HTGM - Earnings call transcript Q1 2019 | HTG Molecular Diagnostics, Inc.

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Operator

Good day and welcome to the HTG Molecular Diagnostics Inc.

First Quarter 2019 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to your, Monique Kosse. Please go-ahead ma’am.

Monique Kosse

[Dorie]. you, Thank released XX, HTG for quarter the Earlier financial March XXXX. ended today, results

on to begin me in events risks meaning could place Before cautions the call, launch Factors decisions filing. the we let recent projected HTG on results is customers, time expectations With listeners that, today's forward-looking possible described call. as undertakes may the product update Executive statement. or of include collaborations events with SEC laws, HTG's potential subject to forward-looking revenue development statements product statements and These forward-looking the by to those securities include XXXX. Officer. to time call, relationship efforts, cause PDP differ and Lubniewski, of any John company's materially instrument beyond no additional remind uncertainties forward-looking within risks to expansion or many HTG federal for Illumina, cause the uncertainties, full-year not placements with customers the differ of like obligation expected John? are from that any including go-forward to Europe, circumstances, from HTG's results reliance materially in undue HTG to this of providing call I’d remarks turn and that and of statement. numerous you company’s Chief date are to pharma the information HTG over this which actual that those control

John Lubniewski

To on CEO billing I’m pleased our investors. to for about everyone, my you today on the as company creates continue joining enable very CEO though us call. pleased same. exciting local the thank Even position, for I It’s the a economic key remains I’m been helps at transition we the work and with for our there’s employees, quarter the Thank return business I’m to continue level. that on precision mission challenging and medicine smooth closely and TG lives progress a as work million Good a quarter our strategies. which here patients, what on move revenue, in We as passionate advancing first been was a of first provides strong $X.X we call. with change of finished call and environment improve medicine. company of forward our first we afternoon, to the in you, had Monique. make above goal earnings HTG. that us last in guided precision be conference

our compared continued which areas two was we’ve As can a year. in control however, results. the business, as the Revenues by clients this quarter, our we the in pause were company, profiling up which active PDP evaluated impacted our made quarter that tremendous XX%, strides to last during programs,

on these expect decisions decisions these we news waiting communicated, and programs As investors we’re partners. go-forward and or previously of plan soon we to from have update both one once

targets and panel PDP stage of mouse increased for mRNA While Europe Mouse continued in growth HTG designed a oncology the primarily United and medical our X Response in mRNA and recently use a variety Tumor gene help extraction-free in X,XXX launch in in EdgeSeq States academic continued total activity measures in pipeline, sample of our pathways assay, formalin-fixed, States models and for Biopharma this is the paraffin-embedded tissue. new United so one we see segment, on to announced including to types, expression XX quantify and in This the Setting driven we also X, of Panel. project identify genes mouse Europe. or which pleased expansion at the we’re the business profiling programs and the sits total of centers decisions await in by and our growth now our programs

growth and already a CE/IVD in activity. our mRNA mouse help of in HTG logical human launched tissue to products newly our adjunct the pharma expect believe continues Commercialization to stage Seq Europe panels progress. We it’s early drive steady to our panel based continue with

While an of first year. over XXX% first XX,XXX, XXX,XXX increase nice revenues last quarter versus was almost with negatively quarter

are and broad We’re forward of a sample to seeing grow. the capital workflow This plan range and ALKPlus instrument implementation laboratories to of one offer our interest They potential from as our reasons to of them specifically HTG clients test the about excited to low adopting during the very them the with adopter technology diagnostic our CE/IVD the and quarter. working requirements of laboratory and for early and two help we of ease key look EdgeSeq an Germany test noted for EdgeSeq the sale in DLBCL, menu. patients

instrument additional expecting Illumina the supply our we agreement, of Earlier in the XXXX and IVD submit adding and submit continue fields diagnostic this development our to agreement disorders important the this grow announced fibrosis and during autoimmune, test development with to replacements ability in now to business to Under as Illumina. we in cardiovascular, oncology expansion our development We’re very geography. Europe of component plans diseases, HTG amended plans. month, can

disease the expanding expect Illumina as with about work of it possibility to new to based further in these HTG we diagnostics excited our RNA areas. develop additional position We’re

