HTGM - Earnings call transcript Q4 2021 | HTG Molecular Diagnostics, Inc.

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Operator

Welcome to the HTG Molecular Diagnostics, Inc. Fourth Quarter 2021 Earnings Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. [Operator Instructions]. to Advisors. conference like Eriksen to now LifeSci from would turn over the Andrew I ahead. go Please

Andrew Eriksen

Before our we materially opportunities many pandemic obligation Officer. to events under listeners the therapeutics from and forward-looking would most Lubniewski, regarding John forward-looking John? update not XX-K. company's this call, the our Factors I the HTG of no circumstances, call annual from factors. beyond uncertainties providing business technology. remarks momentum filed the the any call. our described and federal or Executive place call, And that, begin of numerous statements. transcriptome date the forward-looking business, uncertainties, the SEC those time-to-time today’s laws With and expected to These COVID and like include results the March are reliance you to capabilities securities to the growth, and of related on importance this HTG’s over undue future undertakes Chief any cautions company heading Form and HTG of those forward-looking risk and is drug company's report recently actual include on statements. of events including revenue HTG information its to as turn subject that XX, XX to panel filings, results recovery, discovery market HTG to materially impacts the company's statements or on differ risks projected-on of statements cause the in could company's statements that ongoing HTG within differ including uncertainties meaning the statements the that let of expected customers regarding cause are me its company’s remind control, risks including which the may to XXXX.

John Lubniewski

of for as financial our year to performance well XXXX. you was XXXX, Thank recovery and to our be exciting the drug important for HTP with our set milestones back resuming here HTP. growth us the introduced with with Throughout release in our milestones to of also of and forward exciting transcriptome in they operations, HTG facilities, studies a believe prior pleased using Through Andrew, unit, most the bring move the review customers for HTG’s planned against in that panel, year you, strategic some or capabilities and of began the we more of exciting expansion saw business our business, pandemic. and their release key of market profiling stage We're to the an our had results history completion today creation new XXXX the as development in is The the they XXXX, employees segment. a welcome to of to their discovery everybody. product we what our future resumed both we our company.

in open, of labor and chain place even impacted the at due risks. nationwide that operating However, restrictions had the pre-COVID global travel to careful we're restrictions, shortages. monitoring XXX% capabilities. we're still customers or customers supply end by year, of shutdowns, of And ongoing and workplace Many not were by

year team and to customer for Our of was much commercial visit facilities. the restricted its actually ability

continue we've throughout challenges, XXXX. As our to months delays to ongoing of experienced and these speed a result unexpected in react sales cycle

business XXXX faced as to XXXX, recovery our we products, interest progresses. especially While challenges resulting of that in in to some XXXX continuing continues we our HTP recently in expect customer of a into continue strong, these slow product our released be profiling

statements services XX% continued product-related approximately which approximately XXX,XXX Total revenue XXXX collaborative in from was business services in our I we X.X development was previously. as XXXX. profiling our direct our didn't in up discussed of XXXX revenue included Total XXXX, of that Breaking reflecting any the programs revenues, X% active to numbers. defined and XXXX. the recovery revenue that have financial down ahead now for million, X.X product Okay, million, revenue of in

revenue instrument transcriptome assay. than HTP product we Our five number our new ended in XX by increased sales had $X.X generated base XX our and and million of one in active in less as selling XXXX. instruments months Overall, customers EdgeSeq install

technology, of a prior publication indication that of have HTG This that more is in than year. in our programs XXXX. experienced a is XX% biopharma, the HTG In technology. front, now word rebound EdgeSeq getting about over nice we the we publications EdgeSeq number advantages active On reference XXX clear increase out the

in As a included our for active program a requirements reminder, programs metric. there's be to three

needs the program associated with trial. be farmer a sponsored to First, clinical

up XXXX. of needs of within to on XX to last of it be extensions that programs to a generated needs programs. for And HTG were XX, the new Second, clinicaltrials.gov. from the months. at it XX More programs revenue XX XX traceable previous program have were end We finished was finally, active impressive XXXX and XX

technology, the energy our programs commercial discontinued the sales reflects pandemic. during spreading drive customers programs these believe So new the team. and of of XXXX our XX% We the in active increase again the by over or and excitement about are in halted our

we've further COVID-XX see recent the to of us to growth of pharma in the XXXX. in ahead suggest segment growth customer that headwinds through this worst signaling We also gone the trends expect there's

that product development, made progress XXXX. has were our we milestones the strategic to Turning thrilled with through our team and

