- Earnings call transcript Q3 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Lucira Health Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode.

As a reminder, this conference is being recorded. I would now like to turn the conference over to Greg Chodaczek, from the Gilmartin Group.

Greg Chodaczek

Thank you, Jonathan and good afternoon everyone. released XXXX. for Health ended third Lucira XX, September today, financial the results quarter Earlier of press copy A the company’s on website. the release is available

and Dan on Executive me today’s is Engelson, Joining call Officer; Chief George, President and Financial Officer. Erik Chief

Risk forward-looking the remind to or turn to like regulatory may call, include, will statements. past section Form with filed identify specific future resources XX-Q, review product Factors events statements that the without limitation, begin, forward-looking results differ during to events. statements may which future operating and With the the company that the without filings I’ll to filed company’s we those call Form cause company’s potential, this you SEC, performance. strategies, quarterly limitation, regarding the manufacturing, Before We from most make report regarding product on marketing capital or annual these I’d conference These actual materially XX-K now Erik. the encourage the development environment, subsequently that, factors including, in factors in and over and you report sales and recently on described

Erik Engelson

COVID-XX and access find period the with year COVID-XX represents over XXX% Lucira Pfizer a promotional and last the sales Connect Pfizer sequential who of we afternoon immediately Welcome a of its healthcare This the XXXX positive that Good XXth, thank PCR-quality Greg. November test. about support through by demand for you, million in same provider $XX.X molecular for third quarter quality third of treatment a information the provide and joining earnings to COVID-XX us. which options and a consultation. our and of Thank driven and can increase over test revenue high quarter disease for are so users to second conference in you solid partnership financial will call. the awareness XX% increase The availability everyone, had a quarter On the Lucira sales agreement were marketing treatment. risks year. this of executed increase

a Sesame to their has In test option Lucira that is occur If of there a completely with addition, typically to scanning and luciraconnect.com. within test to test, telehealth out doctor speak affordable users telehealth convenience, a offering result positive visit offer is combines result Lucira to affordability. other immediate XX a and minutes an Care, can without our leaving and for about Lucira one’s on there all To speed, tests test such free consumer COVID-XX home. knowledge, no partnered marketplace,

Just We subscription. connect are Lucira referral Connect they for immediately is moment in for with and as good appointments. immediately resources tests believe prescription can locations of initial health utilized our information service built determine pharmaceutical spending business. investment have healthcare required, Lucira to and doctor be all to public no the get users course better provide high to needed, access developments a the combined next request multiple and leaving providers on action from whenever trips diagnosis, Lucira’s seek rapidly and time to a best opportunity can test good that equipment to valuable to was to additional to patients the patients or resources the a needed home they this without These seamlessly with the at and use one-time offering ability diagnosis. to manufacturers, brick-and-mortar sources. virtual ensure reputable confirm partner speak and quality the without

test working funding capital and combination million, of In test of and accuracy our primarily influenza that COVID-XX the and combination A assays. highly Turning The XXXX. related for COVID-XX PCR and of and lab-based B a COVID quarter to cash to is molecular fourth some demonstrated sensitive decreased of operations and launch the test XX% comparable $XX.X is the our operating quarter, advance kit in influenza influenza the in to anticipated kit results. to

inventory kits the anticipate current combination As the to COVID-XX COVID-XX having demand of in markets influenza in U.S. test Canada. anticipated of sufficient fulfill respiratory primary and our and today, we of season

we in During Canadian the quarter, received form of interim QX. approval order regulatory an the During

The and November submitted to product The grant of of the that FDA, with this they not delay early this agency primarily all designed authorization our for approval in the combination COVID-XX have OTC data contained May from EUA transform the review The kit the advocacy DC-based XXXX. throughout maintaining has once has time. consequently our process Lucira OTC received pre-submission of obtaining informed OTC trials. attorneys. was COVID-XX this submission in clinical and use been to agreed We by sales the would previously yet significantly it will strong impact FDA And user allow in having influenza in in only agreed the of us to that obtained point-of-care clinical identical despite to of data operation of EUA QX has to through additional a prospective that point-of-care our clinical and and test ongoing year amend test. our cash is EUA EUA while us regulatory use FDA,

