Q4 2021 Centogene NV Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to centers in Q4 and full year 2021 in English show to school at this time, all participants are in listen only mode.

So to speak at present, they shouldn't they would be a question and answer session to ask a question you would need to press star one on your telephone.

I'd like to hand, the conference over your speakers today Mr.

Mr. Linda Strabo. Please go ahead Sir.

Thanks, Roberto and Hello, and thank you for joining us for today's Q4 and fiscal year 2021 financial results and business update conference call.

This morning, we issued a press release on our results highlighting recent accomplishments and the outlook for the upcoming yet.

The release can be found on the investors section of <unk> website at centers in ductile.

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 plan.

Programs at future 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.

The forward looking statements in this presentation speak only as of today March 30, we undertake no obligation to update or revise any of these statements to reflect future events or developments.

As required by law.

Additional information regarding these statements appear in our SEC filings.

Joining us on today's call that can stretch them Sanderson, CEO and legal finance and appointed interim CFO .

It was supposed to begin with a general business update followed by a summary of our financial results for 2021 .

We will then open up the call to Q&A session.

The call is audio only.

I would now like to turn the call over to Kim stretching centered in CEO , Tim over to you.

Thank you and Hello, everyone. We are grateful for your joining us today and I'm also really grateful to be here, representing census gene as the CEO .

Well, maybe I should start off with the acknowledgement of my predecessor engine thanking him for his contributions and we.

Michigan continued success constantly and also professionally in the future.

I'd also like to thank everyone here at <unk> for their dedicated what to build and evolve the company and for the very warm welcome I've received since joining.

Since assuming the CEO role I've met many great people, a great group of Doug boss, an exceptionally capable professionals.

Let them deeply dedicated to improving the lives of hundreds of millions of people suffering from genetic and especially rare diseases.

So I joined <unk> in an interim role in January and I was excited at the opportunity to assume the role permanently as of last month.

I see and it's important that my experience with the company dates back to 2017 with my responsibility then as the international head for commercial business at Shire when much of my role was focused on rare diseases.

I see I was successful collaboration with Shire now Takeda as a blueprint percentages tremendous ability to partner with leading Biopharma partners to provide great value for partners and rare disease patients alike.

I think this is a prime example of where I see census, gene excelling differentiating and positioning for future growth.

But first let's discuss the 2021 results, let me highlight the key messages for the for the day.

So we're really encouraged by the progress achieved in the fourth quarter of 2021.

In Q4, we recorded solid quarter over quarter revenue growth in both core businesses of diagnostics and pharma.

This growth has exceeded our prior guidance given for the full year 2021 and I think of all shows the annual core business growth of 11%.

And we are positioned to strengthen our core business over the course of 2022.

The management team and I are really focused on expanding and adding partnership with Biopharma both pipeline.

Pipeline building and also execution.

In the fourth quarter, we added approximately 24000, new individuals samples to our extensive said send to gene by a day each bank.

This is a steady increase towards our goal of reaching 1 million individuals overall in the sense of gene by Deutsche Bank.

And even though we are strategically shifting out of the Covid business and this is on track by the way. The Covid segment still has contributed better than planned in quarter four.

Recent highlights since 2021 also include.

The successful closing of a combined equity and debt financing raising approximately 62 million U S dollars to strengthen our balance sheet.

Strategic management appointments completed and also expanded pharma collaborations you saw the Pfizer announcements just this month and we're expecting another key extension announcement to come out over the next couple of weeks.

These milestones reflect effective execution by our local team setting a strong foundation that we can build upon throughout 2022.

Now, let's look a bit closer at the 2021 results.

For the purposes of today I will focus on the core business and Miguel relate to comment on the COVID-19 business separately.

Coal business encompasses our diagnostics and pharma business he.

These are the two key drivers of sense jeans continued growth.

In the fourth quarter, we reported core business revenue growth of 34% versus the same quarter last year for 2022 'twenty 'twenty.

This was the third consecutive quarter reporting core business gross over all however, it was the first quarter since the start of the pandemic, where we observed both growth in diagnostics and pharma.

So, let's first cover our diagnostics business.