severe sample additional into the infectious immune and our commercial our continue our such use of This technology and such the other noted immunology, to Fred Our complex Irvine. diabetes, substantial Dr. the business, progress and our we and lymph members, nodes technology both our a to two other of customer Cancer completed time. discovery. will to To the development Dr. and development Radich our transcriptomic based to what better our potential base, COVID-XX technology whole scientific include for disease, from Publications of collaboration growth expand and included more we our valuable advisory COVID-XX diversify fourth characterize help use support to Roberts the we level in can from the in In team strategy types. areas very [indiscernible] publication support, short sales our first University California disease teams assay frontiers at of these Center, of our help amount our quarter. and provide as board expanding recent elements drug to guide of the from have Hutchinson biologic Jerry This final also beyond understand morphological areas protocols as discovery reflect in response, changes regards of and disease. our oncology, scientific as focus validating immuno-pathological sequencers in the do the systematically and made product transcriptome added

the Chris We Board depth biopharma of Directors, Kos with formerly also addition veteran of to our Pharmaceuticals. of Kiristy, therapeutic added

While technology. our vision this therapeutic our new forward busy exciting infrastructure being is built, proprietary was this development team moving

how will full drug in clinical we've understanding will to structure will over those in structural preclinical and believe XXX RNA human between to the analysis. on in universe first providing model. expression, this our drug actually used pharmacophores With molecules based structure a development to these activity compounds. the that, call This affect Shaun of pleasure relationships, be success of our drug This initial step association my full of for development machine also view help cell-based profiling capability period, derisking From a we'll derisking financials. chosen in structures, to have chances CFO, technology of the compounds to result a just expression. search We've complete EdgeSeq designed is McMeans our our potential pathway early adjustments can Shaun? gene drug development adjustments our cell-based more target. turn biologic them for unique library test a candidates. our our a billion between us and analyzed to first candidates to using candidate understanding well-informed have few During critical We and our XX.X for make show drug and gene Lysates candidates systems transcriptomic of derived insights candidate. and first run of there, with a transcriptome approach synthesized, chemistry differentiate drug improved of early the for we from learning it's drug those the molecular

Shaun McMeans

Thanks, was John. XXXX XXXX. X.X million Total revenue for million with in compared X.X

revenue was as financial product-related entirely XXXX product defined revenue services Our in comprised revenue and statements. of our direct

and product for remain X.X services X.X year in X million both of product-related million with Our Development expense XXXX. Research XXXX million XXXX. at approximately and prior was in revenue and consistent XXXX cost and

of included costs change a this blend However, year-over-year. the in

which therapeutics technology, unit. relating In the costs $X.X addition expense ongoing and million of Research was primarily product, approximately costs business our profiling XXXX HTP to Development to related of comprised development our new included proprietary of to

performed Our development type our panel milestones team our VERI/O the Sales HTG expansions of quarter, services fourth including of totaled commercial in in our when XXXX. all transcriptome August. sample laboratory completed sequencing expansion. its launch through additional in and XXXX, That's were resulting transcriptome million successfully in processing in in completed and development feature capabilities sample $X.X the panel of kits,

per period overall XXXX, credit. in XXXX for received XXXX, year additional operating XXXX. equity December Net expenses. of million focus line in share XXXX, through of additional for ended XX.X receipt XX.X for reflecting reflects in stock management common to market million loss the $X.X the at million This same a sold loss XXXX XX, operating and were was $X.XX of was credits of or $X.XX of Our facility, retention primarily reduction in the the compared and and shares for employee XXXX then

stock securities sale and for transaction of approximately our million We pre-funded million call of $XX.X back by and shares, closed XXX,XXX short-term will turn of $X.X comments. XX, million. gross stock. now the common December cash, included had increased with approximately common to the I ended March equivalents for for shares million quarter outstanding. shares in XXXX, cash The private On John approximately placement outstanding X.X our warrants we common available the we closing XXXX, X.X proceeds XX, securities. for approximately As of

John Lubniewski

new XXXX Thank challenging account XXXX and for you, in were market seek for modify our us to and our Shaun. to to technology. strategies COVID-XX forced exciting and for years interesting, the opportunities changes HTG.

bring to driven our biotechnology payments for engines to potential all We've term transcriptomic the opening in profiling human drug precision with more medicinal company have the cell-based HTP the the our thinking also two milestone revenue new of these where molecules to in and up continue technology areas early new new drug leveraged door company analysis strategy with to opportunity collaborations information enables royalty opportunity efforts, deliver to in evolve candidates efforts forward in with bring believe be transcriptome allows test This We of positions and upfront units upon holds in up a diagnostic development new becoming profiling collaboration to product and business discovery we exciting This us another valuation new seized and integrated in and drug result experience also our doors RNA a discovery. HTG opens use chemistry of licensable to of tech a of in company companion disease potentially growth, of provide panel systems as but important new medicine HTG profiling and to As that continue. to oncology, great and move is drug discovery complete relevant. cash longer derived our for a drug application forward. profiling process. derisking therapeutics. candidate

