HTGM - Earnings call transcript Q1 2021 | HTG Molecular Diagnostics, Inc.

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to HTG Molecular Diagnostics, Incorporated First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. is conference this note being recorded. Please now Monique Kosse will turn the host, your to over with conference I LifeSci Advisors. Thank you.

You may begin.

Monique Kosse

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

impacts the the ongoing HTG's Before we let events laws. of and include many call, on risks begin including These materially its regarding meaning which no on XX, materially differ include pandemic beyond the forward-looking as that, like is of call, that place statements cause call or or the the federal call. to projected subject of statements. company's to today's and differ you within to numerous HTG the me John? forward-looking statements. Lubniewski, the results remarks providing those time-to-time remind the and that securities customers undue Executive turn to forward-looking over information I described Officer. any listeners statements obligation circumstances are or are events COVID-XX may control, SEC company to With that would Chief from reliance cause its those Factors company's and uncertainties not uncertainties the May in HTG forward-looking actual results uncertainties, this HTG and XXXX, from filings. John cautions to update to date any risks of on could this undertakes

John Lubniewski

you, Thank Monique.

remains going COVID-XX are and Whilst results our pandemic. the pleasure Cancer macro the hard past to medicine we've a be of through it's away. personalized eventual not for present to HTG's the believe affected results work disappointing, during always, employees. success drivers delivered the strong. As We quarter continue our by the

believe is and a we complex to advanced are that disease customers several the last treatment was us. seen the this have the of challenging returning XXXX, EdgeSeq costs third company for treatment days we is unlock to improving headwinds ever, systems. and QX past full markets in these move of our revenue I for for the time. than to is ability While optimism no created the will fourth XXXX. of we biology related relevant the help key through disease, we secret patients or return. our We either partially of quarters the technology Cancer This its doubt ahead HTG’s HTG. understanding a There's strongly believe still had of technology believe cautious more that number that we very healthcare starting are the increase an with COVID-XX and believe second our faced headwinds, that and care managing work of for and In of transcriptome the the best to quarter in quarters saw

the for XX% and impacts million approximately we COVID-XX first in been that cases, Europe, We've X.X less on in from or again still the million, aggressive orders complete of result are laboratories for that over wave as down in teams. slip total we our another the partial reporting quarter the saw or, turbulence closed period another for We of many the returning shutdowns revenue XX% normal. their of country our with forecast. they're X the part were But XXXX. as was XXX,XXX revenue of in created later shutdowns, in contact million and to operating in In our more had XXXX. saw either Orders customers, a at previous to Product the from in customers shutdown. expected begun period there Europe, for situations X.X million or came quarter no too and same for the that their X.X with the in wave many compared as a commercial close and the expectations and to in was product-related were are lost, same However, just same in but of was But robust company compared services weren't services to in with collaboration many return year. quarter, for especially period XXXX, revenue out levels. workplaces, delayed development they in normal customers our to out quarter

we control. either panel, sixth of indication ability VERI/O As transcriptome suggests quality to unpredictable probe control, quarter of we it accomplishments on second completing our all input final In business. laboratories have we planned samples I'm sample robustness panel. the cannot pandemic, the the ordering metric first planned program our development predict the for studies panel for the transcriptome limited direct XXXX, probe processing. our and these pool to of study reagent be in milestones that some our strategy, of finalizing will throughout for for proud impact this reflecting and panel, Early defining under completing to that the in that design, or challenges the for run the resume more including planned final for probe resulting tests has round has design customers COVID-XX COVID-XX XXXX. to are of locking our lab of our that the customers our open, areas continue send cannot the scheduled formulation and But of The landscape, control team our faced overstated. the development made quarter given our this and our achieve Tucson in our quality being our

Our get of verification of adopter early hands collaborators scientific and our the design our next testing, program. initiate as the achieve into part lock, steps panel are to

and this call, part to feedback of develop data program academic both to date These access current As collaborations. XX customer strategies, customers diversification the for the at company's transcriptome To provide and and the new promotion we collaborations of with and as to launch, customers over generate customer site comprehensive more exciting prior adopter pharma applications engines prospective and this discoverable make designs in XXXX, to our completed this search content to intended from quarter launch. a active the we're commercial launch critical the identify market prepare early commercialization, for customer to as and adding and Web product continue of overhaul to study HTG product, in will cohorts first of well discussions as of and of our engagement. increased

online targeted primary help to htg.transcriptomepanel.com, Web campaigns microsites, traffic to our created HTG new two We and drive also traffic launched help site. drive why.htgmolecular.com new and to to

active we diversification XX new up and The bright programs new where programs at quarter, end and Our net customers of us the end. from bring customer added market saw another XX efforts to a continue up of the the pharma quarter. for be XX pharma programs XX at to spot new year

impact largest in New and programs of grow. won't offset years the from customers company the time partially they of our some and we being start small delaying prior closed, customers or fully expect but will studies new and or

future. isn’t Big this expect more oncology, Pharma customer decentralized We creating and in will markets the reliant and on addition engine diversified revenue new that base a in that so in be balanced more many oncology to far

the satisfaction Finally, further Shaun? Shaun dive now cumulative bringing XXX, our on our call to for the turn over publication's our deeper added for total new with and quarter, a products. of market the a XX I'll our on front, customer to demonstration publications we penetration financials.

