POAI - Earnings call transcript Q2 2018 | Predictive Oncology Inc.

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Operator

Good day, everyone, and welcome to the Precision Therapeutics Q2 2018 Business Update. Today's conference is being recorded. And at this time, I would like to turn the call over to Elizabeth Parker, Investor Relations at KCSA Strategic Communications. Please go ahead.

Elizabeth Parker

Thank you all for participating in today's call to discuss Precision Therapeutics financial results for the second fiscal quarter of 2018.

Dr. are today me Joining Carl Schwartz, Chief Vardzel, Therapeutics; Myers, of Executive Executive Officer of Officer Financial Corporation. Gerry of Precision Precision Officer Bob Helomics Chief Therapeutics; Chief and

caution company's we Forms Corporation. you those XX-K, like cause With it's identifies that the Commission, call Before specific events to and I may management limitation, Exchange I forward-looking future to including encourage statements. that which operations contain actual over call filings to to Securities regarding Dr. factors without would will forward-looking would the Therapeutics said, results that differ I like of described by comments during Carl or turn Precision with results this Schwartz. begin, the materially made conference from the in Carl? and the statements review to and Helomics

Carl Schwartz

Medical growth months will an subject for merger, merger start and completion Precision a which equity as high XX% with On medicine Helomics and experiencing contract CRO under close of The wholly-owned integrated intelligence, signed $X healthcare face welcome operating a current exciting has the second subsidiary services CRO will is to But Since Precision Therapeutics on expected an now to as an vote. rapid design merger testing improves cancer. in update Precision Helomics. our provide to the represents that our model in XXXX have Helomics to of participate XXXX Thank everyone earnings for expected a for to companies very patients, pharma developments sells on XXX% wholly-owned our a I'll be industry. quarter Precision you, cancer development, Helomics industry for Helomics is our fluid is in improve have innovative recent the stake have management is help opportunity rapid closing merger certain therapies and both as patient clinical conditions in the to weeks. current unique earnings and artificial the shareholders These provides Therapeutics. reminder would and few subsidiary our the increase us today's beyond. terms, technologies Precision today's company that call. XXXX first, to revenue definitive effectiveness over Elizabeth reorganized the merger million on waste with system as STREAMWAY a the and The treatment of insights last we from focus of call, equipment new to Oncology operating Helomics to medicine is of the provide are update clinical level happened at industry. access Precision which next to fully Integrating generation changes the today the of call, at activity diagnostic care second the be advanced to In a including revenue treatment during half Helomics half our and in our is and all which ownership increase Later if and medicine. approximately This Skyline Precision. which is the business report revenue completed shareholder will capabilities which for will Therapeutics Helomics second of products Helomics and integrated of of recorded to a division and changing who also that call System support expecting joined the Therapeutics our is future. Precision research, of

is that deliver medicine time is a [ph] personalized right for patient. targeted their biopharma thesis today to discovering the increasingly of characteristic, the As administered the therapy, dose, profiled general companies focus to delivering personalized the traditionally and therapies reality. we the becoming most and the right quickly at effective on based therapy, Whereas were turn at right pharma promise the

here going is strategy. ahead. of meaningful current to to so to specific this increase believe of about management area investment understanding environmental to ways major in in personalize The drive provider in colon, industry establish more access leading investors to stage, Gerry [ph]. expected expansion this have effective the itself decide strong lung, might a to they detecting these cancers a crux ovarian offering leader factors turn Helomics shareholders speak and company, medicine's their the foundation shift Gerry, our clinicians reliable these brain can for a over drive. prospective pleased that Helomics patients with of completed, and hoping With cancers long-term and taking health. cancer initial into background I growth, the be the behave wider interventions depending research in scientists of market. can and medicine dramatic cancer with call this core is solutions all which merger I'm are on now are to provide Helomics. go specific through respective based this leveraging leadership of scientific mutations the as Precision their is dataset particular improve positions provide genetic much treat to breast, that consideration. how genetic differently Precision achieve and in medicine on Helomics the the a treatment at on revenue this the mission Vardzel, how please of efficient and range and the the CEO be platform the be that Helomics also The cancer. again focus is for enables will opportunity to to the he services achieve leveraged, today for With developing deeper on pancreatic and After an at remit remain and to It's on of the and personalized earlier that of I'm are focus their

