit more detail.

Please turn to slide three.

Yeah, undergrad eat the maintenance, 13% revenue in our core business more specifically on the diagnostics segment.

Portland order intake of 14770 <unk>.

46% over the previous quarter.

Segment, you have seen the business returned to growth up 43% year over year.

Yes.

Trends in the last quarters, and it's nice to see the business mature.

Consecutive quarter of diagnostics segment growth.

He believes he currently offer the broadest set not testing.

For the full year for agency globally, probably the widest range of team.

<unk> value proposition.

During the call the pharma segment.

We are experiencing a protracted recovery as compared with the diagnostic segment pharmaceutical segment revenue was down year over year.

But as we have highlighted in the past week, mostly the result of a delay.

All of that revenue.

Revenues as it relates to the time it takes some tiny.

New contract with a pharma partner.

Contact translate into revenues.

Remember we have now at 57 academic collaborations.

You want to start that in recent quarters.

And they're all advanced who works with revenue generation.

And so we are quite confident that the pharma business will return back to growth starting with the Q4, probably share some further detail on that.

It's long.

Please turn to slide seven.

Yeah.

I look at dollar knowledge repository.

Number of sample order intakes in our coal business and diagnostics and pharma was up 12% with.

Growth was driven primarily by increases agnostic basis.

With Westwood, 46% versus the same period these kinds of things.

The polka pharma company.

Overall, we're making progress on growth.

<unk>, which includes samples as well as state and so on.

The graph on the right you see.

The number is not a data repository over the course of 2021 added about 70000 feet will summarize the key things that they did that.

You can be followed by data thing to be the core of our differentiation and our basis for revolutionizing the development and eventually but discovery.

Yeah.

As he stated in previous quarters, we kicked off an initiative in 2021.

And upgrades to the body of data to back it.

It's a buy data banks that buy now has stayed the backs the close by.

So you can imagine that's about the right time to look at it cleans up and strengthen.

And in the label.

This improves the setting up a good state the governance as well as making sure our approach to growing device to think is truly strategic.

Our inventory then.

Our CTO officer became a gardener shed insights in how we plan to upgrade that with each bank.

If you based on that he has them first.

Dates or insights EBIT.

In the past we have communicated the number of patients at the summary matrix with a newly defined by a data bank wheelchair and some deeper insights going forward.

As of today November 4th we have about 50000 patients active patient.

Looking at the cost of corn.

At the end of Q3, we speak about the approximately 630000.

Okay.

Some of you will remember that we had already communicated the number of about 650000 bed. Previously however, the recent review and Reclassifications cleanup of the buy data bank debt.

That you have now.

But more of a box number ensuring that button in their eating up the quality.

Needed to have the ability to mine two sided impact.

And Additionally, we're now also going to provide you with some more matrix at the grille.

<unk> to debt.

Content and the growth of that buyback.

On to slide eight.

You can see some metrics we developed that we believe so.

More details what seem to date, the bank and how it's progressing going forward.

Total number of returns of course as previously discussed.

And the dried blood spots and that's why it's much of the data by day by day at the bank.

The dry blood samples that historically in our state the banks allow US also to go back to sample and to further and that is it.

And we have the number of <unk>.

<unk> genome exome.

Decrease versus.

Based on their beta tests on a gene panel for example.

And we also have to defend yourself research content that allows us not to use samples and debate the chest for diagnostics and but also for full research and discovery pharma side with the potential of course to commercialize that.

And do you have a cell line.

This important addition, deadlines are critical for our future discovery efforts.

Of course all.

All these scaled on Nx network optimizations that engaged in that work with us for taking access to possible future patients you can see the numbers here on the slide and also how it develops in the recent quarters.

With this we are now also providing more detail.

And we plan to do that going forward.

Belief in VITAS.

To better appreciate the revel until about the value of those I think the banks going forward. Please turn to slide nine.

Here you can see.

A closer look and in terms of they ever you have particularly strong that data and samples as it relates to these areas.

TB in Mesa below it makes economic and neurological.

This is also reflected in increasing number of pharma partners that you have established in that area.

As shown by the revenue contribution most of calibration, but relatively small in nature and however, we believe it's something that will grow in the future. The parking can we start with a rather small.

Search question or our research collaborations that you have which may be low and you need the revenues those partnerships, while the research and the underlying dropped call rate progress. We believe these partnerships will expand until bill have already.

Please turn to slide 10.

Yes.

You've shown that fly did have a June event that I would like to highlight again why do you think you're uniquely positioned in the ready to eat space.

There are some.

Companies that are also in the data driven insight space and equally clearly differentiate from them and add unique competitive you have some unique competitive advantages.

One site.

We are a rare disease company.

Yes.

He doesn't have started collecting samples and insights and have built the brand and the network over 16 years.

Other companies have also more recently expressed interest in rare diseases.

I'll pass the bandwidth that brand nor the repository.

Technically.

I also want to highlight that what you exactly footprint.

That makes us unique of course it is.

Highly available to have a strong presence in the U S, especially as it relates to commercial revenues from the diagnostic business. However, overall, we believe our geographic global footprint, absolutely critical for rare diseases rare diseases are by nature.

<unk> a global challenge.

And to collect patient data.

Generates sufficient patient data to the right insight and our global footprint and our mindsets required and that's what the bottleneck.

Let's go to slide 11.

This is to remind me remind you of our business model and our patient centric business model with the buy data thing.

Our core.

And do you think that body of data bank and our all makes and AI tools.

Inside the superior cleaning for diagnostics.

For pharma services, a patient that patient clinical trial support and last but not least to develop the discovery platform to enable dresses probably orphan drug discovery in the rare disease space.

So let's go to slide 12, I just want to highlight a few updates alone.

So this is continuum, but he has done.

Awesome quarter.

Scientific progress.

Ignacio footprint impact yet from pharma and our budget.

Discovery.

So let's start with slide 13.

<unk> therapy.

As you know and I'm sure you've seen all of the recent quarter and he has that.

At the meeting.

Pricing is a number of scientific publications and they're a key space I just wanted to highlight a recent bond.

One of the Medicine, you do have a contribution to better understand your eye diseases.

Core public commitments to these patients around the world.

Not all of those of course ex U.

Sure no immediately translate into revenues, but I do believe that the highlight I would think he think expertise.

The text of our body of data banks and of course, our attractiveness as a partner.

You've covered taking a closer look at each execute and the study.

Utilizing the data from turnkey keeps by us as a bank.

Our international team, including the Iraqi children, CPT that genomic medicine and eight star.

Analyzed data on a range.

Families, who find creates a deeper understanding of syndromic structural birth defects and pace to be 12 months from the luxury could treatment for that unique medical condition.

Now these methods and buckets demonstrates frankly and ease of robustness.

Offers a unique opportunity for drug developers to capitalize on the inside.

With clinical programs.

Essentially create new approaches to find treatments for it but to date, our almost 4 million infants every year that are born with such growth.

We think that research highlights.

Well I think the key insight data bank turnkey a unique partner not just for the academic institutions with OCA for pharmaceutical and organizations.

Aberrate, who actually translate.

The findings and translate in English.

You will see that developing.

Development.

Slide 14.

In our clinical diagnostic business and we have to.

Signed an exciting partnership with twist Bioscience that he had recently announced.

Together, we will develop and commercialize custom kits for rare disease genetic diagnostics product offering will combine our expertise powered by our data bank with the manufacturing its estimates and cost and sequence. It keeps a twist bioscience to deliver multiple licenses.

We're excited to have kicked off these collaborations and the next major milestone will be progress on <unk> key development, followed by a commercial launch together with the V plan for next year.

These collaborations enables us to address the ongoing trend of decentralization of the testing area.

Our beliefs that offering decent related solutions and will pay people for rule, making to make this testing more accessible and with the help of a partner laboratories deliver raffi.

Five of top quality that genetic diagnostic for Acc's patients do you expect some announcements around our efforts there related also on the progress of our central cloud product offering in the coming months.

Now, let's look at our farmland progresses.

I had mentioned that.

Pharma revenue recovery.

Clearly, taking more time than an agnostic side, but that we have.

Confidence that with recently.

Partnerships and we are on track to get there, but one of them to highlight here is the partnership you have with them Alexa.

We signed that deal early in 2021.

And we have announced that we have now started patient enrollment.

The public vehicle for that large scale three to 4000 patient study.

And it's an exciting study and highlight a few things from our side.

First of all of course that he takes time and combining a contract to actually start seeing the enrollment of patients.

But the revenues.

Our associates have been funded.

But those are the highlights at finding rare disease patients to the right patients is the key competitive disadvantage I. Thank the team at <unk>.

That said the customers happen.

Interest in <unk>.

And also highlight that our business model and wildly pools, such collaborations actually allows us to accelerate our body of data bank and.

This partnership here for example will help us to be ended up that each cohort.

Temporal dementia patients.

In our bite at the bank.

Similar to what you had.

Low types of Denali.

And that sort of <unk> for the mind referred insights can be generated for future customers, who are working with us in the neurological disease space.

And overall, we have signed the.

Quite a number of new.

Contract.

To date in the <unk>.

In the year and actually when you look at the accumulated value of these contracts. These are multiples of what the company was able to sign in 2022.

That's a large.

Volume of new contracts that we had signed not just a late start to see some confidence for sure. It keeps us that starting from Q4 <unk>.

So on that basis will also be back on that on a growth track.

Please return to slide 16.

You have just to show the uptake on our discovery efforts and how we.

Clients can use our body of data bank for recovery partnerships going forward.

And I would like to focus on that.

The development of our S&P's avatars I mean, he has mentioned to you.

These efforts.

