OPGN - Earnings call transcript Q4 2018

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Operator

Welcome to the OpGen Fourth Quarter 2018 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded, today, February 26, 2019. I would now like to turn the conference over to Ms. Kim Golodetz. ma'am. ahead, go Please

Kim Golodetz

This participating Golodetz in Operator. you, LHA. all, for today's is you, with Kim Thank Thank call.

cause and company's reflect now the offerings; call of company factors contain of call Jones, by and Before to conference other we the of to specific forward-looking date may circumstances accurate differ but date care and including services commercialize information obtain obligation to filings which management I hospitals turn OpGen. in law. company's only like or no undertakes conference review of The revise rate adoption and service may you future regulatory Exchange Evan? except Commission, Chairman with project its or caution from to the effect materially February existing competitive for its demonstration live to New update its call, like call XX-Q, and and is XXXX. regarding clearance and of content required The new the of will statements OpGen's to product by events Evan conference the factors. regulatory include, this after call and business XX, its as contains the or health identifies to, CEO. OpGen's that comments I with requirements any without the success actual would events over on operations of begin, today, made and forms timely this providers; the statements. during cost efforts; economic results its I results and by and of that the York ability forward-looking effectively that those described other statements complete products successfully, and commercialization would of time-sensitive as to are results affect the XX-K to seek the not and limited the encourage this that limitation, Securities successfully Factors the State;

Evan Jones

for we thank today. results, and plans full XXXX. objectives towards our Kim, on afternoon, year us company's joining XXXX you, This update the you, key discuss an progress review business Thank our provide everyone for achieving and fourth quarter financial and will

discussion resistance update the Lighthouse urine later for our submissions products, focus FDA with Our Digital well on our to software. clinical Initiative State ongoing and will New an and a genes Acuitas planned as our Infectious products FDA include on York new trials first Health Acuitas testing antimicrobial and the Disease bacterial our planned FDA from testing direct as isolates submission of and pipeline for

IHMA Research We completed lead of isolates for X,XXX Department continue rapid FDA Only. work New antimicrobial marketed and clinical test, four products Hopkins the Hospitals, resistance clinical Medical Acuitas Acuitas separate Cleveland are University Johns of Center, having for tested Gene detection These the currently our more and submit than of for being to sites. clinical trial York submissions AMR Panel Sites diagnostic genes University software. three molecular Incorporated. and Lighthouse We the bacterial the to at Wadsworth Health; State School Center; included Medicine; participating isolates Use

FDA first to end the the this We submission by quarter. first to the submit of expect XXX(k)

UTI. provide This prediction and antibiotic and detection and software to the development Panel We for are Acuitas complicated will Gene urine the AMR accompanying also from for patients for indication continuing support at identification and pathogen from testing software. for Acuitas risk direct direct Lighthouse resistance

prevent New York our with We've The groundbreaking Department spread program was clinical York complete the of New detect, begun one Health trials the New demonstration treat in platform Disease of over two a XXXX. on York State and infectious research novo the submit Digital Merck. of to owned ILUM is urine year Health the announced work the a and to and to of the state-of-the-art project There Initiative Infectious summer de Solutions, partners with develop wholly State. half a second and expect XXX(k) initiatives in subsidiary XXXX. State September We disease in Health applications

As initial we've State software capital million our in building New Governor New Health previously, told $X.X in state. OpGen install beginning funding initial as anticipated and approximately in area Cuomo to has first a City York Acuitas The testing and New York billion the health Public be Laboratory cluster the Wadsworth in to is Lighthouse science three the of the systems. to Metro upgrade in life you funding York's XXXX committed $X.X we Center approximately with Acuitas quarter systems region

of represents with working that prestigious be in to to proud be in the Tim? Acuitas realtime, are and health York The Financial now over one Chief New these Tim will meaningful the family opportunity Initiative York goal financial Use and State who will beds. hospitals call in New include The outlook Research Dec, is our I just identify XX,XXX our and Officer, approximately product. for to encouraging. continues the our outcomes. Only Participation State We products to resulting XX for genotype results. bacteria rapidly turn carbapenem-resistant commercial improved systems discuss

