Q3 2022 Trinity Biotech PLC Earnings Call
Good day and welcome to the Trinity Biotech third quarter financial results Conference call, all participants will be in listen only mode.
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After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw from the question queue. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Joe Diaz with some partners. Please go ahead.
Thank you Kay and thanks to all of you for joining us today to review the financial results of Trinity biotech for the third quarter of 2022, which ended on September 32022.
Joining us on today's call are <unk>, Chief Executive Officer, and John Gaillard, Chief Financial Officer.
Closing of today's prepared remarks, we will open the call for a question and answer session.
Before we begin let me inform you that statements made in this conference call maybe deemed forward looking statements within the meaning of federal Securities laws.
Statements are known these statements excuse me. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ.
Expressed or implied in such statements.
Risks include but are not limited to those set forth in the risk factor statements in the company's annual report on form 20-F filed with the Securities Exchange Commission.
Clearly biotech undertakes no obligation to publicly update or revise these forward looking statements to reflect events or circumstances after today or the occurrence of unanticipated events.
With that said I will now turn the call over to John <unk>, Chief Financial Officer for a review of the financial results. He will be followed by Mr. Eric Cajun Chief Executive Officer, who will provide additional background on revenues for the quarter and the overall business after which we'll open the call for your questions. John the floor is yours.
Thank you Joe Good morning, everyone now I would take you through the results for Q3 2022.
Starting with revenues total revenues for the quarter were $19 $5 million compared to $22 million in Q3 2021.
Erin will discuss revenues in further detail later on the Cogs.
I will move on to discuss other aspects of the income statements.
You will have seen from our income statement that we recorded significant excess and obsolescence charges related to inventory of $4 $7 million this quarter.
As this amount is immaterial to the results this quarter I will now bring you through the components of this charge.
Firstly, there is a viral transport media inventory write down of $3 5 million.
As we've talked about in recent earnings calls the situation related to COVID-19 products has been fluid and hard to predict.
Last year when demand for piece your V. T M products diminished, we cut back our production, but decided to retain the capability to flex manufacturing volumes should market conditions warrant.
As part of this strategy, we maintained an inventory of critical raw materials to allow a ramping up of <unk> T in production to meet peak demand.
It was important that we're able to fulfill high volume orders at short notice in order to retain existing customers and capture new customers at attractive price points.
So far we have not seen any evidence of current or future significant peaks in demand for P. C. R V T M products.
Season so.
So we revised our strategy of maintaining significant levels of raw material inventory to meet demand peaks.
We now intend to sell the vast majority of this inventory, which given current American conditions is expected to be at lower prices.
Consequently, the value of inventory has been written down for estimate of its net realizable value.
Secondly, we have written down the value of certain excess raw materials and work in progress following review and update to I rather than quality assurance policy. This amount that you would charge of $900000.
Turning to find third and final charge relates to write down of Christ AD inventory and amounted to 300000 batteries.
Undertook a strategic review of our Tri stat instrument as part of a broader view of our hemoglobin its product portfolio.
With annual sales of approximately $200000 price that is the least significant product in the portfolio.
To simplify the hemoglobin product portfolio to allow us to focus our resources on the higher growth products, we've decided to limit sales of <unk>.
That's a certain Paragon Paradise ships.
Consequently, we have written down the value of this inventory perfect. Consequently revised outlook.
All of what I've mentioned, so far contributed to gross margin of 10, 3% this quarter.
Excluding these significant enbridge you write down the gross margin for the quarter would've been 34, 4% compared to 44% achieved in Q3 2021.
As was the case in the first two quarters. This year the reduction in gross margin. This quarter is mainly due to the very strong sales in marriage as reported in the comparative period within our COVID-19 related portfolio of products.
Since then demand for Covid Pcr tests.
Or has fallen significantly in North America.
Additionally, our gross margin this quarter has been negatively impacted by rising prices for raw materials and the under recovery of labor and overhead costs at three of our manufacturing facilities due to reduced production activity.
