HTGM - Earnings call transcript Q3 2020 | HTG Molecular Diagnostics, Inc.

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Operator

Greetings. And welcome to HTG Molecular Diagnostics Inc.

Third Quarter 2020 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. reminder, to is Arndt introduce Advisors. a is recorded with As pleasure, now your Instructions] this being conference It LifeSci [Operator host, Paul you. Thank

You may begin.

Paul Arndt

the released Thank financial today, operator. ended HTG you, results XX, Earlier for third XXXX. quarter September its

obligation to company Officer. no date the call of undue turn call, place undertakes Chief actual providing that, John is risks time the including update on the begin programs cautions remind results product me growth and forward use Tuesday, customers many its expected including to and And RNA-based those are SEC beyond the from and reliance statements include ongoing I'd regarding regarding pandemic, Lubniewski, HTG Executive and that materially numerous differ statements let on commercialization described statement. uncertainties company’s not of the uncertainties growth you include may biopharma from the of of any which listeners of biomarkers, molecular anticipated With projected in statements increasing results in or regarding circumstances, call. within call, this the ROU These the pandemic. materially to to XX, collaboration, those uncertainties, meaning HTG information the looking activities differ profiling in cause that impact and and control, federal remarks the to profiling we events revenue, events, Before as related to any COVID-XX COVID-XX forward-looking over recovery could that John? impact this forward-looking like companies to statements. November securities Factors forward-looking HTGs or market, the are laws, and HTG time the and of from ongoing today's its XXXX. business potential the and on to company's cause subject filings. development expectations risks

John Lubniewski

everybody. And Paul. you, welcome, Thank

overview term. of our in our the technology belief an wavered. longer term we challenging with begin and year our trajectory. growth where as and interrupted are commitment This been near me not Let has the view in our how has in But we business COVID-XX

of to technology for business Fewer for our in instruments running and macro that can't also from facilities, for in done the We be people sending believe their impacted profiling immune short biomarkers, And continues biomarker-based due of to the term trend treatment EdgeSeq In precautions large including medicine the especially for expression. response. is a feel is to profiling embraced a precisions. as place disease restrictions fast short be of which use COVID personalized the be in lab driving our increasing have fundamental to us will to medicine, Molecular and home. customers and a be impact services. term, RNA-based our is see simple this continue of on continue largest one restrictions from impact labs in our and we remain of the better some of adopted and patient, player. platform the customers gene home a and efforts. enable this. could COVID-XX. the market, areas oncology fewer many in Work guide Molecular areas, meant the But to other we samples has payer. medicine had where it's workplace visibility reason growing to quarter biomarkers key tools physically technology our Precision NGS-based provided work family we lab for

in Europe. the during trend summer quarter reflects months, historical the This also of especially softness

continue apparent slow the to that In impact quarters, to back the going customers last we're new normal. the have many of become few their to period. businesses up, seen for extended opening an begin our we it's While process pandemic and adjusting is

remaining are to and So new nimble environment. this adjusting we're

our people where and can looking for we are leverage without business, priorities. sacrificing We technology our strategic

We customer for points we're include our This and objectives term see the see new the to Other key I'm to we're pleased impact of expanding call help academic in on those includes are the as COVID-XX smaller our number recovery increasing that market, our call immune many business into buffer of customers, current in customer our mid business. of our sized and same to medical presence aggressively of and metrics near signs points a revenue of opportunities within to making larger results starting accelerating show looking diversification pardoning adjustments say and starting and for leveraging our larger new addresses. biopharma in centers. include our to response the And business. measures, the opportunities

period services $X.X Total at same me was a third Let for period same for to the take for revenue to for last direct look compared performance last as and related the Product million what the revenue, we year. revenue $X.X our million, refer million million, product the compared quarter. with $X.X was $X.X or quarter year.

