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Lucira Health (LHDX)

Participants
Greg Chodaczek Investor Relations
Erik Engelson President & Chief Executive Officer
Dan George Chief Financial Officer
Derik De Bruin Bank of America
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Lucira Health First Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand over the conference to your speaker for today, Mr. Chodaczek. Greg sir. ahead, go Please

may begin. You

Greg Chodaczek

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

on are Erik George, Officer; Dan and Executive Engleson, today's call me Financial Officer. President Chief and Joining Chief

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

Erik Engelson

Good everyone, Call Greg. Quarter XXXX public thank -- a joining you Earnings our for Welcome you, Thank afternoon, company. Conference to and us. the First first as

transition discussion spot. the has an more-detailed infectious future Lucira fit in how is factor followed that the The Dan quality inception anywhere led and and walkthrough quarter of anytime, and of a our testing with developing hand molecular of significant has our lab accomplishments the overview the company today's a and way for then will vision I first the towards opportunities. this today. a results. results in it technology in financial Lucira to of call form would then company implementation that small our revolutionizing founding quarter, disease. would will made was We what will discuss for by Since into put testing start its use progress strategy produce that at-home to our XXXX palm paving on the our been easy-to-use

accurate if always practically earlier have the believed believed test negative. were that we of or use, it positive available, would peace public would result testing quarantine health. Ultimately, easy treatment test. individuals to serve the and result mind Enabling or faster that this should We should

over-the-counter testing. advance, care maintained. usability of test believe that consumer important testing central lab with that high point under augmented label Justice an was innovation an We accuracy represents important anytime testing an is next that anywhere, provided

This As jams year equipment. of population. testing potentially in infectious of in general increase testing logistics States, the issues we that wave immobility and witnessed within risky by at of last individuals the infections the during testing centers, COVID all the United caused first the the were traffic the demand resulted circulation

from our market test the remain focus to Although sample an the wait during that collection initial some alleviate results COVID-XX long to to plan It time to this kits first. we shifted influenza time was challenges, of prioritizing an test to home the kit issue. help our bring

achieve first EUA at testing home The active use. one lab high compared XX%, product, possibly virus only levels accuracy reflected samples XX% PCR of individuals. also symptomatic sensitivity our at expanded included PPA asymptomatic launched low In at on prescription study was prescription NPA. that central and our tests, study, test the demonstrated both the the individuals. home our in XX, no flagship which community This was When Our the head-to-head and COVID-XX kit, authorization care test test over-the-counter upon and XXXX, subsequently all recent remains time include EUA-granted. of supported kit our in with November company point was that FDA, longer This the accuracy excluding the to of XX% against very EUA. for infection,

entered that of timely supplying our vision strategy a supported As we accurate, accessible, our near-term broad had XXXX, company testing.

expansion report submission one, were: and of menu. three, goals five, individuals; capacity; the strategic an channels four, also over-the-counter an continued our to home platform prescription Our EUA, at formation of and of partnerships; through include test various point of creation manufacturing sales of expansion development test an and asymptomatic results; commercialization easy-to-use of two, to EUA of of kits care test

test OTC Following our an focused efforts for of at To to we through kit application initial end, commercialization our COVID-XX accessible EUA. that FDA submitted home an labeling. test on kit, more over-the-counter making prescription we

the prescription also test of initial for In expand to the April submitted company's EUA application individuals. asymptomatic Lucira the include XXXX, over-the-counter It EUA kit. we to the received Check We

a It requiring we is as individuals With in professional in to test. confirm now minutes detect Those and within or on or the available final to which affordable, result kit, formed for Health prescription the labeling, key release we without we shortly. complete also announced quality, users were we XX addressed need XX, test And Canada of minutes. over-the-counter partnerships. issued accurate few this increase expect our to conditions physician Check healthcare an have commercialization as oversight, XX submit the allowing COVID-XX PCR drive positive Check test with to accessibility, that It to negative Lucira a market April Lucira conditions strategic for bilingual To kit. authorization a result

a Customers results to we receive results to system. conferences, have Converge Lucy's digital upload and leisure. provide and users With We XXXXX phone, Technology workplaces, plan partnerships to an to to the test L-U-C-I with in user developed to place, follow simple text the entrances forming Luci test kit large scale. result. direct efficient begun that steps a digitally a to at Check PASS organizations the develop secure the LUCI they to arenas, then with way Lucira results a deliver simply results. Solutions travel verified test on an word easy their partnered It way have Lucira to use All LUCI can on with and way have test access the verified easy an Luci, users negative for PASS are their to Once result through show Text portal. their

