QTNT - Earnings call transcript Q4 2019

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Operator

Greetings. Welcome to the Quotient Limited Fourth Quarter and Fiscal Year 2019 Financial Results Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn Financial Lindop, now Officer. will conference Chris over Chief I you. Thank

begin. You may now

Chris Lindop

Thank morning, and Rob. call March you, Good XXXX. for earnings to XX, our conference Quotient’s fourth quarter fiscal ended everyone year and welcome

at Executive conference Joining Today’s of available call live an will conference Walt, a and today broadcast Quotient. audio being be Officer webcast me www.quotientbd.com. is replay Franz today through is Chief call of later the

as to statements, such During projections in this events, including be development differ expected projected forward-looking Quotient statements may forward-looking from materially future Because operating call, guidance future and will making with actual timeline. and results statements. the those results and commercialization deal

provided date call With only forward-looking the cause in would during Chief Quotient’s forward-looking valid concerning statements. to this that could that, are assumes statements statements results U.S. information be guidance Franz Officer, the Executive factors publicly actual to these filings to release. Exchange morning’s the turn Quotient and found include as Securities in obligation like well differ and Commission as projections update materially and call with to today’s over I forward-looking Additional of The can this Walt. as from no in those

Franz Walt

year made MosaiQ clear the chapter and Quotient’s first year pleased ago achieving report morning this achieving after been as other and next to year expectations I our and a CE of CE realistic trial, the evolution. system, year first we successfully Thank the this our the in culminated you result submission shared would vision which which for objectives. very for the the conclusion We much, upon of Chris creativity on the to I been MosaiQ in the possible IH to build. goals followed in in past microarray, of am Mark one include a microarray our a achievement when Mark EU the and when microarray. that manufacturing have of marking set field have the of last the that Highlights good device, proud by focus was which our and CE terrific to receipt has successful first for taken the stepped company in by everyone. A the sustained of first IH of we certification wanted ISO committing CEO, recent

double-digit a often balance one colleagues strongest in these our manufacturing to raise As to it the to of grow have we company’s setting providing new my this, company. of while much to still to future. And million all revenues. us rate rest moment of reagent But up the strong new capital, level tell facility history, successful all of liquid year $XXX for sheet becomes to that possible well as promise us continuing the move record our the a of about to the I at state-of-the-art realize our the made business caution that achievements on with quite because do laurels,

the has the testing of replacement strategy on been always MosaiQ platforms business based Our systematic available competitive menu.

second U.S. the fiscal approval June. to this file additional of CE important for us to commence microarray, menu which us field completed Serological So, trial Disease about quarter. good with trial now menu here microarray The is news Mark to am in accelerate EU this planned to all field to there for more field’s I forward happy is for We trials have encouraged results report too. to initial our and now move planned plans of specifically, the it’s expansion. that our recently in report successful menu Screening a permitting European the

in paves XX of antigens ability microarray, verification single to which field to consumable unique validation automated addition, move continue assay on field IH MosaiQ’s low make for event. use way a optimize extended completion with one progress also diagnostics this the a work highly In the quarter fiscal diagnostic our testing in probes trials This testing the our include single relevant expanded multiple clinical we and the of the additional phase cost for and is in to of second IH panel. powerfully U.S. in year. demonstrated will

microarray-based later forward promised, remain will derived This data to plan derived research with molecular innovative bring Lastly, performance disease an the the commercialization of track diagnostics we will state-of-the-art to data to We to testing menu important our of approach independently and pipeline our be will our be independent believe the strength an stated in using screening approach our early as testing. our this of for performance unique molecular organization by menu. molecular part designed on demonstrate play summer. demonstrating that

