Full Year 2021 iSpecimen Inc Earnings Call
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Good day, everyone and welcome to ice specimens full year 2021 conference call. At this time all participants are in a listen only mode. A question and answer session will follow management's remarks. This conference call is being recorded a replay of today's call.
Will be available on the Investor Relations section of our specimens website and will remain posted there for the next 30 days I will now hand, the call over to Allison Soss Investor Relations for introductions and the reading of the Safe Harbor statement. Please go ahead. Thank.
Thank you operator, good morning, everyone and welcome to our assessment full year 2021 results conference call, but that's on today's call are Christopher I Am Ali it's definitely chief.
Chief Executive Officer, and President Tracy Crowley, Chief Financial Officer, and Joe Miller, Chief Operating Officer.
Before we begin I would like to remind you that today's call contains certain forward looking statements about my management made within the meaning of section 27, a of the Securities Act of 1933.
As amended and section 21 E of the Securities Exchange Act of 1934 as amended including with respect to the company's recent IPO and the anticipated use of the net proceed as well turning feature of that.
Words, such as May shed projects expects intends plans believes anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.
Statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factors section of the company's registration statement and the final perspective, where the company's initial public offering filed with the SEC copies of these documents are available on the SEC's website at Www dot.
<unk> Dot Gov actual results may differ materially from those expressed or implied by such forward looking statements. The company undertakes no obligation to update these statements revisions or changes after the date of this call except as required by law.
Now it is my pleasure to introduce Christopher <unk>, CEO and President by Sussman, Chris. Please go ahead.
Thanks, Alison and good morning, everyone and thank you for joining us on today's conference call. We will begin by providing you with an overview of our operational and financial performance. During the 12 months ended December 31, 2021, following that Tracy Jill and I will open the line to take your questions.
For our specimen 2021 represented one of the most significant periods in the history of the company.
During the year, we had several major investment related accomplishments in June we closed our initial public offering raising just over $20 million and began trading on the NASDAQ.
Concurrent with the IPO, we converted $16 $1 million of debt, including $2 million of accrued and unpaid interest and $11 $2 million of preferred stock into shares of common stock.
In addition, we paid $2 $8 million of accrued and unpaid interest.
In August we completed a four year, three and a half million dollar debt financing at an annual rate of $4, two 5% interest with a financial institution and paid off the remaining $3 million of pre IPO Bridge notes.
This additional capital significantly improved our balance sheet and has allowed us to start investing more aggressively in the growth of our business specifically the expansion of our supply network and the further development of our marketplace technology.
In September we were added to the Russell Microcap Index. We also completed the $21 million private placement right. After Thanksgiving the proceeds of which have allowed us to further accelerate the development of our marketplace platform and pursue some inorganic growth opportunities, which I'll discuss later in my remarks.
Collectively these capital raises are helping to ensure that the company is well positioned to advance the development of the specimen marketplace platform and network and to execute on our strategy to address the fragmented bio specimen procurement challenge.
Switching gears allow me to provide highlights from our full year 2021 operational results.
At the end of the year, we had 200 unique supplier organizations under agreement an increase of 19 supplier organizations compared to the end of 2020.
These new supplier relationships helped expand the capabilities of our bio specimen network by providing us access to specimens such as characterized in sequence COVID-19 samples a broader array of oncology bio fluids in tissues, and both fresh and cryo preserved hematopoietic cell products among others.
We also grew our customer base as defined by the number of unique organizations that have ever procured specimens from US. We ended 2021 with 415 unique customer organizations and increase of 26% from 330 at the end of 2020.
These new organizations consisted primarily of commercial biotechnology pharmaceutical and diagnostic companies, but also included some universities not for profit research centers and a number of government agencies.
As of December 31, 2021, our ice persimmon marketplace was comprised of more than 5000 total registered customer side and supplier side users, representing an increase of 33% compared to 2020.
We also added more than 2 million patient records and 13 million New specimen records to the marketplace platform. During this time.
Both of these achievements represent significant milestones for our specimen for the full year 2021, we reported revenue of approximately $11 $1 million, an increase of 36% year over year compared to approximately $8 2 million for fiscal year 2020 of note. The majority of this annual revenue growth.
I'm from non Covid business areas as opposed to 2020, where our growth was primarily driven by a spike in demand for COVID-19 specimens, which was the result of diagnostics and therapeutics developers responding to the pandemic by shifting to COVID-19 research.
We believe the overall demand for non Covid specimens from the diagnostics and therapeutics market is nearly back to pre pandemic levels as evidenced by our growth in non COVID-19 investments in the second half of this year.
It should be noted that we do not view COVID-19 as a business outlier, but rather is just another one of the many disease categories that we support as with any disease category that we support we will continue to assess and pursue accretive opportunities to improve our offerings in the category. A good example of this may be seen with the recent expansion of our.
Our supplier network to include a reference laboratory in New York, specifically to support commercial and government customers focused on COVID-19 research and needing sequenced bio specimens containing distinct corona virus variance.