We addressed the latter problem by reducing head count as two of the affected production facilities in relation to the other sites in Jamestown New York, We have started the process of transferring in autoimmune product manufacturing, which up to now has been done at our Buffalo New York site.
In terms of gaining weight margin erosion, which has come from rising input prices, we've already put through some sales price increases where market conditions allowed.
And we continue to monitor the opportunities to implement additional price adjustments in the short term, but subject to consistency with our broader strategic objectives.
Moving onto our expect R&D expenditure, which was $1 million in the quarter down by 40000 compared to Q3 2021.
Meanwhile, SG&A expenses in the quarter were $5 8 million down approximately 320000 compared to Q3 2021.
We continue to focus on operating efficiency and cost control and have continued to reduce head count as we pursue greater automation and simplification of processes.
We're also benefiting from the stronger U S dollar against the Euro which is reducing our substantial euro denominated SG&A expenses.
Offsetting this or additional travel and trade show related expenditures, reflecting an increase in sales and marketing and senior operational SaaS travel close the lifting of many COVID-19 related travel events.
We believe it's important for our sales and marketing staff to resume face to face interaction with our customers and partners is a key component of rejuvenating our sales revenues.
In addition, we also believe it is important to key operational leaders many of which we have recently recruiters have the opportunity to visit our various sites with so we can aggressively execute on our operational efficiency objectives.
We recorded impairment charges of $2 $3 million this quarter compared to zero in Q3 2021.
The development project for the autoimmune Smart reader was posed earlier in 2022 as you review the other options, including the potential to proceed with a third party reader instead of our own internally developed reader.
Following this review we determined that they were likely greater opportunities to capture more market share in a more capital efficient manner through partnering with a third party reader manufacturer, they're pursuing an independent strategy.
At this point in time, there is significant uncertainty if we will complete the project to develop our own in house autoimmune smart reader and thus why we may revisit this decision in the future. The interests of Prudence, we are fully impair the projects carrying value of $1 $3 million.
The remainder of the impairment charge relates to try SAS as I am.
Mentioned earlier, we undertook a strategic review of our cryo sat instrument as part of a broader review of our hemophilia, but its product portfolio.
In order to rationalize the hemoglobin is part of our portfolio and to allow us focus our resources on the higher growth products within that portfolio management decided that price that says will be restricted to only certain target of partnership and this has led to an impairment to the carrying value of the twice that intangible asset.
This results in an operating loss for Q3 2022 of $7 1 million compared to an operating profit of 2.8. Many reports in Q3 2021.
I would point out that this quarter, we have zero paycheck protection program income, but in the quarter comparative quarter, just over $1 million of PPP income was recognized.
The other drivers of that reduction in operating profit and the lower revenue and margin contribution from our COVID-19 related portfolio of products the significant inventory write downs and the impairment charges as well as the aforementioned impact of inflation and under our corporate overheads.
Moving on to net financial expenses of $1 9 million in Q3, 2022, which compared to $1 2 million in Q3, 2021.
The increase is mainly due to higher interest rates applying to our borrowers post the refinancing.
We have replaced exchangeable notes with a coupon rate of 4% with a senior secured term loan with an interest rate of approximately 13, 5%.
But albeit the NASA mountain now BARDA substantially lower.
In dollar terms the interest expenses $600000 higher this quarter when comparing the interest expense for term loan versus the exchangeable notes that it replaces.
Additionally, in 2022 we issued a seven year convertible note and the total cash and noncash interest expense for this debt is approximately 260000 in Q3 2022.
Lastly, we recorded a fair value adjustments on derivative balances related to the term loan was this quarter was income of approximately 300000.
In the comparative period, we had fair value adjustments on derivative balances related to the exchange of a notes, which is a financial income of just under 200000.
Net loss after tax was $8 9 million in Q3 2022 compared to a profit of $1 3 million in Q3, 2021.
As in prior quarters and as set out in the press release, we of course earnings per <unk> effectively are equivalent of EPS.
In Q3 2022, the loss per a D. S. It's $23.05 compared to a profit for a decrease of $6 <unk> in Q3, 2021.
I'll now move on to address some of the main balance sheet movements, we have seen since quarter two 2022.
