TLIS - Earnings call transcript Q2 2021 | Talis Biomedical Corporation

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Talis Second Quarter 2021 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Ms. Emily Faucette, SVP, Corporate Communications and Investor Relations. Ma’am, please go ahead.

Emily Faucette

Good afternoon, and thank you for participating in today’s conference call.

Brian Financial Chief our Officer; Officer. have Moody, Officer; Chief we Chief our and me, Coe, Executive our Roger Operating Joining Doug Liu, today, progress and June Earlier XXXX. financial quarter XX, the ended business released Talis for results be A Investors on talisbio.com. page release at the website accessed copy our press of that can of

These during risks would meaning are that forward-looking uncertainties within the started, Before remind cause or that call we I actual get material management differ events this you federal statements securities that could to laws. of to and from like will involve make statements results anticipated. those statements materially

Additional forward-looking and statements, risks issued uncertainties entitled, press the the release Talis section information regarding in today. appears these in

section financial time-sensitive on turn For with with disclaims XX-Q Except a or required more XX, list May the description, Commission. as complete its that, law, to because revise Factors the Executive by or the Securities XX, of call Coe, live With filed or August conference new like accurate would and Brian? This Officer. otherwise. other information, over SEC future contains please events broadcast and any Risk XXXX, obligation or Talis in statements, company’s and as Exchange to filings update of intention of and the forward-looking XXXX. any only the the Chief is call I to information whether Brian projections see Talis’

Brian Coe

and health diagnostic with access to joining Starting as now for At the point-of-care the providers One Talis will One as believe objectives. over Talis that adoption. thank and following respiratory economics and this empowering be can manufacturing improve accurate our will settings. improve walk broadly, sexually to is is for completion emergency Talis, well serve our time, companies a progress of validation for of obtaining submitted patients One scale. infections. decentralized care of clinical and to out key testing global is increasingly our COVID-XX earnings be capabilities include: believe still for we decentralized the a business actionable to These sales two, everyone, use us present, will the also is July call, in earnings point-of-care model and in EUA point-of-care our COVID-XX States; our our of centralized mission number from diagnostic health it afternoon, to Good diseases. patients self-evident especially that fast, centralized We you easy-to-use Emily. from while More testing you, which patient positioned that further that with shifts have our second the on encourage quality small and the transformation Thank infectious away quarter and The results call. significantly laboratory to to outcomes, by potential locations, one on there for with the near on diagnostic successful Talis authorization expanding initiatives On authorization our scalable well infections and three, test. We these Talis United laid organization transmitted obtaining through test market building FDA study. term. test I XX, update commercial strategic health an our one, last we launch; at women’s additional in application preparation testing,

test positive our concurrent of the more for results the submitted with clinical comparator on results, Our the both including and XX% view negative agreements. percent data look forward very and with we exceed authorization. detailed of receipt the FDA concordance data positive, to guidance specimens We is sharing FDA’s

In arrive. addition we monitor these they to variants results, COVID actively as new

of mutations patented impact to of our vitro mutations and analytic clinical specific with analysis may determine silico extent confirm which to Specifically, samples testing detection. and the execute these we continue to performance, conduct loss test in the in to

showed to the in very a package findings of variants this COVID-XX test. this is the Talis One way. the correct to for this of welcome performed it important variant share were the with program, RADx public note Talis of in June, reflected clinical our our study. had insert. pleased health emerging the the to to One in We be identification to in variant data that and from was As Delta assessment the well, detection. We of in At assess RADx participant FDA distinct detection did XX having observe the internal time EUA Subsequently, included we opportunity we type in Talis of opportunity submission One our available further for not demonstrating variant high Delta of specimens. the Of in believe the goal study benefit submission, testing a sensitivity include small impact

our Turning to prepare to efforts for commercialization.

