Q3 2024 OPKO Health Inc Earnings Call
Phillip Frost, Elias Zerhouni, Phillip Frost, Elias Zerhouni, Phillip Frost, Elias Zerhouni, Phillip Frost, Elias Zerhouni, Phillip Frost, Elias Zerhouni, Phillip Frost, Elias Zerhouni,
I'm talking about Yvonne, of course. What happened on脚21? It wasn't the first time. Something about her foot. Foot? Foot. No. I hope you won't mind. I'm sorry. Why? So sorry for what? You're on my test, right?
Speaker Change: Good day, and welcome to the OPCO Health third quarter of 2024 Financial Results Conference call.
Speaker Change: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.
Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.
Speaker Change: Thank you, Operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors Investor Relations. Thank you all for joining today's call to discuss OPCO Health's financial results for the third quarter of 2024.
Speaker Change: I'd like to remind you that any statements made during this call by management, other than statements of historical fact, will be considered forward-looking, and as such will be subject to risks and uncertainties that could materially affect the company's expected results.
Speaker Change: Those four looking statements include, without limitation, the various risks described in the company's SEC filings.
Speaker Change: including the annual report on Form 10-K for the year ended December 31, 2023 and in subsequently filed SEC reports.
Speaker Change: This conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 7, 2024.
Speaker Change: Except as required by law, OPCO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.
Speaker Change: Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as OPCO's pharmaceutical business.
Speaker Change: After that, Adam Logal, OPCO's CFO, will review the company's third quarter financial results.
Speaker Change: and provide fourth quarter financial guidance. And then we'll open up the call to questions.
Speaker Change: Now I'd like to turn the call over to Dr. Frost.
Good afternoon, and thank you for joining us today.
Dr. Frost: We had a good third quarter with positive developments in both our diagnostics and pharmaceutical segments.
Dr. Frost: Significant progress has been made to put bar reference on a clear path to profitability after selling certain assets to LabCorp.
Dr. Frost: We continue the development of the MODEX technology product portfolio. Pfizer has successfully launched Engenla in all priority markets, and we continue to be enthusiastic about positive animal studies of our once-weekly injectable dual-glip-1 glucagon agonist program.
Thank you.
Dr. Frost: Our collaboration with Entera Bio on an orally delivered, once daily, version of our Oxyntomodulin also shows great promise in animal studies.
We bolstered our balance sheet with significant cash infusions.
Dr. Frost: to ensure adequate funding for our pharmaceutical pipeline and to return capital to our shareholders through a stock repurchase program.
Dr. Frost: As we continue to execute our strategy, we expect these important catalysts to ultimately be reflected in a closer alignment of the value of our assets and our stock price.
Dr. Frost: are currently, the portfolio, consists of a variety of segments that investors need to evaluate.
Dr. Frost: We plan to operate these segments to drive value for OPCO with additional partnerships, business development initiatives, and asset sales.
OPCO is structured around five key businesses.
Dr. Frost: by reference, MODEX, our growth hormone franchise with Pfizer, our global health care business, and our pipeline assets.
Dr. Frost: We have the ability to explore partnerships and sales or business development activities with each in order to build value, unlock value, and return capital to OPCO.
Dr. Frost: You've seen some evidence of this so far in 2024, and we hope to continue the process in 2025.
Dr. Frost: We look forward to keeping you apprised of our progress. With that introduction, I'll turn the call over to Elias. Well, thank you, Phil, and good afternoon, everyone.
Elias Zerhouni: As Phil mentioned, Opto completed the sale of bioreference health laboratory testing businesses focused on clinical diagnostics and women's health nationwide, but excluding operations in New York and New Jersey, which we retain.
The sale was for $237.5 million.
Elias Zerhouni: BioReference Health will continue to offer specialty oncology and neurology diagnostic services nationwide, as well as maintain a comprehensive menu of core services in New York and New Jersey.
Elias Zerhouni: This will allow us to streamline our overall infrastructure and reduce operating costs to better position the division for sustained growth and profitability.
Elias Zerhouni: The assets we sold had annual revenue of about $100 million. Now, net sales from the remaining operations continuing in BioElectrons Health exceeded $400 million in 2023, as an indication.
Elias Zerhouni: Our high-specialty, high-value testing segments continue to perform well. With oncology testing volume, in the third quarter of this year was up 6.8% compared to the third quarter of 2023.
Elias Zerhouni: both the depth and the innovation of our testing portfolio and expanded collaborations with large cancer centers and health systems.