X. San done that California successfully facility on has want work Carlos, I to highlight April to Next, open our the the team tremendous Development

have technical into MDX comprehensive HTG's flagship staff and now breast assay, new on moved work board are and are key Our for project. early their our beginning facility business stage the and

enable to clinical companion our is develop timely and team assays diagnostic This with approved test expected is to unique information Our provides for mission HTG, is kits to relevant are to Carlos diagnostic San using that clinically plan cancer technology precise patients. complement portfolio. EdgeSeq treatment develop HTG’s more unique clinicians in that a but FDA actionable capability emerging

this able our for late share by expect to to product initial be summer. We roadmap initiative

very business remains a In XXXX. the and completed XXXX that building In the during long-run, a who's believe call successfully QX is for certification XXXX for high-quality we I’d financials. products HTG. corporate productive our a standpoint had solid we good quality recertification With and our ISO Maintaining Finally, from a be market over citizen strong, system of very registrar start. we like and quarter for summary, about audit turn to excited to for Shaun quarter differentiators the beyond. and being foundation continuous compliance recommended QX a very our strategy. off to a compliant ISO that, first remain We will of the review a

Shaun McMeans

Thanks John.

revenue versus As million total $X.X QX was QX XXXX XXXX. John $X.X mentioned, in for million

services versus to strong QX to are Our profiling increased we in million $X.X $X.X report in revenue XXXX, QX XXXX. diagnostic XXXX, growth we pleased growth revenues recurring $XXX,XXX or and future reported on XX% which the in the opportunities very and our million products growth downstream the in our approximately of potential profiling QX reflect profiling continues business assays. by and base product-related Building to

QX XXXX, PDP the decreased revenue We primarily million in pause QX development reflecting collaboration the $X.X As services in activity revenue mentioned expected, previously. in million collaboration XXXX. XXXX reported $X.X QX versus

subcontracted impacted increase and cost pharma attributable cost XXXX. QX $X.X services was by profiling million product compared product-related million This first QX the margin, quarter an decrease XXXX QX with XXXX, were profiling to revenue. of of and The approximately customer at is the to mainly XXXX, for in Our to decreased expenses QX reflecting general, margins $X.X in QX laboratory XXXX. revenue XXXX associated in for lower program. revenue Selling, decrease XX% ongoing stock-based versus $X.X QX in services a administrative million to compensation $X our XXXX, in in million compared

QX New compared research million XXXX, in programs product related and QX to development $X.X expenses million $X to unrelated XXXX. for our development collaborative amounting to

versus non-PDP initial mRNA autoimmune assay] activity Our increase as development from await R&D news from and the PDP reflects XXXX, QX we activity as QX increased in low spending profiling activity PDP such developing level our in California-based menu new our team. panels R&D reflects of our customers. Mouse the and additional [breast XXXX

spoken PDP activities, we can revenue. key to from vary next period in due development PDP to milestones As spending one prior and timing generally have significantly tracking the program the of changes in to calls, R&D

was for million QX compared QX Our to million, operating XXXX. $X.X loss XXXX in $X.X

in common $XX stock is with full-year continuing in currently of line stock provide issues We have equivalents securities. $XX million $XX in ended cash compensation and XXXX were to payouts, company QX loss Our program. cash, approximately from cash Net The million stock in $X.XX shares was in our QX was XXXX. and for reflects variable XXXX other The operating QX for year-over-year for paid share XXXX for per guidance for and approximately which short-term million $X.XX sale for shares our QX million additional outstanding. $X.X million and compensation per reflects range. burn top XXXX XX.X We available reduction to common accrued loss share QX and XXXX. of

model at profiling potential XX% to revenues and XXXX wide the year respect our on continue continue or over grow more based to range go PDP a prior timing our revenues clients We of the forward RUO closing this At to would our QX point, of to I tremendous to decisions. August. to efforts our I back team for look in and the John call results appreciate forward like comments. reporting turn and

