Q3 2023 OraSure Technologies Inc Earnings Call
[music].
Speaker 1: Eight.
Okay.
Speaker 2: Good day and thank you for standing by. Welcome to the Erasure Technologies Inc. 2023, third quarter earnings conference call.
Good day, and thank you for standing by and welcome to the Era Sure Technologies, Inc. 2023rd.
Third quarter earnings conference call.
Speaker 2: At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, we'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
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Speaker 2: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jason Pagman, Vice President of Investor Relations.
Your question. Please press Star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Jason Blackman, Vice President of Investor Relations.
Speaker 3: Thank you. Good afternoon and welcome to Orissured Technologies, third quarter, 2023 earnings call.
Thank you.
Good afternoon, and welcome to Orasure Technologies' third quarter 2023 earnings call.
Speaker 3: participating in the call today for OTI, our Kerry Eglinton Manor, our president and chief executive officer, and Ken the graph, our chief financial officer.
Participating on the call today for OTI or Carrie Eglinton manner, our president and Chief Executive Officer, and Kevin Mcgrath, Our Chief Financial Officer.
Speaker 3: As a reminder, today's webcast is being recorded and the recording can be found on our investor relations left.
As a reminder, today's webcast is being recorded and the recording can be found on our Investor Relations website.
Speaker 3: Before we begin, you should know that this call may contain certain forward looking statements, including statements with respect to revenues, expenses, profitability, earnings, or loss for share, and other financial performance, product development.
Before we begin you should know that.
This call may contain certain forward looking statements, including statements with respect to revenues expenses profitability earnings or loss per share and other financial performance product development shifting.
Speaker 3: shipments and markets, business plans, regulatory filings and approvals, expectations and strategies. Actual or the-
Shipments in market business plans regulatory filings and approvals expectations and strategies.
Actual results could be significantly different.
Speaker 3: factors that could affect results are discussed more fully in OTI's FEC filings, including its registration statements. At the annual report on Form 10K for the year ended December 31, 2022.
Factors that could affect results are discussed more fully and oti's SEC filings, including its registration statement its annual.
Our report on Form 10-K for the year ended December 31 2022.
Speaker 3: Quarterly for on form 10Q at other FEC filing.
Our report on Form 10-Q, and its other SEC filings, although forward looking statements help to provide more complete information about future prospects listeners should keep in mind that forward looking statements are based solely on information available to management as of today.
Speaker 3: Although forward looking statement helps to provide more complete information about future prospects.
Speaker 3: listeners should keep in mind that forward looking statements are based solely on information available to management as of today.
Speaker 4: OTI undertakes no obligation to update any floor of the statements to reflect events or circumstances after this call. With that, I'm pleased to turn the call over to Kerry. Thank you, Jason, and thanks to everyone for joining us today. We are pleased to provide an update on the progress or sure of making on the three pillars of our strategic transformation.
<unk> undertakes no obligation to update any forward looking statements to reflect events or circumstances. After this call with that I am pleased to turn the call over to Carrie. Thank you, Jason and thanks to everyone for joining US today. We are pleased to provide an update on the progress or sort of making on the three pillars of our strategic transformation.
Speaker 4: one, strengthening our foundation, two, elevating our core growth, and three, accelerating profitable growth. A few notable highlights during the quarter.
Right.
One strengthening our foundation to elevating our core growth and three accelerating profitable growth a few notable highlights during the quarter include we generated $37 million of operating cash flow in Q3 and grew our cash balance to 225 million.
Speaker 4: We generated $37 million of operating cash flow in Q3 and grew our cash balance to $225 million.
Speaker 4: We continue to execute on our COVID-19 contract and we delivered stronger than anticipated and telephs' volumes during the quarter.
We continue to execute on our COVID-19 contract and we delivered stronger than anticipated and tell us what volume during the quarter and in September We received an award for $5 $7 million for future orders oven Telecom COVID-19 tests from the U S government as part of the.
Speaker 4: And in September , we received an award for $5.7 million for future orders of IntelliSwab COVID-19 tests from the US government as part of the reopening of COVIDtest.gov.
Reopening of Covid test Dot Gov.
Speaker 4: We delivered core growth, core revenue growth of 7% on a year over year basis.
We delivered core growth.
Core revenue growth of 7% on a year over year basis.
Speaker 4: We continue to unlock cost savings as part of our enterprise-wide focus on driving improved operating efficiency.
We continue to unlock cost savings as part of our enterprise wide focus on driving improved operating efficiency.
Speaker 4: And with our stronger balance sheet, we are investing in our internal innovation roadmap and evaluating external partnerships and investments to expand and strengthen our portfolio of assays and sample management solutions and services in order to accelerate our long-term growth.
And with our stronger balance sheet, we are investing in our internal innovation roadmap and evaluating external partnerships and investments to expand and strengthen our portfolio of assays and sample management.
Lucian and services in order to accelerate our long term growth.
Speaker 4: Starting with cost as we continue to strengthen our foundation.
Starting with costs as we continued to strengthen our foundation.
Speaker 4: We remain highly focused on delivering greater operating efficiency, including reductions in our cost structure for both production and non-production and religious expense.
We remain highly focused on delivering greater greater operating efficiency, including reductions in our cost structure for both production and non production related expenses.
Speaker 4: During the quarter, we successfully completed the final milestones included in our contract with the U.S. Department of Defense, related to the completion of our automation capabilities and capacity expansion at our Opus Wave facility and Bethlehem Pennsylvania.
During the quarter, we successfully completed the final milestones included on our contract with the U S Department of defense related to the completion of our automation capabilities and capacity expansion at our opus waste facility in Bethlehem, Pennsylvania. Additionally.
Speaker 4: Additionally, we have already collected the final $24 million of milestone payments here in Q4. With this phase of the extension completed, we expect to make further progress in consolidating our manufacturing footprint to drive additional efficiencies and costs.
Additionally, we have already collected the final $24 million of milestone payments here in Q4 with this phase of the expansion completed we expect to make further progress in consolidating our manufacturing footprint to drive additional efficiencies and cost savings over.
Speaker 4: Over the last year, we have made tremendous progress in establishing an enterprise-wide mindset that is focused on continuous improvement and operating efficiency.
Over the last year, we've made tremendous progress in establishing an enterprise wide mindset that is focused on continuous improvement in operating efficiency, we expect to generate additional productivity enhancements over the coming years, including further leveraging our automation capabilities consolidating facilities.
