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Lucira Health (LHDX)

Participants
Louisa Smith Gilmartin Group, IR
Erik Engelson President, CEO
Dan George CFO
Brian Weinstein William Blair
Rahul Rakhit LifeSci Capital
Call transcript
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Operator

Good afternoon, ladies and gentlemen. And welcome to the Lucira Health First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Please go ahead.

Louisa Smith

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

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

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

Erik Engelson

Good us. quarter our achieved accurate Louisa. and you, driven for for demand the easy-to-use XXXX the by conference record XXXX first call. and everyone, COVID-XX in joining Thank you revenues Welcome thank earnings afternoon, tests. first to Lucira quarter molecular of

almost as infectious has the as been, this it test testing vision. quarantine care testing shift combined see to diagnostic The in performance leader our founding a ago, COVID-XX We decade proxy this category tragic known health and been diagnosis, with become: treatment. a transformation treatment, new has rapid catalyzed of to and pandemic, Lucira paradigm are disease a for treat. Since pleased as in with the a decentralized otherwise what will Lucira's

is fully as pipeline, picnic. name onset, mission disease. endemic and it of replaced currently health only backbone and on accelerated our but Utilization slow by is travel platform. vaccinated both current to I the telehealth envision The investment toward evolve the measured with diagnostic or, relies has of that family care recovery. times, care it see knowing tests for too by our We that company. And improved people society But it partnerships educated to molecular have at current easy-to-use is digital our certainty, thankfully, but to know, this providers patients also as continues the medication infectious service is that in full delivery the disease enabled pandemic see which in-house paradigm, a times team. COVID-XX test and also through testing commercial digital by treat development achieving COVID-XX results boosted next by of while not had test hospitalization to reduced from shared guessing the health. members the all well the health to in our who test prescription of and it the and as declined Lucira, and health for treatment earliest accomplishments immediate requires no to manufacturer as possible, a recently they achieve and public test, of or digital moment in in deepened and as and and For manufacturing an peaks. reporting patients at fundamental, recent or rather care whether to to scale than know before through in Accurate severity, early at a personal for as requires Lucira's speculate we and make symptom are still as infectious. and mean that COVID-XX, intervention suffering providers death, guesses growing even diagnosis, many digital our rapid is a good, We

benign, otherwise it many is it some, but healthy For for individuals, is debilitating.

likely to to cycling Lucira's seasonally, as durations with Visits made with immunocompromised, population rising testing booster children Our plans school, and but with return testing that accurate emerge. will assume COVID-XX all safer new cycle families those are molecular variants vaccine, will to fluctuating demand to who to tests. remain, grandparents by young are work, first return travel,

person flu patient of Lucira's the a our sign near-term obtained infection process had far home accurate, step that but or bedridden and recently the needed While so but at test, to easier on flu antiviral symptoms. with only A flu strategy Negative quickly on of confidence worked without can patient predicated regulatory growth is treatment family flu in is still need symptoms, flu ascertain prescribe on can Lucira's to the we telehealth approvals next COVID-XX and faster without and a and launch visit requiring COVID-XX medications XXX% antiviral a and in diagnostic wanted was the antiviral would combo molecular have of very flu been telehealth test no the level physicians the been elsewhere. Lucira's is with The earliest accuracy and if obtain evaluation. test for member an visit. providers with of infectious fever and combo test This expansion. market. This new well, a global clinic products, practical, the test not is there accurate COVID-XX telehealth that

our that million, of only first XXXX commercial revenue exists million, $XX.X in XXXX, net $XX $XX.X business February, XXx produced available for Lucira with increase a quarter The with the In the announced income to income the first we of QX of modest over in recording million. a net demonstrated up that debt history. the commercial to facility quarter This company's volume. was leverage

million down for initial year drawn XXXX the capital the strong bolster We of tranche financing a $XX only reserves. remains have of to growth company.