offered Our well. a quarter few direct spots bright this as revenue up business

factors. sprint is been But Growth We effective to see this especially revenue gains year-to-date, region in that's kits and on through. able Europe in to instruments. focus to in placements one continue pull business being [ph] of reagent by our and margin lab related We've been a from shift in post existing fact headwinds. mix friendly many services significant spite also modest driven is and

seeing cases, But we've forecast this what week. only are laboratories. day a an work of We We quarters. a and and gradually and track starting and more carefully seeing resuming two or is couple normal some improvement of to are schedules. some last the over may this return their seen to be customers semblance very more customers It's small, it in

our quarter, same that eventually very teams. contract new million people at area. compared with reduced our me sales $X.X us services actively growth believe be of will on development active before XX,XXX in returning the reduced closer as back allowing will a customers, we that for to third will We long our the trajectory had And of Collaborative customers pandemic. current remain in work existing our we the wave revenue trials continued another of year. they do to that take look our this collaborations. And the shutdowns, and work business. regain momentum with remain and for revenue period return Our efforts as expected not more with this oncology complete quarters, with on last there's let spite track, more to expectations, coming sales as engaged In get activity is profiling by HTG

we XX% new recognized of addition, from QX new. the In customers during revenue customers several quarter, our approximately were

number revenue that the to process. data is message graduate our results. These great front, First our strategy With scientifically that part the that and confidence publication's working. products. than usually our in small, metrics technology orders XXXX. there to their demand are active and XXX example the be is had how yield sales and now We In have us in our believe tactics showing biopharma, integral the that timeout, increased our reinforces will increase are technology, a market return QX that for customers but we continue from customers to the work see cutting-edge on publications research is believe a to the in of programs opportunities This Similarly, EdgeSeq approximate they time. the growth reference we more XXX starting over of HTG home that new starting are we XX% laboratories, measures teams we HTG publications restrictions. of do larger employ give to from due a growth

reminder, trial. for It traceable be needs active our in also in pharma sponsored a metric, us program it needs a to As first a clinicaltrials.gov. to include to programs be

it within revenue to generated Finally, months. XX for last needs have the HTG

With site XXXX. pharma running impact that a This have many HTG COVID-XX of trials programs, of from samples mind, Especially or the programs was in our the loss the around is down at XX to with for net customers samples with including we to end out. more timed and the started have So projects finished coast XX delayed, many of active pronounced. of that sending programs, XX quarter XX so because on timeout. biopharma not

However, up programs. new XX extended. been have signed programs We've also XX

the at And are and especially glance. deliver to to starting it another are more measures sales actually customer first So results, biopharma. relates encouraging our promising numbers and indicator as that diversification

product milestones a Turning for in at level. operate high development, we strategic continue to very

white which internally of a very to we Transcriptome EdgeSeq have technical feasibility XX,XXX gene panel, call our milestone achieved paper produce WTTx. our we're and First, Whole to pleased approximate

Whole such as entire HTG's expression Some its high allows data sample FFPE white free EdgeSeq while prototype extraction and to good were input, maintaining points differential panel Transcriptome advantages, test using demonstrated of are with highly chemistry, alignment tissue. low scalable, and directional that ability RNA-Seq. measurement generated those paper technology of the demonstrated all RNA-Seq. to the quality of human transcriptome, It The generated the correlated also of low highly is that

exciting, as researchers, out a of that of for market. of underscored the advantages demonstrated. enable we cut study a believe and an robust the RNA-Seq building WTTx using traditional believe what a can the we is analysis based has it to has gene operating measure have demonstrated of is who material companies differential accuracy HTG [ph] This they can We the study transcriptome exceptional in the are HTG extract methodologies. and biomarker alternative medical technology human leads proof technology GEP product use expression almost reference biopharma This Additionally RNA RNA of with also like also single spiked-in system. diagnostic content, game-changing all The EdgeSeq expression, tissue. is our entire concept that and offers the for view we our translational

existing implement greatly clinical reproducibility. bioinformatics a been and versus an time, has our less designed a uses RNA-Seq. to simplifies easier performance WTTx for with and As faster precision to sample, workflow, WTTx greater has turnaround traditional products, has

on cell in identify phenotyping Also the on pipelines their We immuno and introduced researchers tumor had them classifiers. sites, molecular build to to we they based believe characterize commercialization XX simply if addition, to having assay profile unique smaller, design that if customers immunooncology mid- phenotypes with or as microenvironment. immune the from non-responders RNA than an and the probes In quarter, same. chemistry allowing signatures that application with own new sequence the measured and expect revalidation, WTTx panels the efficient In selected for into for smaller want market probe track an full WTTx the incorporated QX, down to can be access the sequencer we technology on remains minimal panels remains the the to and our Final more program. take these precision easily of launch. product early immuno responders the the available will select our from XXXX panel for stromal more to allow

