LumiraDx Limited Q1 2023 Earnings Call
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Good day and thank you for standing by. Welcome to the Lumeria DX First Quarter 2023 earnings call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. So ask a question during the session you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
So, we'll draw your question and please press star one one again. Please be advised today's conference of being recorded. I would not like to hear the conference over your speech today. Melissa Garcia, please go ahead.
Hello everyone and welcome to today's call to discuss Lumeria DX's first quarter 2023 financial results issued earlier today.
Joining us are Lumerida X's Chairman and CEO , Ron Wandsiger, and Chief Financial Officer, Dorian LeBlanc.
The press release announcing our financial results is posted on the Investor Relations section of the company's website at numeridx.com.
Before we begin, I would like to caution listeners that any statements we make today, other than historical facts, our forward-looking statements made pursuant to the safe harbor provisions of the Private Security's litigation reform act of 1995.
Please be aware that all such forward-looking statements involve risks and uncertainties, such as those detailed in our annual report on Form 20F for the year ended December 31st, 2022, which was filed with the SEC on May 1st, 2023, and in other filings that we make with the SEC.
Any forward-looking statements that we make must be considered in light of these factors. Actual results may vary materially.
Also, during today's call, we may refer to certain non-IFRS financial measures. Non-IFRS financial measures should not be considered an isolation from or as a substitute for financial information presented in compliance with IFRS. There is a schedule showing the reconciliation of these non-IFRS financial measures in our press release issued earlier today.
We continue to advance our creep priorities, which include commercializing our product, portfolio of 12 CE Mark tests in Europe and other international markets, progressing our US revenue pipeline and 5-take-k plan, accelerating the development of our high-sensitivity triponinum molecular assays on the platform.
and reshaping our organisation while lowering our cost-based support strong innovation and commercial success.
My son's reaching Q1 in Europe and other international markets include launching the world's first quantitative fingerstick NT-ProBMP test in Q1.
This test delivers results in 12 minutes, allowing for immediate linkage to care for patients suffering from heart failure, which afflicts nearly 65 million people worldwide.
In February , we showcased this test alongside MENTRONIC and a number of local health care trusts in the UK as part of your heart matters by initiative, delivering free health care checks in the community.
Since February , we've already shipped our NT Pro BMP test, the highest margin product in our cardio-metabolic project, but for a little more than 100 commercial customers.
As previously announced, we achieve an NG SP certification in Europe for our HBA1T test, and recently, researchification with the International Federation of Clinical Chemistry, demonstrating the high performance of our assay.
Boots Pharmacy announced a new private pilot service for diabetes screening, utilizing the Lumary DX platform and custom their month continues to grow across Europe for this essay.
We received Japanese PMDA approval for both our HbA1c and CRP tests. These tests are going through commercial readiness implementation, and we currently plan to commence commercial sales in June for Japan. Japan represents an attractive market with high reimbursement and pricing for point-of-care assays.
The first quarter marked our house quarterly sales today for IONR, CRPG DIMA, HBA won't see an anti-probe BMP as more European international customers take advantage of our multi-analyte menu.
Additionally, we're optimizing the testing locations of our instruments to prepare for a growing shift in on-covid testing.
We're working closely with our customers to achieve this.
In the UK, we successfully deployed nearly 800 instruments from the NHS from their COVID procurement into testing locations for non-COVID use cases.
We expect to continue to deploy the deploying instruments with the NHS for multi- and light testing.
And we're exploring a similar redeployment initiative for a portion of our 5,000 plus instrument base in Africa.
Overall, we're encouraging our customers to maximize the number of tests run for instrument. We've seen our customers continue to diversify the number of different assets. They are testing on their instrument and the volume of knockouts with tests they're doing per instrument.
In addition to the instruments redeployed with customers like the NHS, we deployed an additional 350 instruments in the quarter. Along with those, we anticipate deploying over 1,000 instruments in this second quarter.
In the US, we concluded five technical studies for our five minute COVID-19 Ultra product and plan to submit the five day night of vacation to the FDA in Q2. In the US, we concluded five technical studies for our five minute COVID-19 Ultra product and plan to submit the five day night of vacation to the FDA in Q2.
