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Talis Biomedical (TLIS)

Participants
Emily Fawcett SVP Corporate Communications and IR
Brian Coe CEO
Roger Moody CFO
Tycho Peterson JP Morgan
Ivy Ma Bank of America Merrill Lynch
Steven Mah Piper Sandler
Mark Massaro BTIG
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Talis First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. would Emily welcome Communications Fawcett, Relations. I for first and ado, Miss today, from further like your to speaker Investor Without SVP Corporate the Ma'am, yours. is floor

Emily Fawcett

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

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

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

information the in release we uncertainties issued regarding today. the section entitled and these press Additional Statements in that appears risks Forward-looking

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

Brian Coe

company. as an to earnings call, This milestone Talis. welcome our Thank for you, a and everyone is Emily, important first public

the infectious the Before we against like join efforts investors. put you over for the appreciate also to to our would global you I take team's to trust put organization. recognize to like shareholders. fight support our to Thank get the belief years. you have welcome have disease, I our into into our dedication moment company relentless Talis and to long-standing a and We confidence new would the started,

I of by initiatives results. growth call, through then financial strategic start walk brief and Biomedical, review opportunities. a today's will our overview with first followed our Roger Talis future of During will a you quarter

Our belief these potential to number at scale. that point driving small this What many of will Talis testing the be transition care. transition? well to infectious that is distributed will that positioned diagnostic timely testing large care. is markets especially companies testing has to And is one serve medical Clinically of for diagnostic the diagnostic global increasingly a of diseases, improve diseases,

it For and antibiotic if infection, be or so, one example, necessary, one that should know avoid treatment self-evident which delay if is bacterial is empiric to care. an information, has sooner With better prescribed. timely in is it can a if doctors

forefront our standard Beyond for in this the need of pandemic the brought people's care has the drivers, mind, transformation. accelerating testing the to view, COVID clinical of point

of point we sensitive to economics One markets within manufactured Talis the a that also is markets, at platform designed fits care of care meet testing is has be Additionally, constraints at in can deliver serve, incentivizing point specific use, to economic time relevant. commercially the diagnostic To we on the market, a clinically result, scale and the needs diagnostic rapid the providers, many to easy and the a bringing and care of to testing to adoption. shifts the

of diagnostic specificity Financially, health variety to brought meet and serve plan to production up or a of testing the goals meet the leveraging And ahead, to last million offers known the a limitations in available, innovating we as from quarter, needs multibillion sufficiently $XXX.X look time while sexual provide momentum business commercially technologies needs our either women's platform sensitivity, to execute due appropriate. Based the scale, to of context, benefit raising ability We healthcare our approximately to company. testing. forward capital of a point this attractive this that margins of company with centralized clinical to be if dollar In transformation to we initial providers, leader believe in health the demand. that While the business is respiratory are moving proceeds. net result, few, and care on ramp any, to decentralized, we meets gross and and the plan is where to that of for our providers at model economics We platform today. markets opportunity simple. exists successfully on the care public continue the

address us, For of those who to uniquely to minutes the the design believe opportunity market a few through our of One walk we story, to you take would to system. beginning of the we are are ahead new enormous I like why Talis with aimed you

including meet and Our and capabilities. database. integrated providers platform a critical test healthcare single a includes a We needs compact confluence unique of five outpace at based competitors believe our care cloud software, point central that use of on the instrument, cartridge, specifically, we can

single specificity sample nucleic cartridge is preparation with that and first integrates acids. use design The the to high extract sensitivity fully the

generate patient rapid actionable of to is XX the an than in minutes less is turnaround second while The result office. test time the

low-cost in two of relevance of for United ahead first The for ease requires and authorization less minutes and the term tests, near operators From obtain customers. third multiple is The lies test. a the what our with infectious increasing drive perspective, value is scale run fourth an extensible use And clinical of menu and to in tests run commercialization time to execution the that favorable manufacturing. COVID-XX untrained to hands-on finally, economics States. disease is than

infections. additional One infections well manufacturing scalable preparation transmitted health for sales respiratory to as and expand as And commercial test build capability third, women's Second, a in organization and sexually launch. Talis

One market we bring first that to to Talis plan on our menu The is assay. COVID-XX the test

As an or pathway emergency One for study of validation test. we authorization, care EUA includes regulatory Talis environment, our previously for a COVID-XX our use in announced, point clinical a