and our are production planned We to thoughtfully scaling a prioritizing of assay meet success. to COVID-XX drive adoption demand and long-term strategy phase

these on to be strong our underway extensive and our in R&D and EUA authorization, difficult for for still later To manufacturing to we to Operating next this be phase to variability have the will validation launch. further predict efforts Furthermore, in growth our testing it roles COVID our submission, directly Chief lines. are Doug makes Qiagen insights FDA’s with Officer. continue we this and demand Talis, project advance ramp speaking we the Doug promoted Bayer our the enthusiastic precise finalize commercial While cannot call our into including establish both about we automation recently of of in readiness. preparations Liu share to need you operational Doug’s areas, manufacturing leadership and programs. in for very instrumental timing of to experience will

at including and commercial has to of to for marketing on physician in team posts led Talis global marketing workplace team Talis by these sales than Kelly. patients adoption organization a to and as decades commercial direct commercial user demand, anticipate our we’ll what market exceptional broader objectives, diagnostics enterprise solution a create Rob experiences of in target and we more launch, drive ensure front, To our we centers, two a sales organization world-class the an needs, providers Commercial to that Rob the a care One health congregate believe Illumina practices. sales by One create a a and meets customers and build execute to awareness to needs an and Officer, Chief strive Talis, with alike. On end, I the call of be and that successfully customer followed experienced care the including leadership launch. industry, Genalyte, continue variety hospitals To experience settings smaller beginning team such to schools and controlled established evaluate With urgent support and

of long-term Finally, to service use experience needs and One anticipate the the building Transitioning create have tests. extremely team and sustained proud commercial customer we are our talent effective exceptional that an am leads R&D commercial we recruited to to an that growth. place of we these Talis loyal to I operations user launch pipeline. drive in for and I’m in roles, confident and our

submission and a currently, to To this by capacity build extended priority COVID manufacturing development momentarily. panel planned remains our aggressive our multiple additional delays the R&D customers and of detail for to leadership in to launching COVID-XX steps programs Doug work company. investment to progress personnel the in our test date scale. will top on on provide and development next for term, objective addressable Our to broaden and menu test been and our year. meet our had lines time of remains trials initiate EUA respiratory file to the We later our and have CT/NG the of markets. expand In flu near needs

of Our Talis the an call our pipeline. broad to the we Doug, in work will in past you continue One confidence on and has as turn system over who our increased I walk now the to to build applicability enthusiasm quarter and and our will development. foundation manufacturing through update the accuracy the advance

Doug? Following on financials that, second details will outlook. quarter and Roger provide our

Doug Liu

this Thank such you, initial role taking at I’m as from Talis be response excited Brian. of One the authorization on regarding time Talis for our for test pivotal we COVID-XX. to FDA await a new

production manufacturing, anticipated to reliability ensuring brief a demand processes focused First, our the are meet for on update quality and of tests. we on the where

lower have automated manufacturing in the scale lines We over invested and cost to capacity cartridge with time.

lines first have the produce earlier final installation been automated and used we stages this completed in cartridges. this year. lines of validation. At to quarter, the thousands time, were During of improved the are we supplied and second have modified set of that These

We are for our and final lines from expect adjustments making to the these have receiving commercial upon cartridges launch EUA.

similar for quality approach in production with progress, take phased pleased second launch sales. implementing sets and ensure and commercial have line automation exceptional with lines provides align are third customers to a we first While our with that order our decided we to of to product to this the

at to that we our launched. produce respect test production instruments as We optimizing final are we materials scale. have One summary, stages and deploy lines production the authorized the meaningful progress will the the COVID of additional and instruments hand once demand needed. on we With manufacturing and meet cartridges and our can for prepare capabilities, to both on have process so in instrument In of Talis made enough

Turning now to R&D.

delays same time, and tests COVID-XX As our extended at COVID COVID-XX Brian manufacturing our in for CT/NG. the beyond mentioned, to due launching and to our flu continues expansion activities. has test the menu scale-up been But develop team

foundation our both to confirmed, pipeline, of is call. version on the both are of Talis over accurate time quarter, Roger. looking design second designs on the to and a confirm system. this the we Once for to When you next proceed updated enter products. During the current with phases will providing In we plan of and are better provide these validation development support in completed, to closing, forward manufacturing to we to quarterly and now be performance verification information One I’ll it building we we finalizing to and began position ramp tests, lines. turn the our original work the