represent product reductions. result The and programs. additional we of action our Several notified workforce companywide. notified in disappointed termination personnel strategic XX% in financing unfortunately a to pipeline to difficult annual expected Board XX-day approximate delay are strategic has reductions employees this a timeline. see costs one. the combined workforce other similar XX sale, only our force alternatives, Our execution The decrease the and million we workforce review company, our were of took in decision reducing an a are weeks of reduce to cost At or Not we of to an hardworking strategy. size leave time, of potential and of reductions a same a merger was and workforce of employees we XX ago, also these including reduce $XX.X impacts period, initiated and transaction Directors our will employees the today

like it have turn to mission. the Dan to I’d tirelessly the contractors now CFO to thank employees and Dan, I financials. Lucira discussion I call and company’s over worked the over our will George, Before of for on turn that of behalf of detailed recognize a

Dan George

discussion you, the us a and XXXX of quarter $XX.X issued and for a reconciliation our for sales to were of XXX% our financial Please XXXX third Thank third our the Eric. refer today results measures. XXXX. non-GAAP press earlier summary quarter financial over a release of of for million, of in Net third the quarter increase

primarily of Our GAAP sales and XXX% for quarter margin to by third for of – gross was directly million and businesses consumers, negative to million XXXX $X.X distributors, of in gross third the quarter approximately negative healthcare gross revenue driven and and was XX% providers respectively compared the $XX.X XXXX margin net loss loss gross and international customers. a respectively.

gross our margin validation the quarter non-cash non-cash sales as primarily inventory XXXX. million in third million the and test period expenses gross were significant XXXX of unanticipated Our profit a million XX%, GAAP respectively. XX%, such XXXX of million to that access Non-GAAP in related and period and of an for gross in compensation $XXX.X incurred manufacturing of charge and resulting during expenses stock-based reduction of profit in was margin onetime same depreciation respectively. was Non-GAAP primarily testing charges driven XXXX gross approval same were in the activities, increase a excess product gross FDA’s in excludes third compared influenza other and our declined and $X.X and related R&D margin in has demand. quarter kit gross from the related in $X.X delay due forecast by R&D $XX.X to COVID-XX inventory loss COVID-XX activities. new million clinical charge to a in were development, $X.X

$XX.X $XX.X of related at quarter compliance. the period third loss of and commercial of of million of of The equivalents of quarter equivalents in primarily in the primarily The quarter capital to personnel increased our in the were in million the of net in loss to redevelopment related quarter of administration process XXXX net launching to loss related the release million. compared in expenses compared inventory one-time $XX.X was million. to in for inventory XXXX The XXXX. cash costs XXXX. million the XXXX. the facility of charge XXXX. manufacturer. decrease purchases $XXX.X debt compared of was related in cash our expenses company third closing manufacturing cash compared first primarily Republic XXXX and contract net $XXX general $XXX.X in at quality A Selling, our Non-GAAP cash primarily million was our partially approximately with million equipment manufacturing of to million in activities XXXX risk end quarter and offset third million third GAAP $XX.X in period the and same financing increasing ended $XX.X R&D of the by in facilitate $XX Dominican to million were was third approximately non-cash We agreement preparation tranche our to cash $XX.X services and related the the and same in increase public GAAP quarter related party same to

revenue sooner seek our than forecast the to In term addition, anticipated. capital significant near decline in requires additional us

initiated for a merger strategic to strategy. call mentioned, Erik or review financial, Eric sale board potential financing other back our As now has alternatives our of transaction or of directors a strategic turn and the of comments. our over closing including I’ll

Erik Engelson

treatments this afternoon performed. well disease in way infectious important health Health. accelerate for of that that testing your you, Lucira accurate all diagnosis transformation offerings into and Connect result are that time Both in Lucira’s and important Dan. We this as are home. improvement interest of will platform test you public from move an the Thank for Thank the in your as Lucira result envision the

Operator

in and program. conference. you, participation today’s ladies the Thank for does your This gentlemen conclude

may disconnect. Good You now day.

Lucira Health (LHDXQ) 15 Nov 222022 Q3 Earnings call transcript