Q3 2022 Todos Medical Ltd Earnings Call
Yeah.
But also initiated a significant transition and it's testing business in the third quarter of 2022 that's.
As far as financial markets continued to experience challenging times the company had to survive primarily on cash flow for another quarter.
And this was accomplished by continuing to focus COVID-19 testing at our <unk> diagnostics subsidiary.
We were able to capture consistent revenue for the first half of the quarter, while we were validating and preparing to launch our suite of non Covid Pcr tests.
Unfortunately.
Significant revenue hit in the second half of the quarter as the key Covid testing kind of client temporarily suspended kogan PCR testing at their school.
As the Baidu administration create an urgency to utilize the remaining three tests from a government program and subsequently President Biden said.
Them it is over a while being interviewed on 60 minutes in early September . This resulted in significant nationwide decline in interest from the public parents to continue to test for Covid on a routine basis.
As a result, we have to see to accelerate our pilot launch of our new suite of PCR tests, including urinary tract infection when respiratory panel gastrointestinal.
Sexually transmitted infections and monkey pox.
The pilot launch in the Dino and Florida area was successful and we gained valuable information related to accelerating turnaround times involving pharmacists reviewed to speed treatment recommendation and engaging with physicians to optimize our reports to better explain the test results and recommendations.
However, this pilot launch did not replace the revenue loss from our Covid testing decline. So as a result, we generally we saw a stagnant chi and the progress the business quarter over quarter.
Just yesterday, we restarted testing with that same large school COVID-19 testing client and it receives the first 4800 samples from their renewed school testing program last night.
The client expects to continue testing at least through the end of winter March 2023, as a result of the expansion of the binding administrations expansion of the public health emergency and significant absences due to illness.
Given that there are now multiple respiratory advice that virus is circulating amongst school age children. We do expect to see an increase in COVID-19 testing as well as flu a b RSV testing and.
In respiratory pathogen pathogen panel testing.
Reports from the F D. A further extending the window of time from four to five days that are Covid rapid antigen tests, maybe may show a negative result, when the patient is symptomatic and ultimately test positive for Covid. It seems to be driving fears. Among this large client that antigen test may in fact be inadvertently draw.
Given COVID-19 spread in their schools.
Our <unk> pharma joint venture partner NLC farmer agreed to extend the window of time to December 31, 2022 for totals to assist the ECL pharma and raising capital to fund <unk> operations and clinical development programs.
We have now substantially completed the creation of the marketing collateral to the crowdfunding campaign and intend to launch it in December of this year.
Which we expect will drive funding inflows to allow <unk> to begin clinical studies.
In early 2023.
At this time I would like to turn over the call to Gerald our CEO to discuss our strategic vision and plans for growth in order to build lasting value for our stockholders moving forward Gerald.
Okay.
Thank you Dan and good morning to everyone. As we've just outlined we've managed to maintain operations at told us by driving revenue produced in the third quarter of 2022 and worked to refine the planning for <unk> pharma to raise funding to drive its operations and clinical development plans for it to reach its full potential.
In that light I'm going to focus on a few key items on.
The company as we look at our strategic plans for the rest of the quarter and heading into 2023.
Yeah.
What are the major challenges for <unk> pharma and discussions with investors as we were looking to raise capital was related to what would actually be required to achieve an emergency use authorization for a total of the year now called <unk> 001 in the treatment of hospitalized COVID-19.
Yeah.
Some of the concerns.
That played into some of our decision making over the last several months there was a significant concern from a regulatory advisors and investors that the emergency use pathway that we were looking to utilize would disappear as a result of the cancellation of the public health emergency this was especially.
Significant in July and August as we discussed with our advisors given that the administration appeared to want to downplay.
The pandemic during that time and this was further supported by the comments by President Biden, indicating that the pandemic was over at 60 minutes.
Given the declining death rate.
There was the expectation that this public health emergency would be rescinded and there is also questions related to the posture of the FDA related to trial size.
One of the major challenges we had.
And looking at funding <unk> pharma was in fact that the.
The majority of the revenues and the Covid cases that we've seen worldwide.
Really has been driven by the United States in the U K.
Yet the policies of those two countries.
The majority of the revenue would be driven for hospitalized COVID-19 as well as in Europe was a little bit uncertain.
So this created pause among the investment community.
What we heard from investors.
And what we also began to really understand was that the.
A company called their route.
Which had an AD com just last week was going to provide a significant amount of clarity regarding the FDA physician.
And that AD com.
Which did have hold last week while.
There was a negative vote and we are still waiting for the actual results, whether the FDA will approve it or not.
It did speak to one the FDA is looking for a significant trial size.
