HTGM - Earnings call transcript Q1 2020 | HTG Molecular Diagnostics, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to HTG Molecular Diagnostics, Inc.

First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode [Operator Instructions].

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Monique Kosse. you. Thank

begin. may You

Monique Kosse

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

expected and meaning forward-looking Before me we expected programs business anticipated from within additional include in pharma statements RUO profiling growth remind let benefits development Federal revenue, the statements product pharma XXXX, you that collaborations and Laws, begin the growth company's regarding the including and of collaboration, and the call, in in commercialization customers company’s Securities with remarks related the activities.

from to statements are uncertainties risks forward-looking pandemic of cause materially HTG These those many events HTG's ongoing and time customers differ actual to SEC which projected could today's the uncertainties beyond subject and to Factors include results or including results described numerous control, its and events or on impact those call. may and HTG's uncertainties, its cause in filings. COVID-XX differ that to materially risks time are that regarding on HTG's from circumstances,

to place listeners XXXX as information any statements. forward-looking is HTG of cautions on no any statements. undue this HTG the undertakes obligation HTG call, forward-looking May providing date and this XX, of reliance update not

John to the like would I that, With Executive call Lubniewski, over Officer. turn to Chief John?

John Lubniewski

XXXX Thank in our you, development momentum, significant entered Monique. direct initiatives. HTG especially with revenue and product

biomarker medicine areas. the and are and the biomarkers as to the HTG’s imagined technology and long-term. the with the COVID-XX is core of of technology believe anything have our is the weeks We RNA pandemic impacts we well believe in could beginning positioned at RNA the disease is Precision While positioned oncology markets and for the We precision of implementing recent other medicine of future say. of events unlike believe we the now to here strength the unchanged. firmly are year, key

peers. the said, of industry quarter our in many COVID-XX, by our and this That impacted most like near-term was

which As operations and was impact country effect sales the March, distancing restrictions those altered of of United States the to the is the swept the stay on to began impact purchases first home The pandemic at the typically at revenue. for significantly Because planned of their early through in efforts, of customers Europe our social and period. our and end the directly the our along implement COVID-XX had most cycle each this of last with material a impacted our skewed quarter, month quarter.

million. million first turn refer and to million revenues, Let $X numbers. $X.X we for to $X.X quarter million compares revenue was XXXX. was of in last the the me year. saw $X.X revenue, as first direct what This Total to Product to quarter we the compared related product

spots a bright in While did was parts the specifically revenue we and our significant, COVID-XX see few direct impact some sales. business, kit of in of instrument

Collaborative the points the on continued decision revenue partners. $XXX,XXX to continue with quarter compared expected its first trajectory, of last as development await our $XXX,XXX for first we from services year quarter to revenues for

any difficult add level And to do new interest of programs the we timing partners. any with now imprecise always do of pursuing continue we has actively an the program high our discussions new and do in and it's to COVID-XX, measure. however, while ongoing The But predict are to timing continue collaborations. note, collaboration of are world more that new we're impact expect partners been to the XXXX. actively and the COVID-XX, seek feeling one remains even in We optimistic. have believe partners I potential

academic profiling work profiling In have of from restrictions mid-March. place a dive our deeper take business. our Now had in a home our since let take me many moment business, to into customers

having daily do video process all to and creative finding of the forward. and sales customers been continuing with moving has existing calls team possible sales telephone keep staying as perspective to Our and that them front sales ways, and in

As quickly, work are the in from regulations United home fairly both to eased, States. and Europe business we academic expect profiling return

continue Number now of to more pharma business. grow pharma. to growth our biotech We that larger see programs than in smaller we and business, our to to XX work believe pharma expect at number. continue profiling quickly also pharma profiling is see will and In we active return expect

development product to California. in activities Arizona Turning and

milestones an of important the This at our the we by Carlos them designing have from We the of our able impacted and achieved areas California, team quarter ordering took transcriptome partner. XX,XXX home as from some to product San regulations. In first the achieve incredible flexibility probes milestone and been first for our dedication internally. one whole supplier was very us for stay