We to for more will to pre-existing utility apps our them our and continue bring drive customers. use to for make easier to panels

we biopharma repositioned call described such response, immune response panel researchers powerful and disease better as panel not renamed is areas, now autoimmune our disorders and we've Lastly, to also and infectious oncology, the RA, panel. tool previously our COVID-XX. This in only to translational autoimmune help what a understand immune and but lupus in including

a work to in very high the product year technical milestones our at development, achieve forward and continuing continue progresses. to We look as to level

by pleasure new customers This see strategy starting HTG are said in expected, customer revenue very our made return our our fact And legacy quarter, I our laboratories. and we before some encouraged by I to to response of as their see of that COVID-XX. that to growth, we results expect started that down we're we to was the customer although of the are the shifts growth review our stronger as better McMeans justify to through results a With our with call to of and all over with CFO, penetration new financials. instruments and this depths more turn their it's and pipelines that, my better we emerge exciting confidence. of to Shaun? diversification, product a our Shaun producing company, for to

Shaun McMeans

of related This $X.X and product revenue was versus decrease to primarily the quarter period John. million from X.X COVID Direct was for third related with was defined in in revenue of XXXX. of the product of XXXX, million associated in biopharma third XXXX revenue the quarter for the customers $X.X a compared $X.XX shutdowns. result Thanks, slower for QX of same product services revenue million XXXX. statements in decrease our our turn financial services as a Total

$X development included million, did third revenue over laboratory in and XXXX, sample by revenue the we XXXX XXXX. large completion related addition, XXXX. at for on of services contract We on rest on our to further In programs. this decreased services from revenue procurement reflecting the product least subsequent reflects programs, activity expect impact do Especially on quarter programs Ongoing of continuing XXXX. a not the customer in Collaborative significant these existing these pharma through program, levels our very from remaining recur a COVID-XX decisions await as pharma services tasks customers. revenue development revenue subcontracted which revenue of limited of

prior are with in based discussions be hopeful return planned the levels. operations will program's to once periods, We restarted on future our ongoing our customers COVID-XX to pre-COVID customers

Our cost quarter services XXXX. same product million related product for $X.X revenue of XXX,XXX with the in of period third XXXX, to and compared decreased of the

in subcontracted third reflects primarily prior in low compared year. In this decrease laboratory decreased and $X.X the revenue revenue related XXXX, expense million decrease impact addition staff first reductions. to to are programs ongoing these to related Research the the the of and development margin of in development quarter services research XXXX, lower expense. period development XXXX, in same a to revenue, and approximately collaborative to recorded in Cost services in half compared

XXXX. team of Our million impact by the the the for same continue our primarily compared with third research successfully lower period travel XXXX, quarter program reflects milestones. year-to-date expenses, collaborative to with unrelated related and million first the of Despite development This new approximately in met half along COVID-XX, $X reductions than development were development staff XXXX. development costs our and for programs created decrease $X.X complications of their the in product XXXX,

same our XXXX. shares third was $X.X the This million and Net XXXX period XXXX. loss in quarter period for per compared the for an of of for additional facility. common warrants September $X.XX reduction of sold XXXX stock underwritten and XXXX And share offering million Our common the in stock in private in market common for was $X.X quarter operating to loss in after third and same drove XXXX. public the stock for reflects sold $X.XX

million As XX, We of million John turn shares term $XX.X for common outstanding. cash, to equivalents sale ended we I will comments. cash in the approximately for securities. got now stock call XX.X September back with short closing of and available QX