The June event.

And I think our aspiration and for us to be able to.

Enabling the cure for hundreds of agencies to do that in the coming years.

So Patrice we have made quite some progress to accelerate that work and make sure that the team.

<unk> and fully developed and our boards to accelerates diversity in that regard.

What exactly is the Dte's avatar.

You may have heard of preterm Eagle, Sweden.

Essentially virtual coffee as a typical about the structure of that.

Physicians can use for example to train a surgery or two modules certain that treatment with <unk>.

Impacts that.

Something like that.

<unk>.

So the duties other card.

Egypt platform on the whole DC.

We have an escalation to actually virtually model.

The whole disease, such that it can be used by researches to mine that data to come up with hypothesis on how <unk> can be fed to diagnose or potentially treat it and then take those are possibly seemed actual.

No.

Do you believe that you need at least 100 day rates with these patients.

April and to develop such an Avatar course won't stop when do you have 100 and that you think that once we are above the 100, you have enough diversity and data to start putting sabotage to regenerate.

And as you know on some of the pieces, we have already clearly achieved that milestone.

And the beauty of it also leads to a sale.

Tell models.

At least 10 up to maybe 20 patient derived cell module.

And part of the Avatar, who actually makes the.

The model completely.

At the forefront of these initiatives is pet treats and therefore, our chief Scientific Officer, who you were introduced to on our last earnings call.

And I would like to talk on his excitement around our use of our cards and how do we enable.

Happy to relate to humans.

Generating insights from hypotheses and validating each by a real patient derived cell models ultimately lead to a better understanding of classic facility enables us to take a hands on approach and testing drug candidate <unk> models. The way, we could never have done before.

And with the initiatives in place Patrice.

Third strengthen the focus on our three course T priority it's hard.

And even in peak and genetic part concludes to accelerate progress we make on those three in the coming quarters.

All right.

Sleep well.

And opportunity for St. Jude team to drive short term value and potentially partner both avatar with pharmaceutical partners. We will of course not stop there and on the.

On the success of <unk>, we have a range of prioritized the thesis that the plan then to work on and to accelerate in the next two years to come.

With that overall update them on our core business and the progress we make on our strategy I would like to hand over to Stuart.

Thank you Andrea.

Please turn to slide 18.

Our overall Q3 revenues declined by 17% year over year to 32 million euros.

This development was mainly driven by COVID-19 testing generating only 22 million euros in revenue in Q3, 'twenty to 'twenty, one versus 'twenty seven 4 million euros in Q3 2020.

This reflects the decreasing importance of the non called non called COVID-19.

19 basis and on the other side, the increasing importance of the coal basis.

I will highlight the COVID-19 business separately in a moment.

With that I would like to focus on the coal business, which includes our diagnostics and pharma segments. The coal business expanded by 13% in Q3 2021 year over year to 10 million euros compared to eight 9 billion euros for the same quarter in 2020.

This growth was mainly driven by the strong uptake of the cleanup diagnostic business, which recorded seven 3 million euros in Q3, 2021, representing 43% growth compared to the same quarter in 2020.

Pharma revenue decreased year over year from $3 8 million euros to 2.7 million euros in Q3, 'twenty to 'twenty, one, reflecting a decrease of 28% compared to the previous year.

The decrease was primarily due to the impact of the COVID-19, pandemic, which unfortunately slowed the clinical studies of our pharmaceutical partners.

In principle, we believe that recovery and time it takes a longer due to the P&L generally longer sales cycles. However, the value.

Of our pharma contracts signed in the first nine months of 2021 already exceeds the value of deals signed for the full year of 2020. So we continue to see an acceleration in the pharma revenues in the fourth quarter.

We will now be looking at Covid before going into more detailed review of the coal business performance. Please turn to slide 19.

I would like to take a few minutes to discuss how COVID-19 business. In summary, Q3, 2021 represents fourth quarter in a row, where our portion of revenues generated by the core business increased and the portion from Covid decreased at <unk>.

We foresee continuing.

We have consistently spoken about the COVID-19, basically says a noncore business, which has in the past contributed revenue and cash to send <unk> to drive the strategic execution in our core business.

Looking at the EBITDA contribution from COVID-19, which has turned negative we have made the executed determination to begin phasing out the business segment to focus on areas, where our contribution margin is anticipated to continue in order to optimize our cash spend.

Very specifically this means that we will phase out most COVID-19 related projects by the end of the year and some specific airports centers will follow in the first quarter of 2022.

We have informed central team staff internally, a face decision and related measures, which will undoubtedly be impactful as we had approximately 230 colleagues working on COVID-19 activities, which are now expected to ramp down through termination attrition and non replacement.

A planned departures.

We have agreed on an accelerated depreciation and amortization schedule for COVID-19 related assets and have carefully examined related inventory.

As in previous quarters, the cost of the segment.

The allocated to cost of goods sold which resulted in the unusual picked a picture of a negative gross margin lower.

To give some specific details the cost of sales incurred by our COVID-19 segment for the three months ended September 30 years 'twenty to 'twenty one.

What percent contract, 43% of the revenues from this segment.

This was primarily due to the reduction of COVID-19 revenues the initial steps and facing out of the Covid business led to accelerated depreciation and amortization expenses of COVID-19 related assets committed a fixed overhead cost as well as cost related to the shut off shut down of our Hamburg lap and.

Unprofitable tasting sides.

Examples of fix cost improved cost of premises, including unprofitable sites that we have since shut down I T cost and temporary wage wages at unprofitable sites, which have now been restructured.

We are also consolidating our operations to only operate at size sites that are still generating positive returns and streamlined our laboratory cost by shutting down the Hamburg, lack and increasing the taste outputs and efficiencies at our all other labs in Rostock, Frankfurt and Munich to ensure our Costco.

For what a streamlined to the needs of the segment, which will allow us to generate a positive EBITDA.

As we phase out the Covid segment, we have reassessed the useful life of all Covid related long lived assets and according to our accounting policy, which resulted in a significant write down of $3 2 million in form of accelerated depreciations and amortizations.

<unk> also recorded at <unk> 6 million write down in Covid related inventories in the quarter.

In summary, we will diligently manage the phase out of the basis as the management team are highly focused on executing on the coal business.

With that please turn to slide 20.

Pharma revenue recovery continued to be affected by the COVID-19 pandemic in the last quarter, we see in the graph that pharma revenue decreased to $9 2 million euros in the first nine months of 2021 compared to $12 3 million Euro in the same period of 2020.

The main drive us a pharma revenues, how patient identification and clinical trial support partnership.

The decline in 2021 year to date is mainly due to the successful completion of contracts by the end of 2020, and a slower rebound due to longer sales cycles and building contract backlog.

And Brian discussed earlier, the increase of signed contract value. We have seen in 2021, which is significantly above the full year 2020. So we remain confident in the acceleration of the pharma revenues in Q4.

During the first nine months of 2021, we entered into 16, new collaborations and successfully completed 25 collaborations resulting in a total of 57 active collaborations as of September 30th 2021.

Revenues from our new collaboration totaled $2 1 billion euros for the three months ended September 32021, with no upfront payments.

I previously mentioned that 57 active collaborations on the pharma side. If you take a look at the Pie chart in the bottom of the right corner you will see that we currently have one lots of patient identification collaboration which reflected six fields, where commercial stage products are already available in this case our con.

Tract with Takeda.

Most of our collaborations continue to be in the clinical development stage with clinical trial support.

All of these are based upon the set up we already have clinical development stage collaboration can be used to support clinical trials all clinical studies like we do with our Denali collaborations all the collaboration with Ikea and then Ali highlighted in recent press releases announcements.

And Brian spoke about our R&D efforts on building the disease sabotage earlier, so through labor labor touring our bio data bank for unique data driven insights, we expect to sign more collaborations in the R&D states into the future.

As discussed at all want in their site event and Jude in detail. This is an area, where we will expand and expect to have the first value share deal added over the course of 2022.

Those collaboration with generally include a value share for central team. When historically these may have been smaller contracts only put this thing research questions. Please.

Please move to slide 21.

While the ramp up in revenue in the pharma segment P. S. Protected we are extremely pleased to see the strong growth in <unk>.

Our diagnostic business in Q3.

Revenues from our diagnostics segments were seven 3 million euros for Q3, 2021, an increase of $2 2 million euros or 43% from $5 1 billion euros Q3, 'twenty to 'twenty two.

We received an order intake of approximately 14770 <unk> in our diagnostics segment in Q3 'twenty to 'twenty one representing.

An increase of approximately 46% as compared to approximately 10950 <unk> takes received in Q3 2020.

The increase in revenue was primarily related to an increase in taste request for panel testing as well as whole exome sequencing and whole genome sequencing. During the three months ended September 32021.

Total revenues from panel tasting whole exome sequencing and whole genome sequencing amounted to $5 2 million euros, representing an increase of 46% as compared to Q3 2020.

Panel testing.

Some sequencing and whole genome sequencing account for approximately 50% of the number of test request in the diagnostics segment 22, one year to date supported by a project win and in Middle East.

Please turn to slide 'twenty, two so I look at our segment adjusted EBITDA.

Here, we see the segment adjusted EBITDA, which includes the contribution from the farmer the Dx the COVID-19 segments.

We report our segment adjusted EBITDA loss of $2 5 million euros in Q3, 2021 compared to positive $9 2 million euros for the same quarter last year.

Same as for revenue segment, adjusted EBITDA was driven mainly by the decline in the COVID-19 business as discussed.

Total coal business segment adjusted EBITDA grew one 4 million euros up from negative <unk> 4 million euros in Q3 2020 reflect.

