HTGM - Earnings call transcript Q1 2018 | HTG Molecular Diagnostics, Inc.

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Operator

Good day, and welcome to the HTG Molecular Diagnostics' First Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Monique [indiscernible] from LifeSci Advisors. Please go ahead.

Unidentified Company Representative

Thank you. financial XXXX. the released ended and HTG XX, March today, results quarter for year Earlier

many begin cause These call, as risks the to we revenue numerous materially additional reliance remarks securities expectations Before statements. filings. of now Chief collaborations turn and forward-looking place materially T.J? the including call from those on HTG's is and I Officer. to statements. may include expected gross results uncertainties the uncertainties, margins. you like projected laws, pharma XXXX pharma forward-looking risks Company's and other that HTG to beyond of from any providing forward-looking T. benefits for J. statements on would to the in could to With improvement to update collaborations, regarding and subject full-year forward-looking or existing which within include the expense are statements meaning control operating cautions from federal let of differ cause events today's expected this and this HTG HTG's me possible over remind circumstances, those no undue to date from Executive any that call. information that, obligation undertakes statements time-to-time revenue are described HTG's not differ of and SEC listeners events Johnson, in call results that HTG the actual or customers, Factors

T. J. Johnson

and for first thank conference joining you us you, our Thank quarter Good afternoon, on call. everyone Monique.

XXXX. $XX our finished in employees for from year of revenue gratitude to to strong QX my with million million. from full have increase the of remain and our a start XXX% guidance revenue in by QX, of an HTG increased and million up begin over XXXX. confident the me expressing guidance Let end $X.X great low start We We $XX to each

and from well execute or to clients. we feedback solid plan precision quarter, in During good the Biopharma diagnostic partnership Meeting each our programs. with PDP our continue of milestones

added is estimated During development first dollars second that program single activities. we adding worth final associated an amendment millions preparation in the phase quarter, Inside with a of and regulatory early PDP the for milestones our most PDP development. third program now submission assay

addition to In XX active approximately We US phase projects and to programs. our European across our three quarter at our increased PDP teams pipeline end. earlier

is have From three development. centers future able PDP us our has also As academic new by of deployed we've or to the project our early XX% This profiling capacity diagnostic in our discussed by and profiling and our for driving to approximately only calls, medical XXXX in driven work importantly expansion but companion US more been biomarker system PDP and for development were Recently with or now fully our assays. to XXXX, new Historically, XX%. and program our of [indiscernible] this opportunities we've our much on pipeline, Europe. menu. our revenues diagnostic business increased the assays and biopharma growth RUO an collaboration R&D we've RUO increase possible been on projects metric earlier use grown pipeline important primarily feeder research programs resources

covering be With first analysis to expected cutting During IO over to I'm oncology with amino in featuring on our EdgeSeq the the expression last members early Immuno-Oncology Immuno-Oncology the precision panel. content the launch product QX. of early held edge thrilled applications. key or a profiling mentioned critical X. by profiling new our with deliveries We're call, new advisory the ASCO earnings Chicago HTG launch at is Panel Conference to panel gene to standard announced X immune-oncology new this plans the at available I set access space. year being our extensive After to this for X,XXX June gene This

been clinical complex has of panel designed Our to simplify accelerate the tumor and biomarkers. biology development

It the resistance as or translation science patient As tools critical a immunotherapy is broader response required with populations. address evolved field. to that lack in being Immuno-Oncology matures cancer of

markers to fully intends We believe Biopharma of fusion newly have cancer facilitate second new as lower to products our standards to role our as developed panel progress. which advanced might the half The for biological existing grow new ALKPlus HTG HTG portfolio requires catalyst assays potential programs requirement treatments? a and such sections the separately. which sub sample [ph] combination be designed CE-IVD Diagnostics of to groups. in stratification of sensitive the into TISH Commercialization and continues marker year. panel versus and in key levers multiplex with multiple builds the clients. allowing HTG's Europe of of molecular a ability our this on the excellent tissue the fit immunochemistry appreciate to of these We in should be play key products partner several typically panel EdgeSeq run Immuno-Oncology this value of precision sequencing Customers Which current for [ph] important to is subtyping next-generation proposition oncology. EU tumors of and be pipeline additional our biomarker