John Lubniewski

who Coming regulations we've Since biopharma the of opportunities, diagnostic that Thank pharma process additional lab molecular into Shaun. been had buy impacted our business hampered laboratories. ability samples instruments you, has been kits to the to This core And in pursue by growth from HTG’s the have time. of reduced HTG samples an coming number their reloading of are home March, XXXX, work our our in profiling. VERI/O unprecedented and customers in to collaborations. and our pipeline for have momentum new processing, strong companion of we the run

or business clinical has Our impacted, been of a also slowed, number have trials stopped. as

to achievement been grow a at not customer that So we've have revenue existing will appropriate value our to We've not our starting adapted, milestone oncology applications despite find victim. less like our storm. publication adjustments continued market base. company allow our the product. rate. results. our be targeted our opportunities diversify this, done us to I the we're all by panels, run taken reduced our culture taken off base. product development this taken to we to WTTx samples our And and base steps made believe Whole creation exciting see the And to our successful steps burn Transcriptome eye weather of facilities. We've cash our instruments to key beyond We've new on with on We've in we've and of more increase to users COVID-XX. worked to continue impacted installed aggressively be We've to taken enable collaborators customer’s lead steps initiatives,

our operate will that we transform building oncology momentum response come call will new I'd be we slowly for capable, an HTG up to learn we back like COVID-XX for that, with to and opportunities customers and here, more With to believe open stronger, As continue platform whole will technology WTTx transcriptome soon questions. now world, and the our HTG. the our believe in market exciting the immune our business, for customers growth work to

Operator

[Operator you. with your Fitzgerald. first Thank line question. from Our with Kristen comes of the Cantor Please proceed question Instructions] Kluska

Kristen Kluska

for Hi, John the taking and Shaun. Thanks so question. much

to Whole about wanted panel. I So ask Transcriptome the

including well talking So white the evidence, recent of as you've you with as a the key paper presented know, advantages. this lot RNA-Seq, about, differences potential

know RNA-Seq So will potential from might collect I look wanted what other key advertise that that you product? help further items once in ask any you to in since customers from to your collection they this switching learn, be advantages, this are how the some be to the of mid-XXXX, might or becomes especially launched metrics going to and about information situation, of

John Lubniewski

This a today, couple if gene different it's you're Great we question. is by we’re biomarker because discovery, ways. doing RNA-Seq. thanks. Answer expression doing you're if john. Kristen, excited product, this likely RNA One, on marker it – in it an

that have then go suddenly development, believe manageable we faster, to that. of in we kind to be, Whole as a cheaper with displace smaller, if the all with RNA-Seq, to way of the have a and biomarker clinic and way better, to so companion We from can technology do move a through And diagnostic, they a again, discovery need panel. more with platform find go a Transcriptome,

I of to it's this we've So a a molecular it new And opens for the think bit play sized that profiling business billion RNA be. entire up HTG. dollar

states, point is actually the in of key customers on. up because it's technology a metrics be And two, for this are The areas. of - going couple disease us, opens then that other it One XX% this be going up regards bringing number so in to response, to like disease other until for also we've transplant, been expression. attractive a HTG product, are alike seen, especially on And oncology. cancer also well recently, diabetes, as think RNA opens a we it gene of product have And path. areas, as that's just and other immune not universal a with as efforts the to markets

also customer will that very monitoring areas we're be company adoption. we disease the into, also and to adapting quickly and other So closely about learning repositioning

Kristen Kluska

Okay, great. disease indications. talked to on we're the more Thanks. Yeah, the these and you market, FDA trials you for I paper, a you which, in and the announced and know, seeing more also lot lot when know, about a companies rare release, white incentives EMA focus press

about oncology you've to So how your efforts ahead next most in where doing you you six in in field learn year? any so, know, Are had now of that are focus this, or looking aren't there middle customers new of months launch in the out of it? this you