Reflecting the strong uptake in the diagnostic business after COVID-19 hit in 2020.

The picture for our two core business segment is mixed adjusted EBITDA for the diagnostic turned from minus 1.2 million Euro in Q3 2020 into a positive adjusted EBITDA of $1 1 million Euro.

Adjusted EBITDA of our pharma segment was <unk> 3 million compared to <unk> 9 billion euros in Q3 2020.

The decrease was primarily attributable to lower revenues as well as product mix.

Looking at profitability I would also comment on our organizational alignment and the coal business.

We will leverage the changes through the phase out of Covid to also optimize our overall organizational footprint related to the coal business to free up resources find basement into our coal business.

This streamlining is associated with the oboes, smaller employee base going forward, but also based on an in depth review by the new management team to ensure a focus on improving processes and efficiencies as well as streamlining our project portfolio.

We expect the results to be saving of up to 15 billion euro annualized excluding restructuring cost consisting mainly of personal related and operational expenditures and a smaller contribution from capex.

We expect a portion of the savings to be invested in the core business execution.

Overall, you should therefore expect to see DNA expenses, decreasing and over time R&D expenses increasing.

Correspondingly, we expect to record restructuring charges of below.

2 million euros in the fourth quarter related to the coal business realignment.

Please turn to slide 23 for a view of the P&L.

Looking at our income statement. This slide shows you Q3 results on the left as well as year to date results on the right and we will focus on the quarterly results for the purpose of today's discussion and compare year over year.

We have already discussed the revenue development in Dakota, and highlighted the dynamic of KOL business, whereas with COVID-19 I.

I do want to spend some time on the gross profit development at states requires some explanation.

On gross profit, we reported a loss of $5 4 million Euro in Q3, 2021 which compares to a gross profit of $10 2 million euros in Q3 2020.

And they get to gross profit as a coach unusual and the reasons behind this is again the impact of the COVID-19 business as previously discussed.

Our expenses, including other operating income increased by 1 million euros for the quarter compared to Q3 last year.

Let me comment on the biggest factors that drove the increase in expenses.

Firstly general administrative expenses increased by approximately $2 million euro.

The increase is principally due to the increased personnel costs administrative costs and additional expenditure on I T support and data centers.

Additionally, the corporate expenses, including share based compensation expenses of $1 9 billion euros and increase of <unk> 7 million euro versus the prior year quarter.

Second our R&D expenses for the quarter were approximately one 1 billion lower than Q3 'twenty two 'twenty.

Basically kris remainder represent streamlining of personal cost related development cost and then a change in the capitalization of costs last year, which led to an additional expense in the P&L.

Thirdly, our sales and marketing expenses for the quarter increased approximately <unk> 9 million euros, mainly reflecting an increase in personnel expenses.

<unk> service expenses as well as travelling expenses due to the easing of travel restrictions from COVID-19 pandemic.

In total our operating loss was 21 point.

3 million euros, a decrease of $16 6 million euros compared to a loss of $4 7 million euros in Q3 'twenty to 'twenty two.

As previously.

As Lee discussed the main change driven by the negative gross profit in the Covid business.

Now please turn to slide 24 for the cash flow and balance sheet highlights.

Okay.

As of September 30th 'twenty to 'twenty, one we had $25 7 million euros of cash and cash equivalents on our balance sheet.

In regards to all out ending step I would like outstanding that I would like to remind you of that.

As of the end of September this includes approximately $19 million euros of lease liabilities.

Looking at the movements cash flow from operating activities improved compared to last year. The main drivers were the cash generated through our COVID-19 testing business segment in the first half of the game.

Having said that we do recognize the impact of the early a fish cost decrease and the COVID-19 business and negative and cross profit.

Profit, leading to fade and contribution from the segment compared to previous quarters.

As discussed before we are managing that business on a cash basis to a phase out.

In 2021 year to date, the cash flow used in investing activities was $5 4 million euro as compared to a cash flow of 11 million euros in the nine months 2020.

Consistent with our aforementioned attention to the Covid business. The decrease is mainly due to a reduction in COVID-19 related investments.

Cash flow from financing activities to increase compared to 2021, mainly reflecting the follow on equity offering which contributed with 22 million euros in Q3 2020.

Based upon this cat development, we have in our 6K also to close a going concern issue.

With that let me hand, it back to entering full our 'twenty to 'twenty, one guidance and closing summary, please turn to page slide 25.

Thank you Randy.

So ground up todays call.

Let me touch on the financial guidance, we've seen that on the core business.

How quick recovery of our agnostic business.

And we are also quite confident based on the contract values that you signed on the pharma side that business well.

Jordan and attract these are Q4.

Of course, all by declining at although muted.

Contribution from our Covid.

Got it.

Accordingly, overall and the.

We will adjust our top line guidance and expect gross revenue for 2021 to be between 30% to 40% versus prior year.

This is mainly driven by COVID-19, however, the old so expect a core basis for the full year would be back to growth.

Mid to high single digit after a decline of 20% in 2022.

Overall.

And exiting.

Business.

The plan will be fully focused on our ready to heat.

Strengthening execution building the capability and attracting the right capital to further strengthen our leading position in Detroit in the fee space to create long term value for our shareholders.

Take holders.

And with that.

Just a few summary points on slide seven.

Core business and recovery of 30%, 43% growth in diagnostics.

In the quarter.

As mentioned, we plan to exit our COVID-19 testing business and we have started to implement a program.

Cash burn in our core.

Overall.

We remain confident on the spec.

I suspect, we probably make our core business. The overall strategic priorities have not changed accelerating our clinical diagnostics and pharma services by leveraging our unique buyers as a bank.

Great and our research capabilities.

It confirmed understanding and treatment.

Starting with core sheet, you must be seen as the partner.

So in closing I would just like to express celebrated foods as well as partners our employees and of course, our shareholders as we continue Tyler the aegis program pursue fewer in pieces.

We remain committed to delivering the basics.

Performance for our shareholders why we are adapting and capitalizing on the testing and Reggie fils directly probably landscape.

<unk> continues to grow.

With that I would like to hand, it back to the operator for Q&A.

Ladies and gentlemen, we don't they gave this question and answer session. If you wish to ask a question. Please press star one on your telephone currently for your name to be hung up.

Our first question if a fleet Philodox SVP Leerink. Please go ahead your line is open.

Yeah, Hi, Andrew.

Couple of questions.

Given the quarter, obviously, so first on gross margin viewpoint. It out your costs rose significantly as offline due to COVID-19 testing.

I appreciate that you're shutting down your COVID-19 testing operations in the first quarter.

I don't think we were expecting your gross margin to be negative. So it appears to us that that would continue into the fourth quarter.

But could you elaborate for us as we look at 2022 when do you think your gross margin.

Can return to be positive. So that's my first question and then.

Secondly on cash runway can you elaborate.

Sort of given the current expenses R&D increase.

How long do you in terms of the cash run rate how long do you have.

Further potential capital.

Raises thank you.

And maybe maybe I can comment on the first one the reason you are seeing this drop in the gross profit that are two fold and now they're seeing the negative.

<unk>.

The Covid business May know, mainly due to the development of Covid business. Our coal business. This is very important is actually developing very positively.

Compared to last year.

So you'll see an increase in the in the quarter compared to last year and the gross profit in our coal business.

From 840000 to $3 2 million.

Bush's quota and year to date, the cole has improved from $8 1 billion in gross profit last year to $9 9 billion. This year. So the underlying business of our quote activity is actually improving.

We set that it's of course correct as the gross profit and total is negative and that is mainly coming from the negative gross profit in COVID-19 with $8 6 million and this.

This is two reasons for that.

As we have told you about that how should I put it the decreased level of activity. As you have also seen in the presentation has basically a decrease from Q4 2020 into Q1 Q2 and 2021 and this has also continued in Q3.

Q3, we have been initiated.

If I may put it like that the ramp down of the activity and reducing the employee employer cost and so on.

Yeah, we have not reacted fast enough compared to the revenue decline.

But due to the revenue decline in Q3, we have been made the decision that we will ramp down to COVID-19 business in <unk>.

Cool.

Until year end.

A part of the activities, except two airports that will continue into Q1 'twenty to 'twenty two.

Having said that and then you can say of course, it will be a negative.

Our negative gross profit development continue due to these accelerated that much chasing and depreciations and then it's a little bit difficult for me to answer exactly but I can tell you in the month of October we have seen an increased activity in the COVID-19 business. So we are actually very.

Cash positive and EBITDA positive in the month of October So and we expect this to continue for the Q4 in 2020 based upon the development in India.

And the infection rates and so on you see first of all of course in Germany, but also around the world.

And so we expect that this will be very cash positive in Q4.

So no I would not I mean, this they say how should I put it this negative gross profit development you have seen.

We do not expect that to continue on a cash basis, if I may put it like that into Q4 and Q1 of 2022.

Yeah.

I believe that was the answer to your first question and then the second question was.

How long do you expect.

Our cash.

Well that will last if I may put it like that first of all I have to talk to them to say that we have disclosed a going concern issue. This means that currently our cash position cannot.

Cover the burn rate for the coming year based upon the current activities.

Therefore, we have also started a streamlining project as I explained where we will reduce the cost.

Approximately 15 million and this has also been kicked off today. This would it be implemented right now and then Oba.

The Q4 and Q1 next.

Next year, so we do plan to reduce the burn rate.

Significantly with $15 million, having said that then we also had $26 million in cash so that should not be any issues. I mean, the 26 million will not carve out another full year, but at least it will cover.

This far into the 'twenty to 'twenty two based upon the current burn rate.

Finally, it's also important to say due to our reduced.

Our cash position.