Elias Zerhouni: Additionally, in Q3, BioReference received New York State approval for OncoHRD testing for homologous recombination deficiency.
Elias Zerhouni: breast, ovarian, prostate, and pancreatic cancers, where PARP inhibitors like Mimparza from AstraZeneca, for example, are a unique therapeutic option.
Elias Zerhouni: These tests are necessary to guide the patient for the best therapy. And so this makes BioReference one of the few labs to offer a full comprehensive tumor sequencing menu with our OncocyteAdvanced.
Elias Zerhouni: next-gen sequencing testing, germline testing with Oncorisk, and now an HRD option in OncoHRD for patients with these common cancers.
Elias Zerhouni: And this combined offering provides patients and clinicians with the most comprehensive view of a patient's cancer subtype and the therapeutic options to be considered by their treating physicians.
Elias Zerhouni: As for our urology segment, the four case core tests, which is an FDA approved blood biomarker test, indicated for use in men age 45 and above with elevated PSAs, or at risk of prostate cancer, and require prostate biopsy for confirmation.
Elias Zerhouni: Year-to-date, the 4K score test delivered a strong growth of 16% over the same period in 2023.
Elias Zerhouni: The 4K score test provides an individual's probability score of finding aggressive prostate cancer, defined as a Gleason score.
equal or greater than 7 prior to a biopsy decision.
and ratio is the 4K score test.
Elias Zerhouni: In the last decade, several European countries have initiated population-based prostate cancer screening trials.
Elias Zerhouni: to evaluate whether a screening algorithm that included both TSA and biomarker tests can reduce over-diagnosis of prostate cancer.
Elias Zerhouni: And the 4K score test has been included in several of these mass screening trials and demonstrated the value of the 4K score test in stratifying men with elevated PSA and the high probability of prostate cancer.
Now,
Elias Zerhouni: Switching gears to our pharmaceutical segments, our Modix Therapeutics programs are progressing nicely. A Tetra specific antibody, MDX-2001, initiated a phase 1 trial and is currently dosing patients.
Elias Zerhouni: Our other immunopathology programs, MDX-2003, are Tetraspecific Antibodies for Liquid Tumors.
Elias Zerhouni: and autoimmune indications, as well as MDX-2004, immune modulator, multi-specific antibody, are progressing to INDs and expected to enter the clinic.
next year.
In short of notes.
Elias Zerhouni: Last month, we were awarded $51 million of additional funding under our existing BARDA contracts.
Elias Zerhouni: to develop COVID multi-specific antibodies and to initiate an influenza program leveraging our mSTAR antibody platform.
Elias Zerhouni: Approximately $35 million of these $51 million in additional funding is earmarked for the development of a second novel, multi-specific antibody to SARS-CoV-2, CoV-2, from preclinical to Phase I trials.
Elias Zerhouni: as well as preclinical work on the gene-based expression of multi-specific antibodies to SARS-CoV-2, including mRNA as well as DNA vectors.
Elias Zerhouni: In addition, BARDA activated funding totaling $16 million from our current contract to begin development of influenza multispecific antibodies with potential gene and protein delivery modalities.
So,
Elias Zerhouni: Collectively, this non-digestive funding brings the total committed support from BARDA actually at $110 million, with a potential for a total of $203 million in total if all options and milestones are executed.
Elias Zerhouni: This additional funding, if granted, will be used to accelerate the COVID program, the flu program, and target other biodefense threats, as well as develop a platform with gene-based delivery methods for use against future pandemics.
In addition, our collaboration with Merck
Elias Zerhouni: for Epstein-Barr virus multivalent nanoparticle vaccine is on track to enter the clinic soon.
Elias Zerhouni: Preclinical work is being performed by MODEX in collaboration with Merck and has been funded by Merck.
Elias Zerhouni: After Phase I, Union Studies begin, Merck will assume all development activities through to commercialization.
Speaker Change: I'd like to recall that we received a prompt payment of $50 million.
and are eligible for milestone payments associated with progress.
Speaker Change: in the development and commercialization of MDX-2201, or the EBV vaccine. And these milestones add up to about $872.5 million, as well as royalties on global sales.
Speaker Change: Now, Pfizer's launch of our Pediatric Long-Acting Growth Hormone drug, Engenla, continues to gain share as patients shift from the daily product to this more convenient once-weekly drug.
Speaker Change: Now, OPCO is also entitled to an additional $100 million in potential milestone payments related to additional pediatric and adult educations. And that is unaffected by the no-purchase agreement with healthcare royalty partners.
