QTNT - Earnings call transcript Q1 2020

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Operator

Greetings. Welcome to the Quotient Limited First Quarter Fiscal Year 2020 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. Please note that 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 good fiscal Melissa. conference June you, And XXXX. call Quotient’s welcome XX, for earnings to our first qua ended morning, year everyone and

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, During projections this including be forward-looking Quotient operating call, guidance future will making results. and

As future differ such statements. actual materially events, from forward-looking deal the statements with results those may projected in

Additional Commission release. no guidance the information August that forward-looking as well actual update today’s to U.S. of Quotient’s cause in provided be differ forward-looking can and the results only in as are found assumes morning’s in date, to these call concerning factors statements. The including statements Quotient projections filings obligation those valid Exchange materially and and from statements this with during as could forward-looking publicly X, Securities XXXX, this

call that, Officer, to to like turn over I’d Walt. the Quotient's Franz Chief With Executive

Franz Walt

blood EU Thank achievements this upon trial had The microarray MosaiQ. build hypercare foundation in launch will since important milestones first future much, year. then later the are the we for April that for success in the the since approval year have of June you completing [ph] microarray our the of A we of accumulated the EU last Chris. very which successfully back in in series of commercial the of year What a grouping initial in XXXX. multiplex field of and achievements

approved and relevant itself, now art is up of by with marking agencies it's of of manufacturing and device both running our state about all menu. MosaiQ CE the the the the the With regulatory facility and

as to us MosaiQ of evaluate platform forward. customers to microarray to in the them approval continues the IH with permit our program in to laboratories the menu working gives CE their The hands technologies, expansion the of move side-by-side opportunity our even the initial technology place the existing

product Remember, platform cost our our the modern lowest competitive to customers a with available efficient, strategy is about tests ownership, a consolidation perform This same the that today more testing total are every comprehensively donation. delivering platforms delivering by today characterized of and onto blood in on even required involve cases on all for of the some will multiple done the manually. MosaiQ

expect the we to what X So respect where in months available in targeting the marketplace. we? the menu are to And we next with are be XX months to

following after microarray in blood of have next and, this While submitted available calendar the we early we can or microarray its field initial guarantees, grouping prologue year. Serological EU may Europe expect successful Disease mark CE for in for trial. is approval If the the there be approval past of CE by IH no companion course, the June, Screening to

a already XXX(k) disease us will the menu MosaiQ both to disease serological microarray testing first this making expectation submission the initial The and plans trial, have with serological This submission initial the cover lead to we which involves Our menu. expansion US of device begun. later year. our the

to and are the customers create of evaluation appeal US laboratories. opportunity platform their it the place already devices of with to MosaiQ be try will potential to this approved, for that the anxious in When aware very

our plans as development. usability products they will testing expansion placements initial as of for conduct be unfold menu continue our research Its in and also important will purposes, to

disease infectious and the IH menu significant the data of Syphilis today. the additional clinically add SDS tests IH detection menu initial microarray important CMV blood which year expanded SDS for our will Other are antigens point proof microarray the this transfusion which V&V or available for grouping are diagnostics, so for planned be microarray. on an later ultimate seven to initial expanded to [indiscernible] working This require an well with our tests, nine additional and and include

disposable our and today's economic the work the screening our follow research our microarray that the We in novel to with value design through hands while results plan existing again, will MosaiQ in Once of disease first microarray of the state-of-the-art low molecular efficiencies performance this platform. of on multiplexing in automate tests, significant and proposition on will place workflow institute to and focus on This field. Europe. advantages test required the unique a will technology delivering cost also be here to

very and the major XX has this of our customers. the of Turning reagent and I'm business, me innovation to for the our cycle note of that approval underpinned with and clearance regulatory submissions strong long-term of recent for in years, most automation use approvals the continued growth. of in prospects This business one growth gives confidence antisera pleased to continued recent liquid recent FDA OEM

that and the so to hard regulatory worked thanks the aspect team on milestone. important this of clinical My

in innovation license Our for will US approval delivered invaluable already and experience approvals creating be have process as menu expansion MosaiQ clinical access. that global XX we biological market and dossiers successful continue the

please. hand So with that, to Chris the Lindop, let me our call Chris, over CFO.