She is also typically a normal for a buyer take company like ours.

We have of course also looked into two different what do you call. It pumping are opportunities that we have.

Yeah.

And we are currently in discussion with various strategic potential partners. We are in discussions with with minority investors and maybe also some in some other potential investors.

It could either be in terms of additional equity Oh in terms of.

Issuing.

Some some depth.

So what we are how should I put it on top of this and as soon as we have more information we will of course disclose to you.

Got it.

Thanks Ryan.

On the data bank.

You reported I believe 600 and somewhere around 630 632 patients 1000 patients in the database.

That appears to be a step down from the 650000 in the quarter and I recall and then talking about this database should continue to increase obviously this is the core part of your offering.

Can you just elaborate on exactly what why the decline.

Decline happened and also on pharma.

Could you I totally appreciate that Covid is ongoing and that is.

Impacting the recovery in that business, but obviously, that's a core business development activity for you maybe just walk us through that what are some of the parts there.

That are impacting on on the ground level and when do you expect realistically for that.

Pharma business to improve because obviously that declined sequentially as well.

Yeah. So the first one the.

The quarter over quarter and that new data coming into the base at the bank.

So in Q3 again, I mean, the AD that sneaks again.

In 2000.

<unk> thousand different slide.

Quickly.

With you on that.

Thank you the exact number.

On slide eight.

Added another 22000 patients to date the banking three elements. So the trend is robust increasing quarter over quarter. The reason for that step down that you highlighted.

Uhm.

We have with our new Chief data officer.

That's really an overhaul of the data bank.

To not just take historical samples for granted but really validate but he hasn't kicked out.

<unk> is no longer a value so that has led to a reset the baseline by 40000.

Patients nothing to do with some easier I mean this is.

From historic cleanup.

Those are patients that have been in that.

Yeah.

Coming from.

A few years ago.

On the so the.

Just to summarize and see the.

The growth.

The body of data bank samples.

Strong and do you expect.

Salary that trained as such remains absolutely robust and it's also not the secret that is of course samples coming today.

More valuable than samples that you have that maybe already 10 years old you have much research constant research content at 80% level.

Of course, we are also.

The physician debate to genomic analysis, you can also see that that percentage of who genome exome sequencing with the type patients that are coming in more recent times of course, it's much higher than your thoughts a couple of years ago.

Overall, the bank the bank remains on track to be strengthened quarter over quarter.

For the farmer.

B B.

Each point in time that the recovery is not.

Despite the pandemic if he's not significantly.

It is really.

As a result of the fact that in 2020.

The company has focused in toll gates and commercial strength on Covid and such close to most new partnerships had been signed in 2020.

And then b.

We refocused on the core business, starting when I came on board.

You start progress and signed the first contract and as highlighted a contract signed in Q1 and given that.

When you signed the contract, but mostly then you start recruitment of patients and you will see the revenue staff to keep gaming.

Sure.

When I look at it.

We have emphasized in all the contracts we had signed already this year you feel very good that first of all the.

Growth is a real I mean, the year's not over but youre very.

Courage by what we see now by November or that we will have a good Q4 for pharma and with the contracts that you signed to date. He also believes that that will continue into next year.

Okay.

Thanks.

Let others nothing.

Yeah.

Thank you for your question. The next question is from cutting shoes from base.

Please go ahead.

Yeah.

Hey, guys. Thanks for the questions.

First yes, there there have been some additional COVID-19 lockdowns and restrictions lately across the world as cases start to rise again, you know how do you see that impacting the fourth quarter. Both in terms of core diagnostics and then clinical trial work for farmer.

Yeah, so thanks for that.

Until we do see an uptick uptake in testing.

Volume.

Q3 or Q4.

To be.

Strongly in Q3, it's a little bit early to tell.

Australia will be given a lot depends of course on December I mean last year, we had the tremendous uptick during the the travelling season.

Holiday season, and a lot of travel will that happen this year or not I mean, it will depend on how strong the potential lockdown wouldn't would not be in.

In Germany, if travelling continues I think we will.

Growth and relates to the cash generation showed the lockdown leads to very strong travel restriction that normally the testing volume volume would go down again, but I said I think the we are.

On track and we will execute a.

The overall ramp down off the COVID-19 business, but it might well be testing volumes continued to be high but doing it went.

Went down.

We generate some additional cash.

Cash.

As for the second question, which was you.

I have to remind me unfortunately.

Yeah. This is one that non COVID-19 business.

Yes.

Yes.

Core diagnosed or the farmer.

Correct, I mean up to now up to now we haven't.

Seen any any impact.

<unk>.

In Europe.

I think that now is the.

Somebody at the center of the.

Turning to.

But that may change.

In a month from now and even here, we don't see an impact right now.

Should it get worse that hospital.

They start to get.

Significantly overcrowded, so they would be priority pipe.

The more standard.

Testing work that they do be made.

Had some impact of some slowdown on our.

Tasty or clinical trials.

That's pure speculation you haven't seen any to date.

So don't expect it to be in any way.

Happen compared to how you bought last year I mean, we do have a global policeman and you're not.

Over presented demand region given that.

There is.

Different phases of that but then you can deepen region and the overall do not expect.

The substantial.

Even if in Europe convert to see smaller slowdown in the months to come.

Okay got it and can you just talk a little bit more about what youre doing but you know when will those custom kit be available and how do you think they'll improve or differentiate your day.

Yes.

Yeah.

Chemical first thing to say would you expect these to be rolled out next year in terms of exact father and blood brain I think b given that <unk> collaborations with fleets that came up.

Just two months before we have alignment with them, but the teams are working on that and we expect rapid progress and has highlighted we expect to have further announcements in our central cloud.

Each year that will keep you also there somewhere.

Insights into how we plan to accelerate the rollout of our decentralized testing solution.

Alright, great. Thank you.

Thank you for your question we have the next question from Sushi now from BTG. Please go ahead.

Hi, Thanks for taking the question.

Just out of curiosity of the new pharma contracts that you've signed this year years ago or even the last I would say you know what the 18 months or even two years.

Do you have a sense of roughly what percentage is coming from.

This thing 30, 30 plus customers versus.

Precise coming from new customers.

Yes.

But have you looked at it in terms of number of contracts. The majority are from new customers in terms of value and some of the existing contracts of course have been significant size. Welcome you want a more from biotech companies and start smaller and if you will.

Asked for our values made roughly I would say about half.

Okay, Gotcha and for the ones that have not that have completed their projects and have not signed on for new projects.

I'd be curious to see what are the main driver of it.

Or do you have a sense if there's some.

Yeah.

Some of them arent.

Bye.

Specifically working on the rare disease with a certain scientific approach and then if that come from.

Sales and of course, the program stops where I think the company given that it would be focused on one specific.

Project of course.

Most likely ebit's to exceed store it needs would have other priorities then you need to if you're starting to next collaborations with us and but.

Overall, I would say that.

Relatively rare.

Rare I mean do you have a lot of repeat.

Customers and I think of the all the larger partnerships that you have I think it needs to date I can of course not to make a forward looking statement that to date. These partnership state by enlarge tends to who.

To continue.

Gotcha, and then just on the diagnostic side on the core diagnostics business side do you have infrastructure in place currently in your view to be able to achieve kind of your long term growth rate target or are there kind of further efforts in.

And quite frankly that are underway.

Yes.

Continuing to drive growth there.

Infrastructure.

I guess it depends what you mean as it relates to our laboratory capacity I think you have like he takes at least four different lease term.

We look at our.

Central cloud, which is.

Call it infrastructure as it relates to working with decentralized labs that we are.

Building up and we will share as I mentioned in a couple of months and where we stand and what you can expect.

The investments there are not significant but still I think it's an important project for us.

When you look at the commercial infrastructure.

I would say and we have highlighted that in the past.

We will have to get it in the U.

And we do have a presence in the U S. But you can see the reason not to be developed at the stage that we would like and that's also why we are exploring partnership opportunities in the U S because of course.

Options always strengthened ourselves.

Potentially there.

Partner with someone who has that footprint already even in the U S and the interest that our urgency is value proposition.

Co commercialization partnership.

Great. Thank you for taking the question.

Alright, we are already a little bit over here before I mean should we take one more.

There are no further liquidity shelter.

Nick on for even better.

Got it.

Alright, I think that limit we can close the call.

Yes.

Yep, Thanks, very much for joining us and.

Talk to you during the next quarter at our investor events as well.

Sure.

Thank you and good bye bye bye everyone.

Sure.

[music].

[music].

[music].

Hello and welcome.

You for joining us to discuss our third quarter 2021 results, which were reported earlier today.

You can view the presentation of the related press release on Central venous website for those unable to view the webcast you'll find the corresponding slides at central team, our investors thought synergy in dot com.

Referring to slide two before we begin I would like to remind everyone that statements. We make on this conference call will include forward looking statements within the meaning of the U S securities laws, including those regarding our strategic plans development programs future financial results.

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

Forward looking statements in this presentation speak only as of today November 24th and we undertake no obligation to update or revise any of these statements to reflect future events or developments.

Sept as required by the law.

Additional information regarding these statements appears in our SEC filings.

If you turn to slide three it is my pleasure to introduce you to today's because our chief Executive Officer, Andrew Oswald in Green They used our chief financial Officer, we.

We will first begin with a general business update followed by a summary of our financial results for the last fiscal quarter ending September 30th. We will then open up the call to Q&A session before closing remarks.

Kelly request already that you're asking Mexico three questions.

I would now like to turn the call over to Endrin, Please turn to slide four and drilling.

Thank you Lynn.

Hello, everyone. Thank you for joining us.

As Linda said I will start with a business update on our core business.