Somewhere between 200 500 patients and they did accept 200 from Barrow in order to be able to review the.
EUA submission so that was important for us to understand too.
It's clear that the FDA wants to understand the underlying mechanisms.
That are driving the potential benefit of any therapy in COVID-19.
So for US those two things gave us significant.
Information.
And after discussions that we've been having with institutional investors since last week I think there is a renewed focus and interest on hospitalized COVID-19, because it's clear that while.
The number of deaths in the United States and abroad has gone down.
There is concern that we have hit a floor.
In terms of deaths in that heading into the winter months. If there is significant surge in COVID-19 that there could in fact be another wave in that.
Really once we have the third such way.
From winter over winter over winter that this is something that we can expect to continue into the future I E. It's more sustainable and therefore.
Significant.
Need remains.
And so I believe that.
Now we've got a much better handle on.
On the regulatory front.
We have already drafted.
The protocol.
For this larger set study with two interim reviews, one at approximately 100 patients and one at approximately 200 patients, which will allow us potentially multiple opportunities for an accelerated review with FDA.
Once we complete enrollment.
Of those milestones, while continuing to enroll patients. So we don't slow.
We don't slow.
The recruitment towards that 500 number.
This also provides us with the clarity on what we are likely to need to raise in terms of capital for.
<unk> pharma and so im going to spend a little bit of time talking about.
The strategy around that one thing I will note.
As Dr. <unk> to read our Rod is coming to New York. This week and we are meeting with our regulatory advisors from Greenberg Traurig to try and finalize an overall clinical development strategy for <unk> 001.
What we believe is the best path.
After speaking with investors is certainly that the hospitalized trial remains viable.
And that clinical development opportunity is significant and will continue into the future I think investors believe that that is the case.
The second thing that's come out is that there is a significant interest in long COVID-19.
And we already have the phase II trial plan for <unk> 001 total avere.
The trial is designed and this is separate and distinct from the clinical study we have planned for a total of bid the dietary supplement.
So.
With that now in mind I believe that we have the key points to finalize our clinical development plan and strategy and raise the necessary funds in order to be able to drive those opportunities towards.
Clinical milestones from a capital raising perspective and that will be the focus of our crowdfunding campaign that we expect to initiate in December .
With regards to the crowdfunding campaign itself.
We'll be releasing today.
Some of the collateral.
That we intend to use for that crowd funding.
One of the reasons that we're planning to do that.
And it will be up for a short period of time.
Just so that investors told us investors can understand.
Exactly what we've been doing over the last several months in preparing for this.
As well we.
Think that.
Some feedback.
Related to that and the significant involvement.
Involvement of Doctor Rod will give told us investors comfort that in fact, we are working closer together closely together to make this a reality I do know that that has been something that.
Investors are re to our current retail shareholder base has been asking about and certainly its something that we have been cognizant of.
Okay.
The.
Next thing of course is we have as mentioned our clinical study plan for total of bid the dietary supplement at three sell pharma.
We have applied for grant funding for that so in the event.
In order to accelerate that and prior to the crowd funding we are hopeful to hear back on some grant funding opportunities in the weeks ahead.
So those are the primary updates that we have for the.
<unk> pharma subsidiary.
I will note a couple of other key items.
We've now completed the submissions.
For approval to sell the dietary supplement toll of it in Israel. There are a few additional documents related to some of the recent studies that we've completed on safety.
As well as some of the mechanistic work that we have to submit.
And we are now waiting for a response.
So I know that again that has been something that investors have been asking about and we have made progress now and has completed all the necessary requirements and now we are waiting a final response. In addition, we're midway through with submissions in Singapore.
And we are in discussions with several partners.
For the launch of toll of it in southeast in various southeast Asian jurisdictions.
There seems to be significant interest.
Given the background of toll of it as a traditional Chinese medicine.
And some of the data that we've produced thus far.
Yeah.
Alright.
Now.
Switching gears, a little bit I will be now focusing on revenue.
And just wanted to give a flavor obviously as Dan has discussed.
We had COVID-19 test and client.
That primarily drove our revenue with significant volumes that abated sometime in mid August and now as of last night has restarted. So our lab is right now in the middle of processing samples.
So thats very positive.
We expect that that revenue is going to come back that will drive operations.
We have also in the meantime, while our revenue was down.
We did focus on other revenue opportunities.
So a few.
That we looked at one obviously is the expansion of the pilot launch in dental in Florida, and looking at other jurisdictions in which to launch and acquiring sales staff with books of business in those jurisdictions.
That's something that we're making progress on and we believe that we'll be able to start executing on that in.