Timothy Dec

the $XXX,XXX the This Operating our of fourth our of of of share. loss $X.XX verification quarter The the loss million XXXX for year to $X.X XX fourth partially to $XX.X the fourth operating CDC Evan. revenue for or for I'll net was per quarter with from attributable decrease quarter attributable from XXXX. The in for larger million; million and associated million, common XX, for for million $X.X and of the of reported some revenue million million, higher of approximately were of from a Total was December XXXX with with with XX loss the our XXXX. operating G&A The were and sales for December million million quarter net The expenses cost were million $X.X the financial to full highlights narrowed compared XX% $X.X common results. items: XXXX. decrease was trials clinical the compared for was stockholders per offset $X.X from ended fourth following million of products, quarter clinical The increase XXXX $XX.X XXXX of XXXX development year. Revenue a loss expenses company quarter fourth million you, of a QuickFISH compared the was to expenses due in XXXX by or prior $X.X the revenue $X.X afternoon, expenses were contract. fourth approximately with million to million company's sales fourth million per the research compared collaboration was per due XXXX expenses ended of XXXX in quarter $X.XX share, year. $X $X.X was XX, Thank $X.X the for XX% slightly stockholders $X months up million; share. $X.X $XX.X for Total net or and on XXXX. primarily for down and marketing down fourth million, quarter climb touch $X.X share. $X.XX $XX.X prior of or the months the $X.XX Net in XXXX's

this of cash XXXX fourth equivalents million. million quarter trial due balance increase $X.X XXXX. verification Turning of and the to of clinical We to fourth quarter had burn $X.X as work. sheet. cash in Again, was in our XX, and for Cash December our clinical cash was the burn

towards We have great FDA the during progress made of submissions XXX(k) our pursuit XXXX.

that FDA XXXX. part receipt focus we growth As to of from anticipate following latter regulatory line from diagnostic of R&D our our Acuitas our software, submissions, Acuitas in primary AMR we Gene products see XXXX clearance, tests will move we in commercialization in of Panel top our initial the revenue and

with of system State recognizing demonstration delivery acceptance the installations first the $X we schedule, year customized New of Lighthouse million our in terms during York of In Acuitas our Acuitas and software. milestone half project and first of the the anticipate conjunction

will until publicly have XXXX. of be will our to our we runway of of our cash FDA commercialization latter plans, coming sheet to QX looking in QX. and We submission portion weeks closer to move schedules we Due that the expected balance the the as our strengthen stated provide current end

acceptable throughout burn commitment which strategic turn to realized and have and and back call critical for past arrangements at evaluating the development our Evan. few With equity XXXX. years, value levels, debt to those various milestones We cash including maintaining in we objectives I'll internal XXXX. of agreements partnerships, are done realize importance We be will and shareholder collaboration achieving significant ensure in the that, alternatives, while the

Evan Jones

for ongoing next I commercial the of you, FDA part Acuitas the details In Thank trials. more our will regarding share Tim. opportunities and their products the clinical call,

Gene Panel spring last FDA on clinical for trials the AMR since focus the has Our Acuitas been test.

bacterial the support time believe approximately in molecular X,XXX it tested preparing stages whole II testing We bacterial review of sites the isolates. more are the of at XX than genome average submission further and for our samples expand Class is and can testing date are the statutory X,XXX including samples been for diagnostic X,XXX applications. times have and clinical threshold to Results sequencing tested, We The performance More for third-party of established FDA. objectives XXX(k) isolates. XXX than final days. approximately by XXX(k) review days, of

process, submissions. the X review the anticipate we follow-on During completing

period. commercial we the our Although customer progress foundational interactions there test FDA RUO this indication. FDA the anticipate are during testing The bacterial from urine isolate continued rigorous direct guidelines regarding is submission to process, during with review

Gene anticipate software. work includes XXX(k) performing Lighthouse York nearing Acuitas confirmatory AMR testing submission New are pressing we and hard CRE de in Panel for bacterial isolate With the complete State. we urine indication testing the the opportunity novo Acuitas completion, the The isolate to

recent result States. than states clinical purposes. from There candidates CREs for tested for million are While the The high opportunity million isolates to could annually. AMR that for companies in isolate mandated more are United Panel. as be testing number total bacterial annually figures precise specimens pharmaceutical We these have estimates samples of for the XX,XXX CREs. microbiology there expands XX with from Gene cases that Most in estimate these approximately the Acuitas U.S., X as in confirmatory the testing are of include testing there no