Our first 15K for the DX platform importantly helps pave the way for future 510K submissions for the other tests in our menu, including our cardio-metallic portfolio.
Due to low prevalence, we were unable to acquire sufficient clinical samples during the current season to complete our 5-10-click clinical study this year. We continued to work with the independent test assessment program ITAP established by the NIH.
Rapid Acceleration of Diagnostics, program to achieve accelerated FDA EUA review for our COVID and flu combination product for the 23, 24 season. This program is in its final stages and currently undergoing external testing. Please continue clicking on GP ER not only Darne Phil ???amy, the three Ravenclaw VP 5 Abbine lateral test, to increase the conditions and prevent injuries in an tenirampone, pipeline or for to use it as a main Magah cheering Tim of Jean-ibris G 17 Diagnostics, test in Service Lesson 24 July
We do see expansion opportunities for the Limeridax platform in the near term in the US for endemic COVID, seasonal respiratory testing and for the cardiometic, cardiometabolic menu, which we have commercialized outside the US. We continue to see increased orders in the US for the platform even prior to the menu expansion.
As a result of our cost reduction program, we're accelerating the development of high value and say for both molecular testing initially with strep A and TB and for our high sensitivity to burn an assay.
We expect clinical trials to commence in these assays in the second half of the year for US-Fighting K and IBDR in Europe and expect to launch in the UK and other markets later this year our high sensitivity component test.
The advance end of technology and new care models introduced during COVID-19 pandemic have accelerated improvements in the quality efficiency and convenience of healthcare delivery. Our point-of-cap platform which brings together multiple answers on a single easy-to-easy year-old instrument with laboratory equivalent performance.
and a low cost of ownership facilitates this new generation of care and is resonating across our customer base.
Customers are now developing increased use cases for deploying our unique point of care technology as seen in the following examples.
In the UK, some of the previously mentioned redeployed instruments are being positioned in the NHS Virtual Award Program. Virtual Award, which are a growing trend in health system worldwide, allow patients to get care they need in a place they call home, including care homes.
safely and conveniently, rather than being in hospital.
NHS England definition of a virtual ward is a safe and efficient alternative to bedded care that is enabled by technology.
The Limerides platform, which delivers a broad menu of lab-comparable primary care tests with the minutes as exactly the type of technology enabling this key development towards a more patient-centric healthcare system.
Another example, France is in the pro-separze authorizing legislation to enable an expansion of point-of-care testing and reimbursement into clinical settings that have previously been required to use only lab testing such as medical houses where general practitioners practice the facilities comparable to urgent care clinics and nursing homes.
This legislation is expected to open a new launch.
new point of care market opportunity in the second largest country in the European Union. The recent amendment to the U.S. Public Readiness and Emergency Preparedness, or PREP Act, which was enacted during COVID-19, extended PREP Act coverage to essentially allow pharmacists and qualified pharmacy technicians—
to administer vaccine and COVID-19 testing at pharmacy location.
This model emphasizes the need for point-of-care testing and allows a pharmacist to conveniently test results and treat patients in one visit and is especially impactful in geographic areas and for patient populations lacking convenient access to traditional health settings. The Lumeriex platform they utilized this.
A single instrument with low cost and high accuracy is particularly well suited to serve the trend to consumer oriented care at retail locations.
And the final example we'll provide is on April 18th of this year, the WHO issued the WHO standard universal access to rapid tuberculosis diagnostics. This is a time to take a break and a plan to achieve universal TB testing.
For the over 10 million infected with TB annually, as part of the report, the WHO calls for a next generation TB test that will be, quote, low cost battery operated rapid nucleic acid amplification test that provides results within 30 minutes as an expected price.
well below the US $10 threshold and suitable for sample types that are simply to collect, e.g. tongue swabs. This is an exact description of the TB tesla-mir DX they're developing and speaks to the enormous global demand for our potential first-in-class product.
As you can see, the LemuriaDX platform was designed specifically as a diagnostic solution for Lemuria traditional and emerging care models.
As our platform continues to mature, our menu expands, in key geographies and our customers to continue to implement new workflows enabled by our performance.
continues to mature, our menu expands and keeps your properties and our customers to implement new workflows enabled by our performance, ease of use.
and low cost. We remain confident in our platforms' capability to transform community-based healthcare with lab cover-all results in minutes. Now, Doreen will further discuss our financial performance in the first quarter. Doreen.