Speaker 4: We expect to generate additional productivity enhancements over the coming years, including further leveraging our automation capabilities, consolidating facilities, and controlling our non-production costs. These initiatives give us confidence that we will achieve our target of operating cash flow break even for our core business by the end of 2024.
And controlling our non production costs.
These initiatives give us confidence that we will achieve our target of operating cash flow breakeven for our core business.
End of 2024.
Speaker 4: Moving to COVID-19, our IntelliFlop volumes were stronger than expected, generating $50 million in revenue and huge...
Moving to COVID-19 are and tell us what volumes were stronger than expected generating $50 million in revenue in Q3, our relationship with the U S Department of health and human services continues to be positive.
Speaker 4: our relationship with the US Department of Health and Human Services continues to be positive and we have good visibility to order trends that could complete the remaining portion of our existing contract during the first half of 2024.
And we have good visibility to order trends that could complete the remaining portion of our existing contracts during the first half of 2024.
Speaker 4: Additionally, as I mentioned earlier, in September , we received an award for $5.7 million for future purchase orders from the US government for COVID-19 tests that are available for free to household across the US as part of the reopening of COVID-test.gov. And on the product side, the US FDA approved the shelf life extension of IntelliSplot from 18 to 24 months in September .
Additionally, as I mentioned earlier in September we received an award for $5 $7 million for future purchase orders from the U S. Government for COVID-19 tests that are available for free to households across the U off of part of the reopening of Covid test dot Gov and on the product side.
The U S. FDA approved the shelf life extension of Entellus Slob from 18 to 24 months in September.
Speaker 4: Looking at our core business, which excludes COVID related products, total core revenue in Q3 grew 7% on a year-over-year base.
Looking at our core business, which exclude COVID-19 related products total core revenue in Q3 grew 7% on a year over year basis.
Speaker 4: And our HIV franchise, the Together Take Me Home Program, continues to demonstrate strong traction in expanding access to HIV testing to at risk and underserved populations. And we look forward to continuing to collaborate with our partners as we enter the second year of this important five-year initiative.
In our HIV franchise that together take me home program continues to demonstrate strong traction and expanding access to HIV testing two out risk and underserved population and we look forward to continuing to collaborate with our partners as we enter the second year of this important five years.
Speaker 4: We believe the positive outcomes from this program could create additional opportunities for our infectious diseases.
<unk> initiative, we believe the positive outcomes from this program could create additional opportunities for our infectious disease business.
Speaker 4: Our differentiated HIV product also continues to resonate in international markets, which contributed to our growth and diagnostics in the quarter. Additionally, we are expanding our menu of tests available in international markets through a new partnership agreement that will launch late this year. Through this partnership, our international team will be able to offer three new infectious disease tests for syphilis, hepatitis C, and hepatitis B.
Our differentiated HIV product also continues to resonate in international markets, which contributed to our growth in diagnostics in the quarter. Additionally, we are expanding our menu of tests available in international markets through a new partnership agreements that will launch late this year.
The partnership our international team will be able to offer three new infectious disease test for syphilis, hepatitis B and hepatitis B.
Speaker 4: In key markets through our existing sales channels and existing client relationships and new opportunities. We believe this expansion of our international test portfolio can provide additional fuel for future growth.
Key markets through our existing sales channel and existing client relationships and new opportunities. We believe this expansion of our international test portfolio can provide additional fuel for future growth.
Speaker 4: Additionally, in our substance abuse testing portfolio, we are pleased to announce the expansion of our point of care toxicology off.
Additionally, in our substance abuse testing portfolio, we are pleased to announce the expansion of our point of care toxicology offerings.
Speaker 4: to a distribution agreement with a manufacturer of these devices.
There are distribution agreement with the manufacturer of these devices.
Speaker 4: This agreement allows us to leverage our sales team and channel presence and expand our services in the substance abuse testing market. As part of this agreement, we will add several oral toxicity panels covering a range of drugs including THC, opiates, and amphetamine.
The agreement allows us to leverage our sales team and channel presence and expand our services and our substance abuse testing market.
Part of this agreement, we will add several oral toxicity panels, covering a range of drugs, including THC opiates and amphetamines.
Speaker 4: Shifting to molecular, we continue to see signs of stabilization and our sample management solutions, despite softness in some end segments that we've discussed previously.
Shifting to molecular we continue to see signs of stabilization in our sample management solutions, despite softness in some and in segments that we discussed previously.
Speaker 4: and we are seeing positive momentum in establishing new partnerships
And we are seeing positive momentum and establishing new partnerships and commercial relationships as well as extending existing relationships.
Speaker 4: As an example, we are pleased to announce a multi-year extension of our relationship with embryogenetics. Embry will be using our origin DX device for a variety of testing related to hereditary cancer, rare hereditary disease, reproductive health, and pediatric disorders.
An example, we are pleased to announce a multiyear extension of our relationship with Ambry genetics Ambry will be using our origins Dx device for a variety of testing related to hereditary cancer rare hereditary disease reproductive health and pediatric disorders.
Speaker 4: As we continue to expand and diversify our customer base, we're also proud to share the recent success we've delivered in the companion animal site.
As we continue to expand and diversify our customer base. We're also proud to share. The recent success, we delivered in the companion animal segment.
Speaker 4: Our performer gene product has been selected as the sample collection device for new canine health offerings that are being launched by two leaders in the space.
Our pro forma gene product has been selected as the sample collection device for.
New canine health offerings that are being launched by two leaders in the space.
Speaker 4: Overall, we continue to make progress on our initiative to accelerate profitable growth through investments organically and inorganically, including external investments and potential acquisitions.
Overall, we continue to make progress on our initiatives to accelerate profitable growth through our investments organically and inorganically, including external investments and potential acquisitions, and our strong balance sheet and positive cash flow generation are key differentiators in the <unk>.
Speaker 4: Our strong balance sheet and positive cash flow generation are key differentiators in the current market and economic lands.
Current market and economic landscape, we believe that these factors as well as our strong client and channel relationships, our track record of execution and consistent delivery for our customers plus our experience navigating complex regulatory approval processes positions OTI to.
Speaker 4: We believe that these factors, as well as our strong client and channel relationships, are track record of execution and consistent delivery for our customers, plus our experience navigating complex regulatory approval processes, positions OTI to be the partner of choice to help power precision health into the future. With that, I'd like to turn the call over to Ken to discuss our financial results and guides.
The partner of choice to help power precision health into the future with that I'd like to turn the call over to Ken to discuss our financial results and guidance.