Now,
Speaker Change: something very interesting has happened and that is that we have continued to advance the development of our long-acting oxytomodulin analog in both subcutaneous and oral formulations.
Speaker Change: As you know, oxytomodulin analog are the basis of the peptides that are being used today for diabetic patients as well as for weight loss.
Speaker Change: And they essentially suspended the trials after their completion and did not proceed because of dose-limiting formulation.
Speaker Change: But the same key peptide was then redesigned as an acetylated compound and has been confirmed in in vitro assays and animal disease models to be a strong candidate for once-weekly subcutaneous administration.
Speaker Change: And so, in collaboration with Entera Bio, we recently announced results from our ongoing collaborative research combining our novel acylated compound and Entera's proprietary NTAP technology.
Speaker Change: to see if we could deliver our compound orally. And the program is focused on developing the very first oral dual agonist GLP-1 nucleosome peptide.
Speaker Change: And this could be a potential once-daily treatment for patients with obesity or metabolic disorders, including NASH.
Speaker Change: The in vivo studies in rodent and pig models showed that a single oral dose administration resulted in a desirable PK profile and bioavailability that would support a once-daily oral treatment regimen.
Speaker Change: In parallel, we're going to continue to develop our injectable, once a week, formulation and trials for the...
GLP-1, glucagon peptide, we have recently generated.
Speaker Change: We look forward to presenting these findings at an upcoming clinical conference.
Speaker Change: We're pleased that our internal innovation has attracted significant partnerships to date. While our balance sheet...
Speaker Change: has been bolstered to adequately fund our operations and our growing pipeline of first-in-class products. And so, we remain confident in our business strategy and our ability and capacity to drive progress.
Speaker Change: Thank you Elias. As Phil and Elias have discussed, the third quarter of 2024 was transformational for our business and our balance sheet.
Speaker Change: We ended September with over $400 million in cash and cash equivalents, which don't include $23.7 million held in escrow related to our LabCorp transaction.
or a restricted stock of $20 million.
Speaker Change: We repurchased and retired 14.9 million shares of our common stock for $23.8 million.
through September 30th.
Speaker Change: And through yesterday, we repurchased and retired a total of 24 million shares for $37.3 million under our $100 million share repurchase program.
Speaker Change: This does not include the 55 million shares that we repurchased earlier this year, bringing our total repurchases year-to-date to 79 million shares, or approximately 10% of shares outstanding as of January 1st.
Speaker Change: Further, we closed our asset-based lending facility with J.P. Morgan with the cash inflows from our LabCorp and Healthcare Royalty transactions.
Speaker Change: We have a significant cash balance and will be disciplined in what we invest in, including our highest priority R&D programs.
Speaker Change: We will also continue to fund our opportunistic equity and convertible note repurchases.
as a demonstration of our commitment to enhancing shareholder value.
Speaker Change: With that, let's review our financial results for the third quarter.
Speaker Change: Starting with our Diagnostics segment, revenue was $121.3 million for the third quarter of 2024, compared with $131.7 million for the 2023 period.
Speaker Change: This decrease was primarily the result of lower testing volumes, including the impact of the LabCorp transaction that occurred mid-quarter during the quarter.
as well as two hurricanes impacting the southeast.
Speaker Change: During the third quarter of 2024, costs and expenses totaled $184.2 million, compared with $160.8 million for the comparable quarter of 2023.
Speaker Change: Importantly, costs and expenses included approximately $30 million of non-recurring costs and expenses for severance, facility closure costs, and contractual volume shortfalls
Speaker Change: All incurred as expected as we are relying on our business to ensure sustainable growth and profitability after the LabCorp transaction closing.
Speaker Change: During the third quarter of 2024, we also recorded a gain of $121.5 million on the transaction with LabCorp.
Speaker Change: which resulted in operating income of $58.5 million compared to an operating loss of $29.1 million for the 2023 quarter.
Speaker Change: Depreciation and Amortization Expense for the Diagnostic Segment was $6.1 and $8.4 million for the 2024 and 2023 periods, respectively.
Speaker Change: As we have discussed on previous calls, the LapCorp transaction was a major step for us to return to profitability and the restructuring activities this transaction allowed.
Speaker Change: And we initiated this quarter, put us in a strong position to have the business operating at a break-even run rate by the end of this year and operating cash flow positive and profitability in 2025.
Speaker Change: Moving to our pharmaceutical segment, revenue was $52.4 million for the third quarter of 2024, compared with $46.9 million for the comparable period of 2023.