The diagnose diagnostics business grew 30% in the fourth quarter and 26% in the full year 2021. This is full year 2020.

And I think it's important to talk about a couple of operational highlights.

In Q4, we reported our order intake of approximately 15000 tests request.

This represents a 30% increase compared to 12000 in the same period of 2020.

We believe we offer the broadest diagnostic testing portfolios for rare diseases globally, and we cover over 19000 genes.

In quarter four 2021, we signed the collaboration with twist Biosciences for the development and the commercialization of custom assay kit for rare diseases.

And in January 2022, we released the center cloud globally.

Our cloud based bioinformatics solution, which enables decentralized analysis interpretation and quality reporting for laboratories, all over the world.

I think it's important to note that our diagnostics business was a broccoli and significantly impacted in quarter two of 2020 with sales decline of almost 50%.

Since then diagnostic revenues have grown consecutively each quarter to recover to the current level of 7.5 million euros.

Please note that this is at the same level as of quarter, one 2020, which was the record quarter in diagnostic sales in the company's history.

Think we can report that we have now recovered to pre pandemic levels in our diagnosed diagnostics business.

I would like to take this opportunity to thank Matt Schmidt.

And diagnostics team as well as Florida and vocal in our laboratory team for this turnaround performance.

And we will not stop here.

The diagnostic business remains a key pillar of our strategy and we will provide a stable base for our business.

It keeps us close to both patients and physicians and it will continue to fuel Center gene Biodata Bank.

Now, let's turn to our pharma business.

Our pharma business grew 40% in the fourth quarter versus Q4 2020. So.

For the full year 2021 pharma revenue was $15 6 million euros, yes, it was still below the prior year.

We believe this year over year trend reflects a longer recovery time, and the pharma segment, just compared to diagnostics.

It's important to remember that prior to the pandemic.

<unk> had been on a solid growth trajectory, averaging around 20% annual revenue growth in the years, leading up to 2019.

The impact of COVID-19, pandemic home Center gene in 'twenty, 'twenty, one and 'twenty 'twenty was two fold.

Internally the company deploy great assets to setup and Opportunistically pioneer commercial COVID-19 testing in Europe . It was really needed you said was a significant driver of revenue and it suddenly was also a service to the health system and to society.

However, it did also means that some of the folks shifted away from execute execution in the core diagnostics and pharma businesses.

Externally the pandemic also slowed down or stalled commercial and clinical development programs and studies at Biopharma companies, leading to a contraction of the Companys business pipeline.

Well Center gene experienced this decline we know this impact was also felt by the broader industry.

For example, in 2020 one.

Annual sponsor survey by Jeffrey reported that 60% of new trials, and 40% of the existing trials, well either delayed or pause due to pandemic related disruption.

Nick looking forward a return to normality provides an opportunity for <unk> in 2022 and beyond.

A potential tailwind for catch up and additional activities in the industry.

We are positioning the company to proactively identify the relevant trials and policies and address them as part of our business development and partnership pipeline expansion.

The key 2021 pharma highlights.

Q4 revenues was the was the first comparative growth quarter since Q1 2020.

We also announced the following.

We enrolled the first patient in the clinical study partnered with electrical targeting data rich genetic testing her more than 3000 funds, a temporal dementia or S. T D patients.

We expanded the clinical development partnership with Azure pharmaceuticals to provide genomics and central lab support core addresses three global pivotal trials in solid senior and sickle cell disease.

And more recently a few more milestones.

As we announced just a couple of weeks ago, we expanded the data access and collaboration R&D agreement with Pfizer to advance the discovery and validation of novel genetic targets.

Did it so the development of new therapies for rare diseases.

We know that providing insight into these types of partnerships is a tremendous value for our investors and for the public and we are committed to improving transparency in this regard.

On the research side, we have joined forces with <unk> silicone medicine.

Partnership is leveraging the center gene Biodata bank and artificial intelligence.

Intelligent together within silicones, AI based drug discovery platform to identify new targets and accelerate orphan drug development. In this case for Niemann pick type C. O M. P C.

Which is an ultra rare disease for which no FDA approved treatment exists at the moment. So we're looking forward to the outcomes in the second half of 2022.