Thanks Ron. Quarterly revenues for Q1 exceeded our recent guidance on stronger than anticipated COVID sales.
Of our 22.2 million and first quarter revenues, 7.3 million or 33% of total revenues were from non-COVID-specific solutions, including 2.9 million from our Limeridax technologies and 4.4 million from our distribution business.
We expect seasonality in our respiratory business, including COVID influenza and RSV testing, to provide headwinds for revenue growth during the next two quarters.
We anticipate total revenues in Q2 2023. It could be similar to our Q1 results with growth in our non-respiratory point of care tests to compensate for the seasonal decline in respiratory testing.
Total adjusted gross margins for the quarter, or 0.5 million. Adjusted gross margins exclude net depreciation, amortization, stock based compensation, and restructuring charges.
The full impact of our most recent cost reduction program will decrease our fixed cost manufacturing expenses from June onward and we anticipate similar mod suggested gross margins in Q2 as fixed cost and instrument placements dilute the strong gross margin profile of our test strips.
As discussed in our prior earnings call, we are in the process of implementing our most recent cost reduction program to generate an additional $36 million of annualized cost savings.
We expect that the full impact of these restructuring activities will be realized during Q3 2023. Our goal just has to be built on thatir Partnif Doesn't work.
We did accelerate the impact on our operating expenses from our 2022 restructuring activities within the quarter.
Our first quarter adjusted R&D expenses were 14.8 million compared to 16.8 million in Q4 2022, and first quarter adjusted SGNA expenses were 19 million compared to 22.3 million in Q4 2022.
Adjusted operating expenses exclude depreciation, amortization, stock-based compensation, and restructuring charges. Our adjusted operating loss for the quarter decreased to $33.3 million, and we anticipate our cost reduction programs will further reduce our loss in Q2.
In March 31, 2023, our cash balance was $68.1 million.
In addition to our specific focus on our cost reduction programs and our declining operating losses, we do expect to deal with our balance sheet later this quarter to strengthen the company for the future.
As a prelude to this, we filed a shelf registration statement on May 4th, which became effective yesterday in the amount of $100 million to provide additional alter this for Raiden Capital.
We will now pause for the operator to gather any questions.
Operator.
Thank you ladies and gentlemen. If you have a question or a comment at this time, please press star 111 on your telephone. If your question has been answered, or do you wish to move yourself from the queue, please press star 111 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Vijay Kumar with Evercore Eyes.
haven't had any real impact in Q1 from the most recent cost reductions and we only had about half of the quarter from the cost reductions we announced at the end of 2022.
So I think you can anticipate that the cost reductions are impacting all three lines of expenses, cost of goods, R&D, and S-GNA.
So we have the full 3 million to come out. And you can think of that almost as being split a million, a million, a million across those three lines. We have additional couple million of expense that's going to come out from the cost reduction, the full impact of the end of 2022 cost reductions.
Okay, and then one for Ron, could you just give some more color on the install base utilization, higher expecting based business revenues to look for the rest of the year and like, especially what you're seeing in the UK and Europe .
Well, in a company stage, such as ours when you're doing a transformation or changes, it's always a bit hard to predict. But by way of the example about a year ago, a little over a year ago, in the German-speaking countries of...
well Germany, but it's particular, but Austrian Switzerland, the vast majority, I think 98% of the accounts with were testing COVID only.
And that's already risen to 23% or 25%, I think 23% are using three or more tests and that continues to rise.
So, so it's um, so we're seeing this everywhere now.
In the UK, we talked about the redeployment of tests and we redeployed 800 units. And actually, we think the NHS might redeploy more. And this is quite an operation, moving instruments around to new locations. And we expect, and we've only just had.
the first orders from the locations previously all the ordering for COVID was done centrally. Now these 800 units have gone into I think over 300 locations and there I think it's about 300 separate locations and they've only just started ordering and each one of these locations.
We'll be using a different combination of
of strips. Now these are combinations. These locations tend to be with quite sick patients. So the sort of testing, the kind of tests that they'll be used will be CRP, which will be fairly ubiquitous.