We EUA to the to our to are quarter this target moment dynamics second I'd submit to take of a testing. an this on like the test application perspective year. discuss COVID-XX on for around market

the While million from trending volumes day high States levels testing with conducted down to each volume tests approximately earlier is currently remain this year, in experienced alone. X continue United being

contracts, see demand adoption. relative is to Our the as point to care belief of Central will that testing we market quality for high continue preferentially

our spectrum of the the well continue we an market. a wide promote COVID role platform across positioned established testing to have One believe We commercial in Talis that team testing. play is important ongoing will to And that

activities and to launch operational our support our our test. to of anticipated COVID-XX Turning commercial

We have in month. automated invested manufacturing cartridges million lines cartridge per of capable producing X

economies efforts operational lower further capabilities manufacturing scale support of to drive costs. continue and manufacturing to efficiencies will We and

City, test with in create Additionally, build our our and for panel our and Chicago, growth market, our these during to further order single quarter, respiratory Switching to menu we locations. and to Both rapid and team expand the to include continue tests an to functional support in signed will on addressable development. broaden first California we us develop enabling leases and on of out customers capabilities to space office our and groups, offices labs new COVID-XX in final to all objective A Illinois commercialize Redwood for B and the to combine our upper needs a Influenza meet tests cartridge. site

by sexual virus. related development in investing to including tests the also for to tract broader a and test a tests with infections simplex gonorrhea, panel, urinary of are followed then and bacterial and for herpes vaginosis, STI and health starting We women's infection expanding chlamydia

be excited leader Board as of welcome our Talis of Committee. the a our our to Jeri public Finally, as business to preparation Hilleman guidance Directors wealth scale the commercial and Jeri's instrumental launch as company to continue we in Chair we of One. for of experience Audit will are

proud future to financials. With to details we confident look collectively deliver. call execute progress continues I make. exceptional our as poised over team we continue for of our I turn am we the that, Roger now more As and growth for to I'm the will that on are ahead,

Roger Moody

Talis's on We pleased the the revenue recognize afternoon, quarter were NIH. quarter to $X in I This summarize achievement in of results. contract first based with associated our milestones Brian. Thanks, XXXX first financial million RADx will with

not we the However, expect do remaining revenue before to RADx contract recognize QX.

Turning to expenses.

invested expenses expansion automated elements, was scale period personnel instruments and million, R&D our assembly R&D, that quarter our our be working the net for including year. this commercialization our approximately test which Net production, $XX.X sales, cartridge was for $XX.X First Talis scale over compared delivery compared up XXXX. of automated and increase Among our It's of in in $XXX.X prior One. of increase the of primarily quarter million inventory quarter the $X.X total this of first February, investments taking IPO as year's after as $XX up; This of treated are these manufacturing of instruments cartridges capital million by expenses change $X.X our quarter. and investments in was prepare team. million approximately lines, $X completed test last an materials, cartridge and same an We first expenses of driven increases most of expenses for million. the million nearly customer were we related team, test the were in our will associated $X.X building on and first million authorization, marketing where most FDA to operating commercial menu expense, in of commercial inventory. and million respectively, the to Most were pre up, in One and XXXX and of The both by manufacturing million noting or of lines, loss $X.X for R&D to $XX driven all generating million of including SG&A cartridge as $XX.X increase was first scale and in proceeds manufacturing the million first we Talis $XX last expensed quarter R&D of worth in support. expansion. year in SG&A million, these manufacturing investments to expenditures being to

cash. strong funds, cash position business With in move ending $XXX quarter forward, with are we first a unrestricted the to the million in these

material our progress. instrument we summary, $XX.X In And recording In secure have purchases execute look aggressively of are our to with addition, million we continued restricted we forward manufacturer. contract and the our to capital pleased had plans. to cash on

Now I'll for turn Brian call over the to back closing remarks.

Brian Coe

Roger. and of questions. is will the accessibility serving and A manner, over this large shift underway with to actionable the care low with We menu thereby referenced the today diagnostic combination more in a will believe that now in use, care. near test results market testing growth. transformational the Success Talis a deliver timely speed, you, the cost. of in promise for medical point to Thank accuracy, to future to improving positioned require well pipeline operator it for promising turn on that deliver ease of is I term a we

Operator

you, sir. Instructions]. Thank [Operator

the from of comes line Tycho Our from question Peterson Morgan. first JP

Your line is open.