John Lubniewski

is the next Right that Yeah. the we the stage the continue the of one us I things I companies mean, done. program. development access is we'll an that's do, lifting And early this there one, really of like mostly do technical so program. have heavy believe development, for

performance types, Now, in around read it's device, characterizing et cetera. - of with sample will, depth the if tissue than differences how you types, in the differences other

fully and tight that now other do we understand run we've samples recommend would parallel like thought we customer also So be should areas other there's then that sample and But should literally key do how leaders disease we'll looking between us engaging we at. to that cases, And to customers. RNA-Seq. what be have what begin be amount them looking very to they when then think in at, doing can the protocols and to types use help also in product, launch, work many they of leaders probably customer we got better opinion a tremendous that our

is development of market that's our next body kind big really teams. the our So work, of really

people on now run got data market. that be we've the actually assays will here now and the list, to best actually can way they product the Tucson, already engaging that start Now got the samples, can we that learn in position run in to we've but prototype generate we

Kristen Kluska

is, the well? and RNA how DNA Thanks. as do think you Okay, these about great. segments versus for question then me in And of some last

John Lubniewski

question. Good

around a it think last decade, DNA still going it's the a in been It's as also a upon game. half I it's the well mutations. known decade stay state, - depends to and obviously, disease DNA specifically game, oncology

mutation. think, liquid at I don't you patients look have however, an as biopsy, of actionable XX%

in additional into RNA patients. So clinicians will presents they're at opportunities biopsy. subtypes, liquid look at pathways And treatments also to looking those think differential I way molecular for work do for its

again, I believe profiling, we I think DNA, best what oncology, I you is RNA, trying And workflow, we just the expression think do have to you gene build I need in and chemistry So world, think you as a over said, multi-omics it's protein. over need it. to and we're need and

other are the Now you're or a areas in like, not protein like helpful, as actually, disease because cytokine, absolutely it's a at going an not storms now that immune game. to are mutations and game is game, autoimmune, that's be RNA that or that DNA looking response

response in at And So we've as then here others at We like, COVID, we look can what also but can virus new you well. HTG areas. believe we market think there's as respiratory take opportunities with a got those know, for diseases, mentioned, disease, building infectious viral we we in look panels.

we can another way or one why bacterial actually to infection. and to develop some So they people people subtypes look respond some respond a and have viral why when at profiles,

entire again again, just up still the just the for it to WTTx believe And the think I a market. do as to I oncology need it's best the the expression. have is want just all open also gene going one researchers multi-olmec market And world. to in So opposed class, we RNA But tools.

Kristen Kluska

you Great, thank again.

John Lubniewski

Thank you.

Operator

the Our with proceed line next from question. Alex of Craig-Hallum. your Nowak question with Pleased comes

Alex Nowak

you reiterated timeline John, got should between everyone. expect test? proof What and now know, of launch? mid are what the afternoon, the then? XXXX we Transcriptome Good for next here we else You the the concept, Whole Great.

John Lubniewski

Yeah.

between of and of access early sometime January. to the end early late now the December, You're going year, our see the program start

gene the see the On last that look always probably for probably you'll strive assay probe content, that, will full one do conditions we’re should RNA-Seq. You to design and be words, will that final JTM before will up. probably comparison have definitive - be be to other another, designs, locked could to locked. We're a on that out that come white essentially to [ph] right things going now plan then but paper there's

that development third. guys cost emphasis our first, always give I are, So its second, product our quality timing

want order. that's to them in think don't then out - there, technology out do I to of it on QX for force then of we full commercial full launch And And to again, something June, find to on So in take and from throttles path look the I start up QX. and adopters the to will product. we are still July-ish

Alex Nowak

what expand salesforce there. going us is Is primarily it on maybe launched year. this the and Yeah, OEM out to help Is and will pharmaceutical, Just lab clinical maybe razor-razor the calling who be be lab? when the or be task? a blade So still on is through expand it - initially on? EdgeSeq Or what academic system? the strategy salesforce is going sold sales be through the this next labs,

John Lubniewski

question, Great Alex.

depends segment that upon So we're it the serving.

