Q3 2024 Co-Diagnostics Inc Earnings Call
Earlier today co diagnostics released financial results for the third quarter ended September 30 F. 'twenty 'twenty four a copy of the press release is available on the company's website.
We will begin the call with management's prepared remarks, and then open the call to analyst Q&A.
Before we begin we would like to inform the listeners that certain statements made by co diagnostics. During this call that are not historical facts are forward looking statements.
This includes statements concerning the company's forthcoming Kodiak PCR testing platform, which requires regulatory approval and marketing authorization for diagnostic use is currently being reviewed by the U S. F. D E and is not currently for sale actual outcomes and results may differ materially from what is expressed or implied in any statements important factors, which can.
Could cause actual results to differ materially from those in these forward looking statements are detailed in co diagnostics filings with the SEC co diagnostics assumes no obligation and expressly disclaims any duty to update any forward looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated.
In addition, the company may discuss certain non-GAAP financial measures during today's call. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. We refer you to the company's earnings release issued shortly before this call which contains reconciliations of the non-GAAP financial measures presented.
To their most comparable GAAP results.
Speaker Change: At this time I would like to turn the call over to coat Agnostics, Chief Executive Officer Dwight Egan Dwight.
Dwight Egan: Thank you Andrew and good afternoon, everyone. Thank you all for joining code diagnostics third quarter 'twenty 'twenty four earnings call.
Dwight Egan: I want to begin by extending my gratitude and thanks to everyone involved with co diagnostics. Our employees have continued to work extraordinarily hard to propel our probably our platform and test pipeline forward. This quarter and we are pleased with the progress we have made.
Dwight Egan: Our Kodiak PCR platform includes a low cost easy to use and highly portable point of care real time, PCR instrument and mobile at.
Dwight Egan: All designed to support a multitude of different tests.
Dwight Egan: Over the past three months our team has been focused on advancing the development of our platform and associated test pipeline.
Dwight Egan: As we have reported previously earlier this year in June we submitted a five 10-K application to the FDA seeking clearance for over the counter use of the Tony X P. C. Our pro instrument and Kodiak PCR COVID-19 test.
Dwight Egan: The F D. A substantive believe reviewing the application and we continue to engage in the interactive review process and communications with the F D. A.
Dwight Egan: While we retain full confidence in the quality and integrity of the platform.
Dwight Egan: A company can't predict remaining review process timeline or outcomes.
Dwight Egan: However, during this time, we have also been actively taking steps to broaden the potential reach of the Kodiak PCR platform by continuing the development of our tuberculosis respiratory multiplex H P D multiplex and strep, a test, which I will discuss in greater detail shortly I.
Dwight Egan: I am excited by the progress that we continue to make each quarter and believe that co diagnostics is well positioned to execute our strategy and goals through the remainder of 'twenty 'twenty four and into 2025.
Dwight Egan: During our last earnings call, we discussed our submission of a five 10-K application to the U S. F D. A for the Kodiak PCR probe the mobile App and the Kodiak PCR COVID-19 test for over the counter or OTC use.
Dwight Egan: <unk> K O T C clearance would allow the platform to be utilized in the home workplace and point of care settings, including skilled nursing and assisted living and assisted living facilities and physicians offices in the U S.
Dwight Egan: As we continue to remain in active dialogue with the FDA regarding their review of our submission.
Dwight Egan: We also are preparing for clinical evaluations on regulatory submissions outside of the U S for Covid as well as T b.
Dwight Egan: H P V multiplex and respiratory multiplex in Central and South America Africa, the Middle East and India, where we believe there is an unmet need and an opportunity to accelerate the commercial adoption of our platform.
Dwight Egan: We plan to target local health centres point of care settings, and remote settings in these regions.
Dwight Egan: In India. For example, we are preparing to seek clearance for multiple tests on the new platform from the central drugs standard control organization or C. D. S. C O in a region, where we have gained a comprehensive understanding of the commercial and regulatory landscape through our joint venture Coursera diagnostics.
Dwight Egan: Coursera has an established yourselves networked throughout the India for its 15 infectious disease PCR tests cleared by the C. D. S T O.