Later on this quarter now that we have our COVID-19 testing business back up and running.
Additionally.
We've found some niche opportunities.
In the ESG space.
So what.
What we mean there is there are fortune 500 companies that have mandates to deliver.
Some percentage of the testing that they are companies do too.
<unk> minority controlled entities.
We have been in discussions.
The tail end of executing upon joint ventures with some of those minority controlled entities that have the contracts with these ESG.
With these fortune 500 companies to deliver their testing volume to minority controlled labs, and we are finalizing joint venture agreements.
To serve as the operational arm of a minority controlled entity, where we will be the minority partner in a majority minority.
Relationship and.
And we can do this on a multiple scale basis and our attorneys are finalizing the structure there.
So with those what we like to call set asides for minority controlled businesses through some relationships that.
That we've developed over the last several months, we do see significant revenue that can come in on a satisfied basis for <unk>, which will allow us to move from the concentration risk that we have now with a single school client to being much more diversified.
So that is something that we've been working on over the last several months and we expect to come to fruition in the very near future.
Additionally.
We are looking.
Looking to make progress with our previous initiative around mobile labs.
We expect that there will be some news on that very soon.
Because the opportunity.
Continues to be significant and while we've had.
Full of years of in activity on that front.
We see that.
The opportunity remains.
And we are better positioned to execute upon it than others, who we're partnered with.
So we expect that we will be able to.
Again have some news on that in the weeks ahead that will allow us to expand.
Expand the hub and spoke business model that we had originally planned for <unk>.
With regards to revenue the other revenue producing asset that we have which is total of it.
We are completing a label change.
So one three sale pharma is going to be formally taking over the legal.
Contents, so youll see <unk> pharma on the toll of it bottle on the front of the total of the bottle at least thats compared to.
Totals totals will be on the back.
As we are manufacturer we remain the manufacturer of the product.
We do.
We have recently been asked the relationship between total of it until a year.
And we do want to note that they are in fact different raw materials.
And total of it is not approved to diagnose treat prevent or cure.
COVID-19.
We do not positioned to compete with <unk>, which is an approved authorized therapy for COVID-19. However.
However, it is positioned as a resale protease cleanse.
And so we do see that cleansing the resale Proteus can be beneficial in today's challenging times, where we have found significant.
Revenue that we believe is highly scalable for total of it is in the long COVID-19.
Market opportunity, where supplements represent virtually 100% of what patients who use to address their long COVID-19 symptoms.
The cleansing aspect.
Does resonate more clearly in the long COVID-19 commute.
Community.
And we are now working closely with data scientists to allow us to.
Pinpoint.
Exactly where we will be able to find those seeking solutions for their symptoms, they're long COVID-19 symptoms online.
So that's something that we intend to continue to work on we decided to pause some of our marketing efforts as we optimize our funnel so.
So that we don't waste resources, and then intend to turn them back on.
With unexpected much higher conversion rate.
As we head into Thanksgiving.
And the Christmas season.
When we have historically seen our highest sales of toll of it.
And so we are now preparing for that.
As we have started to see a rise in revenue.
In the very recent past.
Sure.
With regards to.
So all of it.
Distribution channels.
And marketing, we have decided to lower our spending.
In marketing on Facebook.
Because we werent seeing a significant return.
On our marketing spend however, we have seen a significant return on our marketing spend on Amazon.
And over in the last quarter, we can't retain much closer partners with Amazon.
We became part of there.
New company package their DSP package, where.
They are now actually delivering.
Our packages from our my told <unk> Dot Com website, Amazon is delivering them, which has resulted in a significantly reduced turnaround time from order to delivery from three days down to $1 seven days.
This is very important.
Especially over the holiday season that people look to clans or three cell protease on a more regular basis as they interact and move indoors.
One of the key differences and it's important to note.
Our product is compared to competitors is that we actually test for <unk> alkaloids.
And we have confirmation that our product does not have <unk>.
<unk> alkaloids as compared with other products that claim to mimic toll of it that we have tested that do have these alkaloids and thats a very important safety issue.
We think gives toll or at a significant competitive advantage. In addition to our three cell protease inhibition assay that confirms the potency of our formula.
So those are the primary updates on total of it as.
Many of our investors know we did.
Late in the third quarter.
Enter into a manufacturing services agreement.
Where we took over manufacturing facility for the manufacture of <unk> and the capability to manufacture hemp based.
CBD products and subsequently entered into an agreement.
Two.
Manufactured products for a client in nerd half.
Where we forecast significant revenues for this quarter.
An update on that contract one.
Sure.
The scope of the automated retail opportunity with nerd half.