in software An project software data first and sequencing first $X.X project. completion of increasing is complicated resistance coli New the recent years most important the Merck from annually meaningful The ILUM been State the the Initiative patients at exchanges beta-lactamase infections. for And an testing antibiotic resistance Wadsworth at products is pathogen. XX% the Lighthouse isolates There quarter of feeds common begin for Department data demonstration for for revenue Laboratories. the Digital extended dramatically anticipated Health Antibiotic resistant part has care need E. these risk Approximately to through fluoroquinolone of resistance coli State genome health resistance our to tract the pathogen Acuitas data E. and milestones are called customization increasing in and with take the our type and over of Health ESBL York of expanded is rapid has XX% of real-time York whole in of UTI new spectrum to antibiotics. services million New years. patients from initial from urinary and for hospital recent Acuitas a or

and result, million urinary once United are resistance these ideally is Gene Lighthouse address tract Acuitas that Acuitas to software, more Gene with to the positioned the candidates In treatment Panel the testing more workhorses are antibiotics States cleared, are of or a there urgent alone, FDA these X.X patients for the potential for the patients with AMR XX% third-generation clinical in range. XX now As are The Panel. patient cephalosporin AMR than infections and needs. Acuitas million

health work at to to installed top is at products for an conferences. RUO via and establish peer papers strategy awareness key and with near-term our care reviewed base our Our institutions build presentations

that our clinical and was for potential real-world using in study to testing could the Medical at informatics. urine Intermountain and bio fourth Lighthouse decision-making and Acuitas a antibiotic urine evaluate The Center, test specimens Acuitas the XXX completed molecular and we be were Beth Geisinger Healthcare. rapid tested setting software. diagnostic improvements During quarter, remnant possible verification initiated Deaconess study Israel

we control pleased infection days provide Three together the results of solutions performance support preliminary decision our using very the current are information stewardship infections low- We in resistance hours. We received manuscript, We and milestone that with of the distribution antimicrobial and decision-making clinical the the quarter. commercial results. near pleased this the results compares methods. results under a in with currently, technology with subcontractor the for contracts in award final investigators the In on smartphone-based the with two the fourth using goal platform develop hospital Disease to under study. sites to the and summarizing December, terms identify antibiotic ILUM later with it they're during for Centers in confirmed of with tract This for software publication agreement Control the preparing takes three culture rights the and urinary are CDC, the and The Prevention, support term. are completed countries. or middle-income negotiating we a this for the software region Under to are year. launch ILUM, our payment new the

We our have first region received new rapid the approval in during we products our first the in to quarter. market identification pathogen customers expect Colombia,

help we our operating broadly America. activities In We also lead in established region. South more plan XXXX, to the in Colombia market in an to company

provides entered QIAGEN multi-year that is acid the test and United The ability Acuitas the kits EZX rapid into We the with AMR in to for quarter, to for the resistance. commercialize automated During nucleic collaboration a instrumentation in fourth purification Gene products. EZX antimicrobial utilized workflow agreement advance a Panel diagnostics OpGen supply we QIAGEN States. announced the

already this agreement. are under revenue We recognizing

a the commercialization in this submission partners in During understand company. with for multiplex high as to Acuitas front help accelerate the to our first and software. XXXX, inflection see DNA for will a of established expanding we test opportunities of test, FDA an the submission point of our and XXX(k) bar for anticipate we We our XXXX. capitalize agreements work channel Customers on us application critical

business. Only first FDA expand Acuitas clearance clearance, program launch, following Research business in FDA Use the for as sales to phase and further XXXX clinical OpGen we objectives FDA the in demonstration and to informatics the following commercial systems Panel development for growth and full install Health the Acuitas the the the work launch revenue support New Digital York commercial XXX(k) achieve software rapid help of family launch peer-reviewed of in of full commercial to support Panel for expect AMR the activities FDA publish clearance, and and Infectious project to Acuitas verification product establishing during Gene products advance commercialize phase Gene transitions products results validation to Lighthouse to molecular continue following submissions Initiative, America. and South continue forward, to Acuitas accelerate File Acuitas to the programs to commercialization our Disease software support State milestones AMR product testing journals, and of Looking

we All We and of beyond. we've afternoon. your at us the opportunity this see of and for OpGen are thank work tremendous XXXX proud your support, accomplished during appreciate you XXXX and time for

are Operator? for questions. ready We now

Operator

Instructions]. [Operator

question Yi from the first Wainwright. Your with of Chen comes line H.C.