might return fourth the and product In trends in we XX% in as started largely cost execution. manufacturing this perhaps is manufacturing the sales remarkable More XXXX, supply our shed cost the during a duplicate see quarter, profitability we work business, planning facility. FDA growth in like Notified former full Now, business over whole we that the to this of the flawless Quotient European to audits and market, processes the Alba any our year without recently reagent at January interruption completed in project facility with respect while say pull positive X after approved of Campus to Body supporting important this our reagent offerings to able product to effort, Completing revenues. the off by reagents conventional new. to successful following grew U.S. required core The the this a FDA off the and we it One Allan-Robb performance. research transition constructed type. our it bank planning and pull product, liquid were and acknowledge the of our of both collaboration manufacturing to by also is for that to in the antigen to clockwork additional switch blood kind with extended has

team to well So, a reagent done. my for the very special job thanks

I that, the like hand for back with to So to update. Chris would financial

Chris Lindop

loss third-party facility. the per with to full in margins the from did quarter, of prior million interest million increase impacted of were continued the increase increased fourth an to $XXX,XXX fiscal up duplicate which other Thanks, costs $X.X year year, expense XX% margin million year. The to quarter in were growth last to were contractual Research quarter. we recorded to $XX.X Gross million quarter in $XX.X were contribute compared reflecting attributable an net top gross Franz. increased of of compared other performance margin In customer additional scaling the operating XX% operating the better current revenue fourth $X.X which of launches on sales associated costs sales of increases from million increase million of with milestones growth $XXX,XXX margin year. an recently of customers quarter quarter expenses product $XX.X not expense, million during comparisons the solid sales and due $XXX,XXX quarter. and base. last last million, product the In XXXX. product loss year-over-year million which pricing, XX.X% in $X.X million support of include margins project The compensation of in $XX,XXX consisted earned the quarter, last and fourth as increased XX.X% $XXX,XXX our $X.X to existing improved compared of represents related to arise $XXX,XXX. increase and and improvement gain continuing year. cost the In of new loss million distributor quarter, comparison product million sales the XX% our compared and million development increased group. $X.X amortization continues fourth fiscal incremental other year-over-year year’s MosaiQ the The associated and expenses $X.XX Overall, quarter, grew $X.X from to revenues year’s the in cost exchange be at year’s in adversely exchange with product marketing non-cash of operating the $X.X reflects and with prior an expense XX.X% million, the share line OEM General margin ordinary expense both ARC this or In our prior an was increased new over increase recurring includes and by in expense the of OEM represented versus strong $X.X XX% fourth execution year, strong sales during a year-over-year driven $X.X new new Interest States sales related launched the administrative consulting depreciation the direct quarter gross of customers, margin compared from In of quarter. we XX% the XX% million, to increase OEM prior compared development the of by in distributor and ordinary expenses and gross Included foreign in million to the achievement response the expenses expansion current quarter, has all Direct fourth and $X.X the sequential was quarter, product year’s prior fourth the prior million fourth year-over-year. sales. been sales. was of and stock incremental was the quarter, gross United X.X% increase $X.X $XX.X expenses The the $X.X or to year. in the and year. products, Net of from and million quarter-over-quarter. sales. the from up Direct fourth $X.X year. interest anticipate $X.X million, products. $XX.X $X.XX year. fourth facility incentive expense last of In incremental prior the and reflect administrative the compensation share $XXX,XXX million year’s of and benefited foreign impact million, sales mainly remaining gross communications of year with during in headwind which revenues were year-over-year other per product was are to bringing and with new in the attributable commercial impact general to fourth Sales shed pricing The margin borrowing. We online increased paid $X.X $XXX,XXX $XX.X for

XX.X% by also For revenues $XXX,XXX of revenue developed revenues an $XX.X two certain the by and over also year million, sale reagent for of development milestones. product prior of year. of Total by for of for revenues represented other earned the the approval were prior purposes. principal achievement the MosaiQ includes of fiscal the the product fiscal FDA the other on In increase year, milestones sale products the evaluation earned instruments liquid $XXX,XXX OEM year, our product development certain customer for

the transfer, gross and year, margin the which reagent old to a non-cash extent, your XX.X% year. gross sales new in was incremental were being bring forward. completed fiscal business’ the in manufacturing new performance attention in duplicate manufacturing margin facility, cash during new the incurred the the XX.X% facilities going for to fourth being incurred draw previous was indicative margin performance were and with quarter operated compared the impacted as For while on of to both ARC the and I’ll Gross the the baseline costs January. online by product margins lesser by expenses