Chris Lindop

Franz. Thanks,

our we quarter. record of product for earnings full slightly While the Reported but a indicated. report X.X% first to the quarter I'm million, were that guidance that same to of from to still happy and last million, we year's expect revenue sales were figures year $X.X $X.X achieve $X.X original financial million behind sales range increase the an previously first

million and XX% customers $X.X grew XX% of to and of and XX% represented versus quarter in year-over-year last and attributable $X.X X.X% were is million represented product direct year. OEM sales product from while sales, XX% increased standing the sales distributor sales of product sales in direct to sales. OEM increase year-over-year and Product orders distribution sales. The X.X% both of

costs costs the online our quarter, profit gross margin related In million, non-cash XXX headwind the basis product therefore XX.X% quarter year. XXXX were the which with XX.X% campus. compared $X.X to of and Gross compared These depreciation on additional to the equivalent bringing to sales Allan-Robb by on last last X% $X.X was contributed to $XXX,XXX were compared product incremental gross costs new sales, non-cash impacted margin points and were year. in ended other higher down XXth in quarter million June

expense the $X.X a and reduced a expenses general first million. with $XX.X year. year $XX.X million a $XX.X In to $XXX,XXX decrease expenses increase with and quarter, from operating $XX increase in in $XXX,XXX loss million in was Operating last million, to marketing compared the million to million last expense $X.X R&D administrative sales to $XXX,XXX and $XXX,XXX

marketing expenses attributable the of the move in to MosaiQ we launch. greater sales costs expenses as of in of of and increase administrative MosaiQ anticipation majority expansion Group towards Commercial commercialization general personnel-related reflects increase The The the in and the MosaiQ.

with the compensation the was Stock other prior first the year. million million million compared same year. million $X.X expense in quarter expense quarter In quarter, compared was first $X.X in in last the $X.X net $X.X with

expense foreign expense $X arising from of consisted and million in a assets interest of liabilities, of Net $X.X the denominated foreign and monetary currencies. million other revaluation exchange gain

senior in notes and interest quarterly included notes, which October. due expense million, loan the loan issuance amortization currently paid April expense. costs our and deferred due senior under Quarterly in of is Estimated biannually is also interest future included debt royalties on which $X are

the XX the as result Overall, loss net was ordinary increased a the an last of share. borrowing prior or over incremental year months. expense $XX.X our $X.XX quarter Interest million per during for

was million Moving June million. million account $XX.X to $XXX.X XXth, while long-term cash and on with term other debt balance long-term offsetting reserve $X.X short the sheet, cash investments were an of

this of XXth, proceeds cash which addition the CE On for of a inventory totaled yielded first accounts million $X.X receipt IH offering of account. $XXX,XXX $X.X quarter. issued expenses expenditures and in $XX.X million year, the XXth we senior $X.X secured required totaled totaled initial This debt microarray. and $XX.X receivable Capital additional $XX notes, million totaled long-term mark after to net the of our reserve offsetting million. million May On June of an following issuance the funding our million

Now, moving to guidance.

Estimated product and such of year. amortization for still compensation. million million between expenditures expected stock full previously $XX million are be guidance to of confirming estimated $XX depreciation, for of to $XX.X fiscal million. $XX loss losses the approximately expenses are $X $XX revenues operating million Capital operating to and million We and million provided as an non-cash ranges include $XX

and Other include the which during of revenue estimates under of second quarter regulatory development additional submissions which products development. for of is revenue million approval balance, achievement been $X already completion product regulatory $XXX,XXX of earned a contingent upon certain and has

this receipt milestone As of uncertainties. of and portion such, risks involves payments the the

in of $X.X the sales $X.X our excuse second fiscal million quarter, with For quarter $X.X compared million - the a fiscal full in of for to million range XXXX. we expect second product me,

to me Franz. call turn the let Now, back

Franz Walt

Thanks, Chris.