But some INR and we anticipate quite a lot of NT probe, NT probe VMP.
So we see that picking up everywhere and the feedback we're getting from everywhere in Europe is increased negotiations and increased interest in the multi-analyzed aspect.
of our platform and indeed which we didn't have before because we were so focused a year ago on COVID but we were now actually getting new orders where the initial order is already for multiple tests.
So the whole concept of, you know, that we set up the company is beginning to take hold. We mentioned the fact we've got a more products recently cleared in two additional products in Japan, so now Japan is getting a bit of a basket of tests as well. So we're anticipating significant growth.
Some of the growth, of course, will come from two-way flu B, which is done very well, but of course, is decreasing, well, it's decreasing. We will have almost relatively little in Q2.
Great, thanks for taking my questions.
Great, thanks for taking my questions. One moment for our next question.
Our next question comes to Mark Massar with BTIG. Your line is open.
Hey guys, thank you for the questions. My first question is around the instrument placement number in the quarter. I know it's a relatively small number relative to your install base. Were those subscues mates substantially all in Europe or were there some US placements?
I think there was substantially all in Europe and there was and there was that there were obviously non-COVID.
Yeah, okay. And then Ron, in your prepared remarks, I heard you say that due to the lack of prevalence of a certain indication, you may not have been able to continue. Was that for the flu, COVID, and can you just comment as to which?
Is that for the US clinical trial? Yes, that was a clinical trial for COVID-sluase-luBVD, the combination test.
And there was just almost no fluebie around.
And so, but as we described in the prepared remarks, we're working through the ITAP program where they're doing external testing, where the requirements are different. And we do have, and we think we will have the right, what we do have the right kind of data. So we expect, or expecting to receive that, which will allow us to address.
the 2324 season, and then at the beginning of that season, we'll complete the regular trial for a regular 510K for the COVID-19 vaccination.
Okay, all right, that's helpful. And then it's nice to see the good initial uptake of the ProBN PSA in Europe . Could you provide an update on the high sensitivity triponin program in the US?
Yes, certainly. So, first of all, the internal results we have.
show that we can achieve high sensitivity.
which should enable a rule out claim. So that's where we're at now. We're starting the, we expect to start the clinicals for that later this year to cover, you answer the US, but it'll be just the same for Europe , for IVDR. So we're expecting to start those trials for both IVDR.
And the 510K later this year, unlike most 510Ks, these are more involved, they involve rather more sites and they involve a large number of patients in the study.
So we expect to do that and that could take six months and we hope not more than that simply by having more size to do the data collection.
And then we were then we were expected to submit to the next year. Now in the meantime in the US and for Europe , but in the meantime under the UK self-settification program
We expect to get that through later this year and actually expect to start shipping in the UK for this High Sense TBT component in the UK later this year. And the fact that we're able to do that...
opens a select group, a select number of customers, countries of apologies, countries around the world as well. So we can start getting the, we can start generating revenues from the tripon and while the IBDR and FACTA and K process completes next year.
Okay, that's great. I believe your Fast Lab Solutions business was primarily COVID. Are you guys looking to try to roll out more content that's non-COVID and that segment? Well, just to correct your question, we did have...
on fast lab, flu and flu B, which we were selling significant amount of in the numbers you've seen in the US, under EUA, in Japan and in Europe . So we already have flu A.
could be on the platform and it did very well. And yes, we do expect additional overtime additional markers on the platform.
Okay, and just the last one for me, I heard you talked about accelerating STREP A molecular, what is the status of that on the clinical trial front in the US market?
said about proponent, although the trial itself should be shorter. So we expect to start this Treppe molecular trials this year, later this year, and beyond the market world, subject to the regulatory issue.
next year. Again, our early results are very good and we're very excited about the strep A. And we also have had initial feasibility results, clinical trials on our TV program and we expect to submit it to a...
to a program organized by fine to an organization in Switzerland that does this and we expect to be in the market with it. As we said in our prepared remarks, the WHO has got this program which they described in a major.
paper they published in April , this past April , a month ago. And so we expect to be with the TB test on the market as well. Generally our molecular line, not just the strep A.
and the TV, but tests coming immediately behind it include Climidia gonorrhea. That whole part of the company is on quite a role and despite the generally severe cutbacks we put in
We actually protected this part in the cutbacks because these tests are so important for our platform. I'm introducing myself, so far you slide a little bit about 15 of the video video. So, hopefully if you are doing that happened!