Intangible assets decreased by 1.6 million. This is made up of additions of 1 million, which mainly comprises capitalize R&D expenditure, partially offset by amortization of 300000 and the impairment charges for the two development projects of $2 3 million.
The amount of capital R&D expenditure reduces water compared to recent quarters and this is because several of the main projects. We've been working on have reached the final phase of development and in the final phase fewer resources are typically required.
Inventories decreased by $5 6 million, mainly due to the significant excess and obsolescence charges I talked about earlier.
Excluding these significant inventory provisions of our level of inventory has reduced by 3% since the end of Q2 2022.
Is it an area we are targeting and we have an ongoing project aimed at optimizing our inventory levels going forward as part of our focusing on improving the overall effectiveness and efficiency of our supply chain.
Accounts receivable balances on the other hand have increased by 8% and this is mainly a function of the increased sales this quarter.
Finally, I will discuss our cash flow for the quarter, our cash balance decreased by $3 2 million to $7 3 million in Q3 2022.
Cash generation from operations for the quarter was 700000, an increase of about 100000 compared to Q3 'twenty 'twenty. One it is the first quarter. This year, we reported positive cash flows from operations and as a result of trimming our cost base better working capital management.
Capital expenditure cash outflows comprising P. P and R&D spend were one 3 million a reduction of 700000 compared to the prior period intra.
Interest payments in the quarter were at $1.7 million I will now hand, it back to Arris, who will bring you to the revenue. Thank you. Thank you John .
I'd like to take a few minutes before we answer any questions to go through the highlights for the quarter.
Total revenues for Q3, 'twenty, two or $19 $5 million, excluding our COVID-19 focused Pcr products.
Q3, 2022 revenues of $19 2 million were marginally higher by 2% compared to Q3, 2021 and were up 6% Q O Q2, compared to Q2 2022, So we have to close some sequential growth around 6%.
The strong year over year increase of 30% venues attributable with both our hemoglobin, Jim Fitzgerald businesses offset the timing impact of atypical concentrated sales.
Yeah. It was Uni gold HIV in Q3 2021.
In addition, we put through pricing changes and optimize capacity.
Our autoimmune products business and that's led to a 30% increase compared to the same period last year.
Quarter over quarter revenue momentum was once again driven by Fitzgerald.
At about 25%.
And this reflects actions that we've taken to optimize demand generation throughout the year.
We also had some strong demand for the Uni gold HIV product on a quarter over quarter basis up 35%.
And as I previously mentioned and the actions we took in autoimmune and resulted in a 20% quarter over quarter growth in the autoimmune products.
We're experiencing particularly strong demand for hemoglobin products in Asia, Pac and Latin America, where there are well over 50% year over year revenue growth in Asia Pac and over 40% in Latin America.
We continue to scale, our commercial coverage in these markets, where the increase in diabetes and propensity for hemoglobin variance.
Is that some of the highest rates.
And our Barnett affinity technology has a particular competitive advantage in this area given that it mitigates and limits interference associated with our lives.
It was variables.
Variance excuse me.
Yeah. The other thing that I'm, particularly focused on with respect to our global growth is in relation to distributor coverage.
So we've also undertaken a significant review of our our.
Our gaps in distribution and I expect to meet the bulk of our distributors in February and in the new year.
Preliminary estimates for Q4.
Indicates significant continued growth momentum in hemoglobin instrument placements and steadily improving global HIV test demand include.
Including New unit gold ores from Ethiopia, and preliminary train screen orders from Kenya.
These increases are expected to offset lower Q4 revenues as fitzgerald, reflecting the demand generation in previous quarters.
But we expect the year to and around $75 million run rate for on an annual basis.
In late August the company submitted its five 10-K submission to the FDA seeking U S regulatory approval for Premier resolution or hemoglobin variance instrument.
We're expecting to launch this product in Q2 of next year and we remain on track hopefully are in line with what your expectations are.
In November 2022, the company initiated the development of its next Gen flagship diabetes H B, a one C instrument the Premier 92 Penn.