Speaker 3: Thanks, Carrie. I'm happy to discuss our results to the third quarter of 2023 and provide updates on our financial outcomes.
Thanks Terry.
Im happy to discuss our results for the third quarter of 2023 and provide updates on our financial outlook.
Speaker 5: In Q3, we deliver total revenue of 89.2 million.
In Q3, we delivered total revenue of $89 2 million COVID-19 products predominantly you can tell us what contributed $50 2 million of revenue in the third quarter.
Speaker 5: COVID-19 products, phenomenally and tele-swab, contributed 50.2 million of revenue in the third quarter.
Speaker 5: purchasing patterns under our contract with u.s federal government was stronger than expected during
Interesting patterns under our contract with the U S federal government with stronger than expected during the quarter.
Speaker 5: Total core revenue, which excludes COVID-19 products, was $39 million in the third quarter, representing 7% year-over-year growth.
Total core revenue, which excludes COVID-19 products was $39 million in the third quarter, representing 7% year over year growth.
Speaker 5: Within core revenue, our diagnostics products generated 19.6 million dollars of revenue in Q3, and grew 59 percent the overview.
Within core revenue, our diagnostics products generated $19 $6 million of revenue in Q3 and grew 59% year over year.
Speaker 5: This growth is driven by HIV test sales to the US and international markets.
This growth was driven by HIV test sales in the U S and international markets.
Looking at our molecular sample none of the products.
Speaker 5: Revenue in the third quarter of $15.2 million decreased 4% on a year-over-year basis, but increased 17% sequentially, which was in line with our expectation.
In the third quarter of $15 $2 million decreased 4% on a year over year basis, but increased 17% sequentially, which was in line with our expectations.
Speaker 5: We continue to see muted purchasing patterns from a few large customers during the quarter.
We continue to be muted purchasing patterns from a few large customers during the quarter.
Speaker 5: That said, we're also seeing to find the stabilization with current customers, as well as opportunities in new areas that carry.
That said, we're also seeing some signs of stabilization with current customers as well as opportunities in new areas as Terry discussed.
Speaker 5: From a gross margin perspective, a gap gross margin in the third quarter was 49.7%.
From a gross margin perspective, our GAAP gross margin in the third quarter was 49, 7%.
Speaker 5: Non-Gaftore Smarge in the 50% in the third quarter due to improved operating efficiencies, including lower manufacturing scrap.
non-GAAP gross margin was 50% in the third quarter due to improved operating efficiencies, including lower manufacturing scrap expense.
Speaker 5: Looking ahead to the fourth quarter, we expect close margin to moderate back to the mid 40% range due to product mixed shifts, including the anticipated reduction in the tele swap bond.
Looking ahead to the fourth quarter, we expect gross margin to moderate back to the mid 40% range due to product mix shifts.
Including the anticipated reduction in <unk> volumes.
Speaker 5: As a reminder, we have expanded our gross margin from the high 30% range at the beginning of 2022 to the mid-40s in 2023. And we believe we can drive additional margin expansion over the coming years.
As a reminder, we have expanded our gross margin from the high 30% range at the beginning of 2022 to the mid <unk> in 2023 and beyond.
We believe we can drive additional margin expansion over the coming years.
Speaker 5: We remain focused on delivering efficiencies across our enterprise, including consolidating sites, standardizing products.
We remain focused on delivering efficiencies across our enterprise, including consolidated sites standardizing products driving procurement savings and further leveraging our automation capabilities at our <unk> facility.
Speaker 5: Driving to pyramid savings and further leveraging our automation capabilities at our Opus Way facility.
Shifting to operating expenses our GAAP.
Speaker 5: Our gap operating expenses in the quarter, with $33.4 million, which includes $6.2 million for impairment of acquired and tangible assets.
GAAP operating expenses in the quarter with $33 $4 million, which includes $6 2 million for impairment of acquired intangible assets.
Speaker 5: Our non-GAP operating expenses were 24 million in Q3.
Our non-GAAP operating expenses were $24 million in Q3.
Speaker 5: The sequential decline in non-GAAP operating expenses was primarily due to a significant decrease in external legal fees.
The decline in non-GAAP operating expenses was primarily due to a significant decrease in external legal fees.
Speaker 5: We continue to focus on driving additional efficiencies in our non-production expenses and coming forward.
We continue to focus on driving additional efficiencies in our non production expenses in coming quarters.
Speaker 5: These cost savings are important as we look to utilize our cash to invest in growth and in our goals to achieve operating cash flow growth even in our core business at the end of 2024.
These cost savings are important as we look to utilize our cash to invest in growth and in our goal to achieve operating cash flow breakeven and our core business by the end of 2024.
Speaker 5: Our gap operating income was $10.9 million in Q3, which is up from 0.9 million in the year ago quarter.
Our GAAP operating income was $10 9 million in Q3, which is up from <unk> 9 million in the year ago quarter.
Speaker 5: Non-GAP operating income was 20.6 million in Q3, which is made for each more 11.7 million in Q3 2022.
non-GAAP operating income was $26 million in Q3, which is an increase from $11 7 million in Q3 2022.
Speaker 5: The end of the quarter with zero debt and total cash, cash equivalents and short-term investments have $225 million, which is up from $186 million last quarter.
We ended the quarter with zero debt and total cash cash equivalents and short term investments of $225 million, which is up from $186 million last quarter.
The increase in our cash balance during Q3 was primarily driven by $37 million of operating cash flow, including a reduction of our inventory levels.
Speaker 5: We also received $6.5 million in Q3 related to the achievement of milestones that are open straight to??...'
We also received $6 $5 million in Q3 related to the achievement of milestones at our <unk> facility.
Speaker 5: Furthermore, during Q4, we collected the final $24 million in milestone payments related to this project.
No more during Q4, we collected the final $24 million in milestone payments related to this project.
Speaker 5: Turning to guidance. We have guidance for fourth quarter revenue of $71 million to $76 million.
Turning to guidance, we are guiding to fourth quarter revenue of 71 million to $76 million.
Speaker 5: which includes in Pellissiwa revenue of $38 to $41 million.
This includes <unk> revenue of $38 million to $41 million.
Speaker 5: We expect Q4 core revenue of $33 to $35 million. And the midpoint implies core revenue is approximately flat on a year-over-year basis.
We expect Q4 core revenue of $33 million to $35 million and the midpoint implies core revenue is approximately flat on a year over year basis.