John Lubniewski

Thank you, Shaun.

to an As XXXX. in We're ways. three excellent measure off our we’re start I continue mentioned believe in going success to earlier. to

opportunities. First, continuing new to greater XX% to operations, grow PDP fund profiling business year-over-year to well our as ability help as our base than create

initiated growing our customers, in our milestones achieving growing grow of diagnostic European business our molecular be pipeline key program. the whether project both Next, in our and Pharma our with newly readout, or and positive numbers last, numbers, business, it And diagnostic continuing breast to projects. PDP by our PDP

us significant the our summary, significant capability, revenue right medicine demonstrated growth to patient. well-positioned opportunity developing help see very right in potential In precision RNA-based at against expanded we’re We believe to plan. by for years. NGS We the diagnostics the company our coming strong that last the believe continue get added be drive markets, help up tremendous setting the to In to quarter, HTG. and we've organizational therapy execution HTG advanced I

our like that, to investors the about excited what employees. this I’d questions. to call open patients up We’re to With to means and for

Operator

Craig-Hallum will question we Nowak take And go first Alex with Instructions] Please [Operator Group. ahead. our Capital from

Unidentified Analyst

everyone. is afternoon question. Will good Thanks on for Hi, today. our taking actually Alex This for

of one the expectation? Just both programs next the we what timelines that quarters on or a Thanks. the a guess be get bit couple the to To the team couple you call, guys is last the last of trying quick one’s PDP sense you. [indiscernible] confirm, should of for for of kind of expecting, a two I little quarters, shifted just said current first,

John Lubniewski

to Thanks, Will. is is going at move trying Obviously, John. challenging Pharma to predict This when least. is

times We just single multiple them a are in week about every if contact with week. not

will again two indicated of one both on the is news some programs quarters as expecting still to sooner. We’re if these not in probably have that script we within

Unidentified Analyst

John. you then And Perfect. Thanks helpful. that’s very

decision Just are the there from concern it’s for wants just what be go if it move your here that FDA into helpful approved, you if the to getting would go pathway two into says you that that getting about and Thanks. as lay sales well? forward, to customers, may out does channel could lay could be just PDP end-lab mean a test and the out, a then out HTG, just

John Lubniewski

again Thanks Will.

set the will essentially be there registration go be module essentially then that would that with generated decision, So, the PMA. data the clinical associated with a trial, is clinical

Simultaneous PMA partner drug process we We be PDP or likely it expedited therapy. upon with four that got depending the will access that, to would in we’ve months, all of client for could That getting be co-approval. look approval that an in essentially for X will submit our countries months. could or most PDP to that it’s we Number or upon go then to commercialize whether market traditional with be would a ensure working adequate QIAGEN XX that the

So, submission that be body the PMA. of to happening simultaneous work for the would clinical

expect that And X upon the breaking and months for testing patient test drug. would XX now probably actual so we between approval from of somewhere start to

Unidentified Analyst

up. Perfect. Thanks wrap more then one just again. to And it

XXXX? said you is do year. there, that were limited You reiterate there X know but planning previously, I per visibility goal it’s to tough, new you PDP's to X for get

Shaun McMeans

do. We

and that visibility we’ve a obviously be got year very two we’re we’re the objective. with would least we’ve on variety of think and in late a working our at team out I hoping. clients one Probably different and sales got

Unidentified Analyst

Understood. Thanks guys.

Operator

Please next from Cantor ahead. And Fitzgerald. our with Jordan question comes Abrams go

Jordan Abrams

guys. Hi

in quarter, the was number confirming. Early-stage projects there? Just what

Shaun McMeans

[XX].