We're expecting to launch in Q3 of this revised instrument.
Next year.
It is planned to feature an improved backward compatible reagent column system.
That will feature up to three times, the injection capacity and stability.
Requires limited calibration.
And improves user interface and lab system integration.
In addition.
This system should underpin the lower cost mid throughput <unk> instrument currently in development.
We think this product launch and the associated Redesigns associates.
In conjunction with.
We will give us substantial gross margin improvement in our hemoglobin business over the next couple of years.
Since the World Health organization approval in February 2020, do worse screen print screen product.
The Kenyan Ministry of Health Task Force recommended it as a first line screening test Virginia's new HIV testing algorithm.
We expect to conclude the current pilot program that's underway.
We expect that the end, probably some time close to year end.
And we believe that we're gonna be delivering ministry of health orders in Q1 and.
And ramp up to approximately 6 million tests a year.
The company's in partnership negotiations with a number of rapid test innovators.
Our intention here is to leverage our lateral flow biological development and manufacturing capabilities and also provide access to our global distribution channels.
In addition to capital efficient growth and strategy provides early access to intellectual property associated with the evolving user interface concepts.
We've been implementing improved design for manufacturing supply chain and other in sourcing enhancements.
In order to significantly optimize margins across the portfolio.
In Q3, we focused on streamlining the portfolio with the elimination of lossmaking legacy products and inventory much of what John explained to you earlier.
We continue to consolidate multi product flexible production in our Jamestown facility with the transfer of our immuno fluorescence and you're into manufacturing activities from Buffalo, New York, and Burlington, Canada, respectively.
The company continues to focus on attracting and developing world class leadership.
We've recently appointed a new Chief Technology Officer.
Our global head of quality and regulatory affairs and.
In our global supply chain leaders all critical.
In driving our growth strategy that I reviewed last week at the Piper Sandler Conference, where I outlined the company's strategy and our focus around key initiatives.
You are welcome to take a look at a copy of the presentation. It's on our website.
And with that I think we'll open it up to questions.
We will now begin our question and answer session to ask a question you May Press Star then one on your telephone keypad. Please take your phone off speaker before passing a keypad to withdraw from the question queue. Please press Star then two.
My first question is from Jim Sidoti of Sidoti and company. Please go ahead.
Hi, good afternoon, thanks for taking the questions.
It seems like you've made some pretty significant investments in the hemoglobin product line too.
To to accelerate growth there well if you look out to 2024, how many different premier instruments do you expect to have on the market and what markets do you think you'll be in.
Well look let me let me.
I'll, let John give you some context around the the numbers are associated with the plan.
But I will give you some context our.
Our technology.
Is somewhat unique.
Is it it keeps variance interference out of the a one C testing process.
It might not be as big a deal in the U S, but outside the U S where you have the highest growth rates of diabetes, whether it's in South East Asia or Latin America.
Or the middle East for that matter, our technology is actually perfectly suited.
With the high growth markets that we're talking about and that's where we're seeing significant growth. So you know we feel pretty confident that we could be placings.
A number of instruments on a on a on a consistent basis in those markets now at the same time behind that we're using a fair bit of the same technology.
To rollout our T 20.
Lower cost instrument.
Lower throughput use.
Call them technology Sim.
Similar supply chain.
And I think you know.
Again that that gives us significant opportunity.
<unk> gained share in these critical markets and.
As you know that the business model, it's a bit of a razor razorblade model, we get a number of placements and around the world, especially where the high growth rates are.
It's just math.
John I know if you want to give some context on some of it in terms of numbers like we have historically placed you know 200 200 instruments a year.
That had been reduced down to Covid and we certainly have seen an uplift throughout the throughout this year.
I would expect once this redesign goes through and we're also focused very much in terms of our supply chain efficiency to reduce down the cost of the instrument.
There would be to give a lower entry price point right in terms of the market. So I think both of those the redesign and the supply chain efficiency, reducing down the price point, Jim We would expect that we would increase those number of placements from that historic run rates.
In terms of the T T 20 instruments, the midlevel analyzer.