Speaker 5: Finally, as part of our ongoing focus on enterprise-wide operating efficiency, we are on track to exceed the $15 million of annualized cost savings announced in Q1 2022.
Finally, as part of our ongoing focus on enterprise wide operating efficiency, we are on track to exceed the $15 million of annualized cost savings announced in Q1 2023.
Speaker 4: With that, I'll turn the call back to Carrie to conclude. Thanks, Ken. During the third quarter, we delivered significant progress on our strategic imperative. We continued to strengthen our foundation through strong cash flow generation and improved operational efficiency.
With that I will turn the call back to Kerry to conclude.
Ken during the third quarter, we delivered significant progress on our strategic imperatives, we continued to strengthen our foundation for strong cash flow generation and improved operational efficiency. We delivered some examples of our plan to expand the portfolio of tests that our sales team can provide to our.
Speaker 4: We delivered some examples of our plan to expand the portfolio of tests that our sales team can provide to our clients. And we completed the final milestones included in our contract with the U.S. Department of Defense related to our capacity expansion at our Opus Way facility.
Clients and we completed the final milestones included in our contract with the U S Department of defense related to our capacity expansion at our Opus way facility.
Speaker 4: Overall, we are confident or sure as well positioned to execute on our vision of transforming health through actionable insights.
Overall, we are confident <unk> is well positioned to execute on our vision of transforming health through actionable insights.
Speaker 4: powering the shift that connects people to health care wherever they are.
During the shifts that connects people to health care wherever they are and our mission of improving access quality and value of health care with innovation and effortless test sample management solutions and services is aligned with where healthcare is headed in the U S and globally over the coming years with that I am.
Speaker 4: And our mission of improving access, quality, and value of healthcare with innovation and effortless tests, sample management solutions, and services is aligned with where healthcare is headed in the U.S. and globally over the coming years.
Speaker 4: With that, I'm pleased to turn the call over to the operator for Q&A.
Pleased to turn the call over to the operator for Q&A.
Speaker 2: Thank you, Carrie. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.
Operator.
Thank you Carrie at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker 2: To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster.
These standby, while we compile the Q&A roster.
Speaker 2: Our first question comes from the line of Jacob Johnson with Stevens. Your line is open.
Our first question comes from the line of Jacob Johnson with Stephens. Your line is open.
Speaker 6: Hey, good afternoon and congrats on this quarter. Maybe can just on the gross margin line that was a big standout in the quarter. It seems like from your comment mix was a benefit this quarter, which we shouldn't assume and fork you. But can you just discuss kind of gross margins on an ex-COVID basis, how much improvement you've seen in the ex-COVID first margin?
Hey, good afternoon, and congrats on a nice quarter.
Maybe Ken.
And then just on the gross margin line.
The big standout in the quarter.
It seems like from your comment mix was a benefit this quarter, which we shouldnt assume in <unk>, but can you just discuss kind of gross margins on an ex COVID-19 basis, how much improvement you've seen.
And the exco, but gross margin.
Speaker 5: Yeah, thanks, Jacob. We are, as we've expressed in the past, we are seeing improvements X COVID when it comes to leveraging some of our operational expertise. And in particular, we're seeing improvements in a couple areas.
Yeah. Thanks Jacob.
Yes, we are as we.
Breast in the past we are seeing improvements.
Ex COVID-19 when it comes to leveraging some of our operational expertise and in particular, we're seeing improvements in a couple of areas. One is around our as our continued facility consolidation and leveraging the overhead of our existing facility persuade facility. The other is in our automation and then leveraging that automation into.
Speaker 5: One is around our continued facility consolidation and leveraging the overhead of our existing facility, the Opusway Facility. The other is in our automation and then leveraging that automation into our other product line.
Our other product lines and then some product standardization, where we can leverage for example, some of our packaging improvements and innovation that.
Speaker 5: And then some product standardization, where we can leverage, for example, some of our packaging improvements and innovation that we've achieved with our Intellisoft product, we can start leveraging that into some of our other products.
We've achieved with our Intelsat product, we can start leveraging that into some of our other products.
Speaker 5: And then the other one is around our scrap. We've made a tremendous improvement in reducing our scrap levels on a regular basis.
And then the other one is around our scrap.
There is a tremendous improvement in reducing our scrap levels on a regular basis.
Speaker 6: Got it. That's helpful. And then I maybe can I'll just stick with you for my follow up. Just the guidance implies I think a 5 million sequential decline in the base business in the 4th quarter. Is that just seasonality? Or is there anything else you'd call out?
Got it.
Helpful. And then maybe Ken I'll, just stick with you for my follow up just a bit.
The guidance implies I think a 5 million sequential decline in the base business in the fourth quarter.
Is that just seasonality or is there anything else you'd call out there.
Speaker 6: Yeah, I think you could probably want that mostly into seasonality in particular or in our international diagnostics. And it's really the timing of our donor funding, just a difference in timing from previous years. And then some timing and on the left of our products related to some of our larger customers and their purchasing patterns. I'll leave it there. Thanks for paying the questions. Thank you.
Yes, I think you could probably lump it mostly in the seasonality in particular on the international diagnostics and it's really the timing of our donor funding.
Just.
Some timing from previous years, and then some funding in our molecular products related to some of our larger customers and their purchasing patterns.
Okay. That's helpful I'll leave it there thanks for taking the questions.
Yes.
Thanks Jacob.
Please standby for the next question.
Yeah.
Speaker 2: The next question comes from Casey Woodring with JP Morgan, your line is open.
The next question comes from Casey Woodring with Jpmorgan. Your line is open.
Speaker 7: Great, thank you. Thanks for taking my questions. So just on in Teluswab, you said that there was more government contract revenue in 3Q than you expected. I guess of that 70 million line of site you had in the back half. How much of that was in 3Q? How much is contemplated in 4Q for in Teluswab? And then I think you mentioned that you have a line of site for government revenue for first half of next year. Can you just help us kind of frame how we should think about the in Teluswab runway for 24?
Great. Thank you thanks for taking my questions.
So just on until Swab, you said that there is more government contract revenue in <unk> than you expected I guess of that 70 million line of sight you had in the back half how much of that.
Within <unk>, how much is contemplated in <unk> for entellus lob in them.
I think you mentioned that you have line of sight for government revenue for first half of next year can you just help us kind of frame. How we should think about if you can tell us what run.
Run rate for 2004.