Dwight Egan: I V D used in clinical labs, ultimately international markets remain in high need of a decentralized portable low cost testing system all of which we believe this platform can provide.
Dwight Egan: During the quarter. We also attended several trade shows to showcase the Kodiak PCR platform as well as in international trade mission to Asia.
Dwight Egan: At the end of September code diagnostics, accompanied Utah Governor Spencer Cox and the World Trade Center, Utah executives to South Korea, and Japan seeking to strengthen the company's relationships with the state of Utah and with potential International partners.
Dwight Egan: We learned a great deal about the health care systems in Asian markets and spoke with several key stakeholders to gain a better understanding of the regulatory and pay our landscape as we considered commercialization of the new platform outside of the U S. We continue to identify regions of need and deepen our knowledge of.
Dwight Egan: Market strategies in those regions.
Dwight Egan: Additionally, in the third quarter, we attended presented and hosted a booth at the 16th next generation Dx Summit in Washington D. C. The conference was hosted by the Cambridge Health Tech Institute, who facilitated transformative discussions on diagnostics advancement.
Dwight Egan: We also hosted a booth at the association for Diagnostics and laboratory medicine, or a D. L. M annual meeting in late July where we presented co diagnostics at home and point of care PCR platform and its ability to support a wide range of potential indications. We are pleased with our engagement at renowned trade.
Dwight Egan: So an expos and remain focused on driving global exposure for our platform.
Dwight Egan: It is important to remember that there's new technology represents more than a single test or even an instrument rather it is a novel and comprehensive sample to result platform, which we believe has global applications with the potential to be transformative.
Dwight Egan: In connection with these ambitions, we remain highly focused on the development of our tuberculosis or T V test today.
Dwight Egan: To date.
Dwight Egan: <unk> diagnostics has completed several preliminary analytical studies for TV.
Dwight Egan: We plan to initiate clinical trials in South Africa, and India in early 2025, which remain our priority markets for TB testing.
Dwight Egan: As mentioned in India, we plan to pursue a regulatory pathway through the C. D. S. T O and will initially target point of care remote settings, and local health centers.
Dwight Egan: We also plan to pursue South African health products regulatory authority or Safra.
Dwight Egan: Clearance on World Health organization or W. H O Prequalification, which would facilitate introduction of the instrument and T V test as an in vitro diagnostic into several African markets.
Dwight Egan: As co diagnostics pursues the commercial opportunities in India, we remain engaged in discussions with Ngos and potential future customers gathering detailed data to support the go to market strategy for the TB test on the Kodiak PCR platform and ultimately contribute to the Indian government's initiatives.
Dwight Egan: To eradicate T V from the country.
Dwight Egan: For example, the company has conducted dozens of onsite evaluations of higher throughput smear microscopy centers, where many T. B samples are currently processed as experts believe that these centers need to rapidly transition to using molecular diagnostics, including gold standard PCR technology.
Dwight Egan: Turning to our upper respiratory multiplex test, we made great developmental progress in the third quarter. We believe that this test which has been designed to detect COVID-19 flu a flu b and RSV infections at the same time from a single sample brings significant strengths to the point of care in that.
Dwight Egan: Home settings globally.
Dwight Egan: By expanding accessibility to low cost testing through a four in one multiplex test the Kodiak PCR platform has the potential to deliver quick and efficient results to high need locations.
Dwight Egan: We see the most initial significant opportunities for this test in the U S and Latin America, which represent our initial target markets in the case of the ladder, we believe our U S. F D. A clearance could expedite the registration of the tests that an instrument in several regions across central and South America.
Dwight Egan: We are also encouraged by the significant progress that we have made on our HPV multiplex multiplex test on the platform.
The co primaries based H P V multiplex tests has been fully ported over to test cups for the Kodiak specie are pro instrument.
Results show that chemistry optimization appears to be complete.
Dwight Egan: We expect to begin clinical evaluations early next year.
Dwight Egan: We have emphasized international opportunities for this test and plan to initially target India, followed by Africa, given the higher prevalence of H P. D in those regions compared to the rest of the world.
Dwight Egan: Diagnostics has continued to work closely with our Indian joint venture co Sarah diagnostics on testing needs in India.