It remains significant.
But is not the totality of the scope of the automated retail opportunity in the United States for totals.
So with regards to <unk>.
We are moving forward with a pilot launch in their locations. It's important to note that the.
Automated retail group that were working with has been behind several other automated retail successes so.
So for example, when you see the vending machine like automated retail machines.
From Kylie cosmetics at the airports or the ice store.
Or the best buy store those are the same automated retail.
Machines that we will be deploying our products into.
Both for nerd.
Through their stations as well as through our own totals botanical stations.
Which we will be making significant announcements on here.
Here into the future.
So.
The key and several trends that we're working on and why we moved into this botanical manufacturing area one.
In general since the beginning of the COVID-19 pandemic there has been a massive increase in the market for immune support supplements and one of the lasting.
Lasting impressions from this pandemic is that people have become more in tune to the need to support their immune systems with supplements on a more regular basis. So this trend is driving growth of approximately.
10, 9% CAGR.
With an expectation that the immune support supplement market will reach nearly $132 billion.
By 2028.
We believe all of it is the most important immune support supplement.
In that immune support category.
And we think that that will remain the case.
As we move forward and we believe that.
By leveraging that positioning of toll of it and being able to sell other immune support supplements under our brand we can create a multiple of the revenue as compared with solid toll of it alone.
And we have already had interest not only from our automated retail.
Discussions.
But some of those locations and with the automated retail.
We will have the machines theyre also brick and mortar opportunities based upon success in those machines and some of those discussions are underway.
Additionally.
We see the trend of.
The automated retail market.
Having significant increase.
Over the last several years I think.
No one would disagree that there's been challenges in finding.
Unappropriate.
Amount of labor.
For retail jobs and as a result.
There are fewer waitresses fewer cashiers.
And fewer retail workers available to work and as a result, this is driving large retail businesses to move more and more of their.
<unk> they are onsite distribution from cashiered.
Two automated.
And this is driving significant interest in our partners technology because.
Of the.
Technology.
And data.
That can be captured to optimize sales and improve.
Convenience and experience for customers.
Additionally.
What it does is it provides a certain amount of safety for the product to reduce theft.
And this has been a problem that we've seen.
On a retail basis nationwide in the United States.
So with those two trends, we believe that we're moving in the right direction from an automated retail perspective.
And that we.
We will be able to be create forecastable.
Significant month.
Month over month revenue growth as we roll out these automated retail machines.
To the different locations in the country.
One of the last things I'd like to note.
Is that we are getting significant interest from long COVID-19 physicians and long COVID-19 groups on the use of <unk>.
In that patient population, we did hold a.
Webinar with the Optimus kitchen, and which we had Dr. Leal gallon who's one of the leading physicians in New York.
Who is now using <unk>.
Initially with all of his clients.
And we are.
Now in pilot phases with multiple <unk>.
<unk> Covid groups that are recommending told of it immediately.
Two clients as they come into their long haul clinics, we see this as something that will.
Drives.
Marketing for us.
Obviously, it's physicians use our product and make recommendations to their patients about our product that drives interest in our product.
And it also drives interest from <unk>.
Larger brands who'd like to be associated with our product.
And so all of these trends tell us that we're moving the right direction with.
With all of it.
And we must continue to gather data.
Follow the science.
And insure.
We understand.
Other supplements that are being used with total of it.
<unk> are helping patients on a daily basis, and how we can leverage those to put into our offering.
And offer comprehensive solutions to the long Covid community.
Thats really what told US mechanicals was about.
And we intend to continue to execute upon that.
Concurrent with that.
Work.
We'd like to note that our partnership with <unk>.
And looking at.
Markers related to launch of it.
Is progressing very nicely.
Not only are we gathering data on the T cells b cells NK cells dendritic cells.
Their status.
Weather.
Activated are unactivated.
<unk>.
Particularly.
The memory versus naive population.
We're starting to understand.
Better how to use our products within the context of those markers.
We are.
In the midst.
Through some of the work we're doing with <unk>.
<unk> immune around caspase and neutralizing antibodies starting to understand better.
Exactly what products should be used when and we are supporting the marrow immune as they look to complete an assay related to viral persistence that could be launched in the U S market.
So we believe that this partnership is yielding tremendous data for us.
And that we have some of the best data as it relates to objective outcomes.
With different supplements and long COVID-19.
And this is driving our strategy as we move forward.
Yeah.
With regards to our proprietary testing portfolio obviously.
Our testing revenue ramps up.
And we think stabilizes and grows.
With our Covid testing, providing the base.
Our launch of our suite of PCR testing.