We actually protected this part in the cutbacks because these tests are so important for our platform. Okay, that's it for me. Thank you guys.
One moment for our next question. Our next question comes from Andrew Cooper with Raymond James. Your line is open. Hey everybody, thanks for the time. Some session been covered already. So maybe just first, you talked about Japan and the opportunity there.
Okay, well, first of all, in my last story, because I don't remember, I should remember the number in Japan, it's growing, and they're very excited about.
the two tests that have just cleared. But he specifically asked about the thousand.
We did say in our prepared remarks, which you picked up on, that we would deploy over a thousand. I think the way things are shaping up, I do expect the number will be considerably above a thousand.
But as we said, it will deploy well over a thousand and maybe considerably over a thousand. Dorian, do you remember the deployment in Japan? It's between five and six hundred instruments.
And those have primarily just been flu and COVID in a hospital-based business with our partner, Suzakin.
And she and Ogi. Okay, great. Thank you. Oh, just a clarify. And then just hold on, just a clarify. Since most people on the call wouldn't have understood the comment. Susan Ken is kind of equivalent to McKesson in the US. So it's a very large, very, very large distributor.
Sorry, go ahead. Great, thank you. Maybe one kind of dorian-making angle a little bit more towards you, but just can you give us a little bit more detail on the growth margins in terms of our script margins still tracking exactly as you'd like, and then when we think about the transition from two to you in the tree.
and where you would expect those to land kind of at a negative rate maybe.
Yeah, the two things that I mentioned in the prepared remarks that are interlude the margin is, we do have a fixed cost base that we still have maintained a portion of through the COVID scale up that part of the cost reductions that we're working through now is right sizing.
We have tremendous capacity. So as you think about the cost for us to make the next test strip, you know, a lot of that cost is already born in the numbers, such as the Q1. And to your question around where the margins are tracking on the individual test strips, we still have test strip margins exceeding 80%, 80%.
direct labor and direct materials costs on those testers. As we have followed the company and understand and have seen that are disposable, can note that the amount of material there is so limited that it really drives the spectacular margins on an incremental basis.
So as we track through the back half of the year, we anticipate revenue growth both from the core community-based assays and from an uplift in the seasonality from respiratory, especially in the United States, which should deliver a lot of test-strip volume that's gonna flow straight through the gross margin line.
The offset of that of course is instruments until we move more to a reagent rental model where we capitalize the instruments. We continue to expense a hundred percent of the cost of the instruments when they're placed in the quarter. So that's the other drag that isn't apples to apples, maybe with some of our peers.
But as we move from the more respiratory business into contracting on long-term arrangements around the broader portfolio, we'll start to capitalize those instruments and that'll improve the reported versions as well.
Okay, great. I will stop there for now. Just to add a little bit to that question, you recall that the whole program, which we said the company around had three elements to do with a single platform.
lab performance of the point of care setting and being the low cost provider, which we are and it shows up in our gross margin, but of course to make to get to profitability, we need to keep driving more instruments into the field. But on the cost side, as using molecular, because we're about to start launching,
molecular, just to put it in context about our competitive advantage in addition to a single platform and having lab performance at the point of care setting. Some of the molecular tests out there at the moment...
The cartridges that they have have been as high as some competitors as high based on their data as high as $15 a share of a test for cartridge. Some are at $10 a test. Some of these are public companies.
data is available and then some of the higher volume ones for the market leaders around the cartridges as far as we can tell their cost of production is around $5 per cartridge.
Our strep and molecular tests that we just referred to that are coming out, our cost of production is under a dollar.
So, our competitive advantage is immense and it drives the margins, of course.
Maybe actually if I can speak one more in on that front, you know, just help us think about.
kind of this burgeoning molecular progress, you know, down the road, should we think about COVID or combo potentially transitioning towards molecular or at least having kind of both in the menu? And what would the timeframe look like? And what are the puts and takes to kind of decide whether to invest behind that versus antigen given all the moving parts and all the options out there from a COVID perspective?