So for centers, the in going places. it's academic to positioned be two medical

down one to positioned in and the then so sequencer more that that's as research, biomarker it platform technology discovery for will and select more market. are you efficient panels First, discovery, RNA-Seq the translational a easier smaller signature be versus implement that efficient, can

control they performance this CLIA under And LDT from will, again, almost then an and validated, they as will a it can too, their tests high actually substrate own product. as be a bring that standard, design we use to of OEM actually market, The would used that and other CLIA you why to if centers under lab the that's have in in academic build signatures the perspective. it built – in be then up medical positioned they'll very

So this that's universal expression expect custom you RNA gene academics, our pharma, panels. lab. of In probably of use. translational should that all the This platform we replace becomes the research that CLIA kind will almost

that more risk So it's something why, or to not much or X because be a as datasets, going missing expensive risk could you're to why, use panel. be relevant, XXXX especially developing missing gene that pathway then

all And very, ability off so of very, - if I tissue, and the transcriptome which a very lot makes think alternative - sample. one an data, attractive get entire then, a you uses more cut a to it to RNA-Seq that

fully signature hundreds And there. I want for change, the if to maybe not IUO, panel would our call it genes down lot And set don't going a all and to, forward to because move burn smaller assay then that with is the capacity if a of select of intention will assay expect going XXXX that why sequencer easier, is a probe then to design they would again, be is next have that transfer so because then be the that nor they a chemistry developed, to on collaboration, you to change.

HTG or it NanoString you're port that assay, So you're to PCR, trying your port change. studies there's versus bridging then and to it to sequence a there's a over simpler chemistry are much if doing either probe over or and you're discovery a RNA-Seq, port today on change, to

risk bridging for a that study. there's more so And lot

our people already be bring already out they and automation. we it is boxes that content, starting got really the gene kind as but all expression gene last who be kits, know, around a So at least up go to market answer, the you companion in then our I think And diagnostic. to might also are platform - RNA a discovery from we they've give of that to in pharma, one it might And have - a tests. called way expression the and market, revolves you a, bring

reagents, more or perhaps them test. And look that to or then a like So distribution a agreement, agreement. selling royalty distribution a might limited a licensing lot limited on their use field of

the and either services in first capture, or and value think the I pharma So will be markets, academic probably kits instruments. two the

we licensing almost to a developers, play OEM provider I it'll agreement other of as be an type a test more transaction. As think

Alex Nowak

I'm of just Okay, kind I names And at - their Wayne the looking [ph] the just do are business. the end some you some digging of list at out Genomic other technologies kind think to And companies work kind struggling I'm to work returning HTG to companies return from to someone and of going very quarter looking QX? of saying here up trying pharma lifescience customers why to return why we're just dropping just of the work your on to guess even they from profile into of then perspective, and help, and in group helpful. that these research cancer with of like are sales the it, of the results just are to understand given fails just are when or other that parse customers returning any dropping work? announced seeing some to

Shaun McMeans

immediately when the us, And focused if leveraged Q - Yeah, us sustain happening think going than some revenues clinical that was started on biotechs - into need We some it it's back, exposed and on very to think anything, diversification out on the one other in were those mean, very the couple to smaller needed get very, saw we we we compare too going early that guys have by they're east work. a clinical project in and even come are highly ours, to strategy, big that very, of we quicker revenues, customer revenues today farmers. they're, because far that And of the the customers remain of just some on I knowing west coast early knew QX, one folks close. and of back to pharma. coast, a coasts. I it were to I we this were on They're we and big pushing others, hard -,

the now, to pharma status in pharma we're QX, the are end about of Now just business, of the at we that aggressively of quarter seeing do of track ballpark customers a back. and pretty kind our things,

is digit. So seeing in from up which they're are half on, then or a week, people you almost of turning day back we're them. a two single probably that And know, a,

the is ratios And to quarters the why are July. that say, seeing which do back in think then almost and online. through. we're where we quarter, we've able market in, has is In with good. we're of same, coming lot to orders which our that then of our on the October So an increase hold in been the almost pharma pretty of Europe, or this three were from are market, again academic I And coming seeing business June some a

of Now, fully is open. about XX% Europe

we've I we're- maintained think So momentum. why that's

think new make optimistic return have into part is question strategy, that customers, expect and as that, cautiously the bottom, X, our we've we've to is, customers seen. then which we've that that our gap back going existing way that then up mode we through. we're get of quickly was added do that But work, we're and quarter going So on can growth now. that our how we're be right gone And just up I we we X, to to