This quarter demonstrated marketing several expansion also achievements.

our quantities whom remained downtime their tests strong also with In sales are including even XXXX, care, awarded business-to-business, services, of customer period. include a on an in from X-month employers extension flowed. initial direct-to-consumer Silicon customer XX-month a purchase film all and the update illness In other this QX, to the their are would and provide shares and telehealth, doubled product enterprise purchase like their major of of of over QX to company volume. customers. Canada We wish a tech risk sports one QX offer Health Valley to These In employees tech financial for agreement subsequently Examples another production, employees XXXX, of media demand representative Lucira channels health signed of which an are proximity of with is commercial characteristics outside of of professional their because high. COVID-XX ebbed X that was space year, In to with the cost require and and of to made. current Our an Canada. international. has This exercised remain and main work first options. this government Lucira who to Canada mitigate standing Health purchase enterprise/BXB as customers. defined the critical was allowed has the categories operations, their we

provided testing have in fast tests Canada impossible. which Our otherwise and accurate and be across providing would used to or hard-to-reach value and have been remote difficult communities

QX, Canada, all government of look relationships institutional and to from expand entered with major our provided the This continuing to private system forward our agreement we and and In like to Coast enterprises Canada, a with other into to customers. the had important our laboratory a the For distribution offerings of health remainder allow West working a beyond, and buyers, on the health of and with investing to government Canadian national products is to we distributor. Lucira Lucira customer. Lucira of that coast been ease provinces not Canadians us and to in the XXXX individual a care previously in deepen people resources turn, test coast. ordering to distributor, and relationship

and continuing health quarters, of care the this team health sales networks. to the sell health coming expand seasoned directly small distribution will to hiring who hospital In and business. organizations, to increase augmenting XXXX, a sales sales with the Over this expect professionals to are we care we system distributor systems of other health

We will and direct distributor this and monitor sales hybrid strategy. optimize continue to

and its on same geographic Additionally, the for The COVID-XX no major the COVID-XX May Use U.S. respiratory PCR U.S., less. uses from flu comparable millions test X CE occur reader combo Mark specificity palm-sized based independently submissions Mark anticipated flu are X, received for nucleic on test of and COVID-XX to and we in palm-sized while and and to the are and antiviral and XXXX. producing we for distributed product combo to COVID-XX, with this swab. test of A there for transitioning also flu reliance Clinical test, sensitivity combo COVID-XX or is and in allow COVID-XX for also and are amplification device Taiwan, this COVID-XX and to regulatory instrument Health on our Food Emergency Israel separate minutes and that Lucira's product trial our tests on will product solely Singapore, for platform are acid on COVID-XX which including COVID-XX from the test for assays, test and with diseases to quarter are and submitted Flu were nasal Lucira's design or Clearance delighted May results Lucira Authorization, EUA, the expand May with we Lucira testing. application received Canada, single other X. XX, The On a XX the to Influenza in run positive CE Lucira device authorities, authorized in which lab-based miniaturized second Drug away Canada, the footprint Flu results date. tests B Administration. flu to revenues treatments.

flu cause viruses circulating. symptoms and treatments. such similar importance COVID-XX reminder, a providing such product, flu have them of both tests, This the are as and and the the differentiate between As underscores infections utility distinct that COVID-XX when that but

infrastructure we demand in and sufficient the XXXX, support efficient of COVID-XX We including leverageable have an to and combo now has that product. flu believe anticipated production capacity

potential efficacy, However, of potential stated withdraw to booster remainder guidance. vaccine of cycles factors $XXX are that million. anticipate seasonality visibility potential An peaks, contributed throughout variants the into lack seasonality and contribute XXXX, a cycling the internal analysis COVID-XX challenge decision that to with withdrawing given the year. unpredictability we to We Many the previously associated timing surges guidance new of of COVID-XX revenue of the the of will weather infections, QX to mentioning XXX wave COVID-XX that administration Biden forecasting for of the illnesses cases of The strong revenue of population. a respiratory quantity is quarters. almost the influenza-like Note represents cause of million is be QX quantity product a and U.S. underscoring cold average demand QX. combo which Xx U.S. X/X the number, nearly the illness in potential this in infections,

demand. expect expansion bolster our that into commercial Southern the will We midyear Hemisphere

respiratory Additional STIs, tests feasibility and undergoing on are evaluations. platform, primarily our

home are developed As information to testing and Lucira real-time test is these information to bring about gained to settings, as clinics have test and approach we to and commercialization momentum products Empowering COVID-XX departments. relevant medical professionals emergency will patients phase, such that accurate infections we professional actionable the shareholders. enables treat treat. building through into accurate, health on hospital the report to care and and with

and for commercializing new work and the the instrument-free, it provides appreciate enables care, leadership people setting dedication who success an in experience of forefront testing in is Our are changes any in factor at hard bottlenecks partners and eliminates of easy-to-carry employees, simultaneous and reader- care. point form multiple Lucira's product, technologies our delivering travel. because of of Lucira. is We health contractors for long-term in

that excited new our new are We George, CFO, financials. progress a turn discussion over detailed and the will Dan we I making are markets. the call with products to for of now in