Our existing a our milestones, Arizona reports comprehensive collaboration, potential validation a pharma team response assay completing partner met development its retrospective included assay on which an for RUO trials RUO also pharma another QX for algorithm and developing with assays. two finishing

analysis to important at kept proud very have prioritizing safety of the their work, we're report running, time our families. the We’re able forward both same our labs open our lab look writing development progress and and bioinformatic keep moving all and to in and to our to We area. this along, continuing employees while

been have of has time. the most effective worked an this time, use extremely we it to but challenging Overall, make

processes our We across retrained have areas. of systems functional better We've implemented new board. all and reviewed the and

a We company. key regular development contact, all that and we've Our us product steps preserved have allow and will these capable customer steady of emerge sales creation and maintained timelines. value teams firmly efficient believe the as more to

With CFO, thorough over more our of our Shaun turn review that, to call financials. a pleasure for Shaun? the it’s McMeans to my

Shaun McMeans

in RUO primarily a result in revenue was services XXXX revenue million significant in statements laboratory customer and did first quarter This Direct revenue of XXXX. for two included million which first quarter versus in XXXX. of programs, was our subcontracted product $X.X same decrease levels of for of which product $X.X period services million Total $X $X.X the the decrease financial to million the large for not pharma compared XXXX related revenue, revenue John. processing XXXX in QX for Thanks, as recur was XXXX. defined of sample in the

revenue the over closures our our anticipated due XXXX, to instruments our $XXX,XXX customers’ increase than first in of from increased lower to of and quarter inability While related ship this was March. product resulting COVID-XX facilities consumables

the sample processing programs. anticipated of Our HTG delayed also and as COVID-XX customer shipping to customer closures RUO for revenue impacted by was facility samples preparation

decreased as XXXX. decisions. we of contract remaining further development existing these as over $XXX,XXX decision programs partner tasks year on await revenue programs reflects services Collaborative Ongoing in completion revenue by points year reached development

planned pre-COVID-XX to operations into based and XXXX, or to to second with impact on continued has are planned many the will quarter our revenue that discussions revenue While service of be product our of return in able the recent the customers related customers’ future levels. reinitiated once we're programs our periods hopeful

development and revenue XXXX, expense. development Our compared revenue and XXXX compared primarily $XXX,XXX Research $X costs expense of XXXX in collaborative related services programs costs in in same for product the in are a period of in quarter first as XXXX. product low the reflects to decrease quarter revenue decreased and in prior XXXX period related to primarily related same million approximately compared This $X in to laboratory to subcontracted services to first year. to in research services million these of the margin decrease the the decreased development recorded

development despite for Our million contingent quarter to milestone from programs the compared collaborative services $X.X to product increase XXXX COVID-XX. activities with same million research in our development first disruptions both related in successful California facilities unrelated throughout approximately period This new achievements and in and our and Arizona of development period XXXX. the ongoing operational expenses our $X.X amounted reflects the

same XXXX. for September and the ATM for private quarter $X.XX through an at reduction in XXXX was first additional common stock, in facility the and loss operating common shares compared underwritten loss was quarter first for in common $X.XX and XXXX to offering per and period of for the our XXXX. reflects of XXXX, XXXX. million million Net public for $X.X same QX share the stock Our warrants and shares period of This sold $X.X

ended of unrestricted short-term outstanding. in securities. XX.X approximately We We million $XX currently sale with million cash for available and have shares equivalents QX cash, common stock

turn to back for call the now John comments. will closing I

John Lubniewski

very the uncertainties We're around how in we we product we Shaun. development and our proud you, of during Thank operated the managing nimble been necessary this preserve momentum made cash We've maintain believe our time. runway. and to adjustments

opportunity a As restrictions our forward, in front look still executing we lift. we and we meaningful see us, of forward on as begin and strategy large to to look see

opportunities. diagnostic signing current We yield regain continue products value programs, our which will potential eventually have services, with proposition a and to expect and and our to farmer new momentum terrific

and We Arizona our in of maintain manner product value. focus capital continue California on teams a in to with this make efficient investments with doing grow the our future shareholder business. a our in and very momentum development building And we're to

In remains unchanged. closing, our strategy

continue continue pipeline, continuing opportunities; both to our in collaboration in Our in applications. the of grow services fund next the operations companion R&D, to second, number California rate to Arizona new and the both and base will profiling to a customers; and invest be; and grow wave high and develop of to products, programs third, to business one, at priorities farmer diagnostic our create continue number of

effectiveness. and we're winners working the new This good Hard of timber. HTG experience and make bringing together at is efficiency team levels

We and a stronger will from more capable emerge this company.