While our non Covid business is once again growing.
If the pandemic continues to pose business challenges on the supply side healthcare providers continue to face intermittent COVID-19 related constraints, specifically during periods of high infection prevalence bio specimen collections tend to slow as patients avoid in person appointments as health care personnel are sick or working.
From home and resources get focused on the delivery of health care services versus the delivery of research specimens.
For example, during the most recent spike of the Omicron variant nearly 60% of our supply chain was operating at less than full capacity, which we believe contributed to the slower bio specimen collections in the fourth quarter of 2021.
XOMA chronic infection rates continue to decrease we expect these supply side challenges to abate.
Turning to other recent business activity in October we expanded our bio specimens supplier network to offer increasingly comprehensive selections of whole blood plasma and other bio fluids to help accelerate the development of numerous liquid biopsy assays.
In connection with the development of liquid biopsies, we added another U S based organization with numerous blood donation centers across the country and access to tens of thousands of donors registered to provide blood for research.
In December we expanded our global bio specimens provider network in support of research related to neurological disorders to date, we have added more than a dozen sample providers to our network of suppliers that provide access to banked or custom collections of bio specimens such as cerebral spinal fluid.
Other bio fluids or cells to help advance central nervous system or CNS research.
This is particularly important for us to support given the roughly 1 billion people worldwide that are afflicted with neurological disorders.
Also in December we announced the growth of our global supplier network with 25% of our specimen suppliers added in 2021 coming from outside the United States.
This expansion enhances the value of ice specimens Federated network of human bio specimens suppliers for research across the United States and Europe augmenting our existing network that also includes suppliers in Asia Pacific.
Looking ahead, we are well positioned and prepared to pursue both organic and inorganic growth strategies as mentioned earlier in late 2021, we raised an additional $21 million in a private placement and our plan is to invest this capital to position us for accelerated growth.
To achieve organic growth, you'll see us continue to work alleviating supply constraints throughout supply expansion programs and technology development efforts.
First we will continue to explain expand our supply network by both gaining access to more patients samples and data within our existing supply network as well as adding new suppliers to the network.
Second we're continuing to invest more in the development of our marketplace platform to make it easier for researchers and specimen providers to connect in 2022, we expect to support broader healthcare datasets and tools to accelerate the onboarding of suppliers and their data into our marketplace. We also plan on introducing new search case.
Abilities that make it even easier to find patients samples and data for research and finally, we're developing streamlined workflow tools to increase the efficiency of both our suppliers and our internal operations.
All of these should help accelerate the growth of our existing bio specimens business.
Turning to inorganic growth, we are assessing adjacent business opportunities that can help alleviate supply constraints, while also adding to our overall revenue growth. We are in the early stages of this work now I'll pass the call onto Tracy Curly, who will review our financial results Tracy.
Thank you, Chris and good morning, everyone. Today I'll review, our financial results for the 12 months ended December 31, 2021 compared to the same period in 2020.
12 month period ended December 31, 2021, we reported a 36% increase in revenue approximately 11 $1 million.
Compared to approximately $8 $2 million during the same period last year. The increase in revenue for 2021 was primarily attributable to the success of a maturing sales team for.
For the 12 months ended December 31, 2021, non COVID-19 related revenue was approximately $8 million or 72% of revenue compared to approximately $4 $7 million or 57% of revenue for the comparable 2020 period.
For the 12 months ended December 31, 2021, COVID-19 related revenue was approximately $3 $1 million or 28% of revenue compared to approximately $3 $5 million for 43% of revenue for the comparable period in 2020.
A reminder, for the <unk>.
First quarter of 2020, we had no COVID-19 related.
Session in 2021 decreased 6% to approximately 20800 assessment compared to approximately 22100.
A question during the 12 months ended December 31 2020.
Or a change in the mix resulted in an increase in the average selling price per specimen of approximately $165 or 45% compared to the same period prior year's period.
Cost of revenue for the 12 months period ended December 31 2021.
Approximately $5 $2 million compared to approximately $3 $6 million for the same period in 2020, which was attributable to a 56% increase in the average cost per specimen offset by a decrease in the number of sessions during the <unk>.
<unk> current 12 month period over the same prior year period, the significant increase in the average cost per specimen for 2021.
All of those changing customer mix.
They can project in 2020, which yielded lower than normal average cost per specimen in 2020.
And the 12 month period ended December 31, 2021 technology with approximately $1 $8 million compared to approximately $1 $5 million.
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Period last year. The increase in 2021 was primarily related to an increase in operating and maintenance expenses and an amortization, partially offset by a decrease in project expenses.
Elements of the company technology.
We're not allowed to capitalize as you name it call a portion of the proceeds from our IPO are earmarked.
Typically for technology.
Do you expect to spend more in this area moving forward with a 12 month period ended December 31, 2021 sales and marketing and so forth.
$2 $4 million compared to approximately $1 $8 million during the same period last year. The increases in expenses in 2021 are related to the hiring of additional staff during the second half of 2020 in the first half of 2021.
