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CNTG Centogene

Participants
Lennart Streibel Investor Relations
Andrin Oswald Chief Executive Officer
Rene Just Chief Financial Officer
Puneet Souda SVB Leerink
Catherine Schulte Baird
Sung Ji Nam BTIG
Call transcript
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Operator

Ladies and gentlemen thank you for standing by and welcome to the CENTOGENE Q3 2021 Earnings Results. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Lennart Streibel. Please go ahead sir.

Lennart Streibel

Roberto. Thanks welcome. and Hello joining were discuss reported for XXXX third results, which earlier us you our to quarter Thank today.

You the can related and press release view on CENTOGENE's the presentation website.

only as including these any not the financial view two, slide development are revise undertake include actual meaning forward-looking we developments, except statements by this being, to November statements and update you unable we Referring like may risks before the uncertainties, of Statements and statements, securities would XX, everyone laws, as future which this those or at investors.centogene.com. to in if can this programs during For today, find results. as of The remind to could the forward-looking corresponding obligation our I the such, of historical make events slides and to plans, they required be no strategic law. affect webcast, to presentation we future within that conference or those forward-looking call statements call statements our statements reflect may results. will to made subject and speak regarding materialize, U.S. that be on the materially

our information Additional SEC appears these regarding statements in filings.

to today's our three, Chief Officer. If speakers, you Financial Andrin turn to and to pleasure Just, Rene slide our it's Officer, introduce you my Oswald; Chief Executive

call to a ending Andrin? three up financial summary We will September our questions. by open slide Q&A to will you first that request fiscal begin Andrin. to we of then Please to closing the I of turn maximum session followed turn like general kindly with for update XX, the before remarks. a a results already call We would over business last quarter now the four. ask

Andrin Oswald

Lennart hello, joining. you everyone. for Thank Thank you, and

strategy has making with update our presented our As will June Investor and progress on the we're I core Lennart the some on updates Event. on business business said a implementing start also at

going relates those also to our we the the end to and we one will plan two forward, and COVID then outlook growth, with of that for and with course, company and Rene review, the Q&A. elements it As in how address future the to financial business will be featured power plan restructure

So, QX.

Our our QX progress performance outlined meaningful as priorities, in Event. we strides business core our reflects making execution, which on Investor strategic

for quarter. are solid we development. data-driven to and quarter, is we mentioned, At reinventing we grew last delivering In QX last continuously and As where revenue core expanding saw our see business, year. Diagnostics versus the consecutive XX% drug the this second segments business growth which performance, approach core together discovery Pharma our

We see that are growth. very to to business is core happy back

testing we're have COVID a our in core revenues landscape in proactively, is are did in Diagnostics, we overall previously. our acting including communicated which to COVID-XX and not shift to business While Pharma seeing line top line, contribute are continue over what efforts testing focused on and

Please next more detail increase This six. in bit new having individuals business a segment years. that in turn X XX,XXX our Bio/Databank Bio/Databank million to steady discuss slide of rare for we of couple what's Foremost, to our now in about demonstrate deal diseases. goal our to will our our diagnostics close we're observed to added superior the continued a is QX. I diagnostic commitment core the the expanding patients and In segments. period to business offerings approximately excited of

previous XX% core revenue XX% order can in Here specifically on intake quarter. the segment, the mentioned see up over of the our Diagnostics More on reported graph in QX business. you the we XX,XXX,

growth, the business seen up we segment the XX% Within returned have to year-over-year.

segment Diagnostics with the these value in our the diseases nice return, we've we rare growth. diagnostic to covering business for and with We believe propositions it's ranging see the offer the quarter widest last globally, quarters, indicated teams trends fifth unique We portfolio testing broadest of have currently consecutive had.

Turning Pharma to segment. our

We Diagnostics business Pharma have revenues recovery year-over-year. down compared seen segment. as segment to experiencing the attractive

have of as a results translate the revenues. highlighted a in from of to that it's past, until mostly timing a relates we new it signing As partner the revenues pharma contract the with issues into delayed contract

collaborations, have However, advanced we revenue started active generations. towards and in recent ones they're now XX XX all new quarters

back we that later I to that are details seven. business share will some to QX. so growth, And with confident pharma the slide starting on on. return quite will further turn Please

the business of versus bulk order cell progress our The at core look and driven lines. diagnostics period was sample primarily knowledge of includes by Pharma, XX%. XX% [ph]. This in where making our intakes Diagnostics Overall, growth in Pharma our Here, the and units, business number Bio/Databank, repository. increase XXXX, up well contributed were requests which as test same growing on in as samples we're data is