Roger Moody

Thanks, Doug.

is accordance recognize expected, in our the the One from COVID-XX the commercial quarter. recognized contract is million and RADx did In expected revenue $X to test. the As of be with revenue remaining not we in Talis recently launch our milestone amended contract, anticipated with now conjunction second

to including turning in we million research second and SG&A financial to investments, and up advance authorization. lines non-recurring development results. our driven $XX $X inventory, automation quarter as we expense FDA million in expense initial incremental of largely XXXX. with as rose expenses Now This second and step the by Talis our an compared manufacturing which million of both $XX Operating quarter of of in invested consumable One our was in R&D

have SG&A driven invested company expanding primarily of commercial increase was by expenses. employee of our addition team and base. in the our public we the build-out in The Additionally,

Turning to cash.

As and million. of $XXX cash June equivalents were XX, cash XXXX, our

cash to meets adequately addition in that our $XX than million need more In feel near-term for restricted we liquidity.

are very COVID our difficult we submitted variability this scale we mentioned, and given launch, prospects how commercialization. FDA Brian for the encouraged by excited the our the of Looking timing about uncertainty will revenue recognize predict the much as testing product market. ahead, up and manufacturing the of around data the to It’s year, controlled we EUA, to

expect result, commercial anticipated over meaningful see call We As Talis into hope to With progress further turn first back we’re our once we authorization, as market One. the I’ll the color manufacturing a Brian. and and that, have provide experienced on to with in through ramp our ramp to up we outlook revenue our XXXX. with

Brian Coe

Roger. you, Thank

strategy significant proud capacity launch One and COVID-XX commercial We manufacturing our demand. progress FDA of made preparing meet to execute the our authorization Talis to obtaining building in that test, for commercial we towards are

will to we of to capabilities place Success markets markets serve. unique manufacturing Talis turn multibillion-dollar for of ahead, to and will open in and health sexual to beginning that over the Talis point other combination lead confident the confluence we are these with large the five from to use, in of are low the our is With now plan point-of-care well building, meet cost. menu we capabilities, Labs serving our accuracy, have One’s shift Central we it require Looking the test. care, positioned of health in speed, of future ease this the testing we COVID-XX the questions. needs to respiratory in it operator critical team ability up believe extensibility and I women’s the and

Operator

[Operator from first line comes Tycho Peterson Instructions] JPMorgan. the of question Your from

Your is line open.

Unidentified Analyst

for is guys. Tycho. Hi, Casey on This

around submission. just clarify the the So comments EUA can you

little Can a bit because I So July include it here? why about of a no than a variant you talk question expected? end that that the submitted was there Delta Is X-K we’ve lot was submission? to wanted just guess gotten is, just the your for EUA data? at you why later filed submitted was the it little And strategy

Brian Coe

Sure.

So question. thank you the for

in submission us rate variant. it and at small variant because on submission needed not enroll study, work the able enrollment lower, in second study, for Delta The EUA COVID was that date. the included. be for time variant delay. the obtained RADx, – initial reason but the delayed we clinical It the the the it us we And – and we delayed the study. So was specifically, took our Subsequently, not was was actually clarify that to have detect did we quarter, did population we we a the not internal for to were longer available our to to just into Delta Delta variant to in with study the did samples of prevalence work, the very we population primarily submission that during pleased the get and

For What material to should say. not to I the did consider we an that filing, it material X-K lag, X-K. file

Unidentified Analyst

Got you.

we think sort there health sounds any health the about or more maybe CT/NG now market women’s here. that here? Or test too side? how came so. of year-end just about think it’s pushed the may late women’s dynamics should like concern to before As it competitive a out rapid with on XXXX you rollout, out be we Is towards Cepheid being