Speaker 5: Yeah, I'll share some of the numbers that we shared in the past and where we are today. So in the past, we shared the last quarter that we had about 26 million units, devices left on the main contract with HHS for in Felswald. And we quoted from the past that that price point is about $5.
Yeah, and I'll share some of the numbers that we've shared in the past and where we are today.
So in the past I think we shared last quarter that we had about 26 million units devices left on the main contract with HHS for Entellus Swab and recorded from the past that that price point is about $5.
Speaker 5: except the remaining, and we had confidence that the government would purchase the total amount there.
The remaining and we have confidence that the government with purchase.
Total amount there from.
Speaker 5: from the $50 million of COVID revenue in Q3 at $5, you can apply about $10 million of those units.
From the $50 million of Covid revenue in Q3 at $5 you can imply about $10 million of those units.
Speaker 5: were consumed in Q3. That leaves us about 16 million less.
Were consumed in Q3, so that leaves us about $16 million left our guidance is roughly about $40 million or so $38 million to $40 million in Q4. So that's another $8 million in Q4, which would leave our remaining $8 million related to that one contract in 2024, which we expect.
Speaker 5: Our guidance is roughly about 40 million or so, 38, 40 million in Q4. So that's another 8 million in Q4, which would leave a remaining 8 million related to that one contract in 2024, which we expect to realize over the first half of the year.
To realize over the first half of the year and then that does not include the additional revenue that Carey mentioned in dollars now now putting dollars a $5 $7 million.
Speaker 5: And then that does not include the additional revenue that Kerry mentioned in dollars now. Now I'm quoting dollars of 5.7 million dollars of additional contract from the government that we received this past couple of months.
Additional contract from the government that we received this past couple of months.
Speaker 7: I've got it. Nope, that's really helpful. I wanted to touch on molecular service.
Got it.
Really helpful.
I wanted to touch on but like your services I think that business declined 38% sequentially and 57% year over year can you just walk us through your expectations. There for <unk> I would imagine that that business is being impacted.
Speaker 7: that business decline, 38% sequentially and 57% year over year. Can you just walk us through expectations there for 4Q? I would imagine that that business is being impacted on, you know, from macro and funding related kind of had ones there. So has that stabilized at all? Do you expect a further shutdown and kind of just water trends and that this...
From macro and funding related.
Kind of headwinds there so has that stabilized at all do you expect a further step down in <unk>.
Kind of just what are trends in that business.
Speaker 4: Yes, KC all start on molecular services. You know, this is a business that was very impacted in COVID. Yeah, this is microbiome sequencing services. We think a super, you know, interesting part of the precision health, but still very nascent. And during COVID.
Yes, Casey I'll start on molecular services. This is a business that's been was very impacted and Covid, yes.
This is microbiome sequencing services, we think are super interesting parts of precision health, but still very nascent and during COVID-19.
Speaker 4: What I think everybody experienced was a real delay in funding and pause on funding. What we're looking for, I think, which everybody else is looking for as well, are those green shoots of every turn?
I think everybody experienced was a real sort of delay in funding and and pause on funding I mean, what we're looking for I think like everybody else's.
Is looking for as well are those are those green shoots of return.
Speaker 4: We do have, you know, some large customers doing, you know, really, really strong work. But I'd say, you know, we do, we aren't seeing the full recovery in that yet. That's sort of, you know, who knows if it's the bottom. We all hope it is. We don't know on timing, but we believe in the recovery of it.
We do have some some large customers doing really really strong work, but I'd say, we do we arent seeing a full recovery and not yet that that's sort of you know who knows if that's off the bottom. We all hope. It is we we don't know on timing, but we believe in the recovery of it.
Speaker 4: We think it's an interesting part of precision health, but you know, I think it's just one of the most impacted that we're all looking to the return to investment in the space, both academic and with FOMA.
We think that's an interesting part of precision health, but.
Yes.
I think it's just one of the most impacted that we're all looking for the return to investments in the space, both academic and pharma and I don't know.
Speaker 5: I don't know. I think that's probably kind of the color on it, but we're looking for that return just like everybody else. There's some lumpiness related to certain clients, but yes, that's the goal.
Well I think that's probably kind of a color on it but we're looking for that returns just like everybody else out there is some lumpiness related to certain clients, but you're also going forward.
Speaker 7: Okay, and then just last question for me, just sticking with molecular. So, you know, in the past 4Q had seemingly been your strongest quarter, given the consumer genomics holiday season benefit. I understand you guys have sort of flattened those contracts out over the years.
Okay and then just last question for me just sticking with molecular side.
The past <unk> had seasonally been your strongest quarter, given the consumer genomics holiday season benefit I understand you guys are sort of flat in those contracts out over the years.
Speaker 7: Um, so just kind of curious on that kind of customer lumpiness, it sounds like.
So just kind of curious on that kind of customer lumpiness it sounds like.
Speaker 7: There's still some seasonality in that business reflected in the 4Q guide. So I just want to see if that's the case. What the kind of fluctuation there is with some of those larger customer orders and then.
There is still some seasonality in that business reflected in the <unk> guide so just.
Just wanted to see if that that's the case, what sort of kind of fluctuation there is with some of those larger customer orders and then.
Speaker 5: what the run rate is for that business in 24. If you have any color there. Thank you. Yeah, we're not ready to guide the 24 at this time, but I think your thesis is right on. We had a little bit of lumpiness in Q3 where we received some customer orders in Q3. That's what's driving our guidance for Q4 within that particular area.
What the right run rate is.
So that business from 24 do you have any color there. Thank you.
Thank you well, we're not ready to guide for 'twenty four at this time, but I think your thesis is right on we had a little bit of Lumpiness in Q3, where we received some customer orders in Q3, and Thats whats driving our guidance for Q4.
Speaker 4: And I think the only color I would add is I say, we're less dependent on the few large customers. You know, there's sort of any, if it's the silver lining in this, is that we're having to add a lot of new customers.
In that particular area.
And I think the only color I would add is I'd say, we're less dependent on a few large customers you know if there's sort of any the.
The silver lining in this is that we're having to add a lot of new customers.
Speaker 4: To fill that softness that we've seen in the few large customers we continue to do that
To follow that softness that we've seen in a few large customers we continue to do that.
Speaker 4: you know we we believe in the genomic sequencing uh... in segments and and i think you know that there are so many players you can look at
We believe in the genomic sequencing.
<unk> segments, and I think that there are so many players you can look at how that that market is recovering.
Speaker 4: how that market is recovering. Again, I'd say like micro-bio-mic sequencing services, you know.