September. the Pathology of Congress studies robust the has test seen Congress month and Our more two at that their in Results early have another [ph] this when Pathology determined cordon Germany [indiscernible] German gold standard excellent these later sites and often interestedly, at shared versus will with of HTG update be this method Assay correlation cases European France larger results. adopter at the investigation

sales EU UK sites Switzerland reference to emerging of Germany, DOB acceptance origin, test. working As in with Assay, Spain, and this sell for we're our in gain

new We be continue a test to future. the the targeting of believe will of cell origin that driver of this drugs

for that instrument and assay to enables a is completed Firalis, assays EdgeSeq chemistry a Firalis our a response to diagnostic efforts, anti‑TNF to non-exclusive also research only use theranostic use products important for for partner also intended excited agreement While new focus customers assay of medicine precision and supply we're agreement commercialize HTG to to this diseases. develop initiative. therapy to with certain expressive patients. is rheumatoid we services as and inflammatory arthritis Firalis our in them includes with Their predict of Europe oncology one license in primary [indiscernible] autoimmune other just rights in

for our completed in our honor for and of approved another strategic advanced companion our assay this national a like ISO recommending a agreement Firalis believe appears the our in plant July. strong example path standard with cancer believed majority we plan. for clear certification meaningful crucial and for HTG generate could to to reimbursement and are affects to to to business. diagnostics theranostic HTG diagnostics for based quality XXXX compelling be that patients quarter our menu who's in revenue a is Our be market. recent CMS Maintaining coverage to announcement NGS is successfully favorable diagnostic Also I'd expected platform. continuous transition what with assays XXXX system growth utilizing now improved FDA during for decision the collaboration the by of EdgeSeq be The note registrar millions RA we very the also to of be is test concerning with future. very very US their stream companion

is about we summary, to off So we quarter. Shaun now first had excited financials. I'll remain start and that call beyond. productive very in QX review quarter good turn over a and one XXXX the to a With to

Shaun McMeans

of increase pharma from $X.X an in XXX%. of dollars QX, Thanks programs. compared was sharing clinical million QX, million $X.X our growth compared XXXX T.J. in reflecting a service in to QX QX our revenue $XXX,XXX revenues QX to million XXXX. revenues driven Including in by were was development $X.X This profit zero collaborative

revenue revenue impact in is significant total continues QX, expected overall compared product to increased to to in million to related million QX Product development of Our XXXX's year-over-year. $X.X revenue have our $X.X XXXX service an and in results. and increase XX% drive a

pharma QX the in operating QX, guidance XXXX. compensation XXXX or period-to-period QX pharma programs our higher our the $XX expected QX, non-cash we related Our million And responsible we in increase attributable million is to $X.X QX expenses compared to now administrative million of our expected our mainly included to expense, lower increase are XX% related stock unevenness for revenue $X.X year was $XX in range mentioned expenses as to prior million T.J. to in partially $X.X relative increase earnings increased in revenues have to clinical our the full to revenue in and expenses earlier of end and development OpEx were expenses. million the variability Selling, reflects which in $X.X programs. XXXX to QX general indicated The to to activities development QX to the XXXX to and and be expect amounting research collaborative compared as in our spending million. calls.

continue and We increase will invest CE-IVD marketing to in of sales Europe. our efforts and headcount programs in commercialization pharma as products sales we

cost in greater related million as early as revenue collaborative clinical increased the generally program significant gross pharma in our percentage we from these XXXX. phases costs QX $XX,XXX Our reflects during of development expect QX, gross margin development which increase to expenses significant our and be for This $X reported margin operating in costs to associated revenue of are programs.

QX XXXX. the recent $X.X million XXXX and per million Net a loss sale reflects QX, was $X.X share from QX, for equity AGM under QX, since XX.X Our for our and issued $X.XX was additional shares for transaction. QX million operating compared and XXXX to follow-on of approximately facility $X.XX loss in

short-term outstanding. proceeds for We X, we have cash million completed shares equity XX. gross XX, facility cash, million million senior in gross with January stock. XXXX in QX We refinancing proceeds late common a terminated our As debt raising in our On on in of February through sale million XX.X securities. March. common proceeds from we inception January This equivalents of net which the $XX.X facility ATM from ended $X.X in follow-on includes of and stock our its our raised currently sale available financing reminder, we of approximately from $XX.X $XX.X mutually million approximately approximately of

line Our a working only new facility term portion prior the of interest leverage terms debt to our revolving the of runway provides and additional credit of with cash facility capital. amortization near replacing company

allowing I closing this to back call future would additional earnings for for like plan. At to calls. future progress are T.J. adequately to on of able In revolving expand significantly both financing balance addition, in sheet has and to the of the XXXX proceeds debt term activity We $XX company's total look $XX believe and forward on periods company to conditions. our business the the the the under point million I turn focus execution certain we've of strengthened funding million team this access to to loan management additional reporting comments.