Brian Coe

a terrific question. That’s

Dickinson, and say I for never to just be like gonorrhea multiple at tests test would and That want Becton that were Cepheid, decentralized go if alone to and centralized example, you be testing companies Danaher Roche, tremendous have or that very for We Hologic, large the in that centralized market. we first, chlamydia do anticipated lab markets lab the with companies, not will unrealistic. look point-of-care are So market by served into market. major the these companies, the gonorrhea, chlamydia

a which in attractive connectivity connectivity, very modem authorized. product the that ease each have of of has use, confluence to instrument, be the of the the and ability One for scale the market, feel we to cloud the those we once – to allows a embedded result, produce in offering create product and our our excited launch quality value However, time program collectively we’re and products will Talis

Unidentified Analyst

me, Got and back you. for And then last hop then queue. in I’ll one the

changed of you’re about rollout for test? a little things here talked sort little approach targeting year, Can XQ next little of as you’re the beginning all bit of targeting ramp customer that talk regarding rollout mix? you the in phased in then a You about a sort can phased with about just with COVID the bit And you. rollout? bit here. you phased at customers Has talk your this Thank who plans the

Brian Coe

you for thank question. the So

that with say start I’ll exceptional all, approach, is phased we’re an the first experience. really, to customer So which focusing on of

customer sure and for and some everything in that want that’s to don’t product be just small if swoop. then of to up, into one the a thing we we expectations. make And to fairly able team, us. ramp think we enterprise business So long we’ll we as critical actually in product. wide expressed of sales that term accounts potentially we have of number loyalty are terms have a an And interested. customers in of in customer the interest range is that the have we a And react then to And best the customers’ want push ton market out arises, fell have exceeds enterprise mix,

a physician We office urgent direct lot nature. sales and markets of of the have care segments, There’s a team. interest that in

at to we’re exact enthusiasm. but a As about just excited position we’re – time, to mix, not guide specifically we’re this the in the

Operator

from comes Bank America. line De question of next Bruin from Derik the of Your

open. is line Your

Derik De Bruin

cash we operating step How expenses half? and significant some afternoon. us Can up. the second next sort you for of about the Obviously, should of think indication Good burn on give couple quarters?

Roger Moody

Sure.

take question, Derik. I’ll the So

– OpEx half of was to the million in about that So in the half was more $XX the non-recurring, non-recurring our in first large the first mentioned. million. somewhere quarter somewhere second $XX through. as portion expenses the prepare get we’re manufacturing to second as quarter, expect $XX would off the of that half. going that It going to third million. In quarter, than the is inventory And and second And purchases a was expenses, of the was we’ve around largely it large I complete into start And we launch. what would we’re incurred tail for non-recurring those we the scale-up

expect up. this but past I as would initial down it more the So we’ve to fourth in significantly come than in scale quarter, the gone third even

We build that the will on do to sheet of we which EUA. balance put not as same rate, continue to will inventory, ahead at opposed our but then expense, be the and

Derik De Bruin

Got it. That’s helpful.

can the to given I demand that a on get lot labs. at mean, mean, just the fact get come confidence the with market, looking I obviously, near about. and on certainly had rest bigger is product conversations looking very out equipment little that menu we’ve you a going so of dramatically. bit Talis still that versus a changing that the time term delayed our the this. it, them, the decision guess, with And market mean some at gives actually COVID there. – on from the I what you expansion by there’s you certainly on landscape of talk I One There’s menu doing we is the what’s is for and be the

time what’s a going it guess, there? the One you confidence get Talis your be market I is that for there to So out by