Now before handing to Miguel to the financial section I'd like to take a moment to recognize we're in Asia, our outgoing CFO on behalf of the company and the board would like to thank Rene for his contributions during his tenure, including internal process improvement cost reduction process accelerating out on you.

We're reporting cycle and also to thank him for securing a strong financial foundation for them to change with the financing that closed in February Rene has been fully engaged with the transition of CFO responsibilities to Macau, including the preparation of our 2021 report we wish.

Renee all the best in his future endeavors.

And in the same spirit, it's a privilege to welcome Miguel quango to be quick to the <unk> team as interim CFO .

I've watched with Magellan previous roles and with his more than a decade of experience in senior finance roles in the Biopharma sector I can personally attest that Magellan brings great expertise for their role and with that I would like to turn over to Miguel Miguel.

Thank you, Ken and Hello, everyone.

Before we start I would like to emphasize how excited I am he joined incentive peacetime.

Company has set a solid financial foundation with the financings completed in the first quarter of this year and we are in a strong position to deliver on an extra step in the evolution of these trucks.

Im looking forward to the Huntington, Nevada generation percentages by ensuring optimal resource allocation or no risk.

Strategic path forward.

And now we'll turn to the fiscal year 2021 financial visuals.

Our fiscal year, 2020 , one revenues increased by over 48% to 119 million euros in full year 2021.

$228 4 million euros in 2020.

<unk> was mainly driven by the COVID-19, dusting generating onto the boys $6 4 million euros in the year.

57 million from last year importantly, the growth also reflects a return to growth in the core business.

I will discuss our coffee business.

Separately in a moment on first focus on the core business, which consists of our diagnostics on farmer sentiment.

The golf business expanded by 11% and full year 2021 to $43 5 million euros compared to $39 1 million euros in full year 2020.

This growth was largely driven by the material update he could probably dark most ex business the golf business will pick up significantly towards the end of 2021 demonstrated by a 34% increase in golf business revenues in the fourth quarter.

Well the diagnostics segment, we recorded $27 9 million euros in diagnostic revenues in 2020 , one compared to the $23 1 million euros in 2020, representing revenue growth of 26% for the business segment. We are proud to report that this is a record year.

The diagnostics segment received an order intake of 57000 best request in 2021, representing an increase of 37, 36% as compared to the 42000.

Requests received in full year 'twenty one.

The increase in revenues were primarily due to the surge in order intakes of apartment testing.

And genome screening during 2021.

Total revenues for bundled customers exome and genome amounted to approximately 20 be the jurors in 2021, representing an increase of 25% as compared to $15 9 million euros in 2020.

The diagnostics segment revenue increase was mainly from increased demand in the middle East.

Region. This lead to an increase in segment gross margin by over 22 percentage points with you will also see it reflected in the segment adjusted EBITDA.

In Q4, but no state revenues were $7 5 million euros up 30% versus Q4 2020. It is important to note that this is about the same as the prior record quarter in the diagnostics segment before the pandemic in Q1 2020. So it is fair to say that the Dx business is truly.

Turning to the pharma segment.

Revenues decreased 8% year over year for suite from $16 9 million euros in 2020 to $15 6 million in U S. In 2021.

The annual comparison in pharma revenues reflects the impact of the Covid pandemic related slowdown as Kim mentioned earlier. However, I will talk later about the positive performance in the fourth quarter and also on the value of form of contract signed in 2021, which significantly exceeds the value of deals signed in 2020.

This is extremely encouraging as our partnership agreements on a major growth catalyst to the pharma sector. We have started a number of initiatives to accelerate the recovery of growth for the year 2022.

In 2020 , one we entered into 18, new collaborations and completed 39, resulting in a total of 45 IP collaborations for year end 2021.

Revenues from our new collaborations totaled $2 3 million in U S drilling 21, with our prepayments are pure point 5 million related to setup fees in the prior year.

Revenues from new collaborations totaled approximately 1 million euros with no upfront piece included.

The main drivers of pharma segment revenues were partnerships in patient identification in clinical development.

It's something we expect will continue or whether we will or Stuart described.