Shaun McMeans

million of business impacted X QX customers, continue and XXXX. X.X million existing was period. impact COVID with pharma related services and Thanks, to believe believe revenue We continue clinical was collaborative in services to XXXX X.X the in recover There in U.S. throughout of currently compared We as on revenue new million resumes continued for XXXX, will was revenue QX financial pursue our the especially revenue but impact trial being and closures do development QX product services X.X our not the programs, QX activity begins for to with customers our on compared XXXX revenue John. aspects as Total compared XXXX. our by in in collaborations. QX statements COVID slowly defined X.X no normalize Direct resurgence XXXX clinical continued trials. their million pharma all with additional our development European operations our during with business million XXXX. from customer extensive collaborative product-related continued and anticipate QX to We pharma

resulting and development were X.X and Our Tucson and with recorded QX compared collaborative primarily in the research XXXX facility. development development product approximately to revenue Research related continued and and decreased efforts, decreased transitioning to XXXX, development expense service research to our X services Costs services related XXXX product-related in costs collaborative XXXX, to reflecting consolidation new for our approximately XXXX, for development our expense, primarily QX cost to efforts into QX QX and staff of collaborative compared expenses California-based our programs our million the development decrease reductions for by product-related related Tucson. of million overall compared X.X approximately research X.X again, XXXX unrelated revenue. from QX lower development in million QX in our development in due to million million X.X programs

met year, in milestones for on they’re transcriptome successfully to panel and including Our the the track lock milestone QX development remainder design their their in believe of we goals team meet for a XXXX, QX.

XXXX X $X.XX stock for shares XXXX. continued million additional our QX stock management with compared ended million common the sold for XX, stock. operating successful loss in of QX share and through expenses. XXXX X.X XX for Our reflecting of facility, reflects March reduction per in aftermarket for of operating was loss X.X our XXXX This and reverse our same split Net XXXX, XXXX was period quarter the common $X.XX for and

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

John Lubniewski

Shaun. you, Thank

I of As believe still I call, in the HTG RNA world significant. the The is us. said are of earlier best days front in for

believe patients. commercializing required the many the expression help XX% RNA RNA-seq a gene changing wanting therapy believe at game to impacts the or the there's real for a actionable what cancers, expression approximately either don't laboratories and therapy. for alone to those lack invest transcriptome mutation very level HTG expression. translational for we quality high pandemic. launching quarters, to growing alternative to market plans do research We of to infrastructure but high drugs guide we the presents and product mentioned, previously and do very required decisions billion in a DNA level, be these guide processing samples for was gene no on to customers In In profiling As and COVID-XX coming gene believe at the $X want before

while, universal RNA-seq that require believe It combination demonstrated White Paper, on with doesn't bioinformatics of amounts planned and transcriptome the our diagnostics. current viable translational developing us transcriptome profiling with a robust for Two, for a a and and three, turnaround about accordance program position released mind, recently RNA rigorous We products to sample. with about alternative of build continue diagnostic pipeline over and for expression many when panel our development. a EdgeSeq active sizes continue And time prototype the to and CLIA remainder ranged RNA-seq, to including superiority in we than our of or our in half focus excited fronts, the more in demonstrated LDT up position increasing we strong very FFPE sample and will clinical collaborations EdgeSeq With believe between traditional As panel into questions. emphasis With of moving for HTG, high RNA-seq back continuing We’ve build by repeatability technology the as business and the RNA-seq. launch, was move working about trajectory to rates one, with market profiling and our been a products for between EdgeSeq times. planned development any our and Xx like companion [ph] call get laboratories programs lastly, centralized profiling faster sample small that product where especially help and And that, on HTG’s awareness quality noted to as robust platform transcriptome our transcriptome in our the of panel diversification, working on RNA-seq and RNA-seq Xx is to RNA. uses as a we're the this strong to datasets. now I'd data HTG’s turnaround failure toward agreement companies growth less despite controls. diagnostic data planned our customer market adopter open sophisticated panel. HTG’s field to new and and support. gene XX%. is of to on the collaborations year where XX% build pharma this panel with Operator? pharma product development delivering smaller early translational this All

Operator

this At time, conducting will [Operator Instructions]. question-and-answer you. Thank session. be a we