It is a lower cost instrument and we certainly again would be expecting to be in the hundreds range in terms of placements. So that once we've got that are established in the market.
Geographically as far as the new 92 bed I would expect we'd be running well ahead of where we were prior to COVID-19 once we're up and running and properly marketing the product.
It wouldn't surprise me, if we were starting to put $2 50, even higher 300 units in the in the market on annual basis, that's what I would expect for myself, saying, okay. The deep one he's got them later, we still have to get approvals and commercialize but you know we to John's point, we should have a similar number of <unk>.
Run rate unit placements with the <unk> 'twenty as we are with the 92 that so like if you think about doubling.
Over time, we should be doubling our placement levels with both products compared to where we were a couple of years ago.
Geographically we expect.
<unk> 'twenty, Jamie its probably suited more too.
You know countries, where theres more dispersed a testing regime. So you know a lower concentration of of big Big Labs.
And that can generally be kind of the lower to middle income countries. Okay for the nights to obtain will probably continue to be strongest in.
Higher income countries.
Are those with a significant level of variance so it depends on the economic factors and it also depends on the type of lab infrastructure in country. We've got a good global spread of our instrumentation and we think the T 20 gives us a chance to have even better global spread and a <unk>.
<unk> diversified placement base and the other thing with the <unk> 'twenty is.
We're doing some work on it now, but we think there is.
An interesting market opportunity in the year and in the U S around CLIA labs, and whether or not there are.
The appropriate throughput levels in the right entry point. So we think there is a rebuild revitalization potentially of our U S.
Placements, especially with the deep one and part of the redesign effort. We've got the team together in January the part of the redesign effort is to make sure that the features.
Yeah, we're incorporating really tap into where we think.
The sweet spot might be.
But it sounds like by 2024, you'll go have you will have at least three versions of the Premier systems on the market is that right.
That's.
Including the including the Premier resolution, yes, that's it.
Latin.
Alright.
And in term business for us right now.
The hemoglobin business for US right now is really all about focused product development commercialization and rollout.
Just execution right now very focused.
In terms of facility consolidations.
Is there enough capacity in Jamestown too.
To continue to consolidate.
Yeah, So just to be clear, we're not closing our Buffalo site, we are expanding our autoimmune and factoring capability. So our Jamestown site has historically does what our legacy infectious disease.
Is this I think we flagged a number of times, we do expect that business to continue to kind of.
Keith.
It was reduced down over time right.
And for that reason, we're seeking to gas greater utility out of the Jamestown size that site has been a very loyal and highly productive site for Trinity. It's a it's a very flexible flexible product side as well you can ramp up and ramp down in a number of different product lines, where we're looking at it as one of these.
Swing facility and a N a N a flexible side in many ways and that flexibility and increases our overall utilization. Okay. So that's critical.
So we want that portfolio effect.
And as many sites as we can so that we're not left with crap costs in particular sites dependent upon intra quarter demand for product.
And look at our our intention with the Buffalo side is to be honest as expansion around our lab, that's where our focus is.
So using Jamestown for capacity around autoimmune products. So that we can expand the lab in Buffalo.
Actually aligns a lot.
With War force dynamics.
And so we think we think it's the right way to go.
Okay any update on refinancing the remaining portion of the debt.
We continue to examine a number of options and I think as we flagged previously we'd seek to do that as part of some kind of strategic transaction and that would be our preference and so look at looking at a number of different options.
We don't have a critical need at this point to overly focus on that.
And we'll make a thoughtful decision.
The context of a broader strategic objectives.
A number of <unk>.
Yeah, we were having a number of dialogues with various parties about.
Different strategic ideas.
Most of those should be coming to fruition.
One way or the other in the first quarter early first quarter and Thats, probably the right time for US then go seek a proper refinancings on the back of a move around the strategy we've been outlining.
Okay, and then I just wanted to be clear that I heard you correctly in terms of the guidance for.
For the fourth quarter. It sounds like you know, maybe a little bit weaker on Fitzgerald, a little bit stronger in some of the other product lines, but overall it seems like your guidance you gave at the end of last quarter and $19 million or so it sounds like that's similar to the guidance, you're giving for the fourth quarter.