With questions. call up that, to for would like I the open

Operator

you. Thank

now session [Operator be We conducting question-and-answer a will Instructions].

with comes Souda Our your proceed Puneet Leerink. from Please of line first with the question. question SVB

Unidentified Analyst

terms the our [Leslie] Transcriptome senior place the on to for mean, to of where the work kind to taking teams a start in on Assay, into to and get be stands still I in current lab previous afternoon, this daily member wanted being basis, the of milestones are early at at lab point? departure in and this recent here. present pathway just Wanted view for question. I of team as Puneet and in thanks priorities actually a looking Whole able

John Lubniewski

by San early home. mentioned California one of call, as being in work the Actually, from I spots Northern in the Carlos, affected the

we to an said just remotely went been home. Mainland the that at are stay not exempted since we've but work plans, data Lu] any to to [Dr. the at can and we're telephonically of lab try up lot a lead and I there what able We done experimental more The the we to person this talk a do doing that analysis, program that's one be in have the news good than morning. is all time. industry

in the we milestone. met have our call, mentioned QX As

track for QX. our We are on

said This probe XX,XXX to final assay. being part climb. for steep this is is is configuration now That of the assay getting up it’s to the another, another this whole,

still working which the So single work, doing that you is is day. technical there, was every one that team, really still if will, the

lead One scientists to a in our of runs of some trying completed today as sequencing matter get actually is fact.

that continues plan. on So program

Unidentified Analyst

return pharma moving biopharma, And you to expect mentioned then you and smaller a quicker. bit to that biotech

mean I how guess the biopharma going HTG? right few last what is priorities project of that So for with the now? does How have changed months in the your And I guess looking on? funnel everything

John Lubniewski

bit late to than expecting come back instruments target. based back the what a seeing, two large just of the summer. seeing already a might seeing some quickly it's But pharma, and like the more academic this they customer moving markets more not actually we're quickly seeing month. pharma, on pharma to very installed at of come going we're Obviously, smaller to big we're the look biotech. a We're biotechs -- we're they're and the come Within we back academic

obviously, they're to if even targeting, customer at us not ways back look try So relook stay to causing on of for kind site. effective, that's to

we've last And which months. an out use work pharma that with half within programs of that just the we during that to count the going Again, the program criteria basically we of means has the actually active to very are know statistically, we them, got it number programs stringent with, a to time be year. XX

went into the we XX. year with So

are that going out. knew time XX we to So

also by quarter. that knew we then And cycles

programs of the the QX because optics half in number is of so of we're actually QX. of out total happened the expecting XX, to time XX So number almost

So disproportionate it a was kind number. of

So booked that's then that, why worried about we not May in have too and already because April forward. optics we're and on what going we've kind here of one,

challenge be when back of depending online. So I bit a to going upon is guys big pharma think come the a

Unidentified Analyst

going on just then the changing our great. can cash and anything on quick there burn And I assumptions would Thanks. guess everything levers side, be being pulled one with one with are

John Lubniewski

lighter we bit. the the year, on we knew comment to collaborations. Yes, first I'll I'll part take were Shaun going then and ask be a to Coming into little

And see so our revenues, we did Subsequently to a to lowering needed Arizona, January well also it think expenses. in got base, did that employee of we number it turned lack that Tucson, timed, the be headcount adjustment do I a a because be. translates to out when to that of collaboration very

So planned cash at plan. things expense levels. go really as to to been targeted able of our maintain burn let as Shaun? have rate have we’re our and anticipated, a we us our combined Those to fraction two

Shaun McMeans

one I’ll think thing Leslie first well. raised in I some we add as is the quarter capital

So And we same and quarter are throwing us levers in again initial million a targeting of as that runway gives $X consider QX Q. little needed. that bit said, as and John beyond per into we'll

Operator

line the of Kluska Our Please comes with Kristen with next Fitzgerald. question Cantor proceed question. your from