And also some updates on the progress you're making on implementing our strategy as presented at the two metrics.

And as it relates to our Covid statement and our plan would that run going forward and also how we plan to restructure.

The company to be feet, there for future growth those two elements.

Financial review and then we will aim to outlook and of course to the Q&A.

So.

Q3.

Our Q2 performance reflects progress.

Execution, making meaningful strides on our strategic priorities.

You outlined them basically.

As mentioned, we are continuously expanding our data driven approach to reinvent the way you described with color into that.

Yeah.

In this last quarter, we saw solid revenue performance delivering core basis for the second consecutive quarter.

The core business, which is our diagnostics pharma segment grew.

30% versus Q3 last year.

Yeah.

And we're very happy to see that our core business is back to growth.

COVID-19 testing revenue not continue and contribute to over overall offline.

Seeing a shifting.

And our exiting proactively ensuring our efforts are focused on our core business in pharma segment.

This is in line, what we had communicated previously.

Hormone you're excited about the continued growth of our core diagnostic business segment observe computers.

In that theoretically added approximately 22000 individuals through our extensive body of data bank and continue to demonstrate our commitment to superior diagnostic offerings for it.

You can see steady increase towards our goal of adding 1 million patients alibi.

The next caller.

And I don't know the cost a bit more detail the different segments.

Please turn to slide three.

Yeah.

Yeah on the grass seed the mentioned, 13% revenue in our core business more specifically on the diagnostics segment.

We reported order intake 14770 <unk>.

Up 46% over the previous quarter.

In this segment, we have seen the business returned to growth up 43% year over year.

Yeah, each state the constrained in the last quarters, and it's nice to see the business mature.

Our consecutive quarter of diagnostic segment growth.

We believe the currently after the vote, but not for the full year.

Globally, probably the widest range of team.

<unk> value proposition.

Turning to call him a pharma segment.

And experiencing a protracted recovery as compared with the diagnostic segment pharmaceutical segment revenue was down year over year.

But as we have highlighted in the past is mostly the result of a delay.

Of that revenue as it relates to the timing pace and finding a new contract with a pharma partner until that contract translate into revenues.

However, we have now at 57 academic collaborations.

You want to start that in recent quarters.

The OLED bond, who works revenue generation.

And so we are quite confident that the pharma business will return back to growth starting with the Q4 I will share some further details on that.

Later on.

Please turn to slide seven.

Yeah.

I look at dollar knowledge repository, the number of sample order intakes in our coal business that's not.

And pharma is up 12%.

This was driven primarily by decrease in diagnostic cases, the attachment rates with 46% versus the same period in 2022.

The pharma companies.

And while we're making progress on block data.

The bank, which includes samples as well as state and so on the graph on the right you can see the number it's another data repository over the course of 2021 added about 70000 feet will summarize the key things that they did that.

You can meet all the body of data things could be the core of our differentiation and our basis for revolutionizing the development and eventually to discovery.

Yes.

They did in previous quarters, we kicked off an initiative in 2021.

You and upgrades to buy a big bank.

By data banks that buy now has stayed the backs the cotai.

So you can imagine that's about the right time to look at it cleans up and strengthen content in the label.

This improves the setting up a good base of governance as well as making sure our approach to growing device I think is true.

Strategically at our Investor event.

Julie.

Our CTO office or the chemo garner shared with you insights in how we plan to upgrade our data bank and Nevada.

<unk> based on that he has them first.

Dates or insights.

In the past we have communicated the number of patients at the summary matrix with a newly defined by the banks wheelchair and some deeper insights going forward.

As of today November 4th we have about 60000 patients active patient.

Bandwidth costs incurred.

At the end of Q3, you speak about the approximately 630000.

Some of you will remember that we had already communicated the number of about 650000 bed. Previously however, the recent review and Reclassifications cleanup of the buy data bank and.

That you have now that.

But more robust number.

That button in their eating up the quality that we needed to have the ability to mine it.

In fact.

And Additionally, we're now also going to provide you with some more matrix that relates to that.

Content and the growth of that buyback turning to slide eight.

You can see some metrics we developed that we believe so.

More details, let's see the data bank and how it's progressing going forward.

Do you have total number of returns of course accretive Scott He has been the dried blood spots and that's why it's much of the data, but the body of data bank. So it's a dry blood spot samples stored in our state the banks allow US also to go back to sample and can further and that is it.

And we have the number of <unk>.

<unk>.

Food versus.

Based on their beta tests on a gene panel for example.

You also have to defend yourself research content that allows us not to use the samples and debate the chest for diagnostics and but also for full research and.

The discovery pharma side with the potential of course to commercialize that.

And do you have other cell lines.

Horton Division deadlines are critical for our future discovery efforts.

And then of course.

All of these fields on an excellent network optimizations that engaged in that work with us for getting access to possible future patients you can see the numbers here on the slide and also how it develops in the recent quarter.

With this we are now also providing more detail.

And we plan to do that going forward.

Beliefs in these debates.

To better appreciate the revel until about the value of I think the banks going forward. Please turn to slide nine.

Here you can see.

A closer look and in terms of they ever you have particularly strong.

Data and samples as it relates to these areas.

Eric.

In Mr below that makes up <unk> and neurologic club.

This is also reflected in increasing number of pharma partners that you have established in that area.

As shown by the revenue contribution most of them calibrations are relatively small in nature and however, we believe it's something that will grow in the future. The parking. Please start with lots of small research question or our research collaborations that you have which may be no need for Arabian news those partnerships, while the research and the.

Throughout this call we progress <unk>.

These partnerships will expand and sold them already.

Please turn to slide 10.

You showed that slide that I have a June event that I would like to highlight again why do you think you are.

Uniquely positioning the ready to eat space.

There are some.

Companies that are also in the data driven insight space and equally clearly differentiate from them and add unique competitive you have some.

Unique competitive advantages on one side we.

We are a rare disease company.

In rare diseases and have started collecting samples and insights and have built the brand and the network over 16 years.

Some of the other companies have also more recently expressed interest in rare diseases.

Perhaps the bandwidth.

Grand nor the repository that he did.

Technically I also want to highlight that what you exactly.

Footprint and that makes us unique of course.

It's highly valuable to have a strong presence in the U S, especially as it relates to commercial revenues from a diagnostic treatment.

Overall, we believe our geographic global footprint is absolutely critical.

Rare diseases rare diseases are by nature, and a global challenge and to collect patient data and generate sufficient patient data to the right insight and our global footprint and our mindsets required and that's what the buggy.

Let's go to slide 11.

This is to remind me remind you of our business model and our patient centric business model with the buy data thing at our core.

And using that data bank and our I'll make some AI tools.

Inside the <unk> clinical diagnostics.

For pharma services or <unk>.

That would be the patient clinical trial support.

And last but not least.

Developed a discovery platform to enable dresses probably orphan drug discovery in the race.

So let's go to slide 12, I just want to highlight a few updates along.

So it is continuing but he has done in the recent quarter.

Scientific progress.

Our diagnostic footprint impact yet from pharma and our budget.

Discovery.

So let's start with slide.

<unk> therapy.

As you know and I'm sure you've seen all of the recent quarters and he has that.

At the meeting.

Presence a number of scientific publications, either a key space I just wanted to highlight a recent bond.

Medicine, you do have a contribution to better understand the rare diseases.

Core public commitment to rare disease patients around the world.

<unk>.

Not all of those of course as you for.

For sure no will immediately translate into revenues.

The highlight I would think you think expertise.

The deaths are followed by a data banks and of course, our attractiveness as a partner and new licensees.

You've covered taking a closer look at the exit here and the study utilized data from turnkey keeps by the bank.

Our need for national team, including the Iraqi children CPT genomic medicine eight start.

And have analyzed data on a range.

Families find them to create a deeper understanding of syndromic structural birth defects and pace to be 12 months from the logical treatment for that unique medical condition.

Now these methods and buckets demonstrates frankly.

Smith and offers a unique opportunity for drug developers to capitalize on the inside and with clinical programs essentially create new approaches to find treatments for it but to date, our almost 4 million infants every year that are born with touch.

We think that research highlights.

I think the team inside data bank turnkey a unique partner not just for the academic institutions with OCA for pharmaceutical and organization Collaborates, who actually translate scientific findings and translate them.

<unk> seen a rapid development.

Slide 14.

In our clinical diagnostic business and we have signed an exciting partnership with twist Bioscience that he had recently announced.

Together, we will develop and commercialize <unk> coffee <unk> tea already seed genetics diagnostics.

Operating the combined.

Deep expertise powered by our data bank with the manufacturing investment and cost to sequence it keeps a twist bioscience.

Multiple licenses.

We're excited to have kicked off these collaborations and the next major milestone will be progress on <unk> key development, followed by a commercial launch together with the deep planning for next year.

Collaborations enables us to address the ongoing trend of decentralization of the testing area.

It's our belief that offering keeps insulate solutions.

Paying people for road, making to make this testing more accessible and with the help of partner laboratories to deliver rapid and reliable top quality that genetic diagnostic for these patients.

Do you expect some announcements around our efforts there related also on the progress of our central cloud, but it's also in the coming months.

Now, let's look at our pharma programs in flight.

I had mentioned that.

The pharma revenue recovery.

Clearly taking more time than in diagnostic side that said, we are confident that with recently.

These shapes than we are on track to get there, but one I want to highlight here is the partnership you have with them Alexa.

We signed that deal early.

Early in 2021.

And we have announced that you have now started patient enrollment.

Public vehicle for that large scale three to 4000 patient study.

It's an exciting study highlights.

Highlights of a few things from our side.

First of all of course that he takes time.