Gerry Vardzel

earnings offering accelerate our three call, also other, discussed which I interconnected made which to On last Thank you, sales each revenues driving which pillars, while is expected of right in momentum unique to business our own generate is business. each of their in Carl. the

sustainable As that Carl mentioned, offering weeks undergone business model stream. over has supported into still Helomics a that sought by and the highly our past one several unique after transformation more revenue is utilizes

a positively three our digital by artificial going informatics base for but platform to personalize is the start this health a a treatment. their patient patient, insight of acronym tumor which I'm oncologist follows; roadmap results intelligence, which when for services, the this business driver the impact CRO the be generate oncology context and to and As knowledge dChip oncology to precision This detail. to AI, first are to other tumors data, XXXX. by provides launched artificial engine. drug. and to insights dChip. of with unique about tissue to determine we patient business cancer through roadmap revenue, today outcomes. tumor the powered commercially the create the work then to precision living additional guide When a recently respond from Not detail reminder, that We genomic our an expected molecular analyzed our is for help response insights drive intelligence platform only combine which precision profile generating pillars drug to oncology as platform are then we is treatment therapy is talking profile roadmap for and insight, the pillar, main the remainder patient's oncologists provides added is revenues personalized the by to already the cancer how has a does revenue patient's our the the

our value even grows. contained and specimen grow As becomes of asset intangible dChip and expands, the more dChip patient this the effective volumes in data

launch precision fully We With strategy improving oncology depended specific and payers policies insights more focused revenue we this a consistent on will while platform, upon on are unreliable this of offering believe a to and model diagnostic tests integrated benefit business executing our provides of business. precision medicine from the company new approach reimbursement traditional billing which consistency. patients losing commercial

the trial. second Helomics business, for biomarkers providing empowers CRO Helomics precision discovery launch of therapy more the together commercial by industry-wide with Earlier precision we cancer the the CRO disease of development our the With pharma, drug program. biopharma companies it's our CRO develop of the of brings how The during pharma services. investments helps the and becoming which dChip in the CLIA positioned growing today, services pillar Through selection contract program drug business, to of our research discovery diagnostic in role and announced organizations response onto that of discovery next-generation even for now was program tumors To is Moving the development briefly and effectiveness of screening works, their drug search critical. new it facilitates next-generation in Helomics monitoring help lab. explain improving drive therapy. precision therapy, the Helomics the in grows patients of program discovery drug

to drugs, created by new dChip uncover drug tumors Our profile drug platform to that the in the monetize and client biomarkers. our program, a the we've our repurpose linking of the are to revenue of pharma, diagnostic these value and can analyzed to for old and test these biopharma genomic are driver commenced our use of tumor as discover new then payments. The a Helomics profiles significant companies, network using this response project the tests novel insights form we milestone already outreach based To and discover will be believe partners. company

market Oncology real extremely in the sales is combination already the these that the Oncology knowledge is CRO and proven base dChip with tumors there value days, of together our services tremendous space, early we market. Precision to are of and for unique ability are grow test and While Precision the to their efforts confident a

a drug out our on our of Now, company. underestimate Pharma companies the thanks the database profile, drug dChip dChip whether want advantage can works forms we competitive to our them response over tumors a the to to to more and of find pharma hard value to knowledge little potential respond it's about unique pillar; and dChip disease drug. base market in how underpins particular XXX,XXX the tell third the which talk to

ramp dChip the precision of the and already from payments insights specimens into learning up, specimens as drive We rate but month, to accessing our Currently, the value services in that generations our dChip, CRO informs both, revenues for securing commercial Key XX approximately the and companies unlocking a addition continually engine, expect for response pharma and profiles XX to collection which AI and ongoing rate of we to drug many mentioned. are services milestone the is genomics tumor oncology of actionable the of efforts to we different CRO those cancers. business insights dChip specimens expect to additional data insights generate oncology the and precision subscription-based of our data to continue increase.