Dwight Egan: Where a lack of accessibility remains a large problem.
Dwight Egan: As you May recall, the HPV test development efforts are supported by a grant from the Bill and Melinda Gates Foundation the.
Dwight Egan: The work that we are doing with our test is an important step in making testing more accessible and efficient thanks to the advantages afforded by the Kodiak PCR platform technology.
Dwight Egan: We anticipate our clinical locations regulatory strategy and efforts and target markets to be influenced and facilitated by our HPV testing funding partners.
Speaker Change: In August the World Health organization declared M. Pax, formerly monkey pox, a public health emergency of international concern.
Speaker Change: More recently several health officials have indicated that played one be monkey pox or M box, a new strain recently found to be circulating amongst some affected populations is both more severe and more transmissible between humans and response to the recent surge in cases, which includes over 22000.
Speaker Change: 800 cases, and 622 deaths in Africa alone as of the end of August co diagnostics conducted then in silicone analysis of the logic Smart and pox two gene are you owe test.
Speaker Change: The analysis demonstrated that the tests designed and developed in 2022 should retain full reactivity against all embark strains that have circulated over the past year, including clade. One b. We are pleased with these results, which highlight the potential for code diagnostics to provide a viable and effective empire.
Speaker Change: Tests to those in need at.
Speaker Change: At the end of August the World Health organization asked manufacturers of M box tests to submit expressions of interest for their tests to be considered for emergency use listing or E. L.
Speaker Change: At W. H O E U L would allow a test to be used as an in vitro diagnostic and streamline its adoption in many African African markets and co diagnostics has been working with the W. H O to determine whether an updated version of our logic Smart test would meet the criteria for an E U L.
Speaker Change: Our ongoing emphasis on our new technology as a platform to transform PCR diagnostics on an international scale has also motivated our recent work with Ngos, which has been a focus of our efforts this last quarter.
Speaker Change: The initiatives currently in process, primarily center on bringing the tuberculosis and HPV test on the new platform to market in affected regions around the world through a combination of grant funding opportunities and introductions to other stakeholders with mutually aligned missions in these areas.
Speaker Change: They involve granular research into perspective point of care and near point of care users and distribution pathways, validating and generating preeminent pre analytical data on the test performance responding to in depth due diligence requests and regular status updates N V briefings.
Speaker Change: We anticipate that our partners and these efforts will be instrumental in helping us achieve our ambitions in that our regular considerable work with them is an investment in the company's near and medium term future.
Speaker Change: Wrapping up on our pipeline. Our team has continued to make progress in the development of a strep a test which is one disease area that we anticipate would contribute to our platform's value proposition and point of care settings.
Speaker Change: Use of our vector control business line continued to grow in Q3 of this year at the beginning of the quarter, we announced that our customer base had expanded to customers across 15 states and since that time, we have added customers and three more states. There are hundreds of mosquito abatement districts in the United States.
Speaker Change: These community health programs provide a public service to help improve the quality of life of residents in their districts, which aligns with the mission of our company.
Speaker Change: Our technology platform as we support their efforts by providing frontline surveillance against the spread of mosquito borne pathogens.
Speaker Change: Lastly, I wanted to briefly provide an update on the manufacturing capacity for the Kodiak PCR platform in.
Speaker Change: In addition to the domestic manufacturing facility the platform inaugurated in April we are pleased that the expansion of our all of our synthesis facility in India is nearly complete with an inauguration planned in early December.
Speaker Change: Completion. This expanded facility will allow for cost effective in country manufacturing of our patented co primaries oligonucleotides and is an important step towards increasing the manufacturing capacity for the platform we.
Speaker Change: We are excited to build additional in house manufacturing capacity in India for the instrument and Cups, and we will continue to work closely with Coursera to advance the project.
Speaker Change: In summary, I'm pleased with the progress that we've made this quarter, which has enhanced our ability to execute our future pipeline development initiatives. We strongly believe that our platform is differentiated co primaries technology quick turnaround time, and low unit cost cutting unlocked accurate and accessible testing capability.
Speaker Change: Around the world.