Well, so that's a complicated question because our COVID antigen test performs equivalent. You just have to look at the instruction for use at the, you know, from the FDA website.
to see that our antigen test performs as well as some of the rapid molecular tests out there and our costs are much lower. And so it was one thing during the pandemic when people were getting tests without thinking too much.
and using the very high reimbursement prices on molecular and selling rapid molecular tests and taking advantage of the pandemonium around the pandemic, particularly in the early days, but really all the way through. And so for us to switch to having a molecular...
COVID tests on our platform is tricky because our customers have been taking share, particularly now that all the advantages of the reimbursement are gradually disappearing post-pandemic and life is returning to normal, which means people are starting to think about costs.
and margins more carefully, we actually, our customers, actually gained share as a result of having a more competitive...
price COVID test, which gave you performance equivalent to molecular for COVID. So it's a tricky issue for us to then say, okay, we'll put out a COVID molecular on the platform.
So, we have, we actually have done it, we've demonstrated that we can do it. But the priority for us as a result of enormous demand from customers around Chlamydia, Gonorrhea, Checo interfere, Car revelers and others.
So it's much more, it's better for us to deploy the R&D resources into those rather than providing a molecular COVID to our platform, even though of course it's possible and we've actually done it.
It's much better for us to deploy the R&D resources into those rather than providing a molecular COVID to our platform, even though of course it's possible and we've actually done it. So that's probably rather longer than you expected answer.
No, that was great. I appreciate it. One moment for our next question. Our next question comes from Matt Sykes with Goldman Sachs. Your line is open.
Hi, good morning. Thanks for taking my questions. Maybe Ron, just to follow up on those last comments you made, as you kind of expand in the point-of-care market in Europe and elsewhere.
Have you found that the priorities from the customers have shifted a bit? I'm sure during COVID throughput was an issue for them, just given the volume of tests that it represented. But as we get into post COVID and throughput maybe gets to prioritize relative to cost and you talked about the competitive advantage your customers may have on that cause side, are you finding?
So that's a very hard question to answer globally, but there are, but costs in general.
is becoming much, much more of an issue for customers. And candidly, that's one of our advantages because we do perform. And so one of the reasons we're quite optimistic and we're optimistic about sort of the increasing deployment and our comment that we'll play to that.
where you have nationalized systems, it just gives them the low cost alternative, which they prefer, and of course it gives them the convenience. And so think of the virtual war program which we described in the A&HS. We provide the low cost solution, but we are along with the convenience. So yes, I think, I think customers.
are responding, but there are obviously some customers, it's a decreasing number, who kind of are trying to pry every last penny out of reimbursement, but of course the payers don't like it. And we're kind of on the right side of this argument.
Thanks for that. And then Dorian, in February , you filed and said you modified the debt agreement with senior lender to waive some financial covenants until the end of June . Obviously, the filing of the shelf could potentially address some of those issues. But is there room for additional strategic discussions to take place to push that out, if needed?
or is it really the shell filing that is likely going to address those covenants?
Yeah, I think we've got a few options and we've allowed this to play out the length of time that we have to make sure we make the best decisions. We have a very collaborative lender, as you mentioned, that was our fifth amendment that we signed in February . I'm certain that we have room to continue to block the slams.
draft amendments and work through any issues with our lenders. It's been fantastic and supportive and supports the technology, the company, the team. But yes, we obviously have to address the capital position of the company. The shelf gives us another alternative to do that, and we'll continue to work through it here in the quarter.
Got it, and just one more question from me. You mentioned that with the cost savings actions that you made last year and then again this year you've protected some areas. You mentioned Chlamydia, Gonorrhea. I'm just wondering from the opposite side, could you talk about areas where you deprioritized due to the cost savings initiatives that you've enacted thus far?