Again, I would say like like microbiome sequencing services.
Speaker 4: Green shoots, they're stronger, stronger recovery and not as big a low as microbiome. But I just say, we are excited about adding new customers to fill what was softness in a number of very large customers.
Green shoots there stronger stronger recovery and not not as big a low as the microbiome, but I'd just say we are excited about adding new customers.
To fill what was softness and a number of very large customers.
Great. Thank you for taking my questions.
Thanks.
One moment for our next question.
Yeah.
Okay.
Speaker 2: The next question comes from Brandon, Kuljard with Jeffries. Your line is now open.
The next question comes from Brandon Couillard with Jefferies. Your line is now open.
Speaker 8: Thanks for picking the questions.
Hey, Thanks, Hey, Brandon on for.
Matt on for Brian Thanks for taking the questions.
Speaker 8: On the base business, you know, a nice growth here in the quarter. It looks like the midpoint of the guy can't cost for flyers grows. I appreciate you're not guiding for next year, but, you know, do expect that the core business could grow in 24 and maybe some of the key drivers behind that. And then the three new infectious disease tests you talked about launching. I mean, for those be meaningful contributors to the business next year. Thanks.
On the on the base business nice growth during the quarter. It looks like the midpoint of guide kind of costs were flattish gross I appreciate youre not guiding for next year, but do you expect the core business could grow in 'twenty, four and maybe some of the key drivers behind that and then.
The three new infectious disease tests, you talked about launching I mean could those be meaningful contributors to the business next year. Thanks.
Thanks Brandon.
Speaker 4: The base business, the core revenue this year, when you include our guidance for Q4, is about 2% year-over-year growth.
The base business the core revenue this year.
When you include our guidance for Q4 is about 2% year over year growth.
Speaker 4: We see 2024 kind of in that.
We see 2024 kind of in that.
Speaker 4: you know, low single digits range where we're working to improve on that. And partnerships like the distribution.
Low low single digits range, where we're working to improve on that and partnerships like the distribution.
Speaker 4: agreements that we've announced where we add more testing to that portfolio near term.
Agreements that we've announced where we add more testing to that portfolio near term.
Speaker 4: You know, while we would say it's, you know, sort of moderate impact, I wouldn't call that a material change for next year. We are working to expand our portfolio in that core and to plug into that core in order to accelerate top of the growth.
While we would say it's sort of moderate impact I wouldn't call that a material change for next year, we are working to expand our portfolio in that core and plug into that core and.
In order to accelerate profitable growth, but I'd say this year is 2%.
Speaker 4: I'd say this year's 2% while we aren't providing 2024 guidance yet.
While we aren't providing 2024 guidance yet.
Speaker 4: It's right to think about that kind of in that low single digit range.
Its right to think about that kind of in that low.
Low single digit range, but increasing.
Speaker 8: Thanks, that's helpful. And then, can you provide any color on what the core business has been tracking in terms of the free cash flow, either in 3Q or what they'll do this year, kind of year-to-date, just trying to get some clarity on the bridges, where we think, you know, think about where we are today for that business and getting to break even by the end of 2024, and maybe just talk about some of the progress you made this year on closing the gap between burn and break even by the end of 2024.
Thanks, that's helpful and then.
Turning to <unk> for any color on what the core business has been tracking in terms of the free cash flow either in <unk> or <unk>.
To do this year kind of year to date, just trying to get some clarity on the bridges, where we should think about where we are today for that business.
Getting to breakeven by the end of 2024.
I'll just talk about some of the progress you've made this year.
On closing the gap between burn in breakeven by the end of 'twenty four.
Speaker 5: Yeah, we're making progress. We're still confident that we will achieve our goal of the core business cash flow from operations being break-even as we exit 2024. As we mentioned in Q1, we had the target of $15 million of cost savings. We've exceeded that. And we're continuing. And the good news is we have a lot more opportunity to drive out and drive cost reductions. So making progress.
Yes.
Progress we're still.
Confident that we will achieve our goal of the core business cash flow from operations being breakeven.
As we exit 2024.
As we mentioned in Q1, we had the target of $50 million of cost savings that we've exceeded that.
We're continuing to lead the good news is we have a lot more opportunity to drive value and drive cost reductions.
Speaker 5: From an overall cash perspective, we did mention that we had, we finished the quarter at 225 million.
Progress there from an overall cash perspective, we did mentioned that we had we finished the quarter at $225 million and related to that we do see a lot of tailwind in <unk>.
Speaker 5: And related to that, we do see a lot of tailwinds in Q4 to drive that higher. We mentioned the $24 million that we collected already in Q4 for the Department of Defense contract.
Q4 to drive that higher we mentioned the $24 million that we collected already in Q4 for the department of Defense contract. In addition, we think will generate some positive cash flow. This quarter and then we should have some tailwind related to our inventory and our accounts receivable balance items.
Speaker 5: In addition, we think we'll generate some positive cash for this quarter.
Speaker 5: And then we should have some tailwind related to our inventory and our counterseeable balance items in that area as well.
In that area as well.
Great. Thank you.
Thanks Brendan.
Please standby for the next question.
Yeah.
Speaker 2: The next question comes from VJ Kumar with Evercore ISI. Your line is now open.
The next question comes from Vijay Kumar with Evercore ISI. Your line is now open.
Speaker 9: Hi, this is Alexandra. I'm from VJ. I just have two quick ones. On that new HHS contract, is this going to be at that same $5 ASP as we've been seeing this past quarter? And then, I guess, just any more color pen that you would give on the further cost actions and what we can actually expect to see those showing up?
Hi, This is Alexandra our interim Vijay I just have two quick ones on that new <unk> contract is this going to be.
At that same $5 ASP as we've been saying this past quarter and then I guess just any more color that you could give on the further cost actions and what we can actually expect to see those showing up.
Speaker 4: Kyle and Sandra all start just on the HHS contract is in the $3 range. So our last two.
Hi, Alexandra I'll start just on the HHS contract is in the $3 range. So our last two.
Speaker 4: RFPs with what the government have been in that range as have you know there were 12 awardees we were one and the latest there's all really in that range.
Rfps with with the government have been in that range as half. Yes. There were 12 award to US we were one in the latest Theyre all really in that range.
Speaker 5: on the cross action and the math on that just that Bill Armicari said. So we set out loud that we, the revenue we expect from that is $5.7 million.