External marketing effort.
We expect to continue to spend more in this area moving forward.
For the 12 month period ended December 31, 2021 general and administrative expenses were approximately $5 $6 million compared to approximately $2 $4 million during the same period last year.
Increase in costs were primarily attributable to becoming a public company, including director and officer insurance as well as increased constant all other general and administrative areas such as human resources outsourcing information technology and software licenses.
On the sale of accounts receivable.
Allowance for doubtful accounts.
The remaining increase of approximately $1 million is related to costs.
Could recur in the future.
As human resource cost.
$21 million for special IPO bonus, which was provided to all employees in the form of cash and restricted stock units and increased legal and accounting and consulting expenses.
Not qualify as Ocwen cost.
Do you expect this classification expenses to continue to be higher than historical levels due to our production growth and the cost of being a public company, which on an annual basis. We are currently estimating will be approximately $2 million.
As of December 31, 2021, our cash balance was approximately $27 $7 million compared to a cash balance of approximately $696000 on December 31 2020.
This concludes our prepared remarks, now I would like to open the call for questions.
Operator, Please go ahead.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Please while we poll for your questions.
Yeah.
That's the only one.
Our first questions come from the line of Matt Hewitt with Craig Hallum. Please proceed with your question.
Hi, guys. This is Lucas on for Matt Hewitt.
I guess, starting with the results that you put out.
It looks like revenue kind of took a step down in the fourth quarter is it fair to say that was really due to the spike in the omicron variant or were there. Some other factors we should be aware of.
Hi, Lucas how are you this is Chris.
Thanks for the question.
So I think it is fair to say that but.
Third for that question, because it was slightly down compared to where we thought it was going to end up and how I was going to answer the question.
Maybe in the spirit of the Olympics I was going to say, it's our cobot dismount, we find ourselves emerging from Covid and seeing a decline in the COVID-19 requests and the corporate order flow while at the same time, we see resumption of noncore, but order flow. So I think we're trapped somewhere in between the decline in COVID-19 and the picking up of non Covid orders.
Is the best that we can do to explain why there is that relatively.
Diminished revenue in Q4 relative to what we thought it would be so yes, I think it is a COVID-19 effect and I would say, Chris just we're talking about the demand side. This is Jill there is also the supply side and on the supply side, which are predominantly the health care providers, we know that.
Impacted their ability to collect specimens we ran everything survey beginning of January of all of our supply side and about 60% of them at that time. They were either they were partially shut down so partially or fully shut down so not operating at full capacity. So we know that has impacted their ability to deliver assessments.
And this is Tracy I'd, just like to throw out some numbers. So you can sort of get a perspective on the current versus non covered for Q4.
Almost 80% of our revenue in Q4 with non Covid revenue.
The remaining was covered revenue and when we look at Q4 2000.
<unk> 21 to Q4 2020.
Our non COVID-19 revenue.
55% compared in 2000, 22021, compared to 2020, but our Covid revenue is down 61%.
It definitely is a crossroad breath.
And what the if you will of the mix, we've been seeing between covered and non covered over the last year or so.
Okay. Thank you that's all really helpful.
And then I guess moving beyond the results.
Last quarter I believe you had around six site development reps on the staff. How many do you have now and are you planning to add any over the rest of the year.
So we are currently at that same six number and yes. We are looking to add more site development people because clearly you know as we've talked many times we are supply constrained.
We are supply constrained in terms of we need more quantity of supply we're supply constrained and that we want to gain access to more.
Parts of the organization within our existing supplier network.
Whereas supply constrained because we want to access our need to access more data within those health care providers to streamline the entire workflow from feasibility assessment all the way to the delivery assessment, so clearly, adding suppliers expanding within the suppliers and gaining access to more data are key.
<unk> for the site that team and we need more people to help with that.
Okay, Great and then just one last one here you know back in December you announced the addition of some international suppliers to the platform.
Well those specimens be used to meet international demand or are you able to import those to the U S. If a customer wants something.
Yes, so we actually we do both so they will help provide.
International sites, much more quickly, especially when I'm, saying basically be delivered overnight or fresh.
But we can also important specimens here in the U S for our domestic customers.
Typically things that.
Can be delivered on dry eye for ambient temperature.
Okay. Thank you very much I think that's all I had.
Thank you.
Thank you I show no further questions in the queue at this time I would like to turn the call back over to Mr. Christopher <unk>, CEO and president for closing remarks.
Alright, Thank you operator.
I'd like to thank everyone again for joining us on today's call and for continuing your interest in investment we look forward to having follow up conversations with many of you and to seeing many of you at the upcoming events for which we are registered as a reminder, we are scheduled to participate in the agents virtual conference on Thursday February 24th.
Thank you and have a great day.
Thanks, everyone.
Ladies and gentlemen, thank you. This does conclude today's conference call. We appreciate your participation you may disconnect. Your lines at this time and have a good day.