For quarters. reach customers product of San growth. distribution more quickly. significantly driver hands example, commenced as Check provides see with in our testing being the see as and channels, easily-accessible nationwide. recently agreement in launched your we we the of It the key program sales have such facilitate Golden Most to being a the to only test OTC Amazon programs Chase reopening an to with not in kit safe recently, for our increasing opportunities to Lucira be offers an marketplace, the Amazon sale our sales our but these partnerships partnerships Warriors programs We Center online, such State the and proven an future as We upcoming important of allowing these contributor Francisco.

surrounding COVID-XX to the flexibility have landscape. uncertainties and expanding prioritized current the and we match nimbleness environment, Given the testing evolving

fit routine are against posted that website, shown strains insilico have We our periodically continue drug SARS-CoV-X current to variants of sequence to perform surveillance six the reactivity evolve kit. technical our brief needs, evaluating by as emerging we emerging on These our reactive in databases. COVID-XX noted evaluations products test

for and one, has COVID-XX growth that international and prescription use; venues, OTC kit to opportunities; of a teams, investing and match formation sports continued commercialization new distributors; expansion. to the clear future, company Looking created our large of three, four, test to includes: scaling leisure programs and other and partnerships demand; in menu both with two the path five, capacity travel entities; and manufacturing test

look CFO, discussion are about our We for the a detailed Dan upcoming to of financials. our excited will our forward turn quarters. future now the to George, over call and I

Dan George

million. hello, financial quarter such for activity. for to summary issued Please commercial Thanks, XXXX press first our quarter everyone. XXXX. and QX activity of represents Revenue a and first of from earlier was release perspective, results in $X.X Erik we Overall, full our XXXX the no for a our QX of quarter of had refer XXXX first today the

sales healthcare gross negative the was $XXX,XXX was professionals physicians prescription driven point Gross was quarter revenue by approximately of XX%. of and our primarily Our loss and care first to at authorization. margin home XXXX for for

third activities and income first the XXXX, loss to facilitate the is R&D primarily QX operating first our period at first for activities turn was increase is XXXX, party of is expenses in new anticipated that the change influenced in Sales, capacity XXXX income of manufacturing been XXXX. XXXX, to loss first XXXX over same growth. offset with previously the The established a margin the in $X.X grant compared in to gross increase loss to in has increasing of Q&A. increases our submissions. in $XXX.X were in to The in and other $XX.X We Delfin negative from partially from initial primarily resulting and is related period commercial million previously our from I'll for headcount associated support year-end with cash Loss from million to described. in quarter result at and million $XX.X were resulted proceeds compared gross compliance. primarily of in public the primarily expenses related to now compared period operating $X.X quarter in as The company were first services to period. approximately same primarily related and compared to same of The public the $X.X and increase call launch million the general commercial the Our and net activities. $X.X $X.X to quarter operating was back in compared and the XXXX, quarter increase year ended for described administrative received validation products, offering. $XXX,XXX prior loss in loss manufacturing million million million to Net with $XX.X million million expense cash XXXX. recognized The in in increase expenses in the XXXX. cash related operations EUA quarter XXXX. to

Operator

you, DeBruin Instructions] in of Thank question from [Operator Bank America. coming Dan. Derek Our first from

Unidentified Analyst

you on today. Ivy, Good afternoon. Thank is taking for my this for Hi, question. Derek

Erik Engelson

Ivy. Hi,

Unidentified Analyst

Hi.

So now competitive to more deals any pricing the launch. about bond details Wanted of there's since market. strategy OTC If the firstly, more if share just more a wanted there? your offered to on get entering we're being see you could to

So there. just any clarity wanted get to

Erik Engelson

you Thank Ivy. Hi, for question. the Yes.

with So, for way, vision label product this over-the-counter we have multi-pronged consumer always and a accuracy. much very product it's was central founded, company lab strategy and when the the by over-the-counter prioritized a the with

So, was mainly the in for and BXB and the the sell is partnership as also website, direct-to-consumer product that own well. category. on that reason are We lucirahealth.com the our both opportunities strategy Amazon other

distribution involve of outside the U.S. deals also those comes. So, some some with time involve when those within distributors of deals distribution the U.S. and will the