On the cost action in the math on that just to build on what Carrie said, so we set out loud that we the revenue we expect from that is $5 $7 million. So just do the math, there and divide by three and Thats. The unit volume that we're expecting next year on costing actions the areas that we're focused on our facility consolidations.
Speaker 5: So just do the math there and divide by three and that's the unit volume that we're expecting next year.
Speaker 5: on cost-saving actions, the areas that we're focused on are facility consolidation.
Speaker 5: So leveraging our open-sweight facility and really driving down the overhead by putting more volume into that facility.
So leveraging our <unk> facility and really driving down the overhead by putting more volume into that facility, where we're also focused on reducing our scrap which we get a lot of progress in the last year and a half or so as.
Speaker 5: We were also focused on reducing our scrap, which we made a lot of progress in the last year and a half or so, as well as automation. We're basically, we want to leverage all of the learning that we had from doing in Pelliswab devices at scale. And one of the learnings was automation and applying up to our other product blinds.
As well as automation, where basically we want to leverage all of the learnings that we had from doing entellus Schwab devices that scale and one of the learnings was automation and applying that to our other product lines.
Speaker 5: as well as looking to some other operational efficiency opportunities.
As well as looking at some other operational fulfill.
Speaker 5: when it comes to product standardization, when it comes to looking at packaging. So those are all the areas that we're driving. That's in the operation side. On the op-x side, what we're doing is trying to leverage kind of a process excellence mindset where we look at all of our areas of opportunity and we look at where we can streamline our process.
<unk> opportunities.
When it comes to product standardization when it comes to looking at packaging. So those are all the areas that we're driving that from the operations side on the Opex side. What we're doing is trying to leverage kind of a process excellence mindset, where we look at all of our areas of opportunity and we look at where we can streamline our processes along the way and drive.
Speaker 4: along the way and drive costs in and see that. And the only specific area I'm using lean six sigma, naphthalmology, training people, and having rigorous...
And it is true that all of these specific items using lean six Sigma methodology training people and having rigorous.
Speaker 4: and the key performance indicators for the accountable execution we talked about, both leading and lagging indicators and we have that by function by work stream across the organization, you know, really to drive that rigor. So those are the types of things that give us confidence on delivering our commitment on break even from an operating cash flow on the core by the end of next year. Great. Thanks.
Key performance indicators for the accountable execution, when you talk about both leading and lagging indicators when we have that by function by work stream across the organization.
Really to drive that rigor. So that those are the types of things that give us confidence on delivering our commitments on breakeven from an operating cash flow on the call bye.
By the end of next year.
Great. Thanks.
Thanks Alexandra.
One moment for our next question.
Yeah.
Okay.
Speaker 2: The next question comes from Andrew Cooper at Raymond Jain.
The next question comes from Andrew Cooper Raymond James.
Speaker 6: Your line is now open. Hey everybody, thanks for the question. Maybe first, it's kind of a longer term question. You know, if we look back at historically, there's always been a pretty big gap on the gross margin side between the molecular business and the diagnostic business.
Your line is now open.
Hey, everybody. Thanks for the question.
Maybe first one just kind of.
Longer term question, if we look back historically theres always going to.
A pretty big gap on the gross margin side between the molecular business in the diagnostic business.
Speaker 6: I guess when we think about bringing everything into or a lot more into Opus Way, lower growth in molecular than maybe where it was at peak, all these things sort of coming together post COVID, has that gap changed? I guess in the near term for the core and then longer term, how should we think about the different components of this portfolio from a margin for six?
So I guess, when we think about bringing everything and there are a lot more into opus way lower growth in molecular than maybe where it was at peak.
All of these things sort of coming together post Covid has that gap changed I guess in the near term for the core and then longer term how should we think about the different components of this portfolio from a margin perspective.
Speaker 5: Thank you for the question. Well, we're not guiding longer term on margins for the Q4 we are looking at is probably a normalizing back down to the mid-40s, but everything you describe is a correct piece.
Okay and thank you for the question, while we're not guiding longer term on margins for Q4 will be are looking at is probably a kind of a normalizing back down to the mid forty's, but everything you described is the correct thesis we are trying to leverage our opus way facility and drive overall efficiencies.
Speaker 5: We are trying to leverage our open-source facility and drive overall efficiency.
Speaker 5: And what we're trying to do is drive, and we are driving, our diagnostic margins higher.
And what we're trying to do is try and we are driving our diagnostic margins higher.
Speaker 5: The particular dynamic that was the biggest mixed impact in the last year or so was on Teleswab, which started out lower than our average gross margins and over the last year has improved significantly to the point where it's much higher than our overall margins.
Particular dine.
Dynamic that was the biggest mix impact within the last year or so was on Telus swab, which started out lower than our average gross margins and over the last year has been.
Proved significantly to the point, where it's much higher than our overall margins.
Speaker 5: And that's a dynamic in the mix that we're benefiting from. But when that starts getting into the endemic phase, what we will look at doing is driving the overall improvement of our gross margins again, through the efficiency, the cost operational efficiency items I mentioned before, to drive the overall portfolio higher.
And that's a dynamic in the mix that we thought we were benefiting from but when that starts getting into the endemic phase.
We will look at doing is driving the overall improvement in our gross margins again through the efficiency the cost operational efficiency items I mentioned before to drive the overall portfolio higher.
Speaker 5: And then take advantage of the facility, take advantage of automation, take advantage of the leveraging of standardization of our products and our processes.
And then take advantage of the facility to take advantage of automation take advantage of the leveraging of standardization of our products and our processes.
Yeah.
Speaker 6: Okay, that is helpful. Maybe just one on capital deployment as the cash balance to your credit continues to rise here. Just what you're seeing out there in the environment, how we think about maybe what's coming across the desk and the discipline you've shown, but when you may pull the trigger and maybe if there's any change to what the right assets look like as the environment continues to evolve.
Okay that is helpful. Maybe just one on capital deployment of the cash balance to your credit continues to rise here.
What youre seeing out there in the environment and how we think about.
Maybe what's coming across the desk and the discipline, you've shown but when you make all the figure and maybe if there's any change to what the right assets look like as the environment continues to evolve.
Speaker 4: I'll start and then I'll let Ken address capital deployment more specifically. But in the excitement of innovation and investment, I mean, that's where we think about the long term of this business first and foremost.
I'll start and then I'll, let Ken address capital deployment.
More specifically, but.
In the excitement of innovation and investment I mean that that's where we think about the long term of this doesn't is first and foremost we put together a transformation plan that started with strengthening the foundation to give us this opportunity to think about investing for the long term. So that's that's.