We strive to improve in a range of areas, including first focus on the contribution margin per contract for example by providing more upfront piece into the proposal and going trucks. We believe this is fair to capture the value of the platform. We have built and invested in second improve our portfolio's application for example in the Capex.

Patient identification, we are actually providing a lot more value than just finding the patients. So really want to pursue similar set of distinct offerings under the umbrella market DOCSIS unexplored.

In Q4 pharma revenues were $6 5 million euros compared to $4 6 million in Q4 of 2020. So this is an increase of 40% showing great end of the year momentum.

Turning to our Covid business post Q3, 2021 centered you'd made the executive determination to begin phasing out this business segment, which was communicated to all our stakeholders on the last quarterly update call in November the segment adjusted EBITDA contribution from the coffee segment was still 27 million.

And full year 2021 decreased by $16 5 million euros year over year.

Revenue generated for the year 2021 amounted to $146 4 million euros with approximately $2 3 million test requests received during the year.

The segment gross margin was significantly lower in 2021 compared to 2020, which also caused the overall company gross margin to be significant to change was driven by a range of factors, including the <unk>.

To confirm sub contractors to increase flexibility changes in government contract structures.

Downturn with Covid testing in the second half of 2020 one.

Accelerated depreciation and amortization expenses and costs related to the shutdown of our.

Hornbeak lump on unprofitable testing sites as a result.

Margin for the segment declined from 43% last year to 9% this year.

This impact was specifically felt in Q3 'twenty 'twenty. One afterwards, we were able to streamline operations by closing unprofitable testing sites. This resulted in improved contribution from this segment.

The corporate business is on plan to phase out by the end of the current quarter. The rundown brand is diligently executed in Q4 was actually better than that on it.

At the end of this activity COVID-19 testing, we have generated over 250 million euros, we have revenues percentages, mainly through airport test centers supporting and enabling international trouble on other contracts reported in local and state governments, which must be dispensing solutions.

The business would have delivered a total adjusted EBITDA contribution of roughly 60 billion euros positive cash contribution of about 50 million euros.

Look forward to now refocusing our efforts to further build on the scale of our core business.

Going further down in our P&L, our gross margin by segment overall gross margin for the company was 15% in 2021 compared to 35% and full year 2020, you discussed this decline was caused by the corporate margins, but the core business improved.

Our core business segments diagnostics and pharma combined generated total gross margin of 34% of revenues a significant increase versus our core business gross margin of 14% in the prior year. This improvement mainly reflects the improved gross margin in the diagnostics segment.

Gross margin of 38% versus 16% in the prior year, mainly reflecting the product mix toward higher margin products.

Margins in the pharma segment improved from 12% in 2020% to 26% in 2021 to note. The prior year comparable reflects an impairment of $4 7 million viewers to the capitalized biomarkers.

Included in cost of sales.

The total segment adjusted EBITDA was 21 5 million euros in full year 2021, compared to 41 million euros and full year 2020 again the decline was caused by koby discussed by the core business.

But the core business improved year over year and showed a stronger adjusted EBITDAR contribution.

Core business segment adjusted EBITDA, that's at the sum of adjusted EBITDA in the diagnostic on pharma segment was $8 9 million and full year 2021, compared to $3 8 billion full year 2020, the Victor.

Two core business segments is mixed.

EBITDA for the diagnostics segment down from minus $2 4 million euros in full year 2020 into positive adjusted EBITDA of 4 million euros.

The adjusted EBITDA for our polymer segment was $4 8 million as compared to $6 2 million in full year 2020 under the coverage. The decrease was primarily attributable to lower revenues.

The segment adjusted EBITDA lift out the so called corporate expenses and I will go through the remainder of the P&L.

Our expenses, including older operating income totaled approximately 74 million euros for the year 2021, an increase of $9 3 million as compared to last year.

General and administrative expenses increased by $6 6 million euros to $46 7 million euros decrease was mainly due to an increase in personal costs, including management additions.

Severance costs related to the restructuring announced in November 2021.

DNA also includes share based compensation expenses of $8 million in 2021, an increase of $2 4 million euros as compared to $5 7 million viewers for the year 2020.