Alex Nowak

PDP, just you more with, contracts or PDPs online Does then that and are And the still questions. helpful. those think do two very I still That's program guess, back come Okay. in the contracts active working you're XXXX? two should are those thinking in

Shaun McMeans

We've don't become, know. still the are have move - I now get us. by clear. the they'll we know, obviously, that or repositioned them. we've still they're they those new to ones. agreement. I They're whether kind situation drought. a go, but have to going keep those, of abundantly The in we you longer forward? working QIAGEN been and hurt not more And nervous We active, to not That's And fault,

which free clear and happen, Illumina that's team make do sales our there where our is that, distributor, go to to is and - we we're what plans. now deals off the in need, And it's we and abundantly now there the sequencers. in that's So have

Alex Nowak

I Okay, and quarter place? through other many the in financing got you the it. And were How that ATM agreements issued in it. shares missed then have John

John Lubniewski

north $X.X $X.XX. prices quarter, million the for Alex, at of approximately raised We

Alex Nowak

it. Thank got you. Okay,

Shaun McMeans

Thank you, Alex.

Operator

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

Unidentified Analyst

This guys. to Hey, up for for Puneet. is the on back panel. on I want Whole Transcriptome taking questions. Westley the And follow Thanks

over the your any the can economics looking as cash look burn of couple just commercialization? Just expect question and And of quarters kind forward. are what we now next towards on acceleration if expectations in we

John Lubniewski

it weren't variables. Yeah, a of most we on we risk to behind of us. started, And sure the and of I checked lot wasn't kind of I'll of boxes of - most then I'll I start with Shaun. some of When product design think Actually, the the turn we've that that of the is development criteria.

understand were oops are to not RNA-Seq So of state – product, current then us what need positions to a go sequencer But going takes puts Matter much how both forward, staring the that of in And And sample product and type. then regards itself any gross then we're price steady a will is you sample without we which of to the similar few dollars costs. expecting very at at to risk right disease, think, a by fact, have I expecting in to body pretty comfortable increase side, substantial that, determines many Shaun? technical market. on that And going unexpected reads then hundred as of the very more of the tissue well throw a those types, And type work now. be feel that's I by we without that's maybe and where we're know, our underneath we're going there margin. that's profit to then line at, we're and efficiency, think each now kind too of points than R&D that. - is, still margins front in by increase XX% And we maybe that. panels, on cost we're sequencer and that be in XX% we a expecting

Shaun McMeans

along we're CapEx, there to should other that three - over still if add, than, we've spending. million burn. to quarters, show be and And, targeting material meet nothing there target. and last no with No, we're the that managed adhering that per yeah. $X per make our Oh, just that we million uptick burn to Obviously, in quarter OpEx, sure $X cash quarter

Unidentified Analyst

then about we of non-oncology you. can of gears the shifting forward? quarter? I in guess how bit, performance thank that that t trends a And expect can that. you've positive some how much opportunities? highlighted the little appreciate I kind talk you a of in moving And Great, a contribution was

John Lubniewski

Yeah, we've new bit picked response. of business immune up so a quite in

they're an and has us looking samples we've client, progression, manage So specifically, Lupus, they're trying And area pharma some that for how patients, of large is at disease got area to - a COVID to on best understand because focus. an that Lupus, Lupus is fairly not these folks.

And so is just that starting.

different So regards you sample few the they're is that's the we're the fairly thousands, usually, large disease trial samples, clinical oncology, cohorts. cohorts whereas number one response a in might samples. of in but The versus oncology and know, about hundred autoimmune are - thing be

So of And are And some been are encouraged very but about these different types, markets. to also, these cases, really, really learning blood-based that. that sort these are we're in sample type sample we're working go, many extent, we've some big as a with. we

sample So And we're us worked, before. this we're pushing it able into beyond we've than the pleased technology markets to very worked assays to a going oncology. be continues we're give into encouragement that and push that to different

Unidentified Analyst

new customer midsize much focusing curious just just do your base of your store, I in smaller a business. store of recently then on I'm customers. the smaller looking there smaller kind of on obviously, upside terms of into Just, And diversifying - one like type same you guess, scope But last mean, forward? customers, on how Great. see you're that dynamic? the mentioned of thoughts and just kind I you