T. J. Johnson

you, Thank Shaun.

in our remain CE-IVD strategic XXXX top with studies commercialize products Our and Europe. pipeline excellent customer pharma PDP results and programs team. and from customer Excel senior in expanding deepening biopharma a progressed in our PDP in Europe management. initial and our adoption, approach balance base, by of acceleration goals and of our product for The and of me of our our consistent. prudent retention maintain to We've objectives teams the expanding cash of recruitment, strong while is broadening sheet of Continue priority our CE-IVD well for all excellent our implementation execution development position. talent pipeline,

the HTG company Operating in is bringing existing markets. continue growth people serving promoted capacity for John resources we for tremendous as growth In growth We experienced in Officer. I to promotion trust the first we your belief for important make team. for well continue off thank call our Chief in we're as and closing, to the forward has positioned as a of for and future done seven programs. up natural us for our to well investments to want In shareholders development the provide having to our in is job and align I'll now falling opportunities a we strategic market as President after difference Lubniewski competitive to our support HTG our success strategically in customers believe for updates. to talent Chief today's objectives Officer start questions. diagnostic sales our for believe organization and to HTG and and HTG precision quarter, addition to talented up we're organization. XXXX. product of continue added is his again Business open look progression an and John We exciting in years field in our development make and

Operator

[Operator Instructions] take Canaccord will first Massaro from and we our Genuity. with question Mark

Mark Massaro

on certainly his well and John to congratulate deserved. promotion just COO, I want President

John Lubniewski

Mark. Thanks

Mark Massaro

guess maybe I successful whether in progress. the and needs because program sequencing you I'm comment maybe areas early for to particular all interested in therapies not or immune to in in rheumatoid like could be predicting T.J. Congrats to applications deal, response this on the next-gen spawn agreements in patient arthritis. focusing order Firalis obviously disorders oncology. tend additional be

could guess you arthritis I you see where in disease I'm if states maybe related. paint oncology picture curious So and others your a like versus growth of

T. J. Johnson

Yes, Sure Mark.

been do the of market be the about now the with size research primary and were first laser partnership now, of via got very disease to the certainly customers they clinic. limited and what we're the oncology We've have The a prognostic into to appears working in area the and is we've Immuno-Oncology project. we in advance knowing for a beneficial from license our how an looking we certainly very a number expression to - obviously therapy highly in gene They've of profiling for not of at not to rheumatoid clinicians. not in that limited a but need Europe. having number excited agreement but years all we're because of approach prognostic assay this unmet First caregivers the mark patients our of ability of our Firalis state. with growth research to that arthritis, an one the only and responding focused. believe us assay We're one to provides sizable them adopt move in that technology expert to this developed working with I'm for not are and

a states. Firalis, that disease in our So number with customers and we addition have to other working of other are technology

in our development allow we work [indiscernible] to that looking market in and of to focus want we constantly can do technology, the where would internal financial utilization expand us clinical but So leverage model. a oncology. that for while primarily our raise we We're or collaborations

Firalis think operate to yes outside to play is pivotal us. So oncology, I answer we it of or a I very place great felt some was a think ability to it's initial certainly to bets. no type don't of important our but

Mark Massaro

X,XXX panel over genes. great new and the for IO It's targeting

competitive this reimbursement that For in relates you size? the landscape those gene comment that are less panel Where maybe just environment as do in it the a to large familiar reimbursement that on also for you Can competitive with for for panel? oncology. come panels of think and will