Yi Chen

Lighthouse two urine FDA half clarification, actually the question Acuitas year, is, second first the Gene novo submission to correct? for is samples and for de just Acuitas of submissions the that for in the My Panel for XXX(k) software this AMR be are going separate

Evan Jones

for thanks Yi. and correct, That's joining,

Yi Chen

the anyway existing Research the commercial will products you the Gene us for for launch indicative in panel support support personnel what kind whether Panel the is trajectory give look for of Gene what the the potential can And bacterial Use team gene commercial isolates, Panel for and sales regarding company's to the specific question the the also, launch? next that full is, to Is initial of commercial the commercial needed launch? trajectory the of expand -- like? the color Only launch And commercial sales could activities AMR AMR sales now possibly sales of my Acuitas commercial

Evan Jones

of step question. answer Well, time one We'll a all to at points. take key the big and that try was a it

build accounts the strategy during we in is at installed placed to And the Let that CRO me XXXX, close current places to key by of dozen like with systems top our Laboratories health up base. finished part year of begin off Albany. our Wadsworth the saying a and systems and

in to excellent been And place the for So some expand approval. have sites. and post trial represents team to work. sales build with our that an and FDA of for existing these ultimately, five from IVD of were spearheaded this the revenue helping marketing RUO base professionals us installed clinical product, But

the recognize to scaled participant organization do leadership company, think at expand in being the terms of activities, to commercial sales commercial work. into is go will start of both I that the those need industry but representatives. we'll also the year, half you'll as a And the we that really in to growth, we back

But are the see guess, to ramp RUO dramatic revenues ramp. until York We RUO the to that the honored future we pharma it's acute of some back product base. the potential And with critical increases meaningful questions suite just will frankly, we're course, think, didn't that the -- accounts sales there, structure had not continue RUO in full we we grow deploy that Digital qualify our your as this can trajectory, and Initiative. point, milestone. We the of a from hospital in sales sales that look State, and the in FDA indicative tremendous of, approvals, expecting I to the in is Health beginning XXXX. XXXX. And clearance our I are to to the that the have we say we experience are looking other targeting be a have RUO really of trial working the we New are care are cost would at really clinical during

and clearance. submission and forward done enthusiastic the and And the so to for looking that's FDA, the ultimately, thrilled why we're getting both getting

Operator

comes Dawson of Wasserman with Bob line Your from the James next Securities. question

Robert Wasserman

to first gun, the additional but systems that metro color, wondering little how New to will we're an also, State the on software into look whether diagnostic York I the and the complete? is and revenue and attached a getting or come in additional Just the could roll to project if you demonstration the area after is Do component that they'll out later also get after revenue the jumping maybe hospitals? there year, systems more testing out I'm contract. states

Evan Jones

and for Bob. at calling, Tim a Let join thanks me can take then crack in. And that

the first So demonstration year a project. includes

expand in of installed portals networks them, alongside As York in March, the York this a in year, then Lighthouse project installations large that the are, across mentioned, hope begins installed three And later XXX where names able February late and to the Acuitas be over could there noted outcomes we we New the software Acuitas the this When to able we the State to the we hospitals, we're the New these go, to demonstrating be them about are mid-summer. state's in percentage announce And systems, the and go-live not could all as to and the hospitals, doing Merck if that's the but the all reasonable you then we're a goal hospitals being keep is going, City health of large to spring, phase you so ongoing. in being and hospitals. systems look state. think going across but there'll successful,

of go other New England partners first the expand in that So across states starting to coming finish it's some the we other be this, a envision top then that whether the country the states that success with of demonstrated to we've would to multi-year the public course, their health deployment departments, with quickly, be picture, or able but just years. in working is to in New then hopefully, York bigger we'll this on after and

there in through could fundamentally it organizations are groundbreaking also being York the but are that the built partners, up very State. for New public capabilities health initiative attractive transformational because this So commercial be for

Robert Wasserman

later be rolling State? York what great. how the year, we the Okay, will into be of year? so know the going? for are later in there additional the it out deployment milestone plans is And it rest And will Or more next New

Evan Jones

particularly be ecosystem, want York you be either one team which or in because complete specific of as our Merck. million our best accomplish player don't I first tied we to and will Well, the revenue with in revenue, as half the those, mentioned, We're just financial all Tim we we done. there'll milestone for our milestones, in do and will New the of that a this it's about announcements to as partners -- recognize to appraise and lot $X the results. State we through work But we'll milestones. We really report to communicate speak