Jordan Abrams

curious the down? On I'm XX, why about call this it last step was

Shaun McMeans

programs of out. the Some timed

the if We pause have we which rules months, project actually and set of a them by for we than XX around and had count out. time more

XXX Our year. goal exit still remains targeting to the

Jordan Abrams

Illumina what script on would quarter, Thank autoimmune you helpful. bit Okay. fibrosis, in agreement year, of expect during also and little you you. cardiovascular at and called those extended mentioned out and the or have to with might this least it the where a then it something during in mentioned you the That’s that you And markets the you color you also attractive? as be you be helpful but maybe targeting past see

John Lubniewski

that’s are mentioned our work Jordan. and very discussed pulling working into calling we example so applications panels the to mean these is – is bit new of with To are type. Illumina exciting already cardiology, what’s these Cardiovascular, where a the part big little indications. developing just about had and and us, new thanks like first liquid sample us the Autoimmune, we’ve transplant markets works are as in FFPE. have of collaborators plasma serum, actually previously I in be Yes. biopsy customers those and for a as because We Again, we markets. some for all last call. exciting areas different move we’re in actually various into our will technology beyond expansion

Jordan Abrams

[indiscernible] Great. the And product and to lastly, MDX of REO mean what’s the revenue business that came confidence level business that your from level continue guide, driving higher what’s seem I confidence? than in your of and just

John Lubniewski

very XX% This for drug in again our bullish that quite time we year we out think have remain nice well. to in We mean, that What’s the a Yes. years from now to molecularly space and Thanks last core question. quarter we’re we need I profile are business. academic talked. increasingly is frankly in profiling as in growth have XX% space. very the the the driving a

You gene good know, we solution expression RNA. very have got a for profiling for

drove overage very drug why So, that’s the with our guidance we of remain and kind the year. there what for consistent

Jordan Abrams

taking Thanks questions. the Okay. for

John Lubniewski

obviously variable PDP. the The is

Jordan Abrams

Okay. Thanks guys.

Operator

from question Please We’ll [Operator with next SVB take our Souda go Leerink. Instructions] Puneet ahead.

David Delahunt

the wondering David that for is funnel strength Puneet. around Delahunt seeing? you're This I on pharma you color guys. the add Hi, of more was could if any project

Shaun McMeans

added me we customer is which customers. We number programs big Dave. to track and new one number of metric, Yes. the the new for That quarter a is both the of why

up by we field Again, that sales programs. effects kind TJ we when a in months by I and starting call, indicated added growing commercial of a what think teed sales starting to ago we’re in not start until the as in five some we’re lot territories that. had of nine presence to to bring investment the of previous about now see new

David Delahunt

you. Great. Thank And one more.

contribution guide? missed If Two full-year you could talk and the about your expectation script. and if I PDP the this from Sorry for in Three

Shaun McMeans

Right now, are where we programs have limited going. visibility those on

had Two PDP couple with of days. in dialogue the have We last

with is still going are soon, of not even we’re that financially company direction can have where color highest and to for they able plan be on program a that. some hoping we PDP heard there we going management We’re that have of Three is to it. a with levels the so that

David Delahunt

it. Appreciate color. that for Thanks Alright.

Operator

And management to in call queue appears like turn questions additional the for there Instructions] it remarks. the back time. this I at further to would [Operator are any no

John Lubniewski

thank like Well, for team us thank thank everyone work the put that and for like joining here to today. at to I’d they’ve you. HTG our in In and previously. quarter this employees I’d particular, tremendous

next our continued like to thank forward I’d and to updating you you. support. again our Thank Additionally, earnings our shareholders their for We on look also board call.

Operator

participation. does today's you Thank This your conclude call. for

disconnect. You may now

HTG Molecular Diagnostics (HTGMQ) 9 May 192019 Q1 Earnings call transcript