$X increase million $X.X incremental year. market related costs personnel, non-cash Increased sales basis during increased the expenses $XX.X and to communications, to primarily project a operating This enhanced stock operating primarily and to corporate million costs year, expense key independent incurred investments marketing million. and on the research of approximately in related expenses included For compensation.

or million $XX.X $X.X XXXX $XX million other non-cash expense to million a expenses the of operating million $XX fiscal non-cash year, net to in other and last consisted of million exchange Overall, ordinary $XX.X the of $X.XX foreign of Net net December amendment XXXX per XXXX. net million our expense with which Net compared in XXXX on loss of fiscal with quarter. loss fourth including was fourth $XX.X $XX.X operating costs operating terms million million included year. expense for related our million compared expense senior the with used million loss loss quarter the and in the $X.XX interest expenses million fiscal fiscal of $XXX.X $XX share totaled In year $XX of the other activities XXXX. of non-cash fiscal in $X notes. year’s of compared $XX.X million was in of prior Our compares cash

with expenditures compared construction $X.X totaled near During the capital conventional in same $X.X during million the of the quarter the company’s Scotland. winding fiscal new largely of fourth XXXX in connection expenditures year, the the of period, reflecting facility with million prior Edinburgh, reagent down

capital $X.X in expenditures the year, compared million For totaled XXXX. full million with $XX.X fiscal

Moving our totaled XX% million. end and cash $X.X million May and long initial account. cash receivable equivalents the XX, CE for Mark $XX.X of cash microarray. the the an receipt due issued reserve $X.X and available investments terms Under totaled the we senior announcement totaled March XX, credit as following we on $XX the XXXX, restricted offsetting the million long-term the sheet, facility, million of short that inventory an were Under term held additional a XX, to facility year debt XXXX. XXXX, our of million at On in amended, notes of million at IH and $XX.X of cash fiscal balance term in $XXX March secured

for sales to guidance, year. year million. revenue also we to product of million range approximately earned of $X to fees expected in during are the from forecasting consisting product Other fiscal is full development totaling $XX be $XX the Moving revenue XXXX, million additional

compensation forecast let we of an including Franz. the $XX million million me and the stock back $XX in $XX range and $X of expense $XX.X XXXX, fiscal turn million expenditures capital depreciation, amortization charges non-cash loss during to call that, million approximately for of For million the year. With to between operating and

Franz Walt

Thank you, Chris.

is here in diagnostics year For we microarray our unique a competitors the which expanding Quotient. and a to demonstrate fiscal exciting be us will power shaping of is able year while the capability. be all It up to customers at menu XXXX capabilities to of very of our for showcasing testing

make have my is have the to This technology. colleague news of often work. accident. to most we multiplex a But was I to just not good work diagnostic As targets that difficult take in probably with immunohematology, it one been is able the an commented make we what

it follow, for is patented of it that as doing just we a a do tremendous optimization I multiple of approach. stock leads. experience this repeat We in all stock groundbreaking us many effort and operating testing over tool have single Equally doing, changing which have I of have in to diagnostic who adds Quotient assays pathway that individual a game made to ability single up individual tried over over in diagnostics. but us crack from be event this a changing for optimize And investors of to is I call domain years. in know, and which and that seven has have and many a customers performance value insights years many difficult the engineers to parallel diagnostics supported is failed the able a truly is with learning what The clinical am also nut proud important years that place will game much to by that unique an to say of optimization, spent the to the wider been technology believe field, transfusion create the market we

regulators So by in system use approved now, hypercare by with opportunity they for potential as customers, to our manufacturing approved we engage and have controlled fully MosaiQ first use our device customers with launch. the a and European microarray