Finding a contract to actually start seeing the enrollment of patients.

The revenues.

Associated with that.

But those are the highlights at finding ready to keep patients to the right patients is the key competitive disadvantage that same team.

That said the customers happen I E.

Interesting.

And also highlight that our business model and wildly pools, such collaborations actually allows us to accelerate our body of data bank.

These partnerships here for example will help us to be ended up that each cohort.

Temporal dementia patients.

In our bite at the bank.

Similar to what you had.

Low patented denali.

The first is they tend to be sort of mind further insights can be generated for future customers, who are working with us in that.

Logic would be some space.

And overall <unk>.

I've signed the.

Quite a number of new contracts.

To date they need.

In the year and actually when you look at the accumulated value of these contracts you need a multiple of what the company was able to sign in 2022.

So that's a large.

Volume of new contracts that we had signed not just a late start to see some confidence for sure. It keeps us that starting from Q4, we think that the pharma business will also be back on that on a growth track.

Please return to slide 16.

You have just to show an update on our discovery.

And how we.

Clients can use our body of data bank for probably partnerships going forward.

And I would like to focus on that.

The development of our recipes avatars I mean, he has mentioned to you.

These efforts.

Our June event.

And I think our aspiration and perhaps to be able to.

Enabling the cure for hundreds of ideas to do that in the coming years.

So be it.

Patrice we have made quite some progress to accelerate that work and make sure that.

Team and fully developed and our boards to accelerates diversity in that regard.

What exactly is it <unk>.

You may have heard of the term digital twin which you can see essentially virtual copy of a typical about the structure of that.

Sufficient can use for example to train a surgery or two modules have absorbed from that treatment with <unk>.

Impacts that.

Turning the page.

<unk>.

So they can keep other card is that each of the platform on the whole DC and by which we have an escalation to actually virtually model the whole disease such that he can be used by researches to mine that data to come up with hypothesis on how <unk> can be fed to diagnose or potentially treated.

Then takes us about completing the actual model.

I believe that you need at least 100 day rates with these patients to be April and to develop such an avatar course won't stop when do you have the 100 and that you think a bunch of a bus 100, you have enough diversity and data starts with avatars to regenerate.

And as you know on some diseases, we have already clearly to keep it that says that milestone.

And the beauty of it also leads to a <unk> model.

At least 10 up to maybe 20 patient derived cell model.

And part of the Avatar, who actually makes the.

Each of the mother company.

At the forefront of each initiative is pet treats and therefore, our chief Scientific Officer, who you where you could use to in our last earnings call.

And I would like to pass on these exciting around I would use a la carte and have been April and were happy to late lumen.

Generating insights from hypotheses and validating each by a new patient lifestyle models ultimately lead to better understanding.

This facility enables us to take a hands on approach and testing drug candidate <unk> models. The way, we could never have done before.

And with the initiatives in place Patrice.

Third strengthen the focus on our three course T priority it's hard.

<unk> and Neiman peaked and genetic part concludes the.

The progress we make one build threep in the coming quarters.

And I'll eat sleep.

Sleep well.

And opportunity for St. Jude team to drive short term value and potentially partner those arbitrage with pharmaceutical partners. We will of course, not stop there and on the and.

On the success of <unk>, we have a range of prioritized set you plan them to work on and to accelerate in the next two years to come.

With that overall update them on our core business and the progress we make on our strategy I would like to hand over to Stuart.

Thank you Andrea.

Please turn to slide 18.

Our overall Q3 revenues declined by 17% year over year to 32 million euros.

This development was mainly driven by COVID-19 testing generating only 22 million euros in revenue in Q3, 2021 versus 27 4 million euros in Q3 2020.

This reflects the decreasing importance of the non cold non called COVID-19.

19 basis and on the other side, the increasing importance of the coal business.

I will highlight the COVID-19 business separately in a moment.

With that I would like to focus on the coal business, which includes our diagnostics and pharma segments. The coal business expanded by 13% in Q3 2021 year over year to 10 billion euros compared to $8 9 billion euros for the same quarter in 2020.

This growth was mainly driven by the strong uptake of the cleanup diagnostic business, which recorded $7 3 million euros in Q3, 2021 representing 43% growth compared to the same quarter in 2020.

Pharma revenue decreased year over year from $3 8 million euros to 2.7 million euros in Q3, 2021, reflecting a decrease of 28% compared to the previous year.

The decrease was primarily due to the impact of the COVID-19, pandemic, which unfortunately slowed the clinical studies of our pharmaceutical partners.

In principle, we believe that recovery and pharma takes longer due to the P&L generally longer sales cycles. However, the value.

Our pharma contracts signed in the first nine months of 2021 already exceeds the value of field sign for the full year of 2020. So we continue to see an acceleration in the pharma revenues in the fourth quarter.

We will now be looking at Covid before going into more detailed review of the coal business performance. Please turn to slide 19.

I would like to take a few minutes to discuss how COVID-19 business. In summary, Q3, 2021 represents fourth quarter in a row, where our portion of revenues generated by the core business increased and the portion from Covid decreased a trend we foresee continuing.

We have consistently spoken about the COVID-19, basically says a noncore business, which has in the past contributed revenue and cash to send to again to drive the strategic execution in our core business.

Looking at the EBITDA contribution from COVID-19, which has turned negative we have made the executed determination to begin phasing out the business segment to focus on areas, where our contribution margin is anticipated to continue in order to optimize our cash spend.

Very specifically this means that we will phase out most COVID-19 related projects by the end of the year and some specific airports centers will follow in the first quarter of 2022.

We have informed central team staff internally, a face decision and related measures, which will undoubtedly be impactful as we had approximately 230 colleagues working on COVID-19 activities, which are now expected to ramp down through termination attrition and non <unk>.

Placement of planned departure as well.

We have agreed on an accelerated depreciation and amortization schedule for COVID-19 related assets and have carefully examined related inventory.

As in previous quarters, the cost of the segment.

Ainley allocated to cost of goods sold which resulted in the unusual picked a picture of a negative gross margin lower.

To give some specific details the cost of sales incurred by our COVID-19 segment for the three months ended September 32021.

Represent 143% of the revenues from this segment.

This was primarily due to the reduction of COVID-19 revenues the initial steps and facing out of the Covid business led to accelerated depreciation and amortization expenses of COVID-19 related assets committed fixed overhead cost as well as cost related to the shut off shut down of our Hamburg lap and.

Unprofitable tasting sides.

Examples of fix cost improved cost of fragrances, including unprofitable sites that we have since shut down I T cost and temporary wage wages at unprofitable sites, which have now been restructured.

We are also consolidating our operations to only operate at size sites that are still generating positive returns and streamlined our laboratory cost by shutting down the Hamburg and increasing the taste outputs and efficiencies at our all other labs in Rostock, Frankfurt and Munich to ensure our Costco.

For what a streamlined to the needs of the segment, which will allow us to generate a positive EBITDA.

As we phase out the Covid segment, we have reassessed the useful life of all Covid related long lived assets and according to our accounting policy, which resulted in a significant write down of $3 2 million in form of accelerated depreciations and amortizations.

We have also recorded a <unk> 6 million write down in Covid related inventories in the quarter.

In summary, we will diligently manage the phase out of the basis as the management team are highly focused on executing on the coal business.

With that please turn to slide 20.

Pharma revenue recovery continued to be affected by the COVID-19 pandemic and the last quarter, we see in the graph that pharma revenue decreased to $9 2 million euros in the first nine months of 2021 compared to $12 3 million Euro in the same period of 2020.

The main drive us a pharma revenues, how patient identification and clinical trial support partnership.

The decline in 'twenty or 'twenty, one year to date is mainly due to the successful completion of contracts by the end of 2020, and a slower rebound due to longer sales cycles and building contract backlog.

And Brian discussed earlier, the increase of signed contract value, but you have seen in 2021, which is significantly above the full year 2020. So we remain confident in the exploration of the pharma revenues in Q4.

During the first nine months of 'twenty or 'twenty, one we entered into 16, new collaborations and successfully completed 25 collaborations resulting in a total of 57 active collaborations as of September 32021.

Revenues from our new collaboration totaled $2 1 billion euros for the three months ended September 32021, with no upfront payments.

I previously mentioned the 57 active collaborations on the pharma side. If you take a look at the Pie chart and in the bottom off the right. Kona you will see that we currently have one lots of patient identification collaboration which reflected six fields, where commercial stage products are already available in this case our contracts.

With Takeda.

Most of our collaborations continue to be in the clinical development stage with clinical trials to support.

All of these are based upon.

Set up we already have clinical development stage collaboration can be used to support clinical trials all clinical studies like we do with all the Denali collaborations all the collaboration with Ikea and then Ali highlighted in recent press releases announcements.

And Brian spoke about our R&D efforts on building the disease sabotage earlier, so through lever littering, our bio data bank for unique data driven insights, we expect to sign more collaborations in the R&D states into the future.

As discussed at all went in they save anything Jude in detail. This is an area, where we will expand and expect to have the first value share deal added over the course of 2022.

Those collaboration with generally include our values have a central team.

Historically these may have been smaller contracts only put this thing research questions. Please.

Please move to slide 21.

While the ramp up in revenue in the pharma segment of P. S. Protected we are extremely pleased to see the strong growth in <unk>.

Our diagnostic business in Q3.

Revenues from our diagnostics segments were seven 3 million euros for Q3, 2021 an increase of $2 2 million euros for 43% from $5 1 billion euros Q3, 'twenty to 'twenty two.

We received an order intake of approximately 14770 <unk> in our diagnostics segment in Q3 'twenty to 'twenty one representing.