the repository. number in individuals see you right, our the on graph of the On data

and we added XX,XXX individuals of our Bio/Databank rare believe discovery revolutionizing database. core differentiation XXXX, the of course about for basis of rare diseases. development the the Over the new our eventually be our disease-centric our We to will and

or tier, metric. forward. we newly a going content as some As previous our patients truly have at of to in the look first event shared the has we stayed its system. proposed data our And strengthened, a summary review into Bio/Databank backs by governance, by growing well that so and CDO you the and to in an it Goerner plan keep past, improves will a years, to the upgrade to upgrade a databank. at stated [ph] we some the that Bio/Databank. At imagine quarters, based our EQ up that share updates Bettina we databank. good time deeper initiative the we the Officer insights databank, by then strategic. few on setting In communicated cleaned It's sure insights number right and in June, the making can defined Data XXXX watch science to up insights six how a in run way our in mind and investor This approach It's the is as what's the devices now

As in XXX,XXX. of active samples our XXX,XXX about QX, end about the approximately of today, have XXth, speak repository. At patients -- we patients November we and

is ability you more and mine Bio/Databank, we we really Some communicated had will that and already there number of improved, of ensuring come reclassification now XXX,XXX it but we robust insights. the the that the review, remember quality recent the have to after have the with needed is of however, cleanup about of to number, that what in previously, and up

provide with some going as metrics to growth Turn we and more of the eight. to Bio/Databank. the it slide relates also Additionally, you to are content now the

more believe, we how You can of the see databank and we details, develop the in progressing what's metrics some going forward. it's that show

We have total discussed. number of results, course, as of previously

Bio/Databank, spots, that's sample blood in but dried go much us back also analysis. the that the so have We that it's blood samples and is do stored further to to why and data, the dried our databanks allow

We have of number versus have data done just genome for the full that example. and panel sequence gene exome we

is discovery that percentage future side And, efforts. Cell potential, that food on to for have discovery our allows network important of is access getting patients. data this an This future are of us in to engage work lines. critical lines built hospitals all and position. with we course, cell active just physicians the also use content of the for samples with have or research. diagnostics, a for that of pharma to also them. our for commercialize course, and not and us on Then We research And the the we

in appreciate you relevance You recent of the way the we're of forward. this can number developed more now the the value slide is nine. databanks quarter. Please we detailed that slide better to on turn we've -- do plan We this, With the forward. to going value see the also believe how to going a also for details -- providing and here and

you area. an And relates can It in see of reflected we closer have neurological data that these Here is partners number strong to that and established areas. metabolic metabolic it also segment there, this is of in look, in have and in increasing terms samples you a diseases. and as -- pharma particularly

research, Please turns think but the space. and we'll partnerships XX. I underlying while in why We've slide partnerships, small shown our something slide we'll believe that with future. again, a highlight shown just Those however, a disease be would event, that at And, will revenue. research are rather we revenue start which As may our question small specific nature. collaboration partnerships the we of relatively the The by may believe is contribution, we're the it that like collaborations revenues. in discovery positioned or and grow progresses, to initial we we expand most these have, in in research uniquely low June have rare the so drug

them, data that Here are insights add we we driven space differentiate the are and some from unique believe and companies competitives. in also clearly

competitive complete And and brands in have are years We network rare a have side collecting disease We advantages. had has samples we filled XX started disease insights rare XX the with company. and and over one years.

do have companies the more that recently expressed brand have it. other in but diseases, those nor rare the can they not also of Some repository bandwidth, the interest do

us Secondly, I footprint also our want unique. highlight that makes to geographic

business. Of if a the good, presence revenues it highly diagnostic especially have a in is to course, commercial it U.S., relates valuable to strong from

what nature, a for footprint we is in overall, the Rare challenge, insight and and global patient global our and to mind is However, required, critical rare believe right data that's patient global our generate diseases. by absolutely a collect are and data have. for diseases sufficient footprint we geographic

enable -- Bio/Databank business omics tools using orphan to our identification, and support, generate is Bio/Databank, clinical to go discovery a discovery our least, discovery, for trial business services, patient This last superior diagnostics, that core. to clinical And remind patient centric remind to rare me platform a not the our for disease drug with model but XX. space. AI Let's for and to you and insights slide in our of at model, develop drug pharma

to I So let's progress. this highlight quarter. slide continuing want few along, what in XX. is a we the done recent updates to go Scientific just have

find impact pharma we and what we Our discovery. in footprint, have diagnostic in