by and within laboratories. to test that our required standard MosaiQ test to MosaiQ operating opening procedures those us market to broadly. provide tuning regard now the previously, insights discipline hypercare valuable As commercializing phase to implementing to will begin in This required any MosaiQ develop I to self early the fine customers their we permitting maybe have technology with have commented before system for with the field

over As plans reported before, to include countries. European centers you our X spread testing I X have

versions in menu, As regulatory to trials we larger testing expand only usability our the on to pathways. the test focused field research sites, the field deliver accelerate ongoing testing, we on early to and and which plan establish additional expanded with menus receive datasets will for parallel learning of

by quarter, the initial during the IH we for trial Also our CE expanded for quarter, microarray menu earlier Mark fiscal our communicated. originally trial U.S. fiscal submit field planned second second initiate will in this into will than first the we taking approval U.S. the and During is SDS microarray. first which field this quarter, followed

our made to second the operator would anticipate hand previously fiscal plans MosaiQ So submissions and during expect to stated both the and half and XXXX. over microarray by remain calendar the of We back having microarray for committed we that, please. to U.S. in expanded like revenues XXXX, our IH both commercialization I initial SDS Europe first With the the

Operator

Instructions] [Operator Thank Thank you. you.

first of your Please with proceed Our question Jefferies. Couillard with the question. line from comes Brandon

Brandon Couillard

Good Thanks. morning.

Chris Lindop

Good morning, Brandon.

Franz Walt

Brandon. morning, Good

Brandon Couillard

Franz, how each How expect many trial the what samples you field U.S. in the many to will us be whether to European MosaiQ, each and for clinical of performance you running microarray and field could differ terms you those remind trial for relative field sites are requirements enroll? trial? trial for microarray the

Franz Walt

Yes.

all all have be customer of have but So, and because finalize will trials contractual at we X it here, around information a I field is mercy always there, this to don’t availability. little still the bit arrangements these

summer was for X, us, during not for So possible the months. it IH

On earlier. with SDS, already said they initial SDS also actually with accommodated one the us hand are other we we quarter the now, ready when actually

details the Screening we the expanded midst do I confident XXXX, very But can of but IH give details here as the year on any for all as calendar can’t the I don’t are well third you So trials we in field U.S. Disease finalizing with in panel me? these that of both for have are the details. – quarter we Serological

Brandon Couillard

$XX looking sales product guidance. there growth any revenues, product MosaiQ of And a to implies $XX question, X% number revenues million about the are as Chris, coming two-part of three fiscal your off outlook, And guidance, ‘XX growth. then double-digit straight X% included commercial far as despite in one, million Okay. of only sales to it then at years

Just there then of conservatism remind And terms would just level much curious outlook? comps? that there if the is tougher is pricing in you a us how or of in of actually

Chris Lindop

Okay.

mean an to very – that ourselves achievable trying to very, outlook So set the for yes, are set I compared strong comps. is outlook some company an we obviously

or on past can as we think any the I we would we bit be X that, hope so have be We little year hand in the make again, once work because I again will be that just And we for to our will to said about once have in trend essentially we beaten X approvals caution X there have and in have. the before, what rather first IH It’s a and numbers And of as calendar every in as that’s going don’t outlook. the the would MosaiQ revenues quarter ultimately it have generator microarray we before be. good it very make ‘XX. those revenue commitments hard in the

in pricing pricing, mid the of revenues, in two-thirds sort about of is our the terms of single-digits. In

Brandon Couillard

one Okay, just what evaluation placements in could follow-up, bit for? quarter were very MosaiQ in the you purposes more mentioned your little I two elaborate the think you more sale then Chris, for And good. instruments of on remarks prepared fourth those

Chris Lindop

one OEM hospital partners prior fourth they of quarter. Yes, market MosaiQ that and our year with was the a who is were partner commercialization for our in –

Brandon Couillard

good. you. Thank it. Very got Okay,

Operator

with And Please next BTIG. with Thank you. the Ji Sung proceed is question your line from Instructions] question. Nam [Operator the

Sung Ji Nam

conventional years. my given drivers market curious rate on are side, of growing faster strong are curious thanks curious know market, growth taking share than you making. still is it’s some reagent for currently? for the kind Was the just – if that just curious the you you dynamics to, at just the touched correct a I was and of the are the over taking you the growth. kind are and there all on and as and assumptions of last the underlying what Hi, the few am progress on for congratulations questions about Is quarter the

Franz Walt

– Yes, I go think ahead. just okay, Chris,

Chris Lindop

will talk Franz, No, you to go I numbers. ahead. the no,

can the business, to You talk yes.