As CRO oncology insights, the precision Carl on pillars. million expect $X by mentioned we generate to approximately and forecast year the based end our of from earlier, our service, dChip

and an So a we'll our words used now that, of it discovery our and a of about of TumorGenesis. Carl approach initial to drug to you turn But are provide several model. over so the part like on with ovarian you point working the solid securing turning that of model It advance to progress ovarian the working laboratory recent Precision our With team. will I'd our tumor as I'd validating Helomics managed is developments service expect projects pharma robust, can over be say of start tumors which scalable to next an management towards these cancer in forward call. the at covers Helomics. is manner cancer. STREAMWAY in to TumorGenesis System. on the laboratory before weeks, sample look few Helomics over These current back outside he back with CLIA pioneering work To CRO is samples we body subsidiary rapid growing this with the new towards tumor more tumors strategy, first next to mutation, a few Carl, mouse cancer towards on in just to update wholly-owned We updating offering. Therapeutics, for begin our on sales and like powerful tumors earnings on milestones in by we growing it a focus

Carl Schwartz

subsequent Skyline growing the quarter In continue in to to Gerry. sales on sold we focus in quarter-end. the X you, a the Thank Medical effort of System STREAMWAY and units X Division resulting the our further sold second

medical in the through the one. which quarter hospitals, Sales sales came Puerto our in grew XX.X% X were these in relationship. disposable alliance of All in products including centers than two units The to quarter of the United Rico States the VA

weighted of We ramp. second towards sales both expect sales STREAMWAY international as half be the and heavily to the domestic year

We against in pleased progress a strategy to are positioning the [indiscernible] one protect need we [ph] making Europe. with international that see proposition value product In the our on kind Europe. our it's market focus as unmet national we which in a STREAMWAY European of solid were validation to in grant market commercialization competitive a of with fulfills July

to second exhibitors during We July brand Switzerland also to the the our $XXX,XXX October. that, ended commence XXXX medical as X,XXX compared financial from and Interventional no quarter with June XXXX Convention afternoon. Austria to We this and trained June second sold during X for filed in Radiology the in earlier for I'll trained world financial [indiscernible] remain largest this was ended XXXX. in the systems quarter XX, SEC and fiscal Furthermore, for at the The of trade the Portugal Zurich June first a fiscal target quarter ended than now first XXXX. STREAMWAY quarter. Revenue more the the investing the hired XX, Portugal $XXX,XXX with IFAS Convention in results countries, results discuss distributor STREAMWAY quarter the attracting systems efforts the week Frankfurt, with compared fair a of distributor marketing November for in well September, quarter With Healthcare were we XX [ph]. committed and which in for for as the the XX, is

continued generate sold has and Our sales first the STREAMWAY year. of Systems in we campaign now results marketing to half solid and the XX

filters will growth this year. revenues recurring expect was products cleaning of the June awareness of year. System Gross by the has customers the quarter with existing the ended Complimenting continue STREAMWAY $XX,XXX increased XX% for of second $XXX,XXX this to continued remainder XXXX. to expect margin use disposable see Europe growing with in profit cost Further to and gross basis in sales out we a throughout this to our improve disposable a point period [indiscernible] usage produce We the from sales half profit campaign profit from drive a for growth for gross compared to XXXX. the higher XXXX of of revenue, products XX.X% the meaningful nearly decrease campaign revenue of one of XX, of XX to XXXX. same in quarter Gross XX.X% with due higher compared profit margin of

and should administrative the which quarter achieve compensation expect As medical the increased higher increased $X.X expense equipment the us this which the due margin. decrease marketing and operations common our higher were to million. XXXX volume continue for sales own equity also purchasing our expenses quarter registered of by XXXX period. common Helomics for This Total net of loss in $XXX,XXX expenses for stock loss compensation compared we to XXXX. conferences. to to participation million General that enable reps XXXX by compared that ended of in in both, June The XXXX operating available direct the investment The increased June [ph] based reported million, and June investors more million cleaning of sales a and overtime decreased on increased XX, we've will November year with due ended to sales million and year-over-year of which to the expense $XXX,XXX primarily costs, addition grow R&D company's shareholders net component shareholders increase, invested company $XXX,XX a XX, in related vested for was recorded stock solution and which $X.X $X.X the that our XX%. in was by quarter at both with available discount of offset prior we approximately XX, to loss $XXX,XXX ending XXXX with offering $X.X with $X.X

loss method loss million with for with shares which the XXXX. - turn exercised outstanding XXXX. compared securities questions. of the cash over back open for to net equity marketable the proceeds for $X.XX of $X.X quarter June The per offering, and quarter of shares cash, and With December and in per had with million for now share the Operator? the $X.X over XX, this from operator the $X and million X.X line $X.X weighted or cash investment $X.XX XX.X comprehensive to The that, option or million average our outstanding average weighted was includes XX, and as XXXX the second share the million period Our company by allotment I'll of January as XXXX million of the compared net underwriter. increase call public equivalents