Kristen Kluska

on team taking thank and well my you as I everyone your time. hope Sean, and Hi John questions, this at for

topics question here? you're more need have your expand this as markets. these Could offering there indications new looking time. since product first Are to customers for or potential come highlighted particular transcriptome the that transplant as any engaging unmet the team in diabetes level So you talk your also the the up conversations in at with conversations? and you've two here, of And product, actively is about

John Lubniewski

to So background. transcriptome more there’s to that's whole We that I is first our the work auto-immune into, clearly targeting a moving we unmet where already oncology. next let commonly going need matter RNA oncology RNA the we're we we're for think be medicine are, significant that's for think used agile the a believe for that technology for of space. market that in be more market already fact precision biomarker is The

maybe to to that arthritis, So think biomarkers the we rheumatoid in as whether now for probably that's five that's become are whole another Lupus, autoimmune. product. going transcriptome by trailing component oncology probably starting strategies a so, or they're very or market years or And necessary of seen MS be drug good but

We do markets. other participate in

to couple a Those And have. those. interesting gotten mentioned have the transplant. we microRNA panels do we've we as of more a that's as that whole some microRNA what's product for be them. transcriptome tendency as a Diabetes, You well being to and publications, opposed mRNA have used

So, I sorry, that -- questions usually Kristen,I'm miss was didn't think I write anything. those them I down. I did down, write

Kristen Kluska

trends your And where to to related about be business looking whether you're talk may as the geographically you region? might you seeing can And any track might this be disruptive? how open by and things to also, COVID-XX most start and vary

John Lubniewski

my morning matter a a of head conversation very that As with of sales this to fact, I subject. had

what at give start shape we're pulling what think XX really trailing of revenue. et have we of not building certainly but by on measure, online. when process our business expect represented some looking yet. And to prospectively, what see percentage We together So retrospectively of our by July, customers in doing thinking the based we be we model the that built will to It August, it'll back is come will we're be a cetera. are them to months we're come it's us that because a precise going the don't

Geographically to has business, we've shutdown. of surprisingly post-COVID in is your really question, all hang a pharma even there, Whereas our complete not maybe kind lost academic at seen scenario. XX%. in of It's kind

markets academic Anderson starting not, or seeing online and the of month. to Europe, it coming this quarter, and we're back I We've believe this seen back. mean MD noise or come So make Texas

optimistic So, we’re there. cautiously

Kristen Kluska

you kind going the And up of may to where wanted ask do to you pattern do the expect be to at think I work just and the of ramp does reopen. speed? different lost lost then start are it to business for things same there relatively be Is it time? defer? businesses? make quickly Or it to amongst Do different last when segments Or up the

John Lubniewski

the latter. It's

regards actually more of actually to inside and we'll upside quickly write analysis. it's So this pharma to like. little to with bit grants the interesting, in portfolio Pharma, even they're rates, doing the think time normalcy I the the I think because bigger academia, they've return burn a a pretty the used maybe

And like in time may basketball bit as on because Everyone what case basically has others. going game come so their prioritized they're rethink almost to are game their a timeout TV what basically reprioritizing pharma’s they even this a it’s plans. a in slower, assets. actually used drugs, indications, what be And to trials over

back with needs. So online it seen remains come they how testing to quickly be their

just I asked Are question the you that seeing? there are. know any I we we're other Actually that remembered. areas

samples actually recently to some out are customers, asymptomatic, from COVID disease why severe of trying a they're are patients, we've why into develop actually host of to from at very gotten subtypes a So looking some very in figure standpoint quickly they mechanism where a state. patients trying move patients where

although, find and interesting not is mRNA very I very biomarker a to area personally, that's that. viable So at oncology look that a of study

would I the surprised a the to understand disease mechanism programs we lot trying COVID-XX. not didn't So of up of pick if be behind

Operator

question comes with Chen next of line Our H.C. Yi from Wainwright. the

Unidentified - Analyst Q

for the is of Chen. have [Dubalin] This Yi in I a dialing couple questions.

lockdown? are one, from your any sensing the or customers recurring profiling early First the of molecular you business from COVID-XX signals

John Lubniewski

starting awakening remains said, really areas. shut regards quiet. on Like two hard. to more pharma weeks we're those samples. example, it running pretty The to receive to academic medical before work. end that starting centers see, starting before, this answer the I to return mentioned is, of yes. But segments. We're Big the was and are our month March, quiet to to some as an to now in pretty last down expecting, We're I start April for of actually see