the to our As two transcriptome sample workflow team our as our expect products we In with same created to of RNA these last bundle milestones. will whole HTP. prep calendar This to enable year, align assays micro a together. strategic QX, we've sales

the and approach capture provide on to to approach we paper proof QX, white novel R&D drug this candidate discovery of development drug and efforts an moving first drug pursuing will development advanced year. the momentum with XXXX. molecules and we preclinical area new We're continue foundational Through of expect discovery. of our assay white continue opportunities the of discovery. the at advancing plan through We out our assets also of exciting most aspects plan fast of through to on drug business QX, licensing our additional and of finalize our In for novel proof QX expect approach our end our to optimization in to which bring our mXA paper, goal our

milestones opportunities; the pharma priorities to milestones be; our CDx development; and maintain year drug operations going to technology profiling in two, and business are help our discovery create new our Our key our fund to one, unit. and growth and to for three, achieve to to strategic in continuing achieve strategic business product

and technology open opportunity up I few still and that, the an we've the questions. front create the to With strategy extended hardened With Operator? of to for days new more are years, past of believe HTG. the us. challenges best it’s for pleasure call exciting in even our my strongly

Operator

Thank you.

We question begin Kluska the [Operator ahead. question go will session. with Please Instructions] first Cantor now answer Kristen comes from The Fitzgerald.

Rick Krause

Hello, for on thank question. for this Kristen, Rick you our taking is

You've previously the further talked presentations for conferences early about from in medical the including the program. publications publications at adopter potential HTG for and from potential users

conference from you publications could we could expect in please talk presentations and upcoming of So about what terms HTG?

John Lubniewski

question. is this for Rick, Thanks Nice. Hi, John the Lubniewski.

well. went adopter program early very Our

abstracts we had forward in additional at at So peer with we're process articles. right to moving And the expecting of reviewed now ASCO, believe actually I addition we're one AACR. abstracts, in submitting

is you're we're process it very month driving that obviously, several but, As and aware, encouraged. know this we're a you

Rick Krause

All Thank right, you. appreciate that.

Operator

with from Please The next question comes Yi ahead. Wainwright. go HC Chen

Unidentified Analyst

Hey, on have [indiscernible] this questions. Yi. is We three quick just

And through first comments Any this any the And far future? near during talks I so the on anything your XXXX? how on, shaping second on your far much. so companion in know for elaborations. spoke processes diagnostics with with EdgeSeq finally, this Any or The introductory Thank HTG specifically impact you progress up? year planned on the remarks. COVID [indiscernible] of the about or on progress one thoughts one you your so the and

John Lubniewski

Sure.

when years opportunities. thing evolve unfortunately, so really is, funnel, in basically be kind as had a said, to I the is the going predict pushed that or to companion of a collaborations, that cancelled program this pharma few good refilled reset could with our last year, collaborative with the through working that XX news we I've to to grow XX% lot good that programs. can and that going impossible. about scratch. lead So year, of and a start learned biotech news we button of had one We're from additional is eventually, that The kind regarding development on like just is there's one when pipeline but programs expect active to is, we've programs, refilled we is active this into to trying will companion those move that, continue XXXX, pipeline. I of But seen

hit Regarding our and the white are where actually just drug morning discovery with process, lead that the this we I draft read paper.

expect licensable by So with a we're right on our develop track with where the to of assets be of the to family we end ability year.

So paper very how demonstrates day to because literally is to in And technology regards a in probably between this important we paper distinguish have that which white first in proprietary really drug a two. we chemical profiling out should used slight very actually insightful white design. changes it our structure, or is

do I really of see is exciting. that to this, work time, own going the probably then COVID your of similar can we question, lastly, excited to our extremely think to workplaces. is to to that continue we're proof everyone And which me, So, -- kind not it's by because very all in the kind really,

to ramp-up backwards, going we're continued a of slow going delays continued go just anticipate just basically chain to back We expecting back things it's as to things So work don't see comes turn are supply interruptions be to everyone but and on. as activity full-time.

Unidentified Analyst

Excellent. much. Thank so you

John Lubniewski

Yes.