X US to Over our the the SDS, the months includes first US. the for the followed of the field months, the trials initial by microarray, milestones expanded each expected submission completion and expanded next IH both SDS in EU regulatory and of X our

mark to includes Europe. expansion to strategy, IH customers also the purpose This our CE efforts but in share in month, commenced ability using plan which menu resolved. Our soon research as risk microarray, initial countries technical last commercialization sites as our results hypercare X of is the the includes place X with for devices

allow ease the customers not will and use able will the before all of benefits MosaiQ record, In experience permit large about datasets become this be that platform. of test of will to full results their to committing also that studies initially case, offer to test become and in but the This potential the commercialization with to confident us will attend familiar and customers to process. advance generate performance the of MosaiQ

approach curve products to accelerate adoption approved are available. expect this once the We

market and second depends European of have timing calendar expanded market both, by microarray the of half availability the to SDS review the While in the hope ultimate XXXX. IH year regulatory we the in process, on the

It one $XXX Disease a cover donation million addressable market microarrays Serological blood to million XX grouping which represents opportunity, X the market. require will each two represents and of approximately an order modalities, testing Screening. first in Europe

saving to significant on the a current estimate as cost multiple of studies European of technology. potential using XX% Obviously, to a XX% be this Based total testing. their that significant very data, customers near opportunity we and cost potential for term cost implement as customer opportunity much savings

effectiveness commissioned disease of data, the of this study. to the the study, innovative forward addition, this work results to which this timing publication generated our The is This approach derived a of we clinical the independent summer. will molecular by cycle setting. In conducting later screening, in impacted of within may performance be planned organization the year, later a and bring expect commence demonstrating independently publication

much performance as opportunity larger clinical transfusion diagnostic underpinning donor the ultimate to that expect menu, for will we and again, the the results Mosaic test in the as confidence market. as diagnostics Once broader provide well

nothing summary, to this in that of time changed So except I last year. at de-risked as MosaiQ have the anticipated we significantly aspects would I technical the we spoke has really platform, when you

hands are expansion on competitive systematic, We our progress customer interactions platform competitive tangible initiatives, key to and menu of commencing the which is replacement. our make continuing strategy to on good

I be fast, train but a many will As of target it. very the this stop when will it our of of change station, to transformation initial past, like have flow hard a in the said necessarily market. you The leaving decisive it be begins, be to won't

a testing ultimately advantage management. Screening consumable which blood MosaiQ disease initial simplifying compelling very unified, and workflows from offers and In testing the for screening, Disease platform include molecular market, Serological our and remain grouping target single,

routine Also automation, allowing in addition, matching as donor of blood which of leader. in clear and current the characterize the elimination technicians. the walk of the And laboratory qualified and majority to and multiple productivity the of throughput grouping parallel all from shortage from and and using responsive single resulting of and donor improved donor for blood, savings comprehensively ability tests for manual better a away vast to blood patients is cost testing to multiplexing patient sample future a

tests using event Importantly, these central is also a testing a initially necessary. laboratory many in and the in big diagnosis advantages of be multiple will whenever automated single panel testing advantage which a modalities in transfusion required diagnostics available will of be

to like I'd that, of partners and our success tremendous Quotient. contribution towards With the for thank all employees continued their of

the I Q&A will operator now begin to ask session. the

Operator

Thank your proceed first comes you. the Our Please question. line Instructions] Couillard Jefferies. Brandon from question [Operator with with of

Brandon Couillard

morning. good Thanks, Hey.

Chris Lindop

Brandon. morning, Good

Brandon Couillard

over interest Franz, pacing added it initially the initially. one hypercare program, at you months? level few your to you those X and sounds of the placements to service the to planned of of Can - next sites extra site of sort X you've kind instrument speak the the other like sort the counts in of ability

Franz Walt

already. customer, it this XX/X says a to customer hypercare we have, think, service given means capacity I do hypercare, have support the you're new reachable, where to in this you we for not that term think It's but the a we mean, about I X And Yeah, the almost attention care the have and normal technology. resources the to testing about customers.