Unidentified Analyst

your 'XX? COVID next in one, XQ The for what impact expectations are

John Lubniewski

back June, in sometime come mean, continue little a will, business, remains if early then come be you I as to online online, and of online, say. we happened as the if things states It quarter what all back et revenue. probably lose seen of QX equivalent we're too and might stay between March in of It's back they bad kind about back as perhaps cetera. to will to

model to a asking build our question forecast we're back that revenues. to can on that we're get customers. feel So that's spoke actually constantly better we where I again, for And a looking model trying retrospectively of forward going that a into where

Unidentified Analyst

One final mentioned have XX from year. me. last I you you know that programs

year, active new many this So how add you did programs quarter? this

John Lubniewski

From added ones. new QX, XX four out timed we and

XX. mentioned that XX, of again, still a because in expecting So XXXX. north a bit a We're timed was negative as the previously be net-net number And out was QX, cycle disproportionate to of programs XXX year-end issue.

Operator

with next question Group. Nowak comes Alex of from Our Craig-Hallum the line Capital

Will Fafinski

This Alex. Will for on for Fafinski our is taking Thanks questions.

First one preparing you've in where working person the be? situation how Can many home. you ease John, work discuss to not it used ongoing meeting team what and the given to a me, is from for post-COVID been in sales environment of the reps

John Lubniewski

Again, fairly spending actually sales mentioned, our a team. of new with it previously lot time was We've been sales a as force.

time lot lot a with training the we sales of training, this used into team, we of do every portfolio market to one. So technical that actually analysis. We had a planning and went

sales be have be we Myers able future identify So they would RNA actually trial assays. their clinical actually portfolio, win the walked Bristol through account, teams you if entire to for applications equipped better to your so as

things lined Teams they've and do new WebEx Microsoft Where been all on have April to folks So possible programs, information. along. with in of with doing all May. and customers We move optics up new that they're kind meetings

samples of video. a on our said, from we're I for The not be customers get that projects. the our than not our safety so key lot not more their that they're to to the will work, they're We still airplanes. capable of going basically for their work That those just customers first aren't or can do or teams and us is they're work telephone the we in back have to we personally tests, of labs, So, be send running people employees, thing probably assembling kind to exited. on tips, our can think actually if because the not using

back sales can work, get our customers. teams very once people and and employees planes customers working our effective the and for on a feel important telephonically, most our our trains is I let right be for safe now thing get think back to our it's then thing we we'll

Will Fafinski

just tough an a And precision there partnership an your share me. one, us. second predict. big on merger? know historically on has to is update, is partners now then PDP-X But their through question there been that if programs? that for has PDP-X Could This diagnostic update We focus you for been

John Lubniewski

doing seen shared be have So portfolio be, a are us. they It to their we know they remains what not with reevaluation. have that new been them priorities to going

than to of now be So the that's can to regards we you of can companies, later stratification. combined that out say, trial going able where of you've with help going, down assets and are to we them one we're sooner to how that probably then places sit in the figure that both be want live rather to these because

have optics of Obviously, that the door. ones we still one year. a that's one slowed adding new or but reach been key did has person kind with milestone We this on knocking do two on

that one beyond or then the working quarter another So on hopefully, to within be two. we're we'll that. able done And deal get next

of year. ;XX lost a had we a in bullish now a partnership we with our kind we've Qiagen. But a bit We got So of slowdown that remain respectively value very was understand proposition. why tremendous

opportunities the forward. reload them moving and will keep We

Operator

question-and-answer turn any like I'd back closing our session. management of for end the reached have over call We the to to remarks.

John Lubniewski

helpful look over earnings with the continue for the like several shareholders this also much. support and our call. the also commitment to First that Board, this thank HTG for their then I that you employees for thank times. to interesting forward to in you key on we are But And us I'd very really have company. time. make to the thank continued for move joining very to of us again they've months, particular, I last tremendous forward Thank next our these have they here everyone been we know And to at strategic again at updating I today. want their to help initiatives all,

Operator

concludes you. Thank today's This teleconference.

You your wonderful Thank this your participation. Have lines may day. disconnect at for you time. a

HTG Molecular Diagnostics (HTGMQ) 13 May 202020 Q1 Earnings call transcript