Speaker Change: Additionally, our cloud based HIPAA compliant technology will support improved usability and time to result, especially in developing countries. While also contributing to a future global network of data that delivers invaluable outbreak information to countries and municipalities in real time.
Speaker Change: We are excited about the potential for our platform to transform global diagnostic testing and look forward to providing more updates in early 'twenty 'twenty five.
Speaker Change: With that I will now turn the call over to Brian to discuss our third quarter financial results.
Brian: Thanks Whit.
And thanks to everyone who joined today's call.
Brian: For the third quarter of 'twenty 'twenty four total revenue decreased to zero point $6 million as compared to $2 $5 million in the prior year same period.
Brian: Grant revenue in the third quarter of 2024 was zero point $4 million in product revenue was zero point $2 million.
Brian: Gross profit for the quarter decreased to zero point $3 million compared to $2 $2 million in the prior year comparable period.
Brian: Total operating expenses for the quarter ended September 32024 decreased to $10 $6 million from $11 $1 million in the third quarter of 2023.
Brian: The decrease from the prior year is primarily due to decreased stock based compensation expense and expenses related to clinical trials for the Kodiak Pcr platform.
Brian: Research and development expenses in the third quarter were $4 $9 million compared to $5 $8 million in the comparable prior year period.
Brian: For the third quarter income before taxes was a loss of $9 $7 million as compared to a loss of $8 $1 million reported in the prior year.
Brian: Net loss for the third quarter of 2024 was $9 $7 million or a loss of 32 cents per fully diluted share compared to a net loss of $6.0 million or a loss of 20 cents per fully diluted share in the prior year.
Brian: Adjusted EBITDA was a loss of $8 $8 million compared to an adjusted EBITDA loss of $6 $5 million in the prior year.
Brian: We ended the quarter with $37 $7 million in cash cash equivalents and marketable investment securities.
Brian: We continue to manage our spend as we look to maintain a healthy balance sheet to position ourselves for long term growth.
Brian: Co diagnostics remains focused on managing its cash position through diligence spending to best position the company for future commercial launch.
Brian: We continue to consider ways that we can improve operational and manufacturing efficiencies, while reducing our expenses.
Brian: We are very excited about our continued progress and remain optimistic about 2025, and the future developments within our test pipeline.
Brian: I look forward to providing you with more updates.
Brian: On next quarters call.
Speaker Change: With that I will now turn the presentation back over to Dwight.
Dwight Egan: Thank you Brian.
Dwight Egan: We are very thankful to our Kodiak employees distributors and shareholders, who make the progression of our test pipeline in core diagnostics mission possible.
Speaker Change: We will now take questions from our analysts operator.
Speaker Change: We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if you're using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
Speaker Change: We will pause momentarily to assemble our roster.
Speaker Change: Our first question comes from Jade Montgomery of H C Wainwright.
Speaker Change: Please go ahead.
Speaker Change: Hi, Thanks for taking my question I'm on for I E churn them. So first of all are you able to disclose any feedback from the FDA for the <unk>.
Speaker Change: Application.
Speaker Change: Thanks for your question Jade.
Speaker Change: Cody diagnostics has remained in discussions with the FDA regarding our submission we cant comment on regulatory decisions or timelines by the F. D. A.
Speaker Change: Our focus has continued to broaden our other geographic regions, where we believe there's a large unmet need and our platform could be extraordinarily beneficial raises like central and South America Africa, and the Middle East and India, where we believe large opportunities exist for commercial adoption of our platform.
Speaker Change: Okay. Thank you more on that then so how is your demand split between the U S and those other clinical companies I'll test My phone do you feel that you had some nice opportunity outside the U S.
Speaker Change: That's a very good question historically our <unk>.
Speaker Change: Revenues have been pretty evenly split between our international customers and our domestic customers.
Speaker Change: So you know kind of depends on what the indication is we certainly believe that the primary markets for tuberculosis or in countries like India and South Africa.
Speaker Change: Whereas.
Speaker Change: Our customers for a a b C. R R.
Speaker Change: Complex upper respiratory will highlight the United States as a customer.
Speaker Change: Probably the same for Covid. So it depends on what the indication is but the broader mix historically has been about 50 50.
Speaker Change: Great. Thank you so much that's all I have.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].