So XX. with let's start slide

As we a to Medicine. around in tried want at diseases Sea scientific a quarter, the to course, we'll number have space. sure attractiveness disease over patients translate as I of Red disease is here utilized We study believe course, they publications our the the just you've a commitment Bio/Databank covered. our of and of rare we highlight and those, here. you of contribution you our know, our And scientific and world. Journal by and core efforts recent of in of know rare presented these that all Taking are depth better of understanding rare look at Bio/Databank. highlight have data revenues the Not a in seen expertise, leading the one for recent our give that sure, to as partner the I'm need to we closer presents the

Children's international find team, the understanding analyzed And for pharmacological a syndromic of including Medicine, create data that medical way Rady Our that Institute birth and to range the treatment condition. Genomic -- a structural deeper have to of unique advanced families to on paves for A*STAR defects.

offering huge every into Now potentially year for deliver the a disease, that method rare sequence what approaches rare custom product Slide partner, highlights has find but for with research Diagnostics to opportunity we for for in find actually development. Together powered announced. birth combine multiple with our date collaborate, of also We recently for XX on assay pharmaceutical disease develop to why signed exciting with X teams what born programs, and expertise, them estimates have and with cost Twist institutions, databank, The create translate Clinical an translates CENTOGENE will offers clinical business, and Bioscience you assays. think million robustness, commercialize organizations it are by defects. a infants translate, academic findings capitalize treatments such if kits this Bioscience developers just and genetic not and our the that drug can such to partnership will the our into and almost to to insights Bio/Databank unique new Twist and we been had to drug are manufacturing be demonstrated of diagnostics. that

genetic deliver that the development, diagnostic ongoing be We to top area. for with offering more year. rapid next testing of decentralization belief a This kicked to plan the enables our in next by off making will reliable of quality collaboration, the and for together followed and It on this milestone have with commercial are laboratories a patients. pivotal to decentralized FTD the and will solutions us is partner genetic role rare address collaboration launch the major progress excited play help trends accessible, testing disease

there months. some related We our efforts our on the product announcements progress around CentoCloud coming in expect also the offering of

progress are confident partnerships I is and at really revenue Pharma that Pharma Now taking recovery on side, Diagnostics had let's than look that there. our we time in to more XX. that mentioned are track slide we with recent but get the

So, you announced XXXX, early signed that. in have the I partnership we want that highlight is Alector. deal have to here We and with

We have just side. an scale patients X,XXX enrollment I a weeks for think of now started X,XXX ago exciting from that our couple large study few patient a it's highlights study. things to And that

team working able with advantage look -- in are competitive that revenues to those the a to who build similar Bio/Databank, overall, temporal associated collaborations in XXXX. have can course, the customers future our And cohort start us this patients mind be generated things right patients, we that or a And interest that next us time us that seeing CENTOGENE here, of will actually number of to disease these to our sort signed has of we the key patients through our date year. example, space. rare such and and have contracts, had multiple dementia Denali new the in, that. do of that First company of for what all, to up insights also with rolled with we while takes what the of partnership Bio/Databank. contracts unique and the quite in the we was help signing But highlights from and rare business that when the the contract And disease accumulated the to actually in be that accelerate highlights high enrollment patients finding for it of are a frontal model at for neurological are customers mostly it's value actually diseases with allows sign the the can and

that be So volume for we some of keep growth you had just started on Please sure that's QX, these to return results the think signed, pharma that in slide a large not track. confidence, Alector basis, that also we back to new XX. contracts we'll

the Bio/Databank our avatars. to like how for partnerships we a plan efforts use Just I development discovery short going of update rare and to on forward. our and discovery would our diseases focus us cure we our I have mentioned the enable to be efforts And diseases coming these in able rare in June the our you, event and years. think aspiration to the and to for on

So, sure boards structure team with You with term that accelerate avatar? What the digital the body regard. fully some progress have in typical developed can is exactly a [ph] heard on disease the the accelerate potential digital swing works may swing that of use. do work copy physicians and and have we made work to that we that Patrice, has make quite to