We saw increased cost relating to be publicly listed company as well as an additional investment in our it support and data center costs second.

Our R&D expenses were $19 3 million.

Approximately $4 4 million higher than in 2020. This increase mainly represent software enhancements costs on our research costs related to biomarker development projects that don't qualify for capitalization.

Related note in 2020 , one we booked an impairment of approximately 1 million euros or biomarkers that have been to de prioritize it as we focus on the development of bio market directly linked to ongoing pharma projects or our <unk>.

Franklin.

R&D expenses include extended investments in additional intelligence database development in 2021 and associated amortization.

We believe we will see a decline overall corporate costs in 2022.

The effects of the restructuring implemented on Florida assessments and that shouldn't be a review it will be.

Sure.

This in the future thirdly, our selling expenses, including sales and marketing expenses for the year were $9 8 million an increase of $1 7 million euros, mainly reflecting an increase in personal expenses online service expenses as well as common expenses due to the easing of.

Probably restriction from the COVID-19 pandemic, we believe it does.

And Salesforce like step in total our operating loss was 46 million euros, a decrease of $26 3 million.

Compared to a loss of $19 7 million euros in 2020. The main driver. The main driver was the lower gross brokerage generated the COVID-19 testing basis.

Look at our profitability overall I would like to comment that we didnt come in management arm will be focusing on our spend to ensure that we are operating efficiently under spending with greater accountability and investing wisely, we have kicked off a number of the beauty initiatives to drive efficiencies in our lab.

The operation as well as our administrative functions. It is too early for us to provide any immediate guidance, but it is our clear target to lower corporate expenses.

Ported the businesses with greater potential.

Turning to cash flow and balance sheet highlights.

At December 31, 2021, we have a $17 8 million euros of cash cash equivalents on our balance sheet with regards to our overall debt I would like to remind you that the end of December . This includes approximately 19 million euros of lease liabilities.

Looking at the movements cash flows used in operating activities was $21 7 million, an increase of 31 million euros compared to cash generated from operating activities of $8 5 million euros.

Change was mainly driven by the lower contribution from the COVID-19 business segments in 2021 that these costs, notably contribution from corporate should be positive in Q1 2022.

In 'twenty, one 'twenty to 'twenty, one plus cash flow.

Investing activities was $5 4 billion euros as compared to cash flow used in investing a $16 2 million euros in full year 2020.

Consistent with our decision on the coffee business. The decrease is mainly due to a reduction in COVID-19 related investments.

Cash flows used in financing activities was $3 2 million euros in 2021.

Compared to cash generated $14 8 million euros in full year 2020.

Here 2020, mainly reflected the follow on equity offering with contributed 22 million euros in Q3 2020.

Excuse me one cycle.

Yes.

Sorry, again, let me reiterate one of our clear targets for this year is to improve our expense structure and therefore, improving our core business operational cash flow for 2020 to undergo.

Please note that after the end of the year, we successfully to secure approximately 55 million euros.

Equity and debt financing.

This include 15 million euros or type.

Financing from existing investors as well as approximately 40 million euros.

Financing from Oxford Finance financing was important to address the going concern qualification republished in the third quarter last year and I'm confident that this has indeed been Atlas <unk> now has a stable balance sheet transition into our next phase of growth and execution.

With that I would like to hand, the call back over to Paul Kim for a discussion on outlook strategy guidance. Thank you.

Thanks, Mikael Okay. So now if you look to 2021 finite chosen depth I'd really like to give an outlook on where we see the business going we're looking forward to a solid emergence in 2022 a strong focus on growth on execution, making sure we put a fit for purpose organization.

And in line with our three strategic pillars, so our biopharma partnerships strengthening the center chain by a day, each bank and keeping the focus on our diagnostics business.

But let me touch on each of these key drivers in terms of the midterm success.

We believe we have the largest real world data bank rare and neuro degenerative diseases.

The central thing by a day each bank is a leading global proprietary platform. It's based on real world data and it has a biological repository representing over 650000 individuals some over 120 countries.

So our platform includes epidemiologic phenotypic genetic and multi omics data that reflect a glue a truly global population across all ethnicities and.