And like and associated some to BXB such State the are the organizations similar Warriors to as reopen that. Chase deals deals of one Golden the with Center the

visibility deal challenging I extent benefits for to the put I'm schedule to insight partners -- as what subject because value to all over we prices, to internal website volume company involved from of the from at although to will going long are a But provide that's reduced And with there that's, $XX in to slightly. that specific be. that course, shipping. as extent, an the product are volume negotiation To the the is the planning consistency partners COVID have time, place, to COVID and on a And be our And tail, some name can extent all priced on in So, to endemic. although what foresee delivery the there time think includes different across able not partnerships. those company we standpoint. that we over is a the and price deals Amazon then

Unidentified Analyst

supply Great, one, for State to interesting recent That's my Warriors. second pretty the Check It thank opportunity on there. the Golden to you. agreements And Lucira

much arrangement contracts? the how size Just markets. wanted in sizable into in about similar And how a the you the to And near about of should there? the of goes revenue to we talk see going you. could more of, that term question help And about terms you how visibility what's quantify if have opportunities think think general forward? us Thank

Erik Engelson

Ivy. you, Thank Yes.

we're page easily operation remarks. and the instructions this that delivering have shipped one's at simple it's to a partnership all, to season holders PASS Golden I the Warrior for certain into Warriors selecting hearts homes, us product run that Warriors phone to was in great fans' means the Lucira. is our It State partnership to with described the was beauty of then the mostly as ticket and product Lucira Warriors the a first So, Check priority. the opening very had The the to fans. we quality lot grateful created home -- one LUCI of And put such The on is and of

So, integrates into the Warriors, was in PASS the case also wanted LUCI the aggregated because PASS LUCI on fans, data then other of they our platforms.

as so integrated can And video Warriors' on Pass. site, case, you on in this the it Health into CLEAR the see

Pass, to were It for a just appeared a directly that Health phone. very on fact that when in seamless users. CLEAR so went And LUCI they made integration user's obtaining Pass into users a PASS, that CLEAR Health it

entrance. have a one negative sports some There that have can In CLEAR it's People worked who on-site Health in whole We that who case, COVID issues. other at entrance, gate teams a it and in worked vaccinated those the and another are So are gain in process test or had who priced home it without with Lucira vaccinated people to Warriors, the shown and come people the was cases, also negative test some who Pass some well. the chance In any in was for entrance other, prove close a think that like test. Warriors at for ASP it's well. for for this was can hybrid. in a our entrance. demand very And on regulations. testing as $XX I come that to well didn't local There's depends very variability

Unidentified Analyst

you if there? light runway, any the shed revenue could And

Erik Engelson

So, not extremely what Check Lucira interest to this very to an OTC amount Ivy. we're doing to say at have there. need of that hard forecasting begin we working test understand a actually to. so and is, I excited we that and incoming then our quarters we're to kit the by point, the we're any forecast few reaction But would baseline I to labeling the respond think said, can that from that It

Unidentified Analyst

thank in you. I'll the queue. drop Great, back

Operator

sir. And our Weinstein from next William question Brian is ahead, Go Mr. coming from Blair.

Unidentified Analyst

good afternoon. [ph] This for guys, taking Brian. Griffin questions. Hey, my Thanks is on for

setting forward? you're you testing use How the for What's us professional of can professional longer Just here, that Clinic update first the about the have on talk healthcare that what are with in Can the tail? this Sutter an having customers give one product? moving setting been has their potentially on and discussions Cleveland expectations you IPO? a the and your

Erik Engelson

you. Appreciate thank the question. Yes,

whom So, was And some we the QX. label when only the we entered QX, prescription healthcare in when had of the also, are prevalence of pandemic where working. are with higher in we institutions we the locations

rapidity throughout large first of healthcare took be in that and product example, example. of of so the for our expectations departments, positive, to we orders of the in is pre-procedural our for on did By for and product, for the screening, was the produces we prevalence a emergency XX there minutes result orders of benefit practice usage As the test durability a clinics, -- respiratory QX, which institutions. have dropped with Then for consumption spot going way, the in the test. those in it

benefit, from huge have in control particularly a possible would who quickly of positive standpoint. that's as and isolated emergency are who suspected an there So department an as to being the are prefer institution infection as patients

quarter, healthcare would with been we had fill-in had on website. had I not ordering institutions professionals. professionals fill-in then rights in did reorders awareness there see in healthcare we prescription some which see by more was of have thought from we conversely, online we've we would ordering we of one the up but dynamics for Lucira. more our So, the writing that And from brought suspect the QX,

suffered I think quite of and us, best-kept from professionals. have when by by but were people QX found a they it delighted were our secret, products we being a we activity in reorder found they healthcare bit and

very for book. and say example, that forward, we will So, website, say just But where you. But EMT would marketing business. pleased Thank the in received toward practices, to our early very that having ordering that label over-the-counter remains since I important the use practices, efforts psychiatry startup have I prescription by signal very, our going offices, from a resourced there. concierge