Speaker 4: we put together a transformation plan that started with strengthening the foundation to give us this opportunity to think about investing for the long term. So that's exactly what, you know, that's where we start.
What yes, that's where we start.
Speaker 4: Internally, we are taking our time, we're being incredibly diligent, and I'd say based on the market and economic landscape.
Internally, we are taking our time, we're being incredibly diligent and I'd say based on the market and economic landscape.
Speaker 4: the strength of our balance sheet is giving us advantage points to really think about everything externally that's coming across and investing in our organic capabilities and building on the strong portfolios in both diagnostics and molecular sample.
The strength of our balance sheet is giving us a vantage points to really think about everything externally, that's coming across and investing in our organic capabilities and building on the strong portfolios in both diagnostics and molecular sample management solutions so funding.
Speaker 4: management solution. So, you know, fundamentally, what we want to do most is to use this to build long term value, both for shareholders and for for our customer base and having a comprehensive portfolio. And but we're being very thoughtful about that, because there's a there's a lot coming across based on, you know, just the challenges in the market.
Mentally what we wanted to do most is to use this to build long term.
All of you both for shareholders and for our.
Based on having a comprehensive portfolio.
But we're being very thoughtful about that because there's a lot there's a lot coming across based on just the challenges in the market.
Speaker 5: Yeah, just to build on what Kerry said. So right now we have $225 million of cash. We expect that to increase based on the tailwind that I mentioned earlier. We probably need that we want to keep is about 60 to 80 million to cover our annual operating expenses. And maybe we're being a little conservative there. So you can imagine that gives us a little bit of gunpowder to work with. And as Kerry's mentioned before, and I mentioned past, is that what we want to look at is starting with partnerships. And we're trying to be disciplined and diligent in what we look
Yes, just to build on what Carrie said, so right now we have $225 million of cash and we expect that to increase based on the tailwind, but I mentioned earlier, we probably need that we want to keep it.
He is about $60 million to $80 million to cover annual operating expenses they were being a little conservative. There. So you can imagine that gives us a little bit of gunpowder work to work with and as Karen mentioned before and I mentioned the past is that what we want to look at is starting with partnerships.
We're trying to be disciplined and diligent in what we've looked at.
Speaker 5: and making sure that the partnerships that we get have a high opportunity for success to be able to drive future growth and profitable growth. That's our mindset as we look forward.
And making sure that the partnerships that we get has a high opportunity for success.
Build to drive future growth and profitable growth. So that's our mindset as we look forward.
Speaker 10: Yeah, we're our strengths can really be an accelerator together with that. So yeah, there's there's a lot to look at. But and I'd say we're looking at everything. But we're just really taking our time to choose what we think will be the right thing. Great, I will stop there. Thanks for the question.
Yeah, where our strengths can really be an accelerator together with that so yeah.
There's a lot to look at but and I'd say, we're looking at everything.
We're just really taken our time to choose what we think will be the right thing.
Great.
Thanks for the questions.
Great. Thanks, Andrew.
One moment for our next question.
Yeah.
Yeah.
Okay.
Speaker 2: The next question comes from Patrick Donnelly of Citi. Patrick, your line is now open.
The next question comes from Patrick Donnelly of City, Patrick Your line is now open.
Speaker 11: Hi, this is Brendan on for Patrick. I just 1 quick 1 for me. So, last burn is called. You guys highlighted infectious disease, respiratory and sexual health as possible areas to extend to. So, I was wondering, have there.
Hi, This is brendon on for Patrick just one quick one for me. So last earnings call you guys highlighted infectious disease, respiratory and sexual health as possible areas too.
Extensive so I was wondering have there been any updates.
On any of those areas or any new areas that are key.
Kind of in the pipeline for you guys.
Become revenue generating in the next few quarters or years.
Speaker 4: Yeah, so in terms of the strategy around building on our strong infectious disease and sexual health portfolio, that's exactly what we're plugging into with the first partnership agreement for international segments, which includes syphilis.
Yes, so in terms of the strategy around building on our strong infectious disease and sexual health portfolio. That's exactly what we're plugging into with the first partnership agreement for international segments, which include syphilis, I'd say both U S M.
Speaker 4: I'd say both U.S. and international, and let me be clear, the partnership we've announced is for international distribution.
Internationally, and let me be clear the partnership we've announced is for international distribution, but syphilis is one of the fastest growing stis.
Speaker 4: But syphilis is one of the fastest-growing STIs, plugs in very well with our HIV and HCV portfolio as.
<unk> done very well with our HIV and HCV portfolio.
Speaker 4: as well as an international ATV test and a Hep-B test. That's right in this realm of infectious disease and sexual health.
As.
As well as internationally to be test and have the test we yes, that's right in the realm of infectious disease and sexual health.
Speaker 4: You know, sort of near near quarter impact. I would reiterate, you know that we while we are not providing guidance for 2024 I would say, you know, any launch of distribution, you expect to ramp up and I wouldn't call that in the next few quarters.
In terms of.
Sort of nearer near quarter impact I would reiterate that we are while we are not providing guidance for 2020 for I would say any launch of of distribution you expect a ramp up and I wasn't called out in the next few quarters.
Speaker 4: But rather we think that it's a really strong example of expanding our comprehensive portfolio and it's right in line with the strategy we've been talking about for the last year. So you know, right in the wheelhouse of our
But rather we think that it's a really strong example of expanding our comprehensive portfolio and its right in line with the strategy we've been talking about for the last year. So yeah right right in the wheelhouse of our.
Speaker 4: Existing commercial team, the client relationships we have, our public health, and donor interest as well. And, you know, part of our excitement to announce these partnerships is just that it's right there in the portfolio.
Existing commercial team the client relationships, we have our public health.
And donor interest as it is.
Well and.
So part of our excitement to announce these are partnerships or its just outright.
It's right there on the portfolio.
Great. Thank you.
Thanks, Patrick.
Speaker 2: This concludes the question and answer session. I would now like to turn it back over to President and CEO , Kerry Eglinton Manor.
This concludes the question and answer session I would now like to turn it back over to President and CEO and Carrie Eglinton manner.
Speaker 4: Thank you so much, and thank you to everybody for joining. We appreciate your interest in OTI and look forward to our ongoing conversations. Thank you.
Thank you so much and thank you to everybody for joining we appreciate your interest in RTI and look forward to our ongoing conversation. Thank you.
Speaker 2: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Yeah.
Okay.
Okay.
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Okay.
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