I think it will be a little lower in the fourth quarter I, what I said last quarter as well.
We're kind of flattening.
Base lining around 18, $8 $5 million ballpark, that's why it came out roughly.
And the math roughly were $75 million run rate.
Company closing out the year okay.
It's about $18 5 million run rate I think that's kind of it's a little lumpy like here quarter to quarter, but thats kind of where we're averaging out.
The initiatives, we put in putting in place I've been here 60 days issues, we've been putting in place should start kicking in in the new year.
So we expect to start seeing pickups in and revenue profile.
In 'twenty early 'twenty three.
Got it alright, thanks Gerald.
Got us the shareholders. The most it's the biggest swing from quarter to quarter. It's just.
We wanted to make sure the demand profile was more evenly distributed over the course of the year, we got a number of.
Inbounds and Asia seems to be rebounding, a little bit faster. So we were able to book.
Book, some of that stuff, but we're not banking on that with Fitzgerald in the fourth quarter and that's the major gap and Jamie as you know from the past some of our orders can be large value and you know, there's there's uncertainty around that until we reach out into the quarter.
I understood. Thank you.
Yes.
The next question is from Paul Norrie of Noble equity funds. Please go ahead.
Hey, good afternoon wondering if you could give us any guidance on what gross margin will be compared to the third quarter going forward.
Not really at this stage, Paul a lot of moving pieces and to be honest between the head count reductions that we're doing and there's a lot of PPV variance at the moment with input price increases so.
This point I'd be reluctant to give guidance on this I think we gave a perspective last at Piper Sander in that presentation, I think where we're targeting over the next two.
Two three years about a 40% to 45%.
Gross margin level, that's kind of where we're where our base plan lands.
Okay and the run.
Run rate of the screening tests that you mentioned in the press release is that just a number that you can do based on manufacturing or that you think you'll have based on one tenders next year.
Yeah.
The is this the trend screen.
Yes.
Yeah that would be from one algorithm. So that it was just literally be from Kenya. So aim.
We are hopeful that we will be included as the screening testing the algorithm that that's what all indications suggest and that's what the task force recommended.
Am I a pilot is going well. So all indications are we're good to go with Kenya, and Kenya as you know sets the tone.
We've got commercial teams on the ground, we've got a whole team on the ground working all the other algorithms.
We really do believe that when we get Kenya land that it's going to set the stage for the rest and that's what we that's what has been indicated the most is their annual demand under their current plans. So yeah, it's not driven from our remanufacturing capability, it's driven from our expected demand.
On the basis, we get the screening position.
And the legacy business, that's been declining for a number of years and was hit by the.
The Lockdowns in China, how large does that business for me now.
And you know it's it's it's probably you know it's less than it's less than $2 million a quarter right.
What we're seeing with that Paul It's just yeah. I continued a continued tapering off right and I think we there's some evidence of a little bit of a bounce back in dash, yeah around basically a higher level of pregnancy in China.
None of our infectious disease tests, there is used for screening pregnant mothers, so there'll be variability within that number but over time, that's not an area that we're expecting to grow and that's why we're moving to that portfolio effect in terms of our production and manufacturing capability look the key for us with respect.
Infectious diseases.
As we are examining next generation instrumentation around autoimmune.
Especially wrong Chemiluminescence type technology platform.
We believe that has significant.
Synergy and alignment.
And potentially rejuvenate our infectious disease business. So we're looking at that.
In tandem we think that's we're going to do anything significant in terms of investment in the infectious disease.
It'll be on the back of.
Being smart about what we do with autoimmune onto next generation basis.
And the.
Syphilis test that you guys had FDA approved and you know it didn't really sell much of you.
Whatever the factors were in the U S is it completely pulled from the market and what are your plans for syphilis point of care moving forward.
And we distribute a syphilis test and on behalf of a third party and demand for that product is high.
Jim.
We continue to have ongoing discussions with that supplier in terms of our strategic plans.