Speaker Change: Revenue from products, including our international pharmaceutical businesses, was $39.1 million, compared to $40.7 million for the comparable period of 2023.
Speaker Change: Despite the challenging foreign currency environment, the profitability profile of this business continues to improve above our expectations.
Speaker Change: Product revenue includes revenue from Ryalty of $5.8 million, which was lower than 2023's $7.3 million, reflecting an increase in the cost of our copay assistance programs and a slight decrease in the number of bottles shipped.
Speaker Change: Revenue from the transfer of IP was $13.2 million for the third quarter of 2024, compared to $6.2 million for the 2023 quarter. Our gross profit share from Pfizer was $7.4 million during the third quarter of 2024, compared to $4.9 million for the 2023 period.
Speaker Change: In addition, the third quarter of 2024 includes $5.5 million in R&D funding related to our BARDA agreement.
Speaker Change: Costs and expenses for our pharmaceutical segment were $84.6 million for the third quarter of 2024, compared to $72.3 million for the 2023 period.
Speaker Change: Research and development expenses were $28.2 million compared to $18.9 million a year ago.
Speaker Change: R&D expense increased as a result of our activities for our MODEX development programs, including the recently commenced Phase I clinical trial for our first immuno-oncology program, as well as our BARDA-supported activities.
Speaker Change: The resulting operating loss for the quarter ended September 30, 2024 was $32.2 million, compared to an operating loss of $25.4 million for the third quarter of 2023.
Speaker Change: Depreciation on the amortization expense for the quarter increased slightly to $18 million from $17.8 million for the 2023 quarter.
Turning to our consolidated financial results.
Speaker Change: For the third quarter of 2024, we reported net income of $24.9 million, or $0.03 per diluted share, compared with a net loss of $84.5 million, or $0.11 per share for the 2023 period.
Speaker Change: Net income for the third quarter of 2024 included a non-cash, unrealized gain on our investment of GNDX of $45.9 million compared to a non-cash, unrealized loss of $8.3 million for the 2023 period.
Speaker Change: As we look ahead, we are providing financial guidance with the following assumptions.
Speaker Change: For our pharmaceutical segment, we expect Pfizer to continue to grow sales of Ingenla and realize the benefits of the expanded gross margin due to the scale-up of its manufacturing processes.
Speaker Change: We assume a stable foreign currency exchange rate for our ex-U.S. pharmaceutical businesses.
Speaker Change: And R&D expenses for the fourth quarter of 2024 will reflect higher activities related to our MODEX programs, including CMC efforts and...
Progress with our BARDA agreements.
Speaker Change: For our Diagnostics segment, we are continuing our multi-year, multi-phase program to improve profitability.
Speaker Change: This program is focused on operational efficiencies and the reduction of fixed infrastructure cost.
Speaker Change: and is expected to deliver annualized savings of approximately $25 million by the end of 2024, some of which we began realizing in the third quarter and will continue throughout the fourth quarter.
Speaker Change: We expect an additional $14 million of non-recurring costs in the fourth quarter, primarily including severance and facility closure costs, to be paid out through 2028.
Speaker Change: We expect an additional $14 million of nonrecurring costs in the fourth quarter, primarily including severance and facility closure costs to be paid out through 2028.
Speaker Change: In addition, we have taken action and are seeing the benefits from our revenue cycle management programs, including implementing price increases that were effective in the third quarter for certain testing modalities, including our oncology offerings. These actions are expected to result in an overall increase in annual revenue of approximately $8 million to $10 million.
Speaker Change: In addition, we have taken action and are seeing the benefits from our revenue cycle management programs, including implementing price increases that were effective in the third quarter for certain testing modalities, including our oncology offerings.
Speaker Change: These actions are expected to result in an overall increase in annual revenue of approximately $8-10 million for the full year of 2025.
Speaker Change: For the full year of 2025.
Speaker Change: We have established gross margin thresholds and targets for our remaining business to be above 27% and expect.
Speaker Change: Our positive cash flow for the full year 2025, and established hadn't have established an additional cost initiatives targeting an additional $20 million of annualized cost savings, we look forward to providing further details and guidance during our fourth quarter call.
Speaker Change: a positive cash flow for the full year 2025 and have established an additional cost initiative targeting an additional $20 million of annualized cost savings.
Speaker Change: We look forward to providing further details and guidance during our fourth quarter call.
Speaker Change: As a result, we expect the following for the fourth quarter of 2020 for total revenues between 155 and $160 million with revenue from services between 95 and $98 million.