And we believe this represents the only platform that comprehensively analyzes multi level data to improve the understanding of rare and newer genetic hereditary diseases.

How does he estimated 7000 rare diseases. They stayed at 5600 of these have a genetic origin.

And I'll send to gene by a data bank, we have the 2500 diseases covered.

It's important to remember that new genetic variants associated with rare diseases I discovered every year.

And as a result rare genetic diseases that can be diagnosed need to be updated continuously with the new information. We have most of these variances updated in our synergies by Deutsche Bank.

Our capabilities enable us to deeply characterize patients with rare genetic variants, including RNA and transcript scrip Tommy analysis proteomics analysis metabolic analysis, and this helps to significantly delineate mechanisms of disease and thereby.

Characterize molecular markers of disease.

The variance is captured through DNA sequencing.

In 2021, we added 94000 individuals who are leading center gene by data Bank and we are seeing growth trends in terms of depths of phenotypic information as well as the optional research concentric. Additionally.

Additionally, our network of active physicians with now of the 29000, it's truly a unique asset.

Plan to continue growing our posit trees information and biological samples through the identification of additional patients by expanding our clinical network and without current biopharma partnerships even further.

We are also working on better packaging our capabilities into solutions for Biopharma partners.

And I think one example, offering the solution is the data access and collaboration agreement with Pfizer, which utilizes percentages by a day each bank.

A chief data officer, the Ciena done will join US also for the Q&A session. Later, if you have any further questions on that topic.

In terms of Biopharma partnerships, we use SMT gene by each bank.

We are able to add significant value to Biopharma partners along their entire development plan.

Celebrating and hopefully derisking pharma projects.

Rare diseases affect over 350 million patients globally and less than 5% have an FDA approved treatment.

Rather these drug market is expected to grow at about 11% annually to $207 billion in 2024 and to note. These rare disease drugs will capture approximately 18% of worldwide prescription sales by 2024.

And if you add the neuro degenerative diseases space here the numbers are much much larger.

The introduction of new treatments in the development of drugs in this space is still constrained by a number of factors.

Lack of high quality information regarding the clinical heterogeneity of medical symptoms, the lack of comprehensive and curated medical data the difficulties in the early identification of patients a lack of biomarkers and also difficulties in understanding the market size and epidemiology.

Our services span the full spectrum of diagnosed diagnostics drug discovery and development clinical development, including natural history studies biomarker development as well as patient recruitment identification market access and market expansion.

December 31, 2021, we collaborated with 33 pharmaceutical partners on projects targeting over 46 different rare diseases.

It was an ongoing trend, but data driven intelligence is helping grow the use of real world evidence and this can improve the current clinical model and advance Hal studies are designed and executed as I said, helping to derisk and to accelerate.

Thank you James capabilities aligned well in this context already but we have initiated an advanced several initiatives to capitalize on the opportunity first of these is a complete horizons scan of the market, including the growing number of gene therapy development projects is tax over 120 companies with am.

Many more asset.

Second is to strengthen our bandwidth for outreach contracting operational project delivery by adding the needed resources.

Now our diagnostics are truly also differentiated products and services that support efficient and timely diagnosis of rare neurodegenerative diseases, leading to better treatment and health health outcomes.

Have a differentiated product portfolio focused on high quality genetic testing with leading whole exome and genome sequencing and we're on the leading edge of the multi omics.

I'll go to provide the best diagnostic yield for example, with the enhance central zone, we actually increase the diagnostic yield up to 20%. This means more patients are getting the results on the test.

The same to card is our proprietary dry blood spot solution. It provides easy logistics and central testing and its registered in over 50 countries around the world.

With the high highly advanced technology, the <unk> by a data bank without team of medical experts and geneticists. We delivered reports back to the physicians that contain critical genetic proteomics metabolomics information or a combination depending upon what isn't as salient for each case.

And we also put this data back into the centre gene by a data bank.

In diagnostics, we are building on our strong performance in 2021 striving to again reached above the market growth, which we estimate at 11% by focusing on two strategic drivers.

The first one is capturing the opportunity in decentralization.

In January we released the center cloud globally, and we're already working with early customers.