We are inherently and infectious disease lateral flow and developer and manufacturer right. So there's clearly an element of skill set.
We have to weigh that I'll call versus the regulatory costs and development costs and challenges of going after that market. So.
Constantly under review at the moment, we're happy with the performance.
The from a revenue perspective of third party products that we are distributing.
Okay, and I guess, probably the last question how did the lab in Buffalo performed this quarter and in particular, the Sjogren test.
Yeah, we've continued to see growth in Sjogren test aim that's typically growing quarter on quarter.
Yeah, I mean sjogren is were probably doing.
Three and a half or so million of revenue, we think and that's up I mean, if you look at it just from a couple of years. It was it was 2 million packed in about June .
2000 was it plenty yet.
So it wasn't that significant and we haven't really marketed it to be honest with you, but one of the opportunities that I've been focused on is as is where or where do we have IP Ed.
And what's an interesting model going forward for a reference lab and the beauty of the Shoguns product is that we haven't marketed and its been growing cigna.
Significantly.
If we put some work behind it I think we can significantly scale that business and it's all based on the fact that we had a partnership with the University at Buffalo, where we license key markers into a test I think that as a model for us going forward.
You know, where we can we can we can license promising.
Biomarkers around the autoimmune space.
And develop those into into past that.
Only we can provide.
So between that and partnerships with pharmaceutical companies in the autoimmune space, that's kind of where we're leaning with us with our broader strategy and the lab generally Paul I think we've set out at the Piper conference Aaron's or Erez spoke about it.
And you know we.
We are very very focused on increasing the capabilities of that lab, we have a huge amount of infrastructure there.
Have a great assets, having a new York certified lab, we think that really plays well in terms of the the at home testing.
<unk> market, that's kind of opened up post COVID-19. So a big strategic focus for US is finding the right partner that can help us scale that business and in a way that delivers real value to Trinity in a way, that's sticky and recurring rather than merely transactional relationship that.
We can lose value overtime. So that's our strategy around that I mean, if you look at our plan has real growth in the lab over the next several years.
We have visibility.
They're both improving the specialized nature of what it does today around the kind of things that are growing like autoimmune disease.
And at the same time.
We believe we have the capability and capacity.
To build it out to meet the needs of the beta BDC market.
And it's something I.
Just last week at Piper and I'm I really believe we're sitting on a valuable asset.
Alright, well thanks for answering my questions.
Thanks, Paul.
Again, if you have a question. Please press Star then one.
Next question is from Andrew made of Wells Fargo. Please go ahead.
Andrew is your line near that.
Okay.
Oh, okay.
Okay.
Your line muted.
Okay.
There are no additional questions at this time.
Concludes our question and answer session I would like to turn the conference back over to Eric <unk> for closing remark.
Thank you I appreciate it look.
I just wanted to give a give you gave out a comment or two.
Around the recent 13D filing by the Mako group.
I wasn't surprised by it given my knowledge of all the facts that I don't think it's worth seriously addressing the individual points.
They chose to raise.
But first and foremost to be cleared I would do be clear I was recruited by Nico initially as a board member and subsequently put forward by them as CEO .
My My assessment of the situation is this is all about control.
And not about shareholder economics.
There's a clear Jay bolt mentality at work here at 29% stake does not entitle you to control.
The tender rules are clear and are there for a reason they had to protect all the shareholders.
Like anyone else has the option to make a proper bid for the company.
Just remember their market cap is about $230 million I imagine it would take significant resources to acquire Trinity at a price that the board and shareholders would find compelling in light of the ambitious and attractive value creation opportunities available to the company.
It was obvious to me when Mikko asked me to join the Board and then when we force.
C O that while Trinity had several compelling market opportunities I'd also clearly had been in a turnaround situation for several years.
My focus the focus of the board the management team is a complete turnaround to instill operating rigor build partnerships and ambitiously rejuvenate the growth potential that lies ahead of us.
That's all I have to say about the matter and with that I'd like to thank all of you for joining us today.
Enjoy the holidays, we look forward to an ambitious and exciting 2023. Thank you.
Thanks, everybody.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.