Brian Coe

a decentralized the perhaps think world. ball, COVID of time I result locations will molecular quality there endemic – time, over will, predict. our that towards itself for manner, be COVID difficult of helpful getting is from to increasingly other And of time, will And tests long some crystal period to it’s if Derik, be country a our unfortunately, you that more very period in a self-evident first and in all, because very for testing. infectious will is belief, centralized just of a from all, first that that it’s move timely So testing diseases. in But from movement also our away

what we as market really first come some a So then And step this We company lot for we time see ourselves the future. to about of this certainly we’re to that well is will a see will the itself segment good view attractive just test, obviously. is we’re out We going have COVID not how very today. be and really discussed, feel in the come interest we’ve a platform we’ll looking the performs, company, that started we us. menu And for – COVID COVID excited the not as forward forward. but of

Derik De Bruin

I first – opportunity dramatically missed But it you out give gives what model Yes. mean, the are your what is us I you to pushed what say you Basically, products everything I and there? the mean you us your deal with comp confidence can delayed. is that from mean on EUA, was. shared where longer-term

Brian Coe

the and the still markets. Cepheid sure will entering alone an will are I’ll our but produce these we we’ll hand, ahead about are the I markets, to to What relative outstanding we’d which than have anticipated And later product we From will almost we’re not will markets, our large markets way our company in we’re time ability historically. – any IPO look to markets perspective, be we’re size the in excited these other I’m global the results they be think terrific. And say we’re the entering, entering, really model. very lines on on And yes, say. is serve company that a that recognize product – are

Operator

from line Massaro BTIG. Instructions] [Operator question the of from Your Mark comes next

Your line open. is

Mark Massaro

question. the taking for Thanks

it July by QX, indicated as you EUA, I was is that look had submit which date would at submitted XX, that of the end XX. the you you So previously the June

just revenue trying essentially expectations Roger’s XXXX. call in because still you sense a revenue. weeks of X-week you’re to delayed, in I’m month, I’m marry me So it’s extent, a a recognize to roughly it, EUA some QX get which, trying seems to essentially, to that’s delay, commentary around and still potatoes. small get And about you’re if minimal could X it sort – that

So to trying just elaborate think the about the what hitting quite that, submission? an really on being I’m that longer extra that is And is, QX? the the understand. there’s speaking variant, minimal a a a submitted really think so Delta I’m So about additional agency delay think maybe you FDA information you’re X-week information But do possibility do conservative that to to to lead should trying this how recognize you that would could P&L? you And question. the revenue in in analyze we

Brian Coe

thank for there. So you the question. few Mark, A things

the authorization can all, And that we when of – can’t timing out are saying that First be occur. FDA and the on we what authorization know when is what that of unpredictable. tell other tell want the but submitted, upfront will we’re to you like we you side. we the saying we don’t looks We comes timing

optimistic package submitted. are very we’ve about the We

did time, I’m – optimism We’re the But and – we just there XX did were We high. – submit submit COVID – I that sorry, data RADx, before our at to that variants and was had XX very can we available variant – we of that not, to to variant, time through At variant variants, it’s have want say was us. FDA did that’s COVID. the I as on to did I the Delta study the is think but much the we as which to say. access

But some study we good. the amount at monitor it. work, work to We So Delta did in own have internal a we done internal variant. some continuing the work anticipate internal of – preliminary looked small our look to

there. confidence perform So we’ll we have that well

I no the submission? the it. the encouraged data that. positive, looked think reason to We by I would would that agency hope very data be have that believe – that we feel do so And and

Mark Massaro

stages maybe of production And ask wanted about in validating a of also lines. Okay. the cartridge set the then to clarification around I final automated – first you’re

product that ready say be to heard do the of commercialize you guys to you receipt upon go, think I EUA. ready think you’ll I

sense you What Let’s October, And ready what it, a guess, have I needs make done sure like? manufacture? do So you’re you looks to go? call how your to – be just number many else could just that for what cartridges November, to December.