an But were we gone we sites for then hypercare giving customer first hypercare and We one was backwards, is forwards it of within take for make top X days. long There and and said, risk. and answer a take all, away, support after customers. immediate and few the no to the it it came when okay, that they didn't of we who additional X we take have instead an a the happen,

on safe. more. just should it this add time see we it is now less stretched, bit maybe properly. little And a able we to over of do should X to can be if with on planned, we support And needed, we wanted We - but play is the that be one maybe

days said, built-in And also and running assurance were days. and up got all already the to the platforms, first me in normally is with of positive with X results. They we - first everything completed with it is, impressed customer that alternative X comments. setting resonated one the have the and I running everything The the and quality only around the up what well and takes all, mean, trained. up they confidence testing to with all testing get radio concept

and compliments technology. the professionalism team mean, couldn't the and hold all really the their our for but out And real more, and see horses of got customer eager I any place I go we team. think finally was this finally, a

our a did great think well. I So job as team

running. we hypercare getting So In months, nine far, sites the have X the so the and next others good, six and months ready. are will up

product us in, around latest may IH test the be actually but microarray, - the wanted to would and to become which the Also, Brandon, and to confident customer give to access are elevate have add the the great if not addition, and in in what this in, I for came it available thought initial also products. also maybe pipeline, just we play only

small generate own. our So this just opportunity to the work already unique large we capacity organization, datasets gives and us test as potential and incorporate progress to findings in a have, these a on wouldn't

If So, I think it's question. that a win-win situation answers your for us.

Brandon Couillard

front broader of great. know, It's you hypercare those and introduction, many out version kind launch landscape MosaiQ an That’s locked all competitive changed helpful. we period out using any of up in the just the customers landscape have there's very clauses, sites or the PKXXXX if technology for your at How there. Has of a then, competitive look at [indiscernible] the new in extended potential an view? of this the

Franz Walt

or it something have give a to out feel in. will free chime you leave if complementary I shot, I some information, please Chris, and

I X sites of many how to heart. have talk don't these updated by cannot I know So clauses, as

tenders better would the have right where next actually months know or all I we the customers What have over tenders technology. their expect either the XX postponed upgrade to they to though,

of it's it. So a variation

- of now, no postponed tenders have Many to place. There really because think them new right that's I technology our taking is actually advantage. around the and been

us. are couple will next no helps So months just of be that if we tenders for there the happy

the think new I couple their Then, a second products question of from was competitors.

throughput competitive who temptation has our a the across several landscape. testing talk value there can on fashion, no is modalities. to remember, modalities in are do technology we if and resist the to will still nothing do I that changed across the is course, inside Of There able testing but proposition competition, technology about you of high

when we the in. put products, manufacturer once every change together, our in smaller with our same of not while doing a footprint, we already facelift, also so also, a little other a when on coming the course, knew faster bit more the that's for comes knew Of anything all already launch. plans And, the our plan. And original bit of business timing does on competitors all factored are but we

the has without modality, from about original microarray, high-throughput that. MosaiQ, of So talking cross - else nobody concept multiplex competition,

Chris Lindop

[ph] to - been thing that recent available add the available the I is And for most of Europe that has immunity only would in believe I version years. its a is in couple

competitive informed strategy is So completely is for testing. our whole and that by product it awareness a niche infectious definitely, disease

Brandon Couillard

Chris. Thank,

Just one follow up.

the Sort VMD and IH the of of expect the a still calendars for expanded help over timeline here microarray field the schedules should kind function terms weeks? us of in and which is of of start trials just the next of US aligning we with few data

Franz Walt

go timeline. I Maybe through quickly the

research continue year. second half expanded IH and to the from this do we perspective, So SDS, development the a expanded this

move years. US in We second IH talking expanded to in half the 'XX. the in for I'm the and will field always trials Europe calendar about

the expanded the commenced initial calendar Screening US we already then, Disease trial year. XXXX, for microarray, will the well a last And For Serological that field EU and US for early SDS, also have as that's month. has

So that's already ongoing.