Our Puneet first with question from SVB is Leerink. Souda

Westley Dupray

Westley this for on see on taking the for transcriptome today. questions great and progress Guys, is great. Thanks Hi, the all Puneet the assays. to

I just the expansion expecting we And of well. I'll there the from the Is all launch? on starting can assay guess And access to assay before encompass customer the So of can as base is my we the there, prior that launching? questions great in one. guess I else be data be I it's standpoint, expecting there just see early to a guess anything kind data

expectations launching do Just from to your access think out actually much customers prior how post commercially? have assay shakes you on what you that commercialization read And customers? where those into the are through early

John Lubniewski

joining one include more V&V that of Paper final have for data White we’re with launch us, the all of questions. going the and We associated our product. Wes, good configuration do to Thanks expect will at

So bigger of essentially X White RNA-seq. superiority White dataset with to Paper and Paper is a Paper that a its configuration. White Paper up White equivalency, X White Paper is in X backs X be going was the even final kind

essentially We're about that the my people new also adding about next reporting. So thing our program there. since XX into is excited adopter early last probably

we as adopter to launch customer as for launched publications. commercial would works as see start one And and kind do with full a expecting head want is going we're we between day what every to the we're so early when launch, commercial to one get data on one these many customers on obviously expect add of who product, momentum We day of actually continue is in as potential people now of have what sets big we we the customers to fully that a peer-reviewed publications. that well

Westley Dupray

I should sales for for of we just the on Great. updated the there? follow How OpEx quick thinking guess a just And assumptions the up commercial or the infrastructure Shaun. be side building things as spend Any internal then out about launch?

Shaun McMeans

increase, right in OpEx infrastructure. probably QX, on I should see at reflect that think the will point we're a a will But our and marketing low up of and you selling for spin. positions increase the the beefing steady a that together open number year now. with of effort commercial We've got sales

Westley Dupray

last then I And Great. just one. guess

going are anything and with comparing itself, looking to of April saw Thank On guess January, I take discussions the early that trials you are, through things first just returning throughout maybe online, How guess, place throughs back the to companies March us quarter of May quarter, half pharma some that in back nature? you dynamics labs walk gone maybe from can here? the bring Any of you. maybe have down? how read after I the shutting to that and

John Lubniewski

Yes, another good point.

handle eighth of the with country it kind the in which other In we shutdowns. I'll in unfortunately seventh, easiest I'll saw Europe. the segments. So one, wave countries, countries, Europe, I was some think of and start

actually maybe two believe January start out again, academic And they what In we just in was basically Many week. like did. bit. of the than saw frankly, quite are that to they they're get pretty believed Europe and quite those back but we I’ll dampened people a forecast days more happened a went we market. projects could from -- customers back, U.S., a day, in So solid country a what was shutdowns the

long to samples they done. get their through so And versa. actually they enough work labs weren't were in weren't If simply run ship in, they vice that in we to expecting were enough their to get to long us, them samples, all facilities or the either going

they last slip the of were that the lot quarter. our saw pharmas we some said had produced a the kind and optimistic overly some -- oncology and trials in to concentrated of the all being month a and then or And into the business lot has before, saw just business would pharma. just in that largest year. next we significantly of that coasts, And impacted. business as cancelled pharma, JAMA next are we statistic of on been of the do. I biggest to delayed we consider in were how XX% we've were a and And oncology So one customers of from stated going lastly, much

we've of paused been basically have trials cancelled. stopped so or those And or impacted been because

been and biotechs. But pushing into unfortunately, immune autoimmune, hard the also and mix shift we've like start biopharma that So time pushing hard other markets, to medium smaller response in small.

we added XX some fairly to added customers still shutdowns. up the customers in of them new are the significant in takes to new quarter, in time pharma overall of quarter So get the even large bringing customers though and new on XX really in we programs that our level

So it's But do business pandemic. a hard with think in diversified I I'd we're say because getting better base, we're markets it, term, dealing near will, if term, do we're of concentration, customer and and developing other for going hit has biopharma. into we're you the been more I think the in be to than this because oncology longer painful oncology, COVID still especially

Westley Dupray

John. Thanks, Great.

Operator

like of management turn back have remarks. gentlemen, and the I'd we end the Ladies call to reached closing the Instructions]. for [Operator question-and-answer to session.

John Lubniewski

on thank you. to for employees our really forward earnings to again members shareholders, we our are Board But for updating and their everyone And Thank call. next to These like look continued joining especially support. I'd us thank times. our today. like you I'd unusual our

Operator

conference. today's concludes This

may lines your participation. your You And for time. thank at disconnect you this

HTG Molecular Diagnostics (HTGMQ) 13 May 212021 Q1 Earnings call transcript