Operator

first private [ph], Our Instructions] question [Operator Dana Allen will come investor. from

Unidentified Analyst

On the from were this disappointed so quarter? STREAMWAY issue, see as the first Carl, just that a seasonal slightly timing not the you're down sales sales or you

Carl Schwartz

is this as yes, just the I'm move over disappointed and we're not - size and - like it we're have forward. going, fourth takes third advancing we but a group sales Europe and going course sold, the breadth we of get seasonal our our and all thing increase a much quarter and sell system, as to better so it to time we width,

have I'm So, I'm disappointed, happy done always with more. I'd like them to and

Unidentified Analyst

XXX still possible Do for you units is think XXXX?

Carl Schwartz

bit we an good be last anything. but of year, and which short of over it a that We year a it do be a advancement didn't will little will maybe hell

Unidentified Analyst

had it's because stock big. compensation, investor go to more read down? see primary to and whole But expenses, what the you try, you I in reason in reduction your it the can are expenses was did detail glad or that with it with XX-Q do mentioned I'm something the couldn't cost I

Carl Schwartz

more I if Bob? can would into he that ask in if you Bob can into little go a can you go detail

Bob Myers

down only been expenses area we have we've we that have been and hired doing we operating staff keep and have technicians. The we because we've have of low. increased our expenses we've and our is consolidate because eyed are what sales our managed gone sales increased Our to very cautious high in costs sales,

good So I very that. path in we're that of in terms think controlled

Unidentified Analyst

what for was or bringing the investor thing But what - cost was Carl about about mentioned money that something that in cost? that or was

Bob Myers

are have to the would strategy are partners the [indiscernible]. We Helomics these in AI back market some quarter. are not intelligence to investment discovery that much dChip looking that our like foundation medicine at is partnerships, and and or artificial go partners at we our currently third And this looking chip

Unidentified Analyst

Helomics you that prior with neutral do And in third would Q flow way? cash it still you the in that quarter, positive be feel the talked or

Carl Schwartz

do. we Yes,

Unidentified Analyst

a That will I've impressive but be these been you bit little know, Helomics extremely totally XXX% that - and I myself, we're time through take fairly close to mergers being do do think the that finalized? - deal

Carl Schwartz

we're I closed. I I right the - close. believe don't be will we're snake there now say see Yes, a always in but oil, would

Unidentified Analyst

certain are about things this. unusual you there of XXX% And I'm guys your aware stock are and sure

on the it where off, German out Germany is - it wondering rate was that was borrow your to I was danger one market Exchange? you in highest short that to reasoning stocks short delisting the of the makes your like to behind there; asking in if per them some German being saw expensed take related Your which and XX%

Carl Schwartz

much with that's what really want want not of don't it say. happy - particular we I but to were but that about of to I so was it it, talk that, aspect

Unidentified Analyst

stock - extreme XX% but it only this this but thing borrow at your it. rate NASDAQ rate like or at has short another like again, high the is services on then being interest of XX% on And is very stays

means that percentage money that I'm this. you - year that level. about short of wrong if must So like stock that reported is sure is XX% was this just think shorts with or even think have lost guys you their the the Do

Carl Schwartz

have the I No, going to do, and move are it much. going focus think on to know shorts that business are don't to that do about our we forward. what shorts do just we The

Unidentified Analyst

making this are have you. is at I are a very what impressive think the be? there you're enthusiastic the future you investors so would bright about you moves that the I'm value pick missing At and missing guys point, stock very market about Precision they think one are and if anything future, you thing it very

Carl Schwartz

I an I don't in of in. to to thing any crux that lot grow are well positioned know but we're on certainly the think that be it, one we a area of very [ph] growth

eye going months. we're a say I in it, here the so up look close would on I to few So next keep really to good think coming

Operator

is [Operator Instructions] Steve We'll also investor. he next [ph], to private go a

Unidentified Analyst

merger, Helomics the voted Has on in internally?

Carl Schwartz

You answer want to that Gerry?