Speaker Change: As a result, we expect the following for the fourth quarter of 2024. Total revenues between $155 and $160 million, with revenue from services between $95 and $98 million.
Revenue from product sales between $41 and $44 million.
Speaker Change: Revenue from product sales between 41 and $44 million.
Speaker Change: and other revenue between $13 and $18 million, inclusive of the Pfizer gross profit share estimates between $8 and $10 million, as well as BARDA revenue of $5 to $8 million.
Speaker Change: And other revenue between 13 and $18 million inclusive of the Pfizer gross profit share estimates between eight and $10 million as well as BARDA revenue of $5 million to $8 million.
Speaker Change: We expect fourth quarter costs and expenses to be between 200 and 210 million dollars, excluding the non-recurring expenses related to our restructuring of BioReference.
Speaker Change: We expect fourth quarter cost and expenses to be between 200 and $210 million, excluding the nonrecurring expenses related to our restructuring of bio reference.
Speaker Change: R&D is expected to be between $28 and $34 million, depending on the timing of certain activities for MODEX programs, with $5 to $8 million being offset by BARTA funding.
Speaker Change: R&D is expected to be between 28 and $34 million, depending on the timing of certain activities for remote X programs with $5 million to $8 million being offset by BARDA funding.
Speaker Change: We finally expect depreciation and amortization expect expense to be between 22 and $23 million.
Speaker Change: We finally expect depreciation and an amortization expense to be between 22 and 23 million dollars.
Okay.
Speaker Change: That concludes our prepared remarks, and thank you all for your attention operator, let's open the call for questions.
Speaker Change: That concludes our prepared remarks, and thank you all for your attention. Operator, let's open the call for questions.
and Phillip Frost. Thank you.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you are using.
Speaker Change: Speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed.
Speaker Change: To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question comes from Maury Raycroft of Jefferies Go ahead. Please.
Speaker Change: Our first question comes from Maury Raycroft of Jeffries. Go ahead, please.
Maury Raycroft: Hi, Congrats on the progress and thank you for taking my questions.
Maury Raycroft: Hi, congrats on the progress and thank you for taking my questions.
Speaker Change: Maybe starting off, just wondering what the next steps are for the Oxygen Modulin Analog 88006.
Maury Raycroft: Maybe starting off just wondering what the next steps are for that accident My Julien analog eight eight or six now that you have the preclinical data for the subcutaneous form in the oral form as well does and tear up plan to advance this into a phase one study in 2025.
Speaker Change: Now that you have the preclinical data for the subcutaneous form and the oral form as well, does Interra plan to advance this into a Phase I study in 2025?
Speaker Change: And also you said you will advance the sub Q form in parallel with the oral drug is this just forgetting PK data or for keeping options open maybe talk more about the strategy between the oral and the sub Q.
Speaker Change: And also, you said you will advance the subcube form in parallel with the oral drug. Is this just for getting PK data or for keeping options open? Maybe talk more about the strategy between the oral and the subcube version.
Speaker Change: Well that's a good question Laurie. Thank you. So yes, we're going to continue I mean, the development in parallel the Oro with Terra bio as a collaborator and using their technology.
Speaker Change: That's a good question, Laurie. Thank you. So yes, we're going to continue in the development.
Speaker Change: in parallel of the oral with Antero Bio as the collaborator.
Speaker Change: And using the technology, we have early results that say two things. One, it's feasible. And two, it's comparable to other peptides on the market in oral forms.
Speaker Change: We have certainly results to see two things one she's a bolt in to its comparable to other peptides on the market more forms and so we can be competitive there.
Speaker Change: In terms of the Injectables.
Speaker Change: Injectable. So I mean, we just have to advance the preclinical work we've done a lot of work on this molecule.
Speaker Change: Before even reaching a fish too with a different compass.
Speaker Change: Composition of matter, we think this one is.
Speaker Change: Much much better because it allows you to do once a week injection in lower doses. So based on our experience what we need to understand years. This co agonists G. L. P. One glucagon is different from most of the other.
Speaker Change: Peptides are on the market today.
Speaker Change: One from Boehringer ingelheim that is comparable to that.
Speaker Change: This composition of the peptides and so we need to advance that to the point, where we can make a decision as to whether or not we have what we need to do the phase one. So we're in the preclinical phase. It has attracted interest we're talking to other parties that are may have an interest in partnering with us in.
The work is ongoing.