Operator

Please Alex ahead. question next from with The Capital Craig-Hallum comes Nowak Group. go

Alex Nowak

Good Great. everyone. afternoon,

of the giving swings investors of guidance gone years. but here, over a have last lot not You're through couple here

initial for here. ultimately think that's Street are should in thinking year? XXXX? you out? just core essentially in about throughout that think where or then about how So next how ramping sales could growth do that budget growth XXXX plausible for model that think about just we Do doubling year the the you you The thinking the business And shake success, HTP,

John Lubniewski

Good questions there, Alex.

think back are pre-COVID. to growth that that believe we were that for of grabs. really aggressive. Obviously, into a the when I rate return started all doubling once is and I hitting is HTP should XX% we But going OEM segment. So XX%, We opportunity, of work, doubling up timing think be probably people we're large to seeing just to unless we land little commercialization is aggressive, on OEM a we cylinders the

ramp, were Regarding HTG, to a brand-new And we a represented number. customers as fourth about just very of had that a the $X mentioned, they We and good million HTP XX little had X the shy product, XX, million. of of that quarter. third customers buy $X

those guide revenue optimistic like we've QX that of mentioned, to about we're least the now kind we'd transcriptome in protocol because very our chemistry. then XX% RNA, we're And a to but microRNA We've of at both we pushing we with which be stated do very see advantaged So be full a we've going and as full unique off capability our upfront or exit opportunity product. microRNA, guided, that not is offer a HTP. harmonized message to transcriptome sample products as the single previously for of and then a

Alex Nowak

then it. HTP? instruments internal external external to these sort Got for And broad, genome et other the out around cetera? center are users? them of And expect about the some you Just your big papers papers, than own should these our then in what labs when are -- sending white papers we from

John Lubniewski

Yes.

the in of ASCO. I first at abstracts coming think things see you'll couple

leads So program. that the from see is the where EAP we'll

but whole we're there's track process on that's So that, with through, Obviously, a goes that that. driving basically that. we're

Alex Nowak

milestones? end events of Are should drug we it. Are on by the sort should these there? year the announce HTG the expect events sort news see discovery major Got we piece, that then newsworthy what of of And there Okay. there? to

John Lubniewski

an as number of this also changes then able XX,XXX it. surrogate, for willing afterwards will in database the in which demonstrating expression how I call paper with white this all is you potency And use profiling paper transcriptome, about. superior pretty one slight chemical was entire we number dial down modifications associated that through just and be what library, dial be feel very that to the the and/or the the version, has for lot in transcriptomic as looking really value the and opposed week, was CMAP that minor ability will walk to kind and back talking by we're to well, is structure one be with structure toxicity. No, it's genes kind up then a than molecule and to out kind to silico a the But the to we're technical basically, of by which at very chemical a held white measure actually, previously to more one Broad those demonstrate are actually of obviously look showing mapping actually trying to changes, to sensitivity at of which we is --

Alex Nowak

considering then good seem here? have later it capital your and And current for improvements future you on like catalysts a does cash expand number or year. right. But in the on business the HTP of needs therapeutics balance, you All up can the also here coming

the as the maybe reasons speak well? just recent private So placement to for

John Lubniewski

I'll cost then our conscious We're ever, extremely that Yes, start being, Shaun I'll kind to we cash and fill regarding but position. managing in. so maybe always than more are, even as of ask

to milestones call are of comfortably that horizon. to some think market and number that analyst the that versus we the had are QX -- sure readouts read rightly September, very in very, be wanted the same a enough of else to going QX we lot we make happen biotechs we in we out, October As you high. get time in those everyone is that significant of going to And cash kind And does. reports to have

while it out we And money. raise sheet other Shaun? thought also facing trying without shore something we are companies there to to was do so prudent to our up could that X,XXX balance

Shaun McMeans

we're constraint over that our to Yes, to the sheet, with Alex, plenty levers XX remain of we Bank, to reduce don't -- a Valley sure senior prepared Silicon again, to had trying indicates, sure XXX burn. to balance we have we And the wanted measure to have were note next make with where John as a days. we pull we have current And make that cash responsible meet runway. to and we

and were we to that get for probably the enough We inflection prepare points. are will amortizing our us to near-term, in to but continue current trying runway these note

Alex Nowak

note? us default And Can you in just of were covenant that the remind covenant on that you potentially? or there

Shaun McMeans

were We even weren't close. We not.

balance it's minimum and $XX.X balance. So equivalents cash minimum, a cash million

were year, the to at that points. some through point inflection we we So meet later so preparing again, can just, get in these

Alex Nowak

Thank you. Okay.

Shaun McMeans

You bet.

Operator

over I remarks. Lubniewski concludes would turn conference This to back question-and-answer session. closing for like the the to John any

John Lubniewski

and everyone Well, to And self-sacrifice they first for to a as like can-do real continued for our earnings us to to the also again here like It's of tremendous joining our today. all, you And I also you. want at next our updating and us employees highly I'd attitude company. I'd thank grow appreciated. support, continue forward thank shareholders Board their look their for just this again Thank call. to help HTG demonstrate work thank on we to and

Operator

This conference call. concludes today's

have pleasant disconnect day. for your may a Thank participating you You lines. and

HTG Molecular Diagnostics (HTGMQ) 30 Mar 222021 Q4 Earnings call transcript