US, a Then research SDS really molecular also it's that, disease XXXX of expect year regulatory XXXX. as this calendar expanded technology well. with of regulatory that for milestone, Europe later expanded results the IH on study lending a PCR the the screening but year first Then proving later in we half itself not top testing XXXX, early filing is multiplexing of

out, the So will I Did key catalysts any see think coming Chris? around. are you these leave I

Chris Lindop

to expanded will no, be thing VMD question, IH. that up for No, next our but the

So just stay tuned.

Brandon Couillard

Pretty you. good, thank

Operator

you. Thank

Company. Josh line comes Cowen with Please Jennings question proceed question. your with of and next Our from

Josh Jennings

IH CE work the mark with body SDS. thanks. that submissions thinking as to continued future leverage SDS on be approval mean, I IH ask those was standard should menu notified come progress. of process the timelines through? congratulations on a I wanted expanded your the about for expanded approval, for streamline process and And and and some you or just should Hi, work With a potential can initial thinking be - submissions

Franz Walt

I are the conservative. for think already with the is still notified technology, advantage that but now familiar we body is our planning, the

of then, planning paper also or both through, faster larger. to we be the paper amount one to go are have to much for to - We menu, six as It months the factored expanded you first now it's nine might but things than went that in more validate time. an approval and will be amount the verify if

notified a lot, question, also should It's menu the which difficult So to yes, them more verify. significantly but the know to already me answer also body increasing, your gives work is for tell. to

I think side. safe with the we planning be nine months, should the six assumption on to

Josh Jennings

Thanks. well? and using same field field SDS be for menu trials for sites Will SD the thinking as the trial? you are many And the menu sites field with initial expanded How they expanded the the about US trials menu. that and IH

Chris Lindop

Yes. not and same sites they the Three will be sites.

So exposure technology. you sites getting to can of think the six

Josh Jennings

Great. submit... just submissions, just And submission but I maybe expect - timeline there you - then and is the as just US SDS in SDS you then pathway, the future menu. that submissions differences once expanded XXX(k) just hear and and between the for believe, I are thinking IH the about confirmed wanted to the

Franz Walt

absolutely You're right.

submissions. You're are absolutely right. different They

also more BLA initial SDS microarray which why the IH field approval. BLA get the BLA. factored the XXX(k). trial. forward we reason the the is in that's up our is planning, takes pulled The to initial we sDSX, for SDS months only That's time. to So a field only XX trials, SDS In expanded, A a

for first approval. - the we for get submission an can and faster the then we So faster can for microarray and go and instrument XXX(k) a

we XXX(k)s the, the six in to in months. SDS, the for instrument which here up factored So is initial

and have and if their FDA then, to can So with than start them become we the familiar original to and we also at feedback plan, in and not test earlier we approval it now, get the well. earlier least do, right it customers, same out which discussing - an as can't content give

Josh Jennings

More hypercare?

Chris Lindop

much working for not the us giving it's just on on only but technology than hypercare. we the and additional people confident, do to more also get Yeah, own. Hypercare customers could is our to feel more input us for

Josh Jennings

Excellent.

menu in just in about type approval, the hypercare number so SDS approval any another we of terms US lag initial time there with potential And thoughts an should be of a on and and centers between instrument the expect year? and a expanded details launch any IH

Franz Walt

- if allow in initial in - about be customers like I it late And success, of grow reduce a we Yes, will alone and real how the the that Europe, menu the commercial year the showed, need complexity. we and for presentations we IH many think the will expanded SDS.

in alone, case it. slides expanded a the already line green around So the Remember, IH and SDS that itself. business initial with the is valid

And the have far SDS results. fantastic follow And expanded extremely all upside. then, of be of with the on - cherry results good we course, a MDS, if so will up the would if and and top are we very the we an that these promising, be them,

are have we confident that will we a So menu. comprehensive

Josh Jennings

year all to not my just Thanks of the year, rest for Actually, tender in beyond. again hypercare the just you us the taking tenders you're October them? or the within questions roll on how last the for you up schedule open tenders expect just launch, participate or congrats refresh I potentially and will Quotient as believe, some later Europe, in and will through Can how this in maybe, question