Allowing for further growth and as we execute upon some of these opportunities we have for a minority set aside contracts.
We will be able to generate sufficient cash flow to start to drive the <unk> desktop.
Program towards.
Commercialization.
As well as our <unk> program for which we expect to get data in the weeks ahead.
So this is the plan for our business I have been asked recently of course about uplifting to a national exchange.
As mentioned in previous communications with investors.
We are now laser focused on the New York stock exchange, which has a lower price requirement for listing.
And we expect very soon to be hearing.
Kind of a final verdict from them.
In terms of the requirements to meet.
Their listing.
<unk> listing standards so.
That is something that we are very excited about.
Because that will provide an opportunity to open up the investor base of totals to a much broader community.
And when we do that.
We think that between.
Our revenue base Covid testing the significant opportunity.
For the <unk> breast cancer blood tests and are all samaras blood test.
And obviously just the huge very topical opportunity of our <unk> pharma subsidiary.
Working in both hospitalized COVID-19 and long Covid, which we believe are the two areas that require the most attention as it relates to the pandemic.
That we could see significant increase in investor interest as it relates to totals.
<unk>.
With that said we.
We are being diligent.
Over the last several weeks, we've been relatively quiet.
On the Investor front, and we know that that has created some angst among our retail shareholder base.
Do expect that going forward, we will have a number of announcements heading into the end of the year debt.
That we believe could drive investor interest, especially now that.
Another COVID-19 wave has officially kicked off.
We have accomplished a great deal in.
In the first three quarters of 2022.
Before I turn the call over to your questions I would like to thank our employees for their dedication in helping us to position the company for sustainable long term growth.
I would also like to thank our investors for entrusting a portion of their investment dollars in our company and we welcome New shareholders you told us on what we believe will be a tremendous journey.
One of the.
Things that I've been asked recently.
As regarding a lockup.
From some of our note holders.
And the extension of that locked up so that we can see an appreciation in value.
As we make progress towards the New York stock exchange.
We have had conversations with those investors.
To facilitate.
A smooth transition onto the exchange by extending and strengthening the lockup agreement and we believe that.
We will be in a position to execute upon that very soon.
As we finalized our discussions with the New York stock exchange and position the company for growth.
We look forward to building positive momentum.
Upon the positive momentum we've generated so far in 2022 and implementing.
Our plants that we can see the results towards future growth.
Operator. This concludes our prepared remarks, and you can now open the call to questions.
Okay.
I'm not seeing any questions coming through on the chat box and new hands raised on the attendees.
Panel as of yet.
Okay.
Yeah.
So if that's the case then.
There are a couple of questions coming in.
The first question.
Good morning are you also looking for companies to purchase the company to further along toll here absolutely we are.
Evaluating strategic options for the three cell pharma subsidiary.
Again, the very AD Com Committee was very very important.
For not only told us.
And MLC.
But for others, who are in the marketplace to understand the posture.
And the likely stance as it relates to the FDA and new treatments for hospitalized COVID-19.
So now that we have some clarity while we're still waiting.
I still believe that there is a significant potential that very well.
We'll actually be approved.
Obviously I have no information on that but I do think that it is possible based upon the need of the country.
We will then I think have a very clear understanding of just how much the FDA wants any products.
And that will certainly as we move to raise independent capital.
Into three sell through the crowd funding, we think that will also drive a significant amount of interest from strategic transactions, whether they'd be jurisdictional.
So certain jurisdictions, whether there Europe or for southeast Asia.
Or within the United States.
Where that opportunity.
<unk> will be significant and likely will extend given the endemicity of COVID-19 here.
Can you can we update you on the Monkey pox and the New York State Health Department visit Yes, sure. So with regards to Monkey pox, we've submitted an emergency use authorization for the for the lesion based tests.
We are waiting to hear back from the FDA, but while we're waiting to hear back we've been authorized and we're one of the few labs across the country that can actually do leisure.
Leisure based PCR testing they have.
Paused, our ability to do saliva based testing.
While they conduct additional research and so the saliva based testing is no longer offered to the public.
With regards to the New York State Health Department visit.
Unfortunately.
They postpone the visit because.
The Inspector got Covid.
So we are waiting too.
To get a new date for that visit.
And we expect it to be some time.
In early 2023.
So that was very unfortunate.
The inspector of cut Covid.
Right before I visit.
<unk>.
We did pass our cap audit with flying colors.
And so we do expect that when we do have that.
That visit that it will be.
It will be successful.
Alright with that I'd.
I'd like to think.
Our investors.
And for shareholders for listening into this conference call.
And we look forward to a solid future of totals as we move forward.
Yeah.