Dan George

issued refer an the a Please over release was our today approximate XXXX. the quarter for Erik. of revenue Thanks, first increase first $XX.X quarter for summary the of for press financial earlier XXx million, to XXXX. results Net first quarter our XXXX of

a international XXXX consumers gross distributors, margin direct and first Our for and sales, close profit to respectively. quarter were sales and negative million quarter net businesses XX%, gross loss and $XXX,XXX for margin respectively, XX%, health by driven first to care and $XX.X Gross primarily sales to of to the revenue of providers. XXXX compared was the of gross to and

manufacturing expenses quarter of third-party and services $X.X primarily profit administrative primarily R&D by quarter Selling, to and driven the gross margin million in in personnel-related same in was were million in output costs increase efficiencies first compared the compared increase public facilitate increase was approximately sales general same through Our to commercial The and million compliance. were $XX.X increased of increased to operational and million first related the scale. XXXX XXXX. gross company $X.X period in in in period and gained in XXXX to expenses the $XX.X XXXX. and activities

period development, million product in and the $XX.X was million clinical net from primarily our quarter financing in profit. approximately New at investments contracted now income XXXX. income net GAAP manufacturing of primarily $XXX.X in to to the with Dominican tranche us was of was increase decrease been validation million $XX.X cash same We loss scale. of same of of gross compared closing activities QX our first in $XX.X compared drove in our the net manufacturing Most cash facility the These in first The GAAP non-GAAP increased debt period XXXX. the loss of in of manufacturing XXXX activities and the agreement Non-GAAP net automation of QX resulted compared million million Republic of increase. completed, the the $XX end in to million ended a of $XX.X XXXX. for to XXXX certain in loss related have primarily investments in cash to critical $XXX the at steps. allowing The include million. quarter manufacture net

in functions. County, investing are our and San in We Diego operations house also commercial which facility lease will other

We necessary our strategy. long-term to have the fund cash business

XXXX withdrawing guidance, million guidance stated, For revenue. XXXX our in Erik we as $XXX previously of initial are

the over reflect quarters recent visibility resulted may although decision remove annual third QX. second of And back anticipate limitations significantly Q&A. output the for down uptake assessment manufacturing in We to I'll now our and our estimates demand. be demand that turn from Alex revenue expecting sequentially call in are most and we QX, guidance. to to commercial These in

Operator

coming [Operator from of Instructions] line question from Weinstein the William You have your Blair. first Brian

Brian Weinstein

we I and mean, drop time that sure about to is changed contracts, of time and off all removal that, of included there, the kind everybody how last $XXX of of the guidance But that I'm guess I quarter, business. But thought understand in Obviously, there. make trying we'll a so think kind of the demand that was that guess, right I in and -- about I I million the that And kind outlook that maybe that the I these going at spoke, talked today guess we numbers start thinking with, to last you're I I still just was what's million we really guys versus again, what confident that think to going thought and -- significantly. knew precipitously, that guys knew about about committed get I you $XXX was to want repeat binding. you pretty drop off number. all but had seemed myself, to you was think pretty before? demand or

thoughts on any that? So

Erik Engelson

throughout it comment would prudent year. visibility a of than of additional lack We the lack And remove other the be guidance. to just no that. no So here, confidence thought

as more, we we'll share the know go we year, As through more.