Franz Walt

different professionals, Yes, basic reference, X doctors maybe horizon accounts. individuals, - to that I every identified. the years. across and and has where countries. opportunities know where was all everybody different just over information. you a X the sure, and had contacts We launched, That's think XX on - product opportunities XXX the same XX And before the with There XXX

hypercare onwards, who coming them, tenders. have from I tender teamed near And tenders, or October XX also the yeah? we then relevant So, a which up customers are we mean, of for mid-term. September, Out expect sites, identified we up with around

but it don't said to now change, liberty on again or make right XX because of months. the corner the tenders menu the another our for what or what And become as October just I and the about it's progress up then told I in the customers better they will is based before, postpone postpone, they they know or or know, will around no the to September we this the later the us be us. we Now, to later for more meantime. following twelve available, mean,

Josh Jennings

you. Thank Great.

Franz Walt

And getting maybe just a was also the for add to mark on first big time, for to thing customers. we after CE show first the the us, very it microarray, for could,

And so, MosaiQ had its debut at the ISBT. got ISBT we in Basel And that was XXnd a to traffic XXth of at June. of lot

There attendees quotes. demos. [indiscernible] remember a technology works. X,XXX [ph] was there that I saying really It's XX it's And like were no the were and dream. longer microwave just fantastic customer one proof

So a don't We show. Only publicly development behind the customers, openly. talk from is with can have actually input we for curtain, to now very the and instrument good response them to visible.

So us. big thing for

Operator

Thank you.

Please next your with Sung question. line Our BTIG. question Ji Nam comes with of proceed from

Sung Ji Nam

question. the taking for Thanks Hi.

a clarification questions. Just few

trial I'm they sites are hypercare Is are also a to in the overlap there figure sites? some Europe, overlap. field essentially? them - the trying So of your full out

Chris Lindop

No, no.

Franz Walt

I selected are mid all they overlap, So they coming tender terms term? sites. up of have No but what No. any have short or relevant before. Do in tenders they been mentioned

Chris Lindop

And high quality sites.

Sung Ji Nam

testing initial as the list be comprehensive - essay, then, menu Or of will an it molecular pretty be Okay. And for a group an well? of... will initial there

Franz Walt

we be think five our early you it possible least there. how expanded. then see eight don't the I at just But that, an And and It's there which most will tests polling. be as tell. most to than the to we much any will have should But tests on And -- better are today. and initial one They it to it, is likely of an then five it's an do maybe on five advantage be do too -- likely, tests expanded. technology test is will

those patients, can and process, they XX all testing. donors to for which so expensive and such through multiple. positive. today samples to for to testing mean, not XX reasons be turns from technology find And to phone back have the XX pools go XX if It that familiar cost rounded, on I to do an MDS they positive, was the because out something normally a different it's read person the also with

because for So patient, in available IH, single and for case, necessarily. be will no pooling SDS the every our microarray is MDS

for these So technology additional tests. test, you It's it around doesn't completely five of cumbersome are us there step. the whether price. one work tests, The matter course, get is same eight

Chris Lindop

Yeah.

Sung Ji Nam

Great , update and your expectation burn us an remainder Chris, then could the you for year? give the cash of of

Chris Lindop

right first paid we cash did - course around running ties year. part if $XX And service service $X million million adjust quarter, finally. that burn million what of that per gets of then, in with month about - the that to CapEx the the No change, operating obviously, and that and in part the is in cash just now $X our and a million the quarter, the of $X you expenses portion for non-cash

Sung Ji Nam

so Thank Great. you much.

Franz Walt

Sure.

Operator

concludes Thank Mr. answer you. Walt back to for the question Ladies comments. and our floor session. gentlemen, and I'll that final turn any

Franz Walt

much. for on very joining And us today. call you this Thank you, thank everybody

progress MosaiQ, and on forward effort time, mean look considerable make and year in best. much thank you its to very next initial commercial and all Bye-bye. continues the Quotient, So launch to we the Take the care.

Chris Lindop

Thank you.

Operator

Thank teleconference. you. This concludes today's

disconnect for you You lines. your participation. may your Thank

Quotient (QTNTQ) 5 Aug 192020 Q1 Earnings call transcript