Chembio Diagnostics (CEMI)

Philip Taylor IR
Rick Eberly President and CEO
Neil Goldman EVP and CFO
Kyle Bauser Collier Securities
Call transcript
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Good day, ladies and gentlemen, and welcome to the Chembio Third Quarter 2020 Earnings Conference Call and webcast. [Operator instructions] And the floor will be opened for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Mr. Philip Taylor. Sir, the floor is yours.

Philip Taylor

operator. you, Thank

considered Risk let to matters. during begin, Chembio’s may with assumptions, on including They you quarterly those from may to Rick Chembio’s control. the Chembio SEC. may that predictions, company’s Chembio’s statements its Before judgment current XX-Q forward-looking and differ uncertainties undertakes and Including conference me numerous Officer. second Form uncertainties, call concerning these made for be that and time information today. projected. this the of publicly or Chembio’s to XXXX, These no of any today, remarks made for Chief forward-looking XXXX. filings, XXXX the risks Eberly, estimates factors time represent SEC we future. other remind in forward-looking. November include however, update statement under other the Chembio’s are, to that, which Form in many encourage those you report all annual risks over the revise results Executive to SEC described on the and and review or its subject call With filings to I’d are report Chembio’s elsewhere from beyond with filings President materially I and turn for Including obligation of like XX-K X, quarter

Rick Eberly

earnings for conference Thank third XXXX call. you all joining quarter Chembio’s

for top our are it developing global Chembio, you workers, a for you the the will providing to health several like the say conclude begin, a new team discuss made and across Today, third and DPP manage priority to is we to Neil who the will that results, pandemic. progress business model patients financial million, a the third we a would Thank of $XX.X milestones our that around pandemic implementing discuss dedication can quarter performance $X.X launch help of to and completing we for of detailed we world. Before start, have including open will quarter, representing centered X% Then consequences. up From facing the that at of of I million, To portfolio total regulatory care of was growth this the and and I everyone product to including X%, development tests tests. caring their revenue respectively, and the we far-reaching call revenue COVID-XX period. recognize decline together, important prior with are compared our in questions. thank

revenues, the Our improvement results from quarter. our third COVID-XX United demonstrate in systems total second quarter States the outside in DPP which IgM/IgG include shipped revenue

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sales of revenues quarter United tests outside States. Third include antibody the the shipped product

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Now, quarter to over the I third details turn will Neil on call the financials. for

Neil Goldman

Thanks, Rick.

year compared growth and decrease quarter. XXXX, X XXXX to X million, of quarter a increase royalty XX, September revenues for $X.X and program of September for compared third cadence year XX, months period. the revenues incur at prior quarter. representing of of grant which year do R&D but License million, period, to expenses. million, timing Net related combined $X.X XXXX, X% we occur the were performance not the X% the the product were to obligations, certain the of to and For the months total R&D a ended and $XX.X revenue always prior was sales the of prior compared an to XX% certain continue ended

and model development testing the of As of tests our same COVID-XX. third quarter, legacy to COVID-XX infectious customers implementing products. of disease toward focusing the continue resources we Rick our on and described, continued time, business their much commercialization during resources our new At the devote

have for accounting revocation that of requirements continued Our for outside as recognize revenues of on September have customer the declined margins accepted system ended recognized million principles The period. antibody months FDA’s for during decrease significant X COVID-XX the to opportunities XXXX, system $X.X system we the the September the at the reasons, delayed reflected compared principal product were quarter X U.S. I the year time; Gross systems XXXX. impact second generally IgM/IgG of from systems unused now in described revenue. quarter for the to a of precluded IgM/IgG DPP quarter ended recall quarter The the of COVID-XX the during DPP third met sale not the customers within resulting The the of negative the XXXX; included also by during prior to of months some U.S. third our XXXX the internationally. It revenues XX, during of during XX, EUA XXXX, X during revenues product our U.S. second as antibody that the shipments the that previously of XXXX. developments.

we geographic XX.X% unfavorable product quarter we third average our only of of XXXX in First, in To period. have lower highest to with product countries X.X% product in year sales U.S., the sales selling sales concentration the prices mix the much product during compared experienced where with prices. were selling higher sales of illustrate, net prior average

have of Additionally, of the period. selling net sales to of the sales, sales IgM/IgG total sales U.S. product in combination U.S. absolute year of pandemic in the COVID-XX to Africa, the during have reduction of the tests, as lowest sic HIV of a our revocation impact described and product precluded quarter compared XX.X% percent third systems XX.X% in The the where the June quarter from during XXXX Rick prior a prices XXXX sales terms resulted represented in XXXX average as in both for earlier. FDA’s on we third demand and

automated Second, we million such months of at million. the or the general as or items modestly $X.XX per XX, of quarter of compared the to months including together end loss in XX, September in manufacturing the second triggered period. by manufacturing administrative shifts and XXXX X activities to increased diluted year was with to increased ended recall experienced a qualifying the the lines. those share $X.X the XXXX, $X.X inefficiencies, Offsetting related operational prior XXXX, to million the per or by products compared starting product the these million schedules was expenses the million X quarter diluted Selling, period. quarter expenses and $X.X research a share, combined $X.X in shipments $X.XX period. million of net Other compared recognition September year in outside expenses, for year R&D administrative were September which and loss prior prior XX, were previously general XXXX, ended XX% ended U.S. as for $X.X from selling, includes by $X.X deferred of that described. of into net development and revenue third XXXX, the I costs Net

cash capital, remarks. XXXX, sheet, for cash On as now Rick the XXXX, September equivalents, as of XX, I’ll working call of the $XX.X million. concluding XX, $XX.X totaled back balance million. September and to turn Net was