Brian Weinstein

right still the contracts of my in the binding that about Were have are thoughts? Are accurate from available? numbers committed different terms and what you numbers those

Erik Engelson

we've not now removed levels So close But the just about customers. all with we those product. the of point guidance we're excited at of that have They're detail. comment relationships this about to They're our going on excited product. new

Brian Weinstein

are involved you from who And testing of working in government or way funding working to are hearing anything people on Are the with try any there? way the and able government Okay. in needed? else ensure in And that kind continue with to expansions capacity then you and anything any purchases COVID manufacturing they are as you any U.S. government? any and the fund are that's

Erik Engelson

We that have do those to to we're discussions do party interact nothing along and we with report the to referred go government, Those those. on but you lines.

Brian Weinstein

And the EUA scaled thinking It season. And you'll you fully season? will test, ahead there think Or the manufacturing be some still COVID to like ahead right capability Okay. the that What now? have have? down you how you're entirely about, you obviously, is you in of capacity Republic. combo shifting only? about will the I sounds about thoughts basically Dominican combo then the products? Will your that expectation that product almost be the is guess, How just are capacity of on

Erik Engelson

COVID our talked But So We in that. we're excited we units in had for. second end the month of been year. We're ability And asking advance product. in we're which this that it achieved way, exactly by well produce It's half very the We'll about. And QX. about are about transitioning getting product, per X of to continue excited transitioning combo by what of we're production. process million extremely of well. the to as the the to customers they've the the

If you're X to when virus going they present similar symptoms. test to reason with test, there's no for only

So excited we're about combo extremely product. the

Brian Weinstein

it. then is for OUS. Got last And one me

talked revenue. in about being a we you you're whatever that's, of about I revenue think it, that those had OUS? but And think for XX% Southern about commenting potentially recognize along in our opportunities you I call that to in U.S., on had models, XX-XX we're split I about going that didn't mentioned it should guess lines, Southern is Hemisphere. be put thinking I not aggregate, appreciate I the you Hemisphere. something the And

tell are great as that there, So me down doing guys be would if you well. can you anything that

Erik Engelson

first strategy, for provide more turn Hemisphere. That question. of part that business on over we And So the expand. expanding of we'll globally. the Dan we color as it I'll have a to Southern strategy, And a growth the answer to your includes

Dan George

think the I about are around assumptions accurate, split Yes. Brian, your XX-XX.

Operator

line LifeSci from the Rakhit next Capital. of Rahul comes Your from question

Rahul Rakhit

the If are the CE I for your affect of the guess test, thinking split, the And for specifically? I'm expectations XX-XX it, kind little of of following about combo previous do split Just in test available some how we questions. you or EU does year? a understanding half be Mark other up that in the the if with being now a bit of a some combo kind there orders with tailwind, would second the expect

Erik Engelson

as test. about combo So well. are excited very Customers we're the

as continue I And well. the as Europe early proud we're an be we we this there as is in very see will get season think Hemisphere, Mark COVID of. that a flu in into achievement that we expect and do that uptake CE to cycle, Northern

Rahul Rakhit

I wondering just on some of kind you any was milestones any on. you're be And the give guys it. you could Got programs your of of aware attention? Are there if we of the of? focusing Where color that that kind pipeline us working of majority are kind should

Erik Engelson

company developed them bring background, pipeline, focusing STI now discussion so, combo about comes the and on in assays. the other we'll I But had flu other which the digital nearly XX its for addition and at as assays We're and our we'll test. it was excited. excited years gonorrhea we're include chlamydia forward And investing, this days, on to development well respiratory time respiratory products would as suggest products. because are ago, do COVID we in the in the Those as early When so continue those share other in here. and in platform the customers very our and specifics. as productize

Operator

Engelson, over our call I'll back closing turn question-and-answer for to the ends remarks. That Erik session.

Erik Engelson

your afternoon portfolio Thank global all is interest in reach. we Health. The as and our for Lucira expand at and for commercial Lucira you, test time future this Alex. decentralized your exciting Thank you

swab, a the and versatility a are for, provides combo and a launch transformation the our of asking While upcoming into COVID-XX of it testing diagnosis commercial platform. accelerated is what the our flu differential with demonstrates customers single COVID-XX which product, company,

future to forward looks team entire achievements. Our our

are We well. we confident executing are

the have Thank we right the and We forward great to And evening. team. have you, are looking future. a

Operator

that all gentlemen, concludes Ladies call. participating. Thank and you for this conference

now disconnect. You may