Next steps to this year of a launch of the kits developed in partnership with twist.

It allows for global decentralization and standardization and we expect to rollout in the second half of 2022.

Driving innovation ounces out of the core laboratory, we are focusing on multi omics as a key value driver for diagnostics of rare neurodegenerative diseases.

We recently launched several new products that build on our strong existing multi domain portfolio.

For example center metabolic.

Well, we just presented alpha dataset of over 3700 patient at the ACM G. The American College of medical genetics.

This multi omics products not only presents a high a diagnostic yield but for nearly 1400 patient. It is expected to lead to benefits in treatment and counseling for the families.

We truly believe that we're one of the pioneers, it's putting actual commercial multi only products onto the market today.

Matt Smith, who is our chief commercial officer of Diagnostics will also join us for the Q&A session. Today, if you have any more questions around this.

Select round out today's call, we'd like to provide an outlook for 2022 was specific guidance for the calendar year.

We expect our core business revenues to grow between 15% to 20% year over year in 2022 weeks.

We expect revenues derived from COVID-19 testing to be approximately 18 million euros. All in the first quarter of 2022 in light in line with the phase out at the end of the first quarter.

As a result, our Ana.

Total revenues guidance for the fiscal year 'twenty to 'twenty two is in the range of 68 to 70 million euros.

To put this into perspective, the company has historically been on a solid growth trajectory, averaging around 20% growth in the years, leading up to 2019.

The Covid pandemic arose in 2020, and we've discussed the impact to the business in the pipeline.

In 2022 with the new team on board was kicked off a range of initiatives to drive Biopharma partnerships.

Realistically it will take some time for these initiatives to kick in and I think as a result close to one 2022 is expected to be relatively flat with minor growth in the core business.

Pharma segment segment will have a stronger acceleration towards the second half of 2022.

In summary, we're really excited about the opportunity here at <unk>, we are committed to driving financial performance to deliver increased value to our shareholders. We are really focused on growth and execution with a fit for purpose organization and with that I'd like to hand back to our operator Roberto for acuity.

Thanks Rebecca.

Ladies and gentlemen, well now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone.

The first question from childhood with Oh SKU from SVP Leerink. Please go ahead. Your line is open.

Alright, good morning, you've tapped by trucks go on for Puneet Shadow.

Thanks for the color I was just wondering on regarding cash burn could you sort of speak to your top spending priorities. This year.

And what what is the cash burn expectation in 2022.

Just given the recent race, how much visibility and runway do you see it going forward.

Thanks, Scott Thanks, Chuck for your question just give me a couple of cycles here. Please because your comment about the cash burn.

Okay. So.

Look at what when the company and brokers on the on the finance and the goal was to finance the company from a couple of years and that was the initial the initial target.

Then.

With the airports there.

We did and we managed to guarantee these financing.

We were able we should be able to extend this runway.

It didn't come as specifically with our guide on cash burn.

The intention is that as we were saying it is on one side the revenue progression, but also this exercise that we are doing them cost.

We expect that we would be able to come with more specific details in communications.

Communications.

That's helpful. Thanks.

Just in terms of a pharma business last quarter, we saw recycling roughly 40000 samples.

Was that a one time event and can you give us sort of a timeline on that long term goal.

<unk> samples in the biobank.

Maybe the Tina or do you want to talk about the samples that are actually in the dates bank specifically, yes.

Yes sure Hello, Thanks for your question and thanks for having me today so.

So we see a healthy growth of our biodata bank in the last quarter with 24000 individuals edit and then full year 2021 around 94000 individuals added.

We think we are well on track to achieving that mid term goal of 1 million patients and.

Everything Kim described is in a sense a positive feedback loop right as he said all future partnerships. We continue to feed the biodata bank, an extra biodata bank gets richer and richer.

Our partnership value preposition gets richer and richer, which then in turn accelerates the growth of the Biodata Bank.

Thanks for taking the questions.

Thank you.

Thank you for your question we have the next question from the line of Sushi number from B P. I G.

Go ahead.

Yes.

Hi, Thanks for taking the questions. Just a few clarification questions are in terms of your guidance for 2020 to 15% to 20% core revenue growth and can you provided some color in terms of.