Rick Eberly

Neal. you, Thank

to have development a portfolio growing FDA; the applications product been the to the leader an COVID-XX antibody X submitted testing make would our COVID-XX. as few in of for strategy address months, have pandemic. we executed the Chembio past antigen and approved Over and needs stated, regulatory point-of-care EUA

surges opportunity pandemic offer we some solutions to in numbers our the the future. are As the record forward across to case in to looking United states near States, the COVID-XX

in clinicians to the system, access clinicians supply. DPP Our point-of-care never for U.S. I’m testing. has utility rapid been COVID-XX promising. fully setting patients health care of with outpace health care system. continues market technology testing. far outlook of has consistent improve across Chembio realizing And and decentralize platform commercial the expedited The our of team’s The has ability every long-term that accelerated diagnostic success. message to so offers across Both proud the is shown That our are growth positions clinical to and technology That more been for organization, why the our expanding demand development and solutions. sustained

to you as look our We thank PPP on us need. like be are able for business you drive testing new execute Again, I would their with hard our open for times. updating of our work call these model. dedication joining in And employees to today. systems point-of-care to that, the trying in up please for operator, questions. and forward we humbled continue of to adoption this Thank kind We to


Bauser Collier at [Operator We’ll Kyle to go Securities. first instructions]

Kyle Bauser

caught So, I sure I want make to this. just

test? was COVID submitted You application? this data after for talked Was your requested that FDA waiver. about, you Rick, for CLIA antigen the submitting a data the by And

Rick Eberly

Yes. Well, I was referring data. CLIA to waiver the

part that are of We to the EUA as a the FDA submitting submission.

our And SARS-CoV-X waiver. antigen to so, have a DPP for CLIA plan the is test

Kyle Bauser

the shortly And same it a so thereafter. at or that as time like, could potential sounds approval, come

Rick Eberly

correct, that’s Yes, Kyle.

Kyle Bauser

sense the by the get to the for a QX, it’s the a for antigen tests for just less is decision. how many a currently and how know lot being antigen of side. COVID are timing test, Obviously, FDA I’m each? do antibody And evaluated you trying

Rick Eberly

talk try weekly doing of test. FDA, don’t review have to town we numbers and about speed their up does they’re Kyle, into I visibility the exact process. antigen the meeting know Yes, for antibody to both the their and what in backlog great hall submissions the the

very communicating, their And staying changes obviously are what to the to we process. any FDA So very, it. close review relative is to

that. And so, continue monitor will to we

is that very the review speed And get to and able our process hope near the will future. reviewed approved we’ll applications in Our up. be

Kyle Bauser

time. I And are then to may, I’ll just just X system, ask might then dynamics stumbled in the COVID nice see this to there both revenue gen Neil, approved. antibody QX? us multiplex same right on an tests more the There lastly, test. market DPP compelling any really HIV-Syphilis regarding is in update these if here? the give hit at now line And an you the get the for for that that marketplace Can value were that proposition some competitors the compared pretty so HIV-only

So any if the of pricing. update will And on market this there? premium have dynamics kind

Neil Goldman


first second I’ll Rick part. of take the think, part take and the I that, Karl, will

that we’re sold tell that to order into up included $X.X I QX sales that, you earlier on to to can our of there for in of initial continue which is was not So revenues beyond going international Bio-Manguinhos. ship in million QX. get And But side. or announced amount tests our the year some will are the being taken that this

Rick Eberly

is Kyle, Rick. So this

DPP the that of dynamics extremely for yes, HIV-Syphilis the approval terms test, by we’re market FDA. excited the In about

mode. in full distribution Our partners commercial a launch team, with our are along

and HIV long providing are actively our such Syphilis talked for market testing product. to now a We are has selling time. been that The combination who about the of dynamics distributors, information the are

get product process in X approved. to years, around order approval that PMA was Our

approval. And so, delighted we finally that were to get

So promoting marketing we test. are and the actively

That of in the the transmission about clinical we cases HIV talked For we’ve remarks. prepared use and talked about, numbers. in some issue co-infections public that about for the the in patients, terms talked mother-to-child of that health we also

So the commercial engaged. organization is fully

selling that are product, actively hoping QX product. revenue some we’re and the We have to for


And to Instructions]. today’s back conference the any conclude will I’ll for or closing that now management Q&A. additional turn [Operator comments.

Rick Eberly

thank We to time you Jess. for look communication you, future. your in today, the really further forward we and Thank

good everyone. you. a have Thank day, So


a We ask for -- will disconnect and thank you you conclude this can gentlemen, call. your Ladies that day. and have and at participation, today’s time, that great