Speaker Change: I can't make any more statements that were active and actively pursuing it.
Speaker Change: Got it understood Okay, and then for the Mdx Choosier zero one study that's ongoing.
Speaker Change: Do you anticipate you could report a data update from that first half 'twenty five.
Speaker Change: And I know this is an early study, but can you talk about expectations for what you could show an initial data and how this will influence next steps and continued investment in the program.
Speaker Change: Just so you know there are two phases. The first one is physically.
Speaker Change: Relation of the dose to a range, where we think they will do.
Speaker Change: So we have six doses.
Speaker Change: It allows us to do.
Speaker Change: Those are the one patient at a time and you have to wait a month to see business models.
Speaker Change: Once that's done we'll go to cohorts, where we have three patients at a time in different cancers, and then we will be able to see if we have any response at this time no for the first six.
Speaker Change: Probably will take a bubble.
Speaker Change: Six months, so you get to read about whether or not we have.
Speaker Change: A good safety profile, it's tolerable and also finding out which we didn't have antibody drug hunting.
Antibodies.
Speaker Change: So think of it in two ways first is the first.
Speaker Change: Visibility toxicology studies, which will be reading out in the field small since 2010, we smoke more like towards the end of the first of all.
Speaker Change: The second one is a much longer phase what we wanted to test.
Speaker Change: Doses, but we believe we're going to be effective.
Speaker Change: Get drawn off about 40 patients and ER and then that will take a while to read probably towards the middle of 'twenty six.
Speaker Change: We hope.
Speaker Change: Got it okay. That's helpful. Thanks for taking my questions and I'll hop back in the queue.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Jeff Cohen of Ladenburg Thalmann and company go ahead. Please.
Speaker Change: Hi, Thank you for taking our questions. This is destiny on for Jeff.
Speaker Change: Wanted to start with that's 20 201 asked that you said you're moving it towards the.
Speaker Change: Our clinic and at that point I know that market is going to take over for the associated costs I'm wondering who is making that decision since you're both kind of.
Speaker Change: Jointly progressing thus far.
Speaker Change: Well, we have a joint.
Speaker Change: Program basically we've mhm.
Speaker Change: Because the sponsor so mark will make their decision. We obviously have participated all the way through this phase here too.
Speaker Change: To the.
Speaker Change: The entry into the clinic, but that decision is their decision not all decision.
Speaker Change: But they have everything they need at this point to actually make that decision.
Speaker Change: Okay.
Speaker Change: Okay. So there's nothing outstanding debt really is stopping them from moving forward. It's more of a thing my understanding correctly.
Speaker Change: Yes, sure there's nothing in front of US that's an obstacle at this one.
Speaker Change: They're making a decision.
Speaker Change: Okay perfect.
Speaker Change: I want to quickly touch on bio reference congratulations on having not close.
Speaker Change: I'm wondering if your profitability comments are kind of contingent on the investment that you have to make I guess in other words do you need to invest more into this business in order to reach those profitability goals or I.
Speaker Change: As it currently stands.
Speaker Change: Some more of the fat will be sufficient.
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: Sure. So so definitely the cost that we're incurring those nonrecurring costs or the the key for us to be able to get the business profitable, there's not significant investments that we need to make back into the business theres not an expansion of our salesforce or new product offerings or anything like that it is it is simply just.
Speaker Change: Now that we've closed the transaction with labcorp, giving us the ability to to reduce our infrastructure size.
Speaker Change: And in the existing footprint to get us to those profitability numbers. So yeah.
Speaker Change: I'll call it weeks away from that at that point.
Speaker Change: Got it.
Speaker Change: Remember that we closed multiple laboratories and facilities from California, all the way to Florida.
Speaker Change: As part of the process. So we think we can we can definitely improve profitability by focusing also in Newark, New Jersey area, where we have the majority of our resources.
Speaker Change: Focusing there we believe will provide both efficiencies are because.
Speaker Change: Because we have right sized the lab for the market, but also opportunities for growth.
Speaker Change: Okay got it I think that does it for me you addressed everything else in your prepared remarks, so I'll jump back in queue. Thank you.
Speaker Change: The next question comes from Chen of H C. Wainwright and company go ahead. Please.
Speaker Change: Yeah.
Speaker Change: Thank you for taking my questions.
Speaker Change: So.
Speaker Change: Could you comment for Oh quite a 006.
Speaker Change: Do agonist.
Speaker Change: Peptides do you I mean.
Speaker Change: How much outperformance in terms of efficacy do you expect it to.