John Lubniewski

customers. of deliver first not client least to list. we our obviously, quarters, added to sales we current any in I will yeah, XX%. lose our maybe But QX, Yeah, three And at on new pharma through planning delivers what four if they're the plus we're saying, that, mean, names big

those pretty big some some And are some names. of are

the have we great we but some - compounds some us. we're we've trying think want also - made guess our it's just, that say and some great new I'm have investors also I help introductions So is, from gotten after what of to key for folks to go

the year look So and really coming And barring that customer will customer diversification comfortable setting the again, XXXX, continue. for to good we're I shutdown. back I in would I'm new see think then between online, our a the stage customers adds, pretty that very another legacy

Unidentified Analyst

Thank great. much. That's very you

John Lubniewski

you. Thank

Operator

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

Yi Chen

for launch upcoming taking you My Thank of you say situation in the first of dependent the question XXXX panel questions. also on my the the the is Transcriptome would Whole COVID? is,

John Lubniewski

susceptible if to some hear like do Thermo more sequencers go control probe I have a could mean, to this we we really our bit, you, have come to COVID that little provide our good non-COVID We're to timelines, cause have is us our good XX% buy happens feel to one a and But this difficult flexibility, can Yi. got over So that around and extent, We're a vendor or about. Illumina we we've I Actually, is because days. executing. than susceptible in got up. complete, probes, delay. here if we catch which great in days down, weekends service, we

with we're mid our XXXX. launch target date of we're think I So, - comfortable

Yi Chen

sales of your to But COVID situation the the would would be at customers? due situation affected to you the the used be of second of if potential that time, panel XXXX say, is in half the

John Lubniewski

If products to no customers hard the labs. that it's work, yeah, true. again, back stopped if our absolutely to that's our one's Yeah, in coming use

getting are new people seeing, but seeing I in we so environment. really we're And mean, this working to - used

I couple this But and from there example, are a this for think UK of kind shutdown, through so down UK saw for come if week, three temporary of the the I weeks. last. things shut week orders

draconian know, I three first think I don't be have I its And regionalised. they're will this how work. when think So months the originally in were responses that April. going people back about they to figuring people be, we COVID, started get because out - do think And backs, push thinking to are to thing you if March, of

Yi Chen

to they, when they until they a is currently to closed or first eliminated, it. have your the the labs, COVID-XX try gradually next closed, customers to will year, half large plan remain indicated Got of are start there next available who the the will they regarding staying vaccine year? open regardless is they situation reopen try the labs And in completely that of or

John Lubniewski

seeing We're of I'm starting day big sure a question, want back good a to a week. clear. to those both two customers come or make I No,

So they're not full.

return. is you the It's just revenue But now we're what for was they're QX. so starting in not to which know, - they they're, what were So - starting they're is XXXX. it not zero, maybe

to they And office that staff, well things they also year. their have out laboratories. getting stay to and - so communicated expect But us of next upon at yes, into dependent home, they are

a year. So you can't company for pharmaceutical shut down a

it’s their why they finding they that in for just a also think I keep environment and that’s day week, working density, bring so safe with to the employees. And can two lower a ways so are people or

Yi Chen

you. Got it. Thank

Operator

the no the are I'd further back in remarks. closing questions for call to management queue. hand to like There

John Lubniewski

and again, to Sure. tremendous our thank everyone of thank company. joining the shareholder's analysts just for I to continue to encouragement Well, else, dedication and to The like all, have support. first everyone show employees to I'd us thank loyalty their today. HTG this I'd for in then and particular, also who like

calls it of want been in phone have there's that and As lot are our Board who introductions made. I mentioned, Directors some when previously get last, appreciate a I really to thank and of And I during our unprecedented And company. again time history updating we forward next to you to look management in our of this earnings and the counsel, guidance helpful in extremely call. me to

thank you So very much.

Operator

Thank teleconference. conclude Ladies does and you today's your this for gentlemen, participation.

your disconnect this have a at may lines day. wonderful And time. You

HTG Molecular Diagnostics (HTGMQ) 10 Nov 202020 Q3 Earnings call transcript