Parkinson's three derived enable for and by a of and three pharmaceutical and actually be avatar and have make the his models initiative and avatar the who ultimately and our partner -- in value our models patients potentially better drug we is the those candidates to Patrice would and enables cell on around we I disease we excitement At to with practice be XX this then milestone. that start the diagnosed virtually we or maybe the think stop treated, example, to accelerate test psychology we to will avatars diversity and with Scientific up to the and progress of the is and to platform think like on And have disease have like focus were validating have current this able model by we patient, can using done diseases, on that rare on and and at coming And a used key avatar better certain disease least and have take recapitulate that complete. humans three already value. avatars, that avatar so And of a how when by to the insignificant develop clearly data as you last anatomy cell avatars in a avatar. the above to place, to or on hands will part in Chief these our partners. Gaucher have we models a a really We cell and come actually as the to model. an an disease can linked whole we impacts digital to XX, which course, apart up disease that be model the the hundred also leads from a real forefront All to the least on on understanding the researchers once whole CENTOGENE data, And genetic on threes, testing and some who a priority we Niemann-Pick actual disease We, and the For we pass hundred, Denefle, module, approach be rare disease to generate as be call. date how disease introduced that of are this, And to to disease to, those models. enough aspiration at potentially make that Officer, to train insights the with quarters. know, that in a exceeded we won't a initiatives patients such such need drive strength patient treatment we hypothesis we with hundred generate of opportunity the us earnings never hypothesis our mind could believe on the the those before. short-term surgery our

of course, the We accelerate range the our And of stop our we not in three, the next and strategy, that would over work to we and to on those have progress the on and business come. to With prioritize core a will, on hand overall diseases to on update success like make that years of we Rene. there. planned few I to

Rene Just

slide Please Thank Andrin. turn you. through XX.

of partners. believe decrease slowed The the COVID-XX compared of pharmaceutical million. the unfortunately XX% pandemic, by takes year-over-year was cycles. for testing, studies was Clinical decreasing in generally strong declined the by XXXX. reflects pharma the versus from €XX.X mainly the increasing XX% like business a In million to impact will of And XX% I I growth in to year-over-year growth would principle, With to of reflecting recovery to XXXX. COVID the business, only Diagnostics million highlight to quarter the the generating XXXX. a in importance in XXXX, we our was our on in XXXX, longer of million primarily business. revenue million same million the the recorded QX quarter revenue the €X.X core the the in This business, €X.X driven €X.X Pharma due million €XX.X XXXX, sales decreased focus The to QX, QX, by in compared includes clinical €X.X revenues the due same importance uptake in QX, QX, that mainly which to €XX.X XXXX moment. This QX, XX% longer side, overall million year-over-year business. the previous year. of other core core the of expanded representing driven decrease which business COVID-XX to which €XX separately that, Pharma on Our This segments. by in non-core COVID-XX and Diagnostics development to compared

signed of of value first value of full the the already year of months XXXX. the signed our in deal for pharma the exceeds XXXX However, contract nine

in Pharma So, an fourth revenues quarter. we continue acceleration to see in the the

a to minutes We more a represents generated would we trend will I revenues portion portion COVID summary, to now into XXXX foresee detailed looking of our at turn and going take of In decreased, quarter like the where core row fourth be QX, few from business discuss review core COVID the performance. to before XX. Please in business. COVID continuing. business increased by a our slide the

spoken to consistently about the contributed business, to non-core business strategic CENTOGENE have core revenue COVID-XX We cast as the a drive business. and the our has past execution which in in

COVID-XX, COVID-related and to Looking continue projects optimize our quarter business the year out this has that at of is margin to of areas the which negative, means first centers in XXXX. in by contribution on will segment where we made contribution determination the from specifically the to have anticipated will cash focus end the turned to phasing we executive specific order EBITDA Very most spend. airports some phase the follow out begin

activities, and termination, impactful are ramp staff CENTOGENE internally related plant colleagues undoubtedly which down be had will of this of informed now measures, on decision approximately departures. through have non-replacement and we which We XXX attrition as working expected to COVID-XX

schedule related We and assets have related an amortization COVID-XX agreed accelerated inventory. on depreciation for and carefully examined have

fixed accelerated shutdown COVID initial well of cost amortization temporary costs premises, shutdown, the of cost COVID-XX include restructured. sites as related fixed IT of steps which wages a As cost segment costs in and our COVID-XX in as cost segment of reduction of segment. overall. the have Examples since sites, led business negative This revenues sites. months testing XXXX of at depreciation ended September unprofitable unusual expenses primarily by now incurred unprofitable allocated and sales are mainly our that The To in unprofitable XXX% cost been of margin out XXth, revenues. lab for the assets, and sold, was due including of the committed of Hamburg represent to to specific previous overhead phasing we from have which three the some to picture resulted the gross of the COVID-XX to details, give the goods the the of related costs quarters,

a lab operations and the generating outputs laboratory returns consolidating still ensure our streamlined segment, cost is our sites Munich operate and EBITDA. the the Hamburg that labs our also streamlined will allow and the in positive at are to increasing other at We needs only us to efficiencies costs test by to going Frankfurt to positive Rostock, generate which down forward shutting of and our