Operator

of Your comes line next question Weinstein Nathan the with from Capital. Aegis

Nathan Weinstein

actually algorithms go thinking I learning have seen the go and once when the of software to -- the they're get they they that. field, through FDA about immutable smarter Are Or in submission? a I'm So your Lighthouse are out data quick where ones couple more they underpinning over the first that and those time? is can you can one, as

Evan Jones

from one. take I'll that of of all machine the first fixed The learning the data verification were algorithms this were million some knowledge-based that again, testing study points all are in that and -- So that of algorithms analysis. tested being derived are X

be So published in and those The will training are press from hardcoded. panel the shortly. data is

be that example would Lighthouse, good that So in State that New will from a to methods methods we're from all that going piece the And sit and for those base be algorithms agency data isolates be sequenced these the the And those our coming over Lighthouse State, York those can tested the building progress, whole anticipate to algorithms, Albany XX working is we knowledge proprietary and that's in hospitals evolve to to New hospitals. network we And of the a sit and genome is will where time. really in then are in York have with we that that of ecosystems that and their able you'll information those include do we're those. alongside on updating individual nice and that. other as see data hospitals

Nathan Weinstein

more I And clear. moment. then the really just one at have That's

condition a a hospitals and your so Maybe could about in and cost potential Just perhaps you way down generator way speak program. technology, the to to could improve on view but look help the hospitals hospital-acquired the of just maybe thinking it the hospital sort hospitals CMS' line as you systems much customers would will center, at revenue guys? the not and reduction them

Evan Jones

It's question. Sure. a great

we As more on now I a will reimbursement to we commercial of become calls. these get transition question think this phase, also

cost. But we the use So on two incentive therapy. the say an they let that me it have reimbursement that start stay under side outcomes the inpatient types in that so to ones see days reduce of if are hospital environment, and and the product patients, on of that stay, to or of hospital improve cost. DRGs. the our length days case, absorbs In can These are all metrics reduce covered

So they will out costs. for of pay pocket the test that,

can The revenue. them you you more money and, beds turn other if quickly, saves area which increase

The because other room, some is they can many is patients haven't the there emergency those you potential been that admitted income of when generation in yet. look billed be area where

can that work income the firm so our for have approval, FDA gain for that there, But hospital test And there product. so that coding we'll up And there's are codes be to DRG, today. they take app. on to revenue-generating be OpGen in will that reimbursement that their generated not after used their specific will to

Operator

Chen a question. I H.C. has Wainwright apologize. Yi from

Yi Chen

quick a have follow-up. I

Lighthouse full commercialization approval potential realized of would Gene So not and the commercial until the of would bacterial you AMR the Panel isolates say the for software? be

Evan Jones

the of gentlemen, of relevant. interest give some started can on the certainly Yi, That's can you and these for the run you the here the metrics I phone that numbers I different for folks but opportunities true, to we are think just and we've

you're million That opportunity which If be beyond north say, of capitalize at on an you testing annual able state's an the initiatives if isolate-based the opportunity. would terms look be surveillance to State, could U.S. New on $XX market, basis. of York in and whole

like you testing, tests, our done to would isolate we that, indications, want at be fully from things directly opportunity you of indication, of for able but penetration. the them initial be where initial and to blood, X the can If capitalize on some add I million whole out additional look instance, of mentioned get deeper expand that to that those

test, utility expand we So labeling. XX,XXX for just that we're to optimistic expands the those I tests X can time, pretty to, our the CREs, work confirmation to actually get in of isolate it about said, we'll but over further the million but as even

Yi Chen

announced and you Have gross of Gene the Okay. margin it? associated with pricing potential the Panel

Evan Jones

$XXX to... target We've said our wanted for like $XXX range. the some to ASPs to we Tim, would time And in that be

Timothy Dec

of the in be XX% range in Yes, the gross XX% margin, range. that terms should to

Evan Jones

And the splitting informatics just Acuitas the pricing, to that envision Panel. clarify, Gene we and between

Operator

Please that any And time is with presentation your we or all remarks. closing have the today. proceed

Evan Jones

thank we'll forward like you we call this joining Thank I'd you you the our all to for for updating And progress of look to business. afternoon. to as time. continue your

Timothy Dec

Thank you.

Operator

your call you concludes that today. for ask gentlemen, We and and Ladies your you thank for your participation conference that please disconnect line.

OpGen (OPGN) 26 Feb 192018 Q4 Earnings call transcript