The Biopharma I was just trying to better understand kind of where the diagnostic.

Diagnostics versus the core diagnostics.

First as farm out what what's embedded in your assumptions in terms of overall growth within the 15% to 20%.

Yeah, I mean look as for the diagnostics, we said some G that we're where we want to continue to grow above the market rate, which is at about 11% and I think historically if you go back and look at the the last numbers I think it was about the core business about two sides was diagnostic.

One maybe a bit over a third with pharma and obviously, we want to see pharma are actually increasing the the kind of share of all of that core business two to around the 60 40. So I think that that would be the where we would be headed.

Gotcha and then in terms of your gross margins for your core business good to see that continuing to improve but what's kind of the expectation for 2022 are there.

What are the drivers for potential margin expansion.

Into 2022 for the core business.

Thank you. Thank you for the question so.

You could see there was a good recovery in 'twenty one versus 'twenty.

On the overall gross margin for this year, we plan to hub.

Similar levers when it comes to Dx despite of the market price pressure, but we kind of upset by our product mix and where we see on pharma, we believe that we could improve it.

That would come demonstrating the value proposition of our company the products combined with some internal growth on cost optimization. So I would say flattish indications PX on improving Oklahoma.

Gotcha, and then last one personal health.

Obviously, it's based on just the kind of pharma and diagnostics.

Mix as well I think it's important to remember that diagnostics is.

<unk> is a much more kind of smoothed the business.

And as you know with pharma it can be a bit lumpier. So and also I think it takes a much longer to restore so as I also said in my comments you know I think were for quarter. One we'll expect it to be kind of flat or with some some modest growth. But then you should see it actually pick up as the as the year progressing from the second half.

Gotcha very helpful. And then lastly for me for your Biopharma business, you talked about for 2021, the overall the total.

Contract.

Overall contract for the value if you will of that business increased significantly year over year.

Could we anticipate that type of trajectory I know that may not translate into revenue in the near term, but could be anticipate that type of trajectory to continue into 2022.

Yeah.

That's from the eye the contract value standpoint.

Yeah, I mean, I think it's just as you say from GE you can't with some of these contracts they they span multiyear but yeah. That's that's the intention to keep that kind of growth going in 2022, absolutely.

Fantastic. Thank you so much.

Thank you for your question.

The next question from countries Shukla from base. Please go ahead.

Hi, Thanks for the questions I guess first can you just talk to the trends that you've seen in the core diagnostics business. So far in the first quarter to your point Covid has been a big disruptor to core diagnostics over the last couple of years. So did you see any disruption from the omicron wave or it was the business fairly resilient.

And how do you view your positioning and potential future Covid waves.

Thanks, Catherine Fannie Mac, you'll probably best to answer that yes.

Yes. Thank you catch Catherine this is Mac.

So we don't comment yet on obviously in our Q1 performance having said this.

At the moment the business is developing a stable and the impact of on the come so far.

It has not been a significant.

Okay, Great and then Kevin you talked about I think adding resources to increase your pharma outreach team can you just talk to the size of that team today and in what kind of additions you envision going forward.

Yeah, I mean, the the team is kind of obviously the team is quite broad and it's spread out through the.

They buy a day each bank that genomics group and and and also in part I guess in diagnostics, but I was specifically talking about you know increasing our sales team increasing the project management teams. So that we can really have a much stronger outreach to as I said, we you know theres a hung.

<unk> 20 companies out there that are doing that are currently developing products or have inline products in either rare neurodegenerative or gene therapies.

So we need to have a stronger kind of outreach and make sure. We have a stronger lead generation that we have a beefed up kind of sales team.

And also that we're able to kind of manage these projects in a very kind of professional and kind of any kind of excellence in execution internally. So it's it's it's about adding resources, but it's also about fine tuning our operations and our processes going forward as well.

Yes.

Okay. Thank you.

Thank you for your question there are no further question at the moment.

Ladies and gentlemen.

For today, Thank you for it.

You can now disconnect.

Okay. Thanks, everybody for joining us. Thank you for your questions and thank you to the sense James James. Thank you Bye bye. Thank you everyone.

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