reassessed out of segment, in resulted accelerated As the significant X.X depreciation we life amortization. down a million our assets in live accounting according have long which useful the COVID we of write all and of form to phase policy, related in COVID

to XXXX and earlier XXXX the building and patient year-to-date rebound XXXX have recorded backlog. have cycles also mainly identification the core due Andrin diligently in business. contract above down The clinical focused sales of write of we longer discussed million the With as that, In will X.X on period seen please turn highly Pharma compared first to of slide the XX. which the the year executing the inventories million we the to Pharma of are million drivers revenue partnership. We in related increase completion trials to same COVID due in quarter. XXXX, team recovery revenue the and full in out pandemic €XX.X main the significantly are management of XXXX. to continued is on the graph the XXXX. The that revenues to the slower be phase manage in summary, in last months Pharma contract the by decline affected value by decreased contracts the COVID-XX in see We is of €X.X nine report in quarter. end signed business, successful

remain acceleration we the confident in of Pharma in So, revenues QX. the

into active ended our million September collaborations total previously in we of the payments. for XX XX €X.X totaled and collaborations, XXXX, on successfully completed new I September the mentioned side. months pharma collaboration ended new collaborations as the XXth, of collaborations XXXX. of first a with XXth, the Revenues nine XX upfront XXXX, no active three XX from During resulting months

a where already chart support. Most trial clinical case, are one the and the corner, pie be with of state In collaborations will clinical the stage this available. with our right identification fields our you which we commercial at bottom in in you Takeda. disease products If reflect the currently the continue look development large to contract of patient collaboration, take that see have

with be collaboration stage Agios All based these the announcements. releases have. clinical of the we collaborations about disease clinical efforts spoke with All development setup used we support do are in upon can R&D recent on avatars already earlier. like or Andrin trials our collaboration. highlighted Denali to press studies Denali and Clinical the building our

So collaborations the R&D data-driven leveraging through expect we sign in insights, for the space future. unique to our in Bio/Databank more

Investor where at been discussed we our share expand to detail, the deal contracts when area include and a move in XXXX. this collaboration generally in these have expect slide first the historically share an added value Please June of Event research As Those may over is CENTOGENE for will would have questions. value to testing only XX. small course for

for look for approximately whole We was primarily from compared sequencing of increase sequencing XXXX. extremely an from as QX, revenues three the panel project adjusted of genome XX% an genome months whole panel revenue increase from or strong in were for whole up in during XX segment an for account testing, million, Middle of by of XXXX. €X.X are amounted at see an sequencing genome XXXX. ramp as increase an intake in Diagnostics our sequencing to exome QX. and approximately a QX, to XX% XX% and increase Total QX, as segment €X.X appears of to whole September million XXth, requests the order While increase XX% our Diagnostics segment supported received we protected, of year-to-date €X.X slide Pharma whole Revenues in exome million received QX, approximately representing whole revenue East. win €X.X test in ended XX,XXX pleased our to EBITDA. testing, XXXX, and testing, in representing sequencing in Panel the growth in well to million the as Diagnostics Please in exome sequencing the in requests the turn intakes in QX, number XXXX. Diagnostics a XXXX XX,XXX our The order XXXX, to test segment segment related approximately compared business

the into the revenue, XXXX, Adjusted Pharma, for million from QX, last EBITDA QX business COVID-XX EBITDA million. turn attributable driven adjusted Total core XXXX. €X.X segments. Same segment compared the minus in EBITDA adjusted million We see same Adjusted Pharma decline after of €X.X The in mix. a XXXX from our EBITDA by as mixed. two we to decrease up QX year. well positive COVID-XX the the a which from reflecting segment mainly report segment The grew in negative EBITDA, XXXX. million EBITDA contribution million the QX, €X.X quarter to XXXX core adjusted business was EBITDA product Dx, of in uptake primarily loss revenues, million €X.X adjusted €X.X the Here €X.X was segment as business hit lower as for compared the COVID-XX segment adjusted for €X.X business the was discussed. the is €X.X in Diagnostics strong million positive in picture for Diagnostics million to in our as of the includes segment

comment organizational Looking would at profitability. the in on our alignment core business. I also

a as on our employee base based focus an by core footprint out free smaller project also efficiency, changes for business. improving processes leverage up resources the through as also with the the This our review core will optimize but is new of ensure going our portfolios. streamlining to associated to the related to organizational the COVID management investment phase into streamlining We to overall team in-depth on overall and forward, business well