Speaker Change: To show compared to our existing royalty G. L. P. One drugs on the market and also between our weekly subdued version and also daily oral version, which one do you see could potentially.
Speaker Change: Hum better market adoption that the research program.
Speaker Change: Yeah.
Speaker Change: Well. Thank you for the question. So when you look at the market. The way. It has evolved I think it really depends on two factors. One is obviously the composition of the peptide.
Speaker Change: As compared to some of you tied on a trip to a shipper tied already the boehringer ingelheim compounds and they all have differences and a bulk of the all forms and the Injectables, which will have a place you think.
Speaker Change: Simply because there's no other oh, there was only one old semi good time and I think you have actually paid.
Speaker Change: As of the therapy of these patients with all forms will be necessary.
Speaker Change: Once you have them once you've gone through maybe an injectable form control. The way then to sustain that over time it might be better to go to a normal phone.
Speaker Change: But all that will all depend on the clinical performance of the molecules in terms of side effects and weight loss and the necessary observation that you have to make if you noticed we said that you know this.
This peptide it's not gonna co agonists may have a bigger roles, where patients who have liver disease Nash.
Speaker Change: Status or hepatitis and then you know the idea here is to really provide a continuum of care for.
Speaker Change: For the patients who will benefit from a Glucagon addition, remember Jeff one receptors don't exist in the liver.
Speaker Change: Glucagon receptor is due so you'll have we hope a biological action, but well be differentiated from the other ones in there would be a classic patients, especially those who have no evidence of liver.
Speaker Change: Function, there would be more appropriate for these.
Speaker Change: New peptides. This is all speculation we'll have to prove it and we're doing that.
Speaker Change: Our interests are safe to do you think it could potentially have a better safety profile compared to the semi side or just appetite.
Speaker Change: I mean definitely the old homes.
Speaker Change: Well have that ability because you're dealing with a daily dose and we know that.
Speaker Change: The side effects that we see nausea, vomiting, diarrhea related to what we call the maximum.
Speaker Change: Applied in the globe.
Speaker Change: And so because you're moving at all form which is much less than what you give would be weak in terms of fall.
Speaker Change: Yeah, Yeah, the dose received by the patient.
Speaker Change: You would think that the oral form would be most.
Speaker Change: Less prone to side effects.
Speaker Change: So all these things.
Speaker Change: The other one would not be able to speculate because there's more evidence one way or the other that will be added in more or less than what it was.
Speaker Change: In the market today once a week injectable.
Speaker Change: Okay. Thank you.
Speaker Change: The next question comes from Edward <unk>.
Speaker Change: Piper Sandler go ahead please.
Speaker Change: Great. Thank you for taking my.
Speaker Change: My question and congrats on all the progress all these moving parts.
Speaker Change: Strengthening the balance sheet and finance the company going forward My question's really had to do with some <unk>.
Speaker Change: Cancer effort and I'm wondering what we should be expecting in terms of data and really says next year.
Speaker Change: You know what this would be more likely at a medical meeting.
Speaker Change: Is it something you'll update kind of as you've got some interesting and what what should we really be expecting Chinese escalation.
Speaker Change: That's collation and then ultimately guidance with respect to expansion cohorts, where you might develop the.
Yeah. Thanks.
Speaker Change: Yeah. Thanks.
Speaker Change: We want to obviously informed as we have data coming out the first is that the mid mid <unk>.
Speaker Change: Neither.
Speaker Change:
Speaker Change: 2025, when we will have the first readouts and the.
Speaker Change: In humans over the performance of this platform in terms of its ability to be kind of arena inside the facts or.
Speaker Change: Antibody.
Speaker Change: The drug antibodies. Some case so that's the source data because at the end of the day you know we have to really show that this black Swan was well tolerated in cancer patients. Then comes the second phase for Mdx tool, one which is the one that is in the clinic.
Speaker Change: Do we see as you can see it and what tumor so that would be.
Speaker Change: Middle of 'twenty, six I would think and then at that time, depending on what the results are we would probably go into a pivotal trial.
Speaker Change: She did you could you get index to an approved hopefully.
Speaker Change: So that's one second is you have two other molecules, which are really really <unk> and then that you hear about.
Speaker Change: But clearly we will present medical data and we urge to warm before anything else.
Speaker Change: <unk> sort of a.
Speaker Change: News is that we have parties are interested in more platform to collaborate with us and that might be.
Speaker Change: Is that we will definitely share it.
That happens so those are the three things that you will see them oncology emerging programs.