Tycho Peterson

XX% you XX% kind I about think urgent to of been how here. the care, mix? second timeline Hey, bit. about model those the guess moved office. good little with just we'll kind physician I the know pre little hospital, quarter a talk a submission deal since COVID I committing customer start around bit Can about you your afternoon. have of had think XX%

syndromic are dynamic in of do about in you about out? the you I'm And then you how how terms $XX do of for you hold? So still think the think roll in COVID. we pricing testing in to think about where talked think continuum? if curious that that's $XX do terms versus I as mix, standalone you it

Brian Coe

the Tycho questions. thank you for

centers, think specialty mix into the about of and primary was care hospitals, and So, care. urgent first, first I really question your customers, then the

aggregator care As we market, to at care, a as their target more over particularly and we've And testing thought I specialty chlamydia first affiliated ladder think, product. historically, the we demand. finally, go of as little look centers, about care is urgent our to it and and then of get and to launch this our closer urgent then to the move and into gonorrhea hospitals, into

to that expect, one kind through change a progression us this very we outlined and it's though historically. that move And really for hard we've got into specifically. you ratio, haven't give will as would that of we So,

the Roger, in So, and some a by if hospitals, and urgent care. effort work in initial know strong followed you that primary to specialty community I respect any don't there? care really have to With comments on pricing,

Roger Moody

make we to market. the going to Yeah, we're no, price sure

at change, changes reimbursement there's we've large in We that of no haven't seen least a been pricing the seen. certainly recently

see necessary, certainly the evolution will watching in changing And of market if meet don't needs. in kind it. but market, the or keep [Multiple we we'll So, we speakers]

Tycho Peterson

think said COVID you've syndromic. that yeah, I of thought you still Next, previously Is your or XX% of just kind standalone about so XX% assumption? and

Brian Coe

just there we'll Well, going plus I proportions plus flu season. is COVID combination, depending then COVID ratios, move it'll over can entirely think predict is COVID us to get that you know, testing our and a until specific be over hard time, a initially is, flu view increasing it's flu. one we recognize that the to to to for be And

increase seasonality flu and So, it it to that probably - perhaps and quarters. in our spring will during the should it the expectation increase would some have be season, then summer

Tycho Peterson

you build dynamics gonorrhea in can point PCR dynamics. here of preapproved term, be talk focusing the of how just pretty but doing on the Bing particular? the about well test for about with to committee care a the seems thermos a in near obviously question think the beyond Mason And thinking out, you're then COVID on new and women's health as got channel, day, we other competitive competitive

Brian Coe

in you that we difficult to specific don't alluded we we the will these previously, competitive We alone we've say for but had on believe outlined these markets believe What results will first very we be enormous never of Tycho, us can we all, of is the our never comment are have we we will think, we've that, to as that that. quality serving reasons know, is them be high. in an markets. very enormous companies, than feel I expectation So, as for be

capable result. be which The it's for produce think embedded that We and this might menu, use. have platform a to attempt makes I'll competitors, platform, have in a of the be multiclassing. against a marketplace I little very the have on this we we And into extensibility we relevant of important, who many an broader which because us it time scale, to to that rapid last more is believe, enter We'll that's able sample easy not lot a touch prep, piece, and gives market. that to is available bit people a

Tycho Peterson

margin. the automation incorporate think reaching million the on one for was a last for laid At of you kind to capacity the me, I about the manufacturing on know promotes Okay, Is just you side? path margins. kind talked a mid-year out cartridge time the the and key of to I that XX% IPO, automation deck now at part. still on of

Brian Coe

Yeah, so you one. I'll handle a maybe, question, that Roger, since let margin it's

Roger Moody

Sure.

throughout doing bring are bring to we've automated half. on so, we So, we up to up And continue to our to launch. begun lines demand second those track meet the expect

cartridge profile once leaders expect on that industry where of by we we among in the blade do as that's will driven the And And consumable. our is margins that business will So be terms up. plan. scaled a a the razor-razor long term, margins we've over margin majority of think time be attractive we

Tycho Peterson

Okay, thank you.

Brian Coe

Thank you, Tycho.