operational be consisting CapEx. excluding personnel mainly and to million of of related results smaller and from to annualized, the expect a contribution saving costs, expenditures up restructuring €XX We

see should quarter realignment. a to expect the expenses overtime expect the the million view We core core record €X in and Overall, the restructuring charges business of to we you fourth XX increasing. below the expenses related be of turn to of therefore decreasing R&D to Correspondingly, execution. reinvested portion G&A Please to slide expect in P&L. savings business for

of results at quarterly shows results slide year-over-year. QX left Looking income results And right. discussion year-to-date compare the and the the as we as our on for statement. focus on will purpose on this The the well

profit gross the want and we requires profit We gross discussed core reported this to XXXX, quarter A business gross development, QX, is, the of And loss development of some the highlighted to I the the unusual. a in million course, €XX.X compares the time spend some previously profit business impact reason dynamic again, the in this already XXXX. a as have on QX. discussed. as of COVID-XX. €X.X in behind million profit, revenue gross versus do which of explanation. COVID-XX is On of negative

for Our quarter expenses, year. million compared QX income, last increased €X the including by other operating to

factors me grow in comment that biggest on Let increase expenses. the the

and additional on by personnel is IT and support data general €X principally Firstly, administrative increased increased due to The expenses administrative expenditure cost approximately million. centers. and the cost, increase

€X.X Additionally, expenses compensation million, included the share-based quarter. million increase an of COVID the expenses of versus year prior €X.X

lower QX, R&D development our approximately cost, This cost, million XXXX. a year, which additional was represents expenses decrease were an Second, of personnel led €X in of quarter and IT capitalization P&L. then expense related than the to the in streamlining mainly costs for change the last

an as reflecting mainly service due of million travel increased compared loss total, quarter in well of pandemic. easing and In €X.X online Thirdly, €X.X QX, for expenses million, marketing €XX.X operating approximately COVID-XX from loss our our expenses a million, restrictions to to was personnel of decrease increase a XXXX. million the expenses, in travel as €XX.X expenses, sales the

As by the business. negative previously profit the gross the main driven in COVID discussed, change

to balance cash flow and sheet Now highlights. please slide turn XX the for

of outstanding XXth, as million like cash cash €XX.X to As on had of this of we XXXX, would liabilities. In the September, and of million I September approximately €XX sheet. debt, that remind end lease balance regards to our equivalents includes our of you

flow Cash decrease movements. compared first business segment do segment testing half the in year. impact recognize of previous quarters. the Having compared generated main drivers COVID-XX earlier and negative last in operating that, of the the The leading the discussed the activities through year. at cash profit said we the from from to the fading to contribution were our business improved Looking gross COVID-XX to

XXXX the cash related €XX we a reduction €X.X year-to-date, As in aforementioned this offering, to that, contributed our financing nine the have Cash activities which to million XX. to investing hand development, to the months to With slide COVID Please follow-on back the XXXX a guidance flow used issue. XXXX, X-K me Based the upon we out. million a a In also turn compared due cash in discussed investments. with in flow million page business flow from reflecting cash COVID-XX cash to equity Consistent going mainly decrease basis it -- before, are mainly decrease €XX business, disclosed our XXXX. managing concern compared QX, in let closing for attention is of in with on as activities XXXX. was that phase our to Andrin and summary.

Andrin Oswald

you, Thank Rene.

based our today's So we attractive on that to pharma quite seen return of on contract driven our XXXX business, We, accordingly we and values significant top growth COVID the are of business This expect that touch we'll good guidance QX. declining to let and also have be guidance. we our the also business, and confidence XX% from We've an COVID-XX. between off me recovery are signed prior will versus round mainly line financial is on side, revenue by to the that we core the course, on for call, see Diagnostics and overall, adjust contributions to business, year. XX%

execution, we digit for business, of leading in value with fully of just With strengthen a to to require we few full growth business long-term the building XX. Core business disease XX%, the stakeholders. our points our Diagnostics high business position Overall, plan disease XX% be expect the the shareholders create after back year in growth exiting our up XX% this capital recovery mid to also COVID decline to that, slide the be rare space our for and single in to and core quarter. on and However, on activity in rare strengthening to focused XXXX. attracting a summary