Franz Walt

course the had the XX% than we low Yes, we the range. sustainable rate reagents be markets. are the quarter, faster we and mentioned we it or I last think in actually grow growth think high additional should single-digit And by stimulated we is as of before And got the double-digit growing for approved.

an additional it’s I assays. spoke overall last X, XX around additional it’s that, we since mentioned but So

mainly tech. growth the new comes from from So innovation

Chris Lindop

key find what new And we our then business I would other products customers. and into U.S. the our in products that new offering They doing up and open see and say And our follow of phenomenon the we and new very is businesses. in of products especially extending partners one new that the customers course that’s as – is product of have their the one OEM we been our the well other developing well. are

Sung Ji Nam

helpful. very customer am if is or has site, launch, the but hypercare That’s sties... any Great. I too sure not from it’s feedback And early early, your too it

Franz Walt

early. too It’s

Sung Ji Nam

Okay.

Franz Walt

It’s too early.

participate X we can support customer for provide hypercare around have capacity for marking I They the XX/X and We Mark and our and only, all then only, patient that we gone everything no the already product this time. optimize have what the in over process period calculate offering. we also X-month in to expanded we SDS feedback and the so in for CE future as customer from will and without thoroughly are means however re-servicing expanded we the like service without have research customers. also wait up as to get CE say the we that hypercare for on research and think future, slate continuously we X being What in with and are customers is the can IH panels possible I phase. about will in what panels do And addition feedback they we be to so a said take before just the as

have such for So we demand more we much the actually have participate capacity different to from and sites to serve.

they to are how and open so. if spread give add resources we different But more permit hope much our the all I and to time being, sites blocked you see in do X the how is everything feedback and in and Europe it over on X if some is call. maintenance over needed countries already are for So, – next I grows can

Sung Ji Nam

just we if talked out there, about are partnership then curious updates And and with potentially terms discussions from me, are of lastly beyond partners discussion Fantastic. potential there transfusion our had any further you diagnostics, in for development? pursuing -

Franz Walt

we this information. Yes, of from provided got point and at is inquiries some industry But the time, course there in we some ongoing. no concrete discussion

focused I I piece until easier And really on collaborate. end transfusion of of calls, on on we ideally we it and are to one interests previous than the reinventing the doing back our the have and in content potentially wheel microarray. a put happen. We would the could this the own. take come much diagnostic see think That’s as we mentioned them first of year, and all are and financial how make we the will But what this everything

is to content something first, I it [indiscernible] in take we field diagnostics reckon a shown trial, And the years, being likely we phase. time long. with for microarray, the have years if it on works think So two transfusion put X.X would provided, SDS the like it

absolutely signal get, will phase important that of works very doing a also we it a disease to as well. is am I and molecular for the in this confirmation this works it market, So some [indiscernible] sure, screening this

need meaningful potential with for we points a also the discussion these are two So partners. proof

just literally to couple ago that follow is in So the MDS months, if just about next of your and the weeks answers SDS the question? few came

Sung Ji Nam

Yes. much. Thank you so

Operator

this At Franz closing I’ll the back for Walt call to you. Thank remarks. time, turn

Franz Walt

Thank very Yes. you much.

and by the us expect this on today made conference progress of fiscal quarter we time you to forward really So thank XXXX updating have on joining call you everybody look for first we to our call. the

thank very and much So you everybody. goodbye,

Operator

today’s conference. concludes This

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

Quotient (QTNTQ) 28 May 192019 Q4 Earnings call transcript