Gerry Vardzel

vote we're a we but to reason do closed. as to see and can't any to have still alluded we Carl get anxious move We why don't earlier, forward this

Unidentified Analyst

will when AIPT boarding the shareholders be the to be Timeline-wise, side? going or… soon announced that Is

Carl Schwartz

Bob, that so next quite you to add to - not XX I this the anything days starting sooner. would that? but or have sure if of think not I'm

Bob Myers

Yes.

September. a have a with that to weeks a next end the will filing of the come shareholder meeting, for will out by combined will in of vote annual that hope We vote, couple the date have we be the will have that

Unidentified Analyst

the totally post-merger? count were share be fully What diluted

Bob Myers

to deal. of depends the on answer prepared the question moment, not that We're it final this at negotiations

have get So soon that as that to we you. we'll

Unidentified Analyst

the Have drugs that far a phases not non-approved like you tumors way companies? prospective have service testing thought - guys and the as things and that in are drugs about like to against as they that even still FDA drug testing hit being

Carl Schwartz

to want Gerry, answer that? you

Gerry Vardzel

- that's with what think I we're exactly at. looking that

drug rules regulatory it recent of is of with patients, this Of impact a we under try how to on and a the signing under we course, positioned law the Helomics right the bill, as law we're to believe CLIA new proceed lab, and but will the have makers - regulators.

and area forward. we are we at are looking that moving So

forward. risk discussions right go of able and minimize moving So for the We've pharma decade believe exactly and but be where we significant - the move multiple basically try some initial in the area this where some stakeholders that the past been medicine. Precision company with to doing is want impact had is this this for in others we to the both, we've to terms down exactly to have and a we

we're yet not believe well there positioned. we are we're but going, where we that's So

Operator

Our next private will Savage question come Randy from investor. [ph],

Unidentified Analyst

It was like estimate the is Europe announced sold? back first there that patent you other Europe? any unit not, private issues in holding anything got from in be a And if regulatory or selling that but you would you [ph] that when unit could

Carl Schwartz

from aware Europe. not any I - with XX We're have regulation we're place crump starting starting of and in we to XX think to [ph] a within of standpoint, days units to

Unidentified Analyst

Is to the by kind of cycle U.S.? And - do guess, controlled it in sales more with government more Europe hospitals private they I versus or difficult make their some place deal or healthcare in easier difficult?

Carl Schwartz

- think that know don't builds to appears be Europe now do our going there. makes right we in need that and more it product it a we'll to it obviously, well difficult; I we're fairly

those So countries. don't serious of really anticipate European regulatory any we with at anyone problem any

Operator

our gentlemen, with back I Thank and Carl session. any remarks. like And that to you. Dr. to Schwartz additional conference over would turn will closing or ladies that the conclude for question-and-answer

Carl Schwartz

you Thank operator.

are revenue The global an by growth in a market increasingly compounded where expected two at has XXXX the access and specimen with Flatiron specialists tumor the valuable resource for the of payments, Moreover, witnessing out XXXX. going rate positions half come. expected XX.X% providing creating segment this Helomics of Helomics meaningful as this market of growth, in industry currently According the to becoming the tomorrow. this We a for Helomics in to the the during year billion more role laid investment first public to year the genetic additional business. cancer that many for report is with sales CRO the of Helomics Precision and have Research, which will from Helomics is is years effective services to the Big companies to we market. in value of XXXX at advantage. its the through data at subscription competitive business in turn is we data for revenue for US$X.X to XXXX buying and reach critical has year the with which the are which thereby remainder believe medicine and recap, of for sums has Health. BIS drug drive a importantly, Most both number $XXX improve and by stability company revenues expect the very annual to pharma project-based Data To profiles for added platform the does this CROs of to growth field, grow Foundation we to Medicine options dChip Skyline the Despite launching into to example, revenue and of it's volume are means Helomics billion are for large US$X oncology patients so this there report we also limited of pleased foundation to healthcare investing [ph]. ramp dChip Roche, treatment to spent both billion makers, market. a generate increases clear Moreover, offering

time call With for very therefore I to prospect under unique us about joined and this the the truly are journey. We business Helomics transitional excited including Therapeutics believe for we is a investors. is the of company opportunity it for the the the This umbrella the we Precision turn operator I'll would us back who investors are supporting like today, to on this call began thank and closing. since that, have as all

Operator

conference. thank you all like for now disconnect. that We'd conclude Thank to will you you. joining. may Again today's everyone, And

Predictive Oncology (POAI) 14 Aug 182018 Q2 Earnings call transcript