Unidentified Analyst

the Okay, channel, in selling early started for marketplace? the just for expectations that the just and little and a been you've there, there, then on Amazon ecommerce Amazon ex channel just ecommerce selling just products, you've realizing any but from your you been to can while in talk about [ph]; gotten some feedback

Erik Engelson

Yes, uptake we're and be increase for Amazon, moment taking Amazon Amazon, But at the to again, seeing I And think we good awareness. high partnership. we're the steps on a really through have rating to must most we'll in at it this releases me. the that the say, year, the least press was generated Amazon out incoming I had the to we of it that -- most all put release press out grateful email

was that. it think people to I So, exciting quite see to

Unidentified Analyst

Okay, the me. update test then give symptoms. just forward, one given a market symptomatic for be flu-COVID could the and just pretty line It combo, us the In product? testing similarities on you potentially there, seems important. like last Can for and an and pipeline particularly, moving combo time the

Erik Engelson

as question. well. Yes. development you about now. for the And that's excited Thank We're right that in

-- have assays. And design. device we're simple the We developed. the both assay just iterating changes Very assay flu to the accommodate

we're this. excited So, about

being anticipate will and inform We will be be on combo will or it what Maybe then the could able I say need speculate but regulatory will be won't timing XXX-K the to some be, the path, the whether this to meetings the that will product test, with EUA for a FDA that I But not having timeline. in we be going flu determine accelerate whether try do And it future, so to ready. best will do would to that it it will this to we before be is contributing everything year. it would can be to we're in commercially. another commercially not-too-distant this season in clinical contributing so product case, I be say the that trials

Unidentified Analyst

Thanks Great. the for guys. color,

Erik Engelson

Sure. Thank you.

Operator

go question [Operator now Please, Instructions] our [ph]. sir. And David Mr. coming Sherman from next ahead,

Unidentified Analyst

taking guys. Thanks my questions. for Hi,

been just customers on pursue? has the of the of which are economy on one, the was your going First to I to current wondering BXB as reprioritization cities degree target just trajectory there sectors pandemic, reopening, the channel, and to the end with you're that any

Erik Engelson

quite testing. been a the I opportunity country going -- Yes. to own tell There's BXB in positive have view the twice We a alternate We Hi, week. we David, a COVID test. switched or as depending that's of week, twice over-the-counter testing week incremental thanks label, a since within with prevalence for our we bit an between have of using Lucira testing on today on the our question. testing you, associated once the can daily that. And facility, and to facility. a incident

test they give home we and Lucira bring test, door. So, at LUCI to PASS the their on days employees then the prescribed they

any. discussions. that So, BXB having first and quite through, to quite that be productive sure going teams Lucira's making a optional, a in organizations we've to like dedicated is been really category, having that and they're interested we're organizations safe this interest And organizations of are similar the testing to to have of I testing the a for conversations it performing deciding it want test to incoming But to with kind as program interesting, would those employees which do, and from standpoint if gamut bit within partners. fielding with what spans from potential characterize are thinking testing workplace so testing wants some

every bit quite discussions from we exciting. that say sales spend standpoint myself, time would including It's a I So, of been week. these on a

Unidentified Analyst

period terms to you product to of of the through what's sort as Got timeline have just you the these guys do test sort going some assumptions and are thinking it. contract? the assumptions in of to run actually kind want some from is signing envision customers, most of working a of And test with the what

Erik Engelson

small tell still room could also Most mention, we a are see increasing, I because think rollout. us our once that's folks start do here I that's question. have then Yeah, still be they and this and masks is we're early before are wear great vaccinated. numbers and programs in these that but found don't we about in and tested we up although, sitting how masks. they that works. pilot within the facility, people just But us and What anecdotally, the this they will we've today case a within our that earlier showing of together Dan facility, on, sizable

a employees. have of recent among our test However, we had positive one

So on important. feedback really for grateful alone important that a just well. in problem. the getting That's that But, that do vaccines remain BXB advance going solve them. been side not the underscores testing the we've and is They're to we're as the

Unidentified Analyst

that in logistics on Okay, be the about to there a of great. there the more for from road? partnership. for them order logistics is you their Then guys not? Amazon place Could to just business in are handling handle Is it Is plans channels or just the plan down one across your me hands if it's talk shipping you they from coming still? all

Erik Engelson

We the our handling PL and our have moment, order three a fulfilling. Amazon partner great for partners entry. is the at

about discussion by happy and going Amazon. I in certainly come but discussions own to fulfillment a mind. yet, to on have who where That's it's having out PL, we're that's are very addition our a can't with, to maintain three but transition our characterize We

thank that for So, you question.