T. J. Johnson

first at unmet panel. targeted some panel translational We the the all emerging very we the first how this Immuno-Oncology RNA products. are what uncover Mark gene going came the be we be studies, researchers that with, than but other the a experts needs to Yes, utilizing then seek types at field of full are IO And of of that other advisory this applications are really the of panel Obviously larger of or build design and of started is are panel then applications to believe and applications. in content group and cover to panel. fairly space. extensive and clinical to broad what based and this those panels will designed to believe double a work similar of content on folks and range a at competitive with We the least that's about We comprehensive trying are specialists let's for and this from relevant offerings. do that, them genes [indiscernible] the learn

in of the we exist and be to would broader Our in of all would panel utilized applications. smaller various but not panels today, way determine that, this as one a into these smaller expectation would establish, signatures that is clinic be take it

panel that a a for combination multiple would generate So to are, our be will that our customers aspirations panels smaller and be within tool broad this drug a therapy. other or specific very

use resources So PDP product. the as launched R&D a products we're not this in have profiling our been our excited while We've programs. RUO very quite dominant business for about our new into of

product PDP begin now resources but believe balance got and deploying been programs, to that the June only generation We're first of us that pipeline end ASCO we've really strong Now of this really the to new of we on customer IO we've and forward looking front several featuring work next at in panel into these a the our really launches and balance getting it. further not this pump hard sheet, be year. will on to the for in to R&D, feedback added

Mark Massaro

call still apologize. you an update approval in of XXXX? are I got provide and by an late. I the on Did of you FDA the and the optimistic great submission end That's

T. J. Johnson

I've you're those not near finish with currently based the fully referring update that program pharma year. But feverishly pretty no play fiscal PMA any term. we're that how also if the and to on still out filings in of clients provided this on other budgeted ALKPlus, Yes working preparation different we're our in

We will with Obviously timing test description under decision national ALKPlus determination decision make further the of coverage the coverage final the believe in module for CMS we we're on the the national incentivized because that by reimbursement that the for fits US. ALKPlus ALKPlus, perfectly. on

Mark Massaro

I the obviously you Yes, that. asking congratulations ALKPlus. strengthening was And balance for sheet. Thank on

can made little comment hirers might a sales higher was you with where any you force G&A in and have than quarter? the you're the on Your us, bit

T. J. Johnson

about XX we're plan both in and full our resources folks field to lower and taking would above run that from US of nearly was I Yes in our quarter. process think a expect that one-off associated SG&A our to XX. SG&A for current little the year. full within first Europe our I think expected is We field in lot run little than with the what but rate already was based our a rate And expenses. and in

be interviewing is really and focused demand. boarding capacity team going take pharma for recruiting what available our customer of on to So the actively and booster to to in think bulk advantage add some on that, that's the we to team

Mark Massaro

one to a Great increase XX% for continue? understanding Should sequentially we that of expect your me from north partners. business lumpy that revenue is you've and is I expect consecutive Do payments now from gross a to from to three trend and guess margins timing and then token, driven last subject two-parter [ph] on similar you quarters.

T. J. Johnson

indicative your be margins On of to We expect full believe are year. going we question, the we answer is saw yes. very what in second QX the that see for to

As measuring quarters. or year-over-year. obviously have see back patterns. do We don't to some as are ourselves yet not on seasonality trend to the history we that far to of expect enough sequentially can there's sort lumpiness look then we sequential We say Mark

So milestones go, growth. to highly revenues year-over-year but yet. just fall in just we're how are confident we as to learning sequential predict We're and going able going our quarters not how about these fall are we're sequential to

Mark Massaro

you seeing ASCO. Great, guys. at look to I thanks forward

T. J. Johnson

you, Thank Mark.

Operator

we'll Instructions] question [Operator H.C. and with next take Yi our Wainwright. from Chen

Julian Harrison

already wasn't of call indicated in to and current ago on with is your into your if filled the your for the I no days patched still apologize X:XX. you prepared was in Yi. do quarter, that remarks. This this biopharma few one A reference in partners Julian this I out decision deal Firalis? covered but [indiscernible] was go collaboration

T. J. Johnson

a separate No, it's It's not. agreement.

Julian Harrison

that time? are at Okay, updates any there the on

T. J. Johnson

at updates impatiently We're this patiently waiting. No time. or

Julian Harrison

Okay, you. That's great. only Thank my question.

T. J. Johnson

welcome. You're

Operator

at time. to the it back to this there or closing management questions any remarks. are conference further turn like appears would no additional for I Instructions] [Operator

T. J. Johnson

today. really a joining call. our I look next evening. to being updating for everyone afternoon forward Have and us you Thank Yes. great earnings on

Operator

for presentation. participation. Thank today's you concludes That your

disconnect. You may now

HTG Molecular Diagnostics (HTGMQ) 10 May 182018 Q1 Earnings call transcript