Clinical testing mentioned, we our accelerating pursuit we strategic adapting changed, by I in in of plan program business. business employees remain our Parkinson's confidence business, Gaucher on on to remain services closing, and capabilities of continue core our not growth would express Q&A. I treatment while are Diagnostics to We the back course, and exit just priorities it overall we like diseases like on to our operator and performance to strengthen [indiscernible] make business understanding that, and our our COVID-XX our and to in drug Niemann-Pick where the tirelessly Pharma research committed starting discovery cash the With started shareholders and for emergency to testing a So step-by-step in Overall, on have core program our [ph] and leveraging and [indiscernible]. best diseases. and As Bio/Databank rare inevitability diseases./ implement this hand our unique we landscape rare genetic for recovery we our we have to reduce would continues cure to shareholders, as partners, delivering capitalizing the that to

Operator

gentlemen, we Puneet Leerink. question-and-answer [Operator session. now Souda from Please ahead. go first is the SVB Instructions] and Our begin Ladies from question

Your line open. is

Puneet Souda

Rene. Hi, obviously. Yeah. of and questions, Andrin A quarter, given couple the

we margin the out COVID first gross your you outlined shutting I cost to as were your down don't you're first that operations So, on quarter. think I negative. your in mean, testing. margin, COVID appreciate grow significantly pointed due to I testing be gross expecting

XXXX, secondly, for long on cash before you given you So then, look your current do terms us further do in cash So, fourth you could raises. as R&D elaborate -- we positive? when runway, can increase, can that runway, my of into to sort potential capital continue how the elaborate be the of that And long would the quarter. Thank gross do expensive have at margin you it question. first return to you. how us, think appears that's But

Rene Just

the Maybe COVID I the that are mainly can development in profit -- the business, you the comment this reason negative twofold in in one. business. or first COVID The seeing profit in the drop gross on gross the seeing due to

to actually important, positively this business, is very core compared last is Our year. developing very

see in gross to million year. gross So, last and improved quarter last in to compared quarter increase profit €XXX,XXX profit €X.X the this our million €X.X core year-to-date, year to from the has from million an €X.X business you the versus and in year quarter core

has negative correct, business coming the from down of as gross activity the the activity I in level are of decreased reducing In and total about improving. is Having profit QX put has the said gross it we in presentation, in I decreased continued you XXXX also have QX. actually should basically there have may then million. -- that. that, so this initiated, for if of you ramp is the the have cost from our -- mainly seen QX put is like and So, told also QX, And how it -- with two activity underlying the the the and that, COVID QX as this core reasons course, into And negative. of €X.X as in on. we profit The is employer it's, that in XXXX

two the Having we the have ramp we Here, reacted major the for down until activities, the year-end not full except to decline. decision revenue the to then decline XXXX. have airports business made QX of fast COVID development month compared we of a in that tell exactly, can course, due for enough part me that But you will I the profit the continue revenue to into QX, in these in And gross then little of then, in you, can the an answer seen due increased and will to difficult but that, COVID depreciation. continue accelerated negative say, it's have said we activity amortization business. the October, bit will

So, actually we are positive positive very month of the and EBITDA cash in October.

continue we on. expect XXXX -- for based the and So this development the rates the in and upon in QX infection to so

You but course, Germany, world. all, see, of first around in the of also

very in expect that this positive QX. will So, be cash we

negative right question. then seen, question on that development that I gross may QX And reduce streamlining today. rate based the going now of we was that and position how would you expect this This for if it a believe have the the mean million. this that that -- all, you long And Therefore, to the approximately basis a QX continue how explained, was, cover put I'm €XX also ticked activities. I not and cash cash have put started then implemented to I will I the going will next So, profit the should off our like it not I I and concern cost we as of to issue. year do burn our second over with the project, no, like currently say this XXXX. cannot If coming put I has be QX we first last. current been that, cash upon first expect the will also in have your This QX answer have the where do to that we means -- year. disclosed --

plan with said then €XX million cash. Having €XX we reduce in we significantly million. So, do also that, to have burn rate the

year, any cover issues. not So based million another far full least will current not I rate. €XX upon be mean, will the into it but should at cover XXXX that the the burn

are opportunities, biotech to that it's do our a like various cash also position, have, what a which of we it, look strategic also with for currently say course, we due you is potential in reduced important company normal have, to discussing ours, and typically Finally, different, hunting we into call to partners. also

or are in It debt. issuing and We additional terms could investors either some potential of terms also be in maybe with of in other investors. some discussions minority equity

-- So, as on how of soon -- we and we top I more put as we will, of information, to this this course, it have are should disclose you.