Brian Coe

the Thank you question. for

function to I the our So was have Doug excited Doug, respond. company, Operating ask of to that I’ll very and Chief as leading Officer,

Doug Liu

So thanks, Brian.

are, We as earlier, in sets we mentioned three invested have lines. of

first been in we’re steps installed, validation. one The has the and of final

our We of those to that haven’t that producing our completed to yet, meet we this, will them and ready upon able we and but receipt be product meet objective is will belief to have be demand the able lines to EUA. go

ramp-up of lines, they essentially So have are terms in built. further in we beyond production that, invested additional and

receive We but to haven’t them facilities them installed exist. yet, the

so And on capacity basis. which additional moving it, forward we’ll an be monitoring, ongoing be demand we’ll if warrants with

Mark Massaro

Okay.

by also you waiver? to of file curious, did do for the CLIA you Just chance, that the expect Or file EUA? receipt upon

Doug Liu

Do so you to – take that, me sorry. or Brian want

Brian Coe

can you feel that, or I you’d you prefer. to, take can if if like free Doug, Sure.

Doug Liu

Please.

Brian Coe

Okay.

that’s point-of-care what is settings. So in for for. we an are technically, application are it’s point-of-care filed different we EUA – we platform. but we environment, It’s a EUA submitted for slightly the is Which

Mark Massaro

Okay. at future? some for point Is to CLIA waiver it intention in the the file your

Brian Coe

similar of just the waiver, products are officially. and My CLIA is if – as you for do we waiver, an of – art, will. that I’m what But offices, our point platform. which waived type would done were EUA, cetera. physician for like filing And CLIA a users, CLIA the a with XXX(k) et you That’s be a term can officially, is untrained in studies not point-of-care a for understanding, in to settings XXX(k) with environment used

Mark Massaro

we maybe have And question helpful. in submit the you That’s agency If test right, chlamydia the XXXX. expecting for I I your this think of me. then to half last to Okay. a were first

to on line additional the ramping you’re help all it could delay Obviously, I like look I like. be year? a to what lines. this delay? of does try think use looks figure out some Could X-month a us the mean

about we us, and help could think numbers help any just such. especially as So

Brian Coe

I why some let Doug, color on don’t you that? provide

Doug Liu

Sure.

in so doing to an the – just delay around product and and work that on as some finalizing resulted CT/NG, that around So about. COVID terms we also the clinical of the talking manufacturing focused you’re example in in

previously, entering the So are as mentioned phase. soon to development performance feasibility expecting into finalize confirming and we’re and

So when we able the provide better we look details get on quarterly and at be that call. to those next would to lines, results, we’ll time do

Mark Massaro

back I’ll in queue. Thanks, guy. Okay. the hop

Operator

[Operator I Instructions] would are question from this back questions a further Mark the There follow-up like to we time. to have at turn no now Massaro. – conference Mr.

Mark Massaro

curious very light how year, thinking last COVID a combination. flu was At Thanks. I’m the least, about there flu season. you’re

walk flu to what just there preparing you flu last that can through season? a recognizing So or me hearing the flu in you’re be were how few you’re panel, COVID launch to very had samples

Brian Coe

So it’s I think – a great Mark. question,

our if unlikely. belief. about think you away suppressed, the as It And will somebody if in flu great be it’s It but case, be the So flu would a gone – we shows don’t diagnosis back, has disease. some a they’re would believe value symptom, up many use care a that nose COVID be running differential settings. of at at could point office, could flu. be or it a clinician’s great school. have or in have of A they They permanently be which

on when no And so time will, of period be over would flu part, for and the a this become my COVID portion symptomatic speculation in market. see crystal product actually own more is and could my useful of for time, the the this And to until flu flu ball, in COVID population. largely than combination if if actually that COVID you that alone, longer pandemic transition testing testing will market rather one

Mark Massaro

That’s Great. helpful. Thanks so much.

Operator

would like at Coe. time. back questions this turn no to Mr. I Brian the now to are There further conference

Brian Coe

and thank saying by to end look just and I’ll So we for forward speaking you again soon. with interest you time in your Talis,

Operator

concludes and conference. your and for have you Ladies day. this gentlemen, Thank a wonderful today’s participation,

disconnect. all may You

Talis Biomedical (TLIS) 11 Aug 212021 Q2 Earnings call transcript