Well, Ron mentioned switching from the previous question, switching some of the antigen tests to molecular as an area where we have been doing work, but we de-prioritized because really that decision from a customer perspective is primarily a reimbursement decision.
that dynamic's changing pretty rapidly. So that was an area that we've de-emphasized. Obviously we mentioned previously putting our AMIRA program on hold as well. But some of the assays that are longer range, beyond troponin, we have other markers for the emergency room, but landing troponin first as the flagship in that franchise.
is really important, so focusing on that. The value of our molecular with the cost structure that Ron mentioned, the performance, the pathway to development because it's a qualitative result and is kind of easier to get all the way through our programs and to launch. All of those reasons make molecular tremendously attractive.
to drive not only rapid revenue growth, but rapid margin growth. So that's why we prioritized those assays and some of the other community-based emergency medicine assays and immunoassays we've just pushed out a little further. Got it. Thank you very much. But just to be clear, we are part of the...
of the cutbacks was a fairly severe cut in R&D, so there were quite a number of programs that have been delayed as a result of this. We just focused on the ones that, of course, are remaining, which are the high margin, tripognant and the molecular ones are in particular.
Thank you very much. One moment for our next question. Our next question comes from Jeffrey Cole with Leidenberg-Thalman. Your line is open. Your line is open.
I think good morning, thanks for taking the questions. Just a few from there and could you clarify, in Japan, what's approved now? There's two tests approved now. There's a HBA1C and flu COVID. We have the COVID-and-aid in test. We have the COVID-flu A, Fubi, Maltiplex.
And we have HBA1C and CRP. Remember Japan has a hundred thousand physician offices. That's a tremendous opportunity for this type of technology where you can consolidate a number of instruments onto a very small physical space that most of these physicians operate out of.
You can move away from doing lab sendouts and move the revenue into that position office to allow them to do the testing there and get reimbursement. So the menu's really attractive. The multiple asses on a single instrument really attracted for the Japanese market tremendous opportunity for us. We also have the fast labs.
that you made earlier in the call. So could you talk about the units there and redeployment from what types of locations to what types of locations? Could you elaborate a little bit, please? Yes. The 5,000 instruments were distributed in Africa at the beginning of the pandemic.
under the agreement with the Gates Foundation, to about 50 countries. And we're in the process of rounding, of pulling back at least two and possibly 3,000 of these instruments and focusing them down on fewer countries, probably less than...
is non-communicable diseases, particularly diabetes.
but also CRP testing as a proxy.
for TB testing and all this is being done in preparation for the launch of the TB test next year.
But in the meantime, there's quite a big focus on A1C. Say for example, there's a trial program running at the moment in South Africa with 25 drug stores doing A1C testing.
And that program is likely to expand and it's one of the foundations of what we're doing by focusing the instruments down in a certain number of countries.
Okay, thanks for all that's helpful. And then lastly, can you talk about the US market and what we should anticipate here, both on the regulatory front and the current market. So you did talk about...
COVID flu, and I guess the question is will that make the 23-24 season? And talk a little bit about troponin and what else might be planned for the US as far as trial work and or anticipated approvals. Yes, so we mentioned that we were expecting to address the
Next flu season through the ITAP program, assuming that all goes through. We already mentioned that we're doing the first 510K to establish both the strip and the instrument. We're doing on COVID because it's the obvious one to go first. But then after that we will be adding the flu 8 flu B, which we mentioned that we'll be doing the trial at the beginning of the season.
part of this year and specifically designed for the US market. So we should be applying for both of those hopefully early in the early part of next year and expecting to get it on the market subject to obviously the clearance later in the year. Okay.
I was just going to add, you know, we actually continue to see opportunity to take share in the US on endemic COVID testing, you know, kind of based on the, the, you know, the competitive pressure around pricing, our performance and our cost structure.
So that continues to be the opportunity there as well in the near term. Got it. Okay, thanks for taking our questions. I'm not showing any further questions. It's time I turn the call back over to around for any closing remarks.
Thanks, I thought you'd never get to that with all the questions. Well look folks, our transition to non-COVID is beginning to develop, especially with the commercial launches of the HBA1C and the NT Pro BMP on our platform. Customer response continues to be positive and we're collaborating with our key customers on use cases.
on the single easy to use instrument with a mastery equivalent performance and a low cost of ownership is enabling a transformation in community care. Thank you for your time and your support for us. Have a good day. Ladies and gentlemen, so that's conclude today's presentation. You may not disconnect and have a wonderful day.