Speaker Change: You won't you won't have any.
Speaker Change: Specific information except targets into the clinic.
Speaker Change: Emerging technologies that others want to collaborate with US one and then mdx tool one clinical data coming up over the next 18 months.
Speaker Change: That's helpful.
Speaker Change: Just maybe a quick follow up obviously this is gonna be someone's data dependent and you know dependent on cancers, where you see activity.
Speaker Change: What standard of care, but do you ultimately envision combining.
Speaker Change: Combining <unk>.
Speaker Change: Your asset with other standard of care.
Speaker Change: Agents, whether that'd be chemotherapy other I O.
Speaker Change: <unk> or other targeted agents.
Speaker Change: Well, that's just really depend on what we see from the data. Thanks, so much.
Speaker Change: Okay.
Speaker Change: We understand that I mean, it's clear.
Speaker Change: <unk> shows that number one we have to show effect as a monotherapy, but once we do and in what cancer under what subtype in what conditions.
Speaker Change: The combination will be self evident and stuff.
Speaker Change: You know cancer development, we tend to essentially enter the development in phase one and phase two with patients who have already gone through August forms of therapies in sales.
Speaker Change: And once we show that we have in effect even on those patients. Then we go forward from the fourth mine to third line second line and as you go up to the first nine you tend to combine with other therapies absolutely yes.
So your question is absolutely on target and that would be the natural evolution of the development phase of a molecule like index 2001.
Speaker Change: Makes a lot of sense looking forward to seeing you guys soon.
Speaker Change: Thank you.
Speaker Change: The next question comes from Michael.
Speaker Change: Barrington Research go ahead please.
Speaker Change: Hey, good morning.
Speaker Change: In terms of your assumptions around bio reference for 25, what are the top line expectation sort of flat to modest growth modest decline like well what are you thinking in terms of what it's going to take in terms of topline performance to get you to positive cash flow in that business.
Speaker Change: Hey, Mike. Thanks. Thanks for the question. So the short answer is we're going to give you a good guidance in Q4.
Speaker Change: When we go through our full year guide, but.
Speaker Change: The shorter answer here is as we don't expect a big meaningful growth to achieve those numbers.
Speaker Change: Okay great.
Speaker Change: And then in terms of real D E.
Speaker Change: Now obviously this.
Speaker Change: Situation that really has never lived up to that.
Speaker Change: The initial hopes up and I'm just I'm just curious what would it take to get this to a 50 million dollar product I mean is it is it is it more.
Speaker Change: Uh huh.
Speaker Change: Men in additional trials is it is it more investment in sales I mean, what what is there a pathway to $50 million in annual revenue for Ray All day over the next few years. Thanks.
Speaker Change: Yes.
Phil: I'll take the this is Phil.
Phil: We're working on several initiatives there and there is a lot of interest in new data that we recently put together the indicating that a.
Phil: Lowering O P T H in patients with C. J D and home, it's elevated for a certain period of time at a certain level will delay the onset of a slow the progression.
Phil: The chronic kidney disease.
Phil: Delayed the requirement for dialysis, so having said that.
Speaker Change: That is really a mouthful.
Speaker Change: That turns out to be.
Speaker Change: Our whole job if that data holds up and we're hopeful we're hopeful that it will the data looks good.
Speaker Change: Thought leaders are buying into it and we're about to present this as part of.
Speaker Change: A new marketing program, so we'll see what happens.
Okay, Alright, very good thank you.
Speaker Change: Actually Adam one more if I could add one more quick one for Adam.
The share of the share repurchase is it is it likely that you guys.
Speaker Change: When the initial authorization I mean will there be another.
Speaker Change: Fishel authorization or we got to be like what what sort of the future of the share repurchase common stock.
Speaker Change: Yeah. So so you know we've used about a third of what the board authorized earlier this year and to the extent.
You know we have capital allocation to our program and we don't have enough under that program rolling out to an expanded.
Speaker Change: Program, Phil Phil alluded to that in his comments, so I'd say that you'll hear about it through another announcement when we when we get there.
Speaker Change: Very good thanks, guys.
Speaker Change: This concludes our question and answer session.
Speaker Change: Like to turn the conference back over to Doctor Frost for any closing remarks.
Dr. Frost: Well, thank you for participating and for your excellent questions. We look forward to meeting with you again.
Dr. Frost: In a few months and hopefully we'll have an even more interesting story to tell at that point.
Dr. Frost: Yeah.
Dr. Frost: Yeah.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.