Unidentified Analyst

taking for questions. Thanks great. Okay, my

Operator

Thank you.

ahead. For from Go question, Derik Bruin of last our Bank it's America. coming from De

Derik De Bruin

me you letting Thank Erik. in. for Hi, back

a Just follow-up few questions.

to any there provide first, the the you the expense of on margins? growth color would right just be side OpEx on Thank wanted cash what cash still positive volume year, into any could helpful? for to run happen is get you you. run. based the the into color Then the needs So now, is now, up, on see ramping a maybe question and to Right but

Dan George

in factor place gross of it's a right that and a we now. perspective, cost From margin volume have reduction initiatives

tooling Then poised volumes QX both a take negotiations make cost, that today. of we're and Currently going cost were drive direct we're investments, currently to will cost infrastructure anticipation As initiatives up lower from in going than sensitivity volume. and and share of We've with just would not be, working in Erik facilities forward. we're in to primarily perspective, care modeled an would the near in lion's down overheads. although we've of that of of facilitate facilitate our our That's with number along of I launched will guidance, manufacturing XXXX, issues all terms with say in negative working people suppliers giving we our DR a will our say, mentioned liquidity I to us the that having factor margins we're growth. the that made volume-based currently future. what scenarios in no volume That cash place a DR fact down future environment growth. putting materials costs. we at We're coupled three the different a is the in foresee before,

Derik De Bruin

it about to distribution Thank Great, Is talk thank selling more your Any channel helpful. on through especially for or you. Can e-commerce details consignment? be would you channel, you. be the going sales? a

Erik Engelson

PL, distributed the that orders So, we website, from some integration come maintain inventory to we with partners. our in and other cases, orders come that from our have we and through Amazon, three in both

the but fulfilling orders. come in from we're all orders them, that For

If to you add? want

Dan George

shipment. and do distributors passes referring direct have those as some distribution that distribution through well, counter Yeah, us. I'm assuming upon Amazon, through We is but over all title through risk you're agreements the to fulfilled of

product. inventory So, our books we ship leaves all once that actually that

Derik De Bruin

and fans, maybe the the that's Great. in they terms doing impact ramping warrior's More they you're to are Maybe tested? still they of vaccinated, have do utilize you're last I bigger are picture much process a rolling deal, do if of an vaccination impact expectations going on be maybe to still have since the impact one. a for to you of more out, that how either [ph] of process -- or expect a is need to pricing capacity the compared but the of previous Golden specifically, up? your in volume going audience, how

Erik Engelson

there to Certainly, vaccine; on spread so is a the more The may don't global of There will there's wear be difficult individuals issue. The remain the being day million extent our really vaccines impact be masks, tests performed vaccines, at testing the going -- that testing but surprised seeing volumes, is just We're in not X -- if now. channels. the next wouldn't classic the over vaccinate impact taking particularly pockets to the per are open. not there's not some vaccinations I are XXX%. population of phase to that US this issue. a easier point. have This through be the It's that borders are

some risk there's So, assessment for organizations.

policies. a that's the State still assessing. governments as -- what local was -- again [ph] let's that say That I in Ivy, State and So, see local vaccinated of the me tell are portion is the regulations Golden function would Golden question oh, will flux people testing? need

Dan George

there convenience. they have and towards people us a been a be add testing. opportunity want the -- as in being exists been to vaccinated, not, or tested We've want regardless terms population attitude their of There's allows tested to they want inoculated still people research here. to even want at that there's out them COVID of population testing that to people the out I around of who've this well. and certain test know there's by decentralized there treatment done allowing some That an that an

Erik Engelson

a there's testing of no testing talk the testing, on. from to media interesting, going still but has of It's lot shifted

not is it's going not and think to I over our over be it's viewpoint.

I for think testing. we're well poised to the help ongoing need serve

Derik De Bruin

very much. you Great, thank

Operator

session. the for it question-and-answer That's

like hand would for Engelson. I Mr. closing Erik to back Now, to remarks

Erik Engelson

again for Health. everyone for want I thank you. to your Thank interest Lucira time afternoon in your this

excited we very Thanks. to you of look to the are about soon. Lucira forward We speaking future and

Operator

everyone. today's Thank concludes you participation your This call. for conference

a disconnect. great now all may You Have day.