An increase of approximately 46% as compared to approximately 10950 <unk> takes received in Q3 2020.

The increase in revenue was primarily related to an increase in taste request for panel testing as well as whole exome sequencing and whole genome sequencing. During the three months ended September 32021.

Total revenues from panel titled staying whole exome sequencing and whole genome sequencing amounted to $5 2 million euros, representing an increase of 46% as compared to Q3 2020.

Panel testing.

Some sequencing and whole genome sequencing account for approximately 50% of the number of test request in the diagnostics segment 20 to 22, one year to date supported by a project win and in Middle East.

Please turn to slide 'twenty, two so I look at our segment adjusted EBITDA.

Here, we see the segment adjusted EBITDA, which includes the contribution from the farmer the Dx the COVID-19 segments.

We report our segment adjusted EBITDA loss of 2.5 million euros in Q3, 2021 compared to positive $9 2 million euros for the same quarter last year.

Same as for revenue segment, adjusted EBITDA was driven mainly by the decline in the COVID-19 business as discussed.

Total coal business segment, adjusted EBITDA grew 1.4 million euros up from negative <unk> 4 million euros in Q3 2020 replay.

Reflecting the strong uptake in the diagnostic business after COVID-19 hit in 2020.

The picture for our two core business segment is makes adjusted EBITDA for the diagnostic turned from minus 1.2 million Euro in Q3 2020 into a positive adjusted EBITDA of $1 1 million Euro.

Adjusted EBITDA of our pharma segment was <unk> 3 million compared to <unk> 9 million euros in Q3 2020.

The decrease was primarily attributable to lower revenues as well as product mix.

Looking at profitability I would also comment on our organizational alignment and the coal business.

We will leverage the changes through the phase out of Covid to also optimize our overall organizational footprint related to the coal business to free up resources for investment into our coal business.

This streamlining is associated with the oboes, smaller employee base going forward, but also based on an in depth review by the new management team to ensure a focus on improving processes and efficiencies as well as streamlining our project portfolio.

We expect the results to be saving of up to 15 billion euro annualized excluding restructuring cost consisting mainly of personal related and operational expenditures and a smaller contribution from capex.

We expect a portion of the savings to be invested in the core business execution.

Overall, you should therefore expect to see DNA expenses, decreasing and over time R&D expenses increasing.

Correspondingly, we expect to record restructuring charges of below.

2 million euros in the fourth quarter related to the coal business realignment.

Please turn to slide 23 for a view of the P&L.

Looking at our income statement. This slide shows you Q3 results on the left as well as year to date results on the right and we will focus on the quarterly results for the purpose of today's discussion and compare year over year.

We have already discussed the revenue development in the quarter and highlighted the dynamic of KOL business, whereas with COVID-19 I.

I do want to spend some time on the gross profit development at stage requires some explanation.

On gross profit, we reported a loss of $5 4 million Euro in Q3, 2021 which compares to a gross profit of $10 2 million euros in Q3 2020.

And they get to gross profit as a coach unusual and the reasons behind this is again the impact of the COVID-19 business as previously discussed.

Oh, I expenses, including other operating income increased by 1 million euros for the quarter compared to Q3 last year.

Let me comment on the biggest factors that drove the increase in expenses.

Firstly general administrative expenses increased by approximately 2 million euro.

The increase is principally due to the increased personal cost administrative costs and additional expenditure on I T support and data centers.

Additionally, the corporate expenses, including share based compensation expenses of $1 9 billion euros and increase of <unk> 7 million euro versus the prior year quarter.

Second our R&D expenses for the quarter were approximately one 1 million lower than Q3 'twenty two 'twenty.

Basically kris remainder represent streamlining of personal cost related development cost and then a change in the capitalization of costs last year, which led to an additional expense in the P&L.

Thirdly, our sales and marketing expenses for the quarter increased approximately <unk> 9 million euros, mainly reflecting an increase in personnel expenses.

<unk> service expenses as well as travelling expenses due to the easing of travel restrictions from COVID-19 pandemic.

In total our operating loss was 21 point.

3 million euros, a decrease of $16 6 million euros compared to a loss of $12 7 million euros in Q3 'twenty to 'twenty two.

As previously discussed the main change driven by the negative gross profit in the Covid business.

Now please turn to slide 24 for the cash flow and balance sheet highlights.

Okay.

As of September 30th 'twenty to 'twenty, one we had 25.7 million euros of cash and cash equivalents on our balance sheet.

In regards to out ending step I would like outstanding debt I would like to remind you of that.

As of the end of September this includes approximately $19 million euros of lease liabilities.

Looking at the movements cash flow from operating activities improved compared to last year. The main drivers were the cash generated through our COVID-19 testing business segment in the first half of the game.

Having said that we do recognize the impact of the early a fish cost decrease and a COVID-19 business and negative four loss profit leading to fade and contribution from the segment compared to previous quarters.

As discussed before we are managing that business on a cash basis to a phase out.

In 2021 yesterday at the cash flow used in investing activities was $5 4 million euro as compared to a cash flow of 11 million euros in the nine months 2020.

Consistent with our aforementioned attention to the Covid business. The decrease is mainly due to a reduction in COVID-19 related investments.

Cash flow from financing activities decreased compared to 2021, mainly reflecting the follow on equity offering which contributed with 22 million euros in Q3 2020.

Based upon this cat development, we have in our 6K also to close a going concern issue.

With that let me hand, it back to entering full our 'twenty to 'twenty, one guidance and closing summary, please turn to page slide 25.

Thank you Randy.

So ground up todays call.

Let me touch on the financial guidance.

We've seen that on the core business.

A quick recovery of our diagnostic business.

And we are also quite confident based on the contract values that you signed on the pharma side that business well.

Jordan and attract visa Q4, yeah of course, I would like to.

Finding at also.

Contribution ETF amount of Covid.

Got it.

Accordingly overall b.

We will adjust our top line guidance and expect gross revenue for 2021 to be between 30 to 40.

40% versus prior year.

This is mainly driven by COVID-19. However, they also expect our core basis for the full year would be back to growth.

Mid to high single digit after a decline of 20% in two.

2022.

Overall.

We actually.

The Covid business.

The plan will be fully focused on our ready to heat season, strengthening execution, yielding to catch the DVD and attracting the right capital.

To strengthen our leading position in Heathrow agency space to create long term value for our shareholders and stakeholders.

And with that.

Just a few summary points on slide seven.

Or because the recovery of 30%.

43% growth in diagnostic.

I cannot speak.

In the quarter.

As mentioned, we plan to exit our COVID-19.

<unk> business and we have started to implement a program.

Yeah.

Cash burn in our core.

Yes.

Overall.

Consequently on the.

I think we probably make our core basis, whereas the overall strategic priorities have not changed accelerating our global medical diagnostics and pharma services by leveraging our unique buyers Asia Bank.

And our research capabilities.

The understanding and treatment.

Pieces, starting with core sheet and he must be seen as the partner.

So in closing I would just like to express a breakfast foods as well apartment.

And of course, our shareholders as we continue pilot program pursue fewer people.

We remain committed to delivering the best patient.

Performance for our shareholders, while we are adapting and capitalizing on that testing in rare disease directly for landscape maybe.

<unk> continues to grow.

With that I would like to hand, it back to the operator for Q&A.

Ladies and gentlemen, we don't they gave the question and answer session. If you wish to ask a question. Please press star one on your telephone currently for your name to be hung up.

Our first question if a fleet philodox from SVP Leerink. Please go ahead. Your line is open.

Yeah, Hi, Andrew.

Couple of questions.

Given the quarter, obviously, so first on gross margin viewpoint. It out your costs rose significantly as outlined due to COVID-19 testing.

I appreciate that you're shutting down your COVID-19 testing operations in the first quarter.

I don't think we were expecting your gross margin to be negative. So it appears to us that that would continue into the fourth quarter.

But could you elaborate for us as we look at 2022 when do you think your gross margin.

<unk> returned to be positive. So that's my first question and then.

Secondly on cash runway can you elaborate.

Sort of given the current expenses R&D increase.

How long do you think in terms of the cash run rate how long do you have.

Further potential capital.

Raises thank you.

And maybe maybe I can comment on the first one the reason you are seeing this drop in the gross profit that are two fold and now they're seeing the negative.

<unk>.

The Covid business May know, mainly due to the development of Covid basis, our coal business. This is very important is actually developing very positively.

Compared to last year.

So you'll see an increase in the in the quarter compared to last year on the gross profit in our coal business.

From 840000 to $3 2 million.

Quota bushes quota and year to date. The cole has improved from $8 1 billion in gross profit last year to $9 9 billion. This year. So the underlying business of our co activity is actually improving.

Except that it's of course correct as the gross profit and total is negative and that is mainly coming from the negative gross profit in COVID-19 with $8 6 million and this is two reasons for that.

As we have told you about that how should I put it the decreased level of activity that you have also seen in the presentation has basically a decrease from Q4 2020 into Q1 Q2 and 2021 and this has also continued in Q3.

Q3, we have been initiated.

If I may put it like that the ramp down of the activity and reducing the employee employer.

Cost and so on.

Yeah, we have not reacted fast enough compared to the revenue decline.

But due to the revenue decline in Q3, we have been made the decision that we will ramp down to COVID-19 business in <unk>.

Sure.

Until year end for the major part of the activities, except two airports that will continue into Q1 'twenty to 'twenty two.

Having said that then you can say of course, it will be a negative.

The negative gross profit development continue due to these accelerated that much chasing and depreciations and then it's a little bit difficult for me to answer exactly but I can tell you in the month of October we have seen an increased activity in the COVID-19 business. So we are actually very.