Operator

Our America, the open. from line Derek de next comes Bruyne from your of line is of question Bank

Brian Coe

Derek, if you're we you. can't there, hear

Ivy Ma

on Hi, Derek. hear me? this is Can Ivy for you

Brian Coe

Ivy. Oh, we you Thank can hear you. now. Yes,

Ivy Ma

track Hi, FDA, in for certain thank still on saying regulatory so is you if there's wanted the updates there's priority update timeline, XQ, to the approval question. to there? the see shifts you submission taking have Wanted see since but within you're an if for any just

Brian Coe

beyond publicly. said we us difficult don't what's publicly, at regulatory in track Ivy, would time specifically to on submit to also have any FDA It's is what this are we timelines update comment for we be beyond QX. on which

Ivy Ma

Got can trying to for it. of change the how hypothetically, revenues out you product to approval, any after ship get there's soon the customers, the I'm year. after the if just the But to product rest at the

Brian Coe

quite on. to certainly place. an be have to spend very well, in We already much product commercial approval. as timely We we very And in team following go commercial All we position commented in a a ready feel we'll preparedness. feel in And ship on right. an a effort it's manner

Ivy Ma

it. far, if And Got to appreciate the one a OpEx Thank bit wanted - you but more the so on year? full see to the for OpEx is, talk about range for last color the could the you.

Brian Coe

Roger, handle could you that? Roger?

Roger Moody

Yeah. Hi.

not We're the aggregate guidance is that. what up moment. stated at $XXX that about providing would But Sorry at we look manufacturing have scale million. in over I the is

there, sometime then wrap operating to up So, and expecting an from third normalize quarter burn that. to that that the rate excludes we'll in

is. from If you here. our in providing up XX-K, numbers to up bit have. you already guidance scale think that first little we're expect go do more I our a much to our bit we we to can than scale And how to a we on posted We speak quarter. that not back But sales what force continue subtract specific the

see. Let's

Ivy Ma

Great. Appreciate the color guys.

Operator

Our of Piper next from comes Steven line Sandler. question Mah the from

Your line open. is

Steven Mah

Okay, the great. operator. thanks, questions. for Thanks, taking guys And

Brian Coe

Thank Steve. Pleasure. you,

Steven Mah

on combination question a So, test. your

to, was talked say combination of timing obviously, we in it we the be if KOLs season to type for think flu But time comment going the will talked season, you're there past get out season. the tests some to of to the flu KOLs, flu flu So, be the able Could this on you you upcoming the nonexistent. season?

Brian Coe

to guided on I we're Yeah, for believe with as submission we sit year's next we today, believe And flu in a previously we've track time here season. that.

Steven Mah

Okay, great.

Brian Coe

Yes.

Steven Mah

right. All Okay.

to on So, right, the All no timing. good. changes that's

Brian Coe

change point. to that's [Indiscernible] Yeah, providing not any correct. We're

Steven Mah

has built a completely given or build-out. then that SARS-Cov-X COVID the or delay? been back question force And great. out dialed Okay, sales Is on that the

Brian Coe

our out to really really excited team sales our We good shape. in along the actually plans like been And about feel actually team. recruit. we're we've we're able build continued we And to have with

forward. move that's So,

Steven Mah

I it'll for QX? did you you be out revenue a it. to right, grant where pushed Roger, got in said, not there's question going to second And And Okay, the Roger, hear be any quarter? then

Roger Moody

correct. Yeah, that's

As revenue And we in third quarter. the and second the that you in wanted expect recognize quarter recognize the and second saw, or to in hope don't do we'd we milestones, first quarter. achieved so the quarter, to to just to milestones update but expect achieve

Steven Mah

if my changes Can any you. had Okay, know ex-U.S. of go was guys there in update I Thank said previously terms is, there's the timing? you on And to last a plan got have plans, then And us been maybe it. geographies? you to those question

Brian Coe

great Appreciate it. a it's question. Steve,

and are ex-U.S. at this to to at there. to speak is company, we But we real continue of opportunities So, as looking nothing publicly closely at opportunities look be And, us. an yet a There's it's can this time. we'll area interest

Steven Mah

you. thank Great,

Brian Coe

Thank you so much.