Cash positive and EBITDA positive in the month of October So and we expect this to continue for the Q4 in 2020 based upon the development in India.

And the infection rates and so on you see first of all of course in Germany, but also around the world.

And so we expect that this will be very cash positive in Q4.

So no I would not I mean, this they say how should I put it this negative gross profit development you have seen.

We do not expect that to continue on a cash basis, if I may put it like that into Q4 and Q1 of 2022.

Yeah.

I believe that was the.

The answer to your first question and then the second question was.

How long do you expect.

Our cash.

Well that will last if I may put it like that first of all I have to talk to them to say that we have disclosed a going concern issue. This means that our currently our cash position cannot.

Cover the burn rate for the coming year based upon the current activities.

Therefore, we have also started a streamlining project as I explained why we will reduce the cost.

Approximately 15 million and this has also been kicked off today. This would it be implemented right now and then Oba.

The Q4 and Q1 next.

Next year, so we do plan to reduce the burn rate.

Significantly with $15 million, having said that then we also had $26 million in cash so that should not be any issues. I mean, the 26 million will not carve out another full year, but at least it will cover.

This far into the 'twenty to 'twenty two based upon the current burn rate.

Finally, it's also important to say due to our reduced our cash position, which is also typically a normal for a buyer take company like ours.

We have of course also looked into two different what do you call. It funding opportunities that we have.

And we are currently in discussing with various strategic potential partners. We are in discussions with with minority investors and maybe also some in some other potential investors.

It could either be in terms of additional equity Oh in terms of.

Issuing.

Some some depth.

So what we are how should I put it on top of this and as soon as we have more information we will of course disclose to you.

Got it.

Thanks Ryan.

On the data bank.

You reported I believe 600 and somewhere around 630 632 patients a thousand patients in the database.

That appears to be a step down from the 650000 in the quarter and I recall and then talking about this database should continue to increase obviously this is the core part of your offering.

Can you just elaborate on exactly what why this decline.

Decline happened and also on pharma.

Could you I totally appreciate that Covid is ongoing and that is.

Impacting the recovery in that business, but obviously, that's a core business development activity for you maybe just walk us through that what are some of the parts there.

That are impacting on on the ground level and when do you expect realistically for that.

The pharma business to improve because obviously that decline sequentially as well.

Yes.

First of all on the.

Quarter over quarter that new data coming into the body of data bank.

So in Q3 again, I mean, the AD that are significant.

T D.

<unk> thousand different slide.

It could be.

With you on that.

The exact number.

On slide eight.

Added another 22000 patients to the data bank in Q3 alone. So the trend is robust increasing quarter over quarter. The reason for that step down that you highlighted.

<unk> nature.

We have with our new Chief data officer.

Thought that really as an overhaul of the data bank.

To not just take historical samples for granted but really validate but he hasn't kicked out that you think is no longer value. So that has led to a reset of the baseline by 14000.

Patients nothing to do with some easier I mean do you see some from historic clean up that samples are patients that have been in that.

Bank.

Coming from oil.

Years ago.

So.

Just to summarize.

The growth of.

The body of data bank samples and be very strong and do you expect to accelerate that trend as such remains absolutely robust and that's also not the secret that is of course samples that come in today.

More valuable than samples that you have that maybe already 10 years old you have much research constant research content at 80% level and of course Oh.

Also.

<unk> debate to genomic analysis, you can also see that that percentage of who genome exome sequencing with the type of patients that are coming in more recent times of course, it's much higher than your thoughts a couple of years ago. So overall device. The bank remains on track to be strengthened quarter over quarter.

For the farmer.

B B.

Each point in time that the recovery is not affected.

Effected by the pandemic at least not significantly.

It is really.

As a result of the fact that in 2020.

The company has focused in toll gates and commercial strength on Covid and such close to most new partnerships had been signed in 2020.

And then.

We refocused on the core business, starting when I came on board.

Our progress and signed the first contract and as highlighted a contract signed in Q1 and given that you've not boosted when you signed the contracts, but mostly then you start recruitment of patients and you would see the revenue start to kick in.

Sure.

It may not look.

We have emphasized in all the contracts we have signed already this year you feel very good that first of all that.

Growth is a real I mean the year's.

Not over but youre very.

Encouraged by what we see now by November 24th.

We'll have a good Q4 for pharma and with the contracts that you signed debate. You also believes that that will continue into next year.

Okay.

Thanks.

Ill, let others nothing.

Yeah.

Thank you for your question. The next question is from kidney shoes from base. Please go ahead.

Hey, guys. Thanks for the questions.

I guess first you know there there have been some additional COVID-19 lockdowns and restrictions lately across the world as cases start to rise again, you know how do you see that impacting the fourth quarter. Both in terms of core diagnostics and clinical trial work for pharma.

Yeah, so thanks for that.

We do see an uptick uptake in testing.

Volume.

We expect Q3 or Q4.

To be <unk>.

In Q3, it's a little bit early to tell.

How strong it will be given a lot depends of course on December I mean last year, we had the tremendous.

During the the travelling season.

Well the holiday season, and a lot of travel will that happen this year or not I mean, it will depend on how strong the potential lockdown wouldn't would not be in.

In Germany, if travelling continues I think we will see.

Growth and relates to the cash generation showed the lockdown leads to very strong travel restriction that normally with testing volume will go down again, but I said I think the.

We are.

On track and we will execute a.

The overall ramp down off the COVID-19 business, but it might well be if the testing volumes continued to be high.

When.

We generate some additional cash.

Cash.

As for the second question, which was.

I have to remind me unfortunately.

Yeah. This is one that non COVID-19 side.

Yes.

Yes.

Core diagnosed or the farmer.

Correct, I mean up to now up to now we haven't.

Seen any any impact.

<unk>.

In Europe, I think that now is the.

Somewhat center of the.

Turning to.

And they need but that may change.

In a month from now and even here, we don't see an impact right now.

Should it get worse that hospital.

Start to get.

Significantly overcrowded, so they would be prioritized.

The more standard.

Testing work that they do need.

<unk> had some impact of some slowdown on our.

Tasty or clinical trials.

That's pure speculation you haven't seen any to date.

So don't expect it to be in any way.

And compared to how you bought last year I mean, we do have a global policeman and you're not.

Overprotective demand region given that.

There is.

Different phases of that but then you can deepen region and the overall do not expect to see.

Substantial E.

Even <unk> convert to see smaller slowdown in the months to come.

Okay got it and can you just talk a little bit more about what youre doing but you know when will those custom kits be available and how do you think going to differentiate your day.

Yeah. So.

I cannot go further than to say do you expect these to be rolled out next year in terms of exactly what they are and what Wayne I think be given that the key thing that collaborations with fleets that came up.

Just two months before we have alignment with them, but you know the teams are working on that and it can be expect rapid progress and has highlighted we expect to have further announcements on our central clouds deal with each year that we will keep you also there somewhere.

Insights into how we plan to accelerate the rollout of the fiber decentralized testing solution.

Alright, great. Thank you.

Thank you for your question we have the next question from Sushi now from BTG. Please go ahead. Your line is open.

Hi, Thanks for taking the question.

Just out of curiosity of the new pharma contracts that you signed this year year to date.

Or even the last I would say you know Paul for 18 months or even two years.

You have a sense of roughly what percentage is coming from.

The existing 30 30 plus customers versus.

Chris I was coming from new customers.

Yes.

But have you looked at it in terms of number of contracts. The majority are from new customers in terms of value and some of the existing contracts of course have been significant size. Welcome you want a more from biotech companies and start smaller and if you will.

Asked for our values made roughly I would say about half.

Okay, Gotcha and for the ones that have not that have completed their projects and have not signed on for new projects.

I'd be curious to see what are the main driver of it.

Or do you have a sense if there's some.

Yeah.

Some of them are.

Bye.

Specifically working on the ready to eat with certain scientific approach and then if that come from.

Sales and of course, the program stops where I think the company given that it would be focused in one specific.

Project of course.

Most likely EBIT to exceed store it needs would have other priorities then you need that you're starting to next collaborations with us.

But.

Overall, I would say that.

Relatively.

There I mean do you have a lot of repeat.

Customers and I think of the all the larger partnerships that you have I think it needs to date.

And of course, not to make a forward looking statement that to date.

Partnership state by and large change too.

To compete.

Gotcha, and then just on the diagnostic side on the core diagnostics business side do you have infrastructure in place currently in your view to be able to achieve kind of your long term growth rate target.

Or are there kind of further effort in you know in.

And quite frankly that are underway.

Hum.

Continuing to drive growth there.

Infrastructure.

I guess it depends what you mean.

As it relates to our laboratory capacity I think you have what it takes at least four different return.

Sure.

If we look at our.

Central cloud, which is.

Quality infrastructure as it relates to working with decentralized labs, I mean that we are building up and we will share as I mentioned in a couple of months and everything but you can expect.

The investments there are not significant but still I think it's an important project for us.

When you look at the commercial infrastructure.

I would say and we have highlighted that in the past where you do have to get in.

Yes, I mean, we do have a presence in the U S. But you can see the reason not to be developed at this stage that we would like and that's also why we are exploring partnership opportunities in the U S because of course.

The option always strengthened ourselves.

The potential there.

Partner with somebody who had set footprint already in the U S and interested.

Our urgency is value proposition.

Co commercialization partnership.

Great. Thank you for taking the question.

Alright.

Over here before I mean should we take one more.

Sure Sir.

Nick on proven better.

Good.

Alright, I think that limit we can close the call.

Yep, Thanks, very much for joining us and.

Talk to you during the next quarter at our investor events as well.

Sure.

Thank you and good bye bye bye everyone.