Operator

Our comes Massaro last the from from question Mark line BTIG. of

Your is open. line

Mark Massaro

of My up? first can us questions. the tests the emerge? ability walk they known of variants through just can emerging as your your Taking testability or through you pick detect even of to And expectation your one us to variants COVID is, you walk today, those

Brian Coe

So, provide is I closely an we What area you tell Mark, well can is, this specific can't I that monitor. very detail.

we bioinformatics We time. did where I giving guidance very previously, we'll this additional believe and assays. this against have us as they're do is also performance variance. mentioned and at RADx, well, as do our assay's but look part have closely something target team a is of over we two also, And some And

today. variances against we're well here we So, as sit we feel performed

Mark Massaro

expect you're have you to new the the can strategy? great. Talis, for flush to remind divulge folks to to in might out market willing And And of helpful go maybe field? that people if are That's number us to the be you expected

Brian Coe

on so the to strategy. Yes, market go

we cetera. as larger specialty the go urgent after institutional accounts Commercial after very or a people have have team. go that Chief that sales Enterprise And institutional of sales closing terrific centers enterprise well as sales as, elements after team Kelley. care those as are who Sales accounts, have we an care, and Officer, - from well and Head Rob These of territory go to will a et We sales, perspective, then talented like

me at I So, have in you ahead. there. But given I'm specific up of time. there to is Roger, believe go what set any we're - out we don't if number the building this guidance giving we're field people sorry, guidance a tell could Roger, sales

Roger Moody

and think center. for guidance, that that already specific that Yeah, team. ready do, We, not no, we're we're a probably think going I commercial but sufficient in going one market we're have is we we're for what to we for fact, the sizable providing is launch,

Brian Coe

think and then we're And I question and which specialty we and the also systems going then into care into move we hospitals care ladder, our centers, get Mark, is, centers, as primary last the and by chain start fairly to appreciate hospital their and your urgent and product. and to care if of chlamydia quickly closer urgent urgent asking affiliate care targeting piece targeting watch this then particularly your gonorrhea

Mark Massaro

sum Is that's by expecting quick Okay, reason a the the the to you're be And understood still our realized model, out year? you revenue so that do this of Roger, shift dollars a then any bit later maybe that in grant for can one just all not there maybe dollars think little QX. a great. quarter? in that Or believe

Roger Moody

don't Well, we're would revenue any just it quarter. not say we guidance, expect that specific this in I providing

recognized I $XX a large grant that. If look overall portion already at, million you since we've was go about of the think

last you you of is the make so, remainder, be. think not that program couple it's And not overall But to milestones. a a - might about models, be the is finishing expected in when program. our can the your This assumptions long-term

Mark Massaro

peak, be they'll my Or if walk that same just so are volumes you testing can largely to standalone we endemic remain going then an the of us alongside done at that we with you are will and elevated, indication? doing be Brian, basically for question, that you do time? is done COVID for COVID where talked each the the probably future. Even be other? people plex most do the through, it, disease believe and it's Okay, testing are a market And testing testing COVID like will down and standalone believe testing flu mean, low endemic, I is we final on this to the both same think from of foreseeable basically see how that And flu you testing? page? Do

Brian Coe

So, thanks Mark. for the questions,

we have increasingly first, our just quality plays out. shift will better the and quality And tests on testing more care our COVID. can testing. not see more all that be can we'll my my this is urgent But balls on that tests So testing and that, belief like opinion, confirmatory it just in will that that that said endemic of And it's be next that for testing to don't we'll COVID high like answer or least for few you locations be centers, there'll it. and And and a belief higher see this so providers have the distributed at require to is obviously, patient they because towards also, an crystal care diagnostic continues level how testing for act for delivered in shift to rapidly, years inherently come. the and

will, COVID of be in the seasonal. that flu to of all first COVID COVID we principle - towards continue From come We COVID hope COVID the all, to we'll shift flu this while and for see So, market with should customers the down. respect rate a versus testing plus will serve. our alone, in sakes,

up depending goes of it year testing, flu traditional with you're speaking, on part the down in what volume, in. generally and So

be individuals. are about would used happens see people. alone COVID concerned or symptomatic we'll what The flu what happen. exposure, risk should at And COVID will plus for in practice second perhaps be that in people is is preferentially who vulnerable believe or And, we

plus obviously, see the progresses. So, I a we'll as for both, both And, the this and and how evolves see there's think role we'll real year flu. COVID COVID

Mark Massaro

Thank for me. that's you. Okay, it

Brian Coe

Hey, thank so much, Mark. it. you Appreciate

Operator

That wraps turn for over the remarks. closing back Brian Executive now Officer to co-Founder session. Coe, and I Chief Q&A will Mr. up the call

Brian Coe

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

Operator

concludes participating. conference call. again you Thank for today's This

disconnect. now may You