Puneet Souda

Got it. Rene. Thanks

appreciate expect Maybe impacting a that do you. you be the to XXX but believe is improve XXX,XXX that's that. for are in you recovery the are That activity walk I patients should increase. Pharma you us core offering. XXX,XXX your you the pharma, recall And as quarter. level step-down some core database. there around business, Databank, -- business impacting I COVID obviously elaborate sequentially totally a the reported, database to What that Andrin of that continue in that why business is the And the On decline and is for I in because parts talking well? about the just appears through on development realistically this what and on happened? somewhere XXX, that from just exactly to Obviously, ground when also -- obviously the Can could this ongoing part on this of declined -- that

Andrin Oswald

is collateral Yeah. the into the so data the Bio/Databank new first one, product increasing. Puneet, coming that

QX, it Difficulty] as to the mean, alone. patients we Databank on another exact in XX,XXX again, [Technical So number. in On that slide eight, QX added significant I

down The And robot. trend us reason have quarter-over-quarter. the you and is step Data Chief highlighted, increasing with for nature. started new we our lab that that story It’s So Officer, of not overhaul what an think as key the that granted, for to but samples of just we value. count, in take historical have Databank, longer really really validate, no is we

that I So by a that this mean, this Nothing the [Technical samples baseline year. from has is of led coming from theme historic Difficulty]. be to of patients. reset bank been patients will good of in -- XX,XXX that have from a

in samples a at are years, XX analysis. And, in research genomic secret are also such accelerate. today, the On that level. are much just and more to absolutely it than the strong XX% the -- of very that not is robot already come we also of that, the Bio/Databank so trend the and we samples -- we to expect course, it’s samples content The the being position that valuable or had summarize, we do have to maybe of growth remain much today course,

ago. that also have couple that can course, a with weeks see of You whole that more sequence of we exome patients recent is the percentage much time, come genomes, in the of higher than

in be on signed commercial its and to year's will but the that feel XXXX start you're is will in then by And emphasized QX. we we signed contract when all see this at as has of to into in good time continue to And and counted fact with we revenue And at contracts had given had the came we and but contract the close by Bio/Databank Difficulty] company affected that believe all that [Technical sign look there year, first encouraged keep patients been not next the mean, and when for very such real. the XXth, a now overall, this is XXXX. signed COVID mostly we progress quality we when then, is year. already least QX also not on we that November and core for the Pharma, signed business the refocused store. and have in it highlighted told we contracts first the and signed have you really starting new strength over, -- contract, that will not as what we date, the pandemic, in good So, the I the more you -- not partnerships board, I the the wining I by point significantly. on remains in very whole see we have we It's of a to recovery strengthened start focused that as the Pharma recruiting on quarter-over-quarter. the that that But track

Puneet Souda

Thanks. Okay. in. hop I'll others to let

Operator

your Please Thank you next Baird. from question. question go The for is from Schulte ahead. Catherine

is Your line open.

Catherine Schulte

guys. trial terms Hey, do again. for as COVID Thanks work How pharma? diagnostics guess, of first, that you been across clinical view world then for quarter, core additional lockdowns impacting or have and in both the the questions. lately start rise I cases your there restrictions some to fourth

Andrin Oswald

Yeah.

the we for testing On question. uptake do see volume. thanks in COVID, an So

on the a will -- uptake a season traveling track high If year the it a down would we ramp tremendous QX. if continue will continues, said, lockdown well depends, testing volume It's be again. think additional the during given we are the to last execute the see on some or to the will I go would I volumes really to we COVID that I how the down, might potential be mean, Germany. lockdown in be to showed travel, think traveling course, the as lot leads relate be normally the as not? on generation, or ramp the season would to than of and and we business -- strong this the -- overall generate holiday will this travel mean, lot stronger of But strong had I down that will little cash not very the December. depend restrictions. happened expect We testing strong will year cash. bit tell that And during and of early QX growth it we how be,

second -- question, you was As for the to unfortunately. have me, remind which

Catherine Schulte

the diagnostics business Yeah. -- It's of the non-COVID core side pharma. more on the for

Andrin Oswald

haven't now, -- change I but start now. in think we Correct. that And impact impact. right now. Up even Should it here, somewhat seen significantly month from we now of to current In center Europe, it's that's may overcrowded. a to pandemic, an any that see worse don't get the get hospitals

be So more be made or clinical as in that work our our some But some they standard trial. do testing speculation. on slowdown impact the would that's -- prioritized testing or pure they

seen haven't any to We date.

business expect in substantial I don't how a if you months be even if global impact phases any it last got way see do it see a of in also and smaller regions presented we near in one happened come. have not different do We in there and that we to we given were is not year. dynamic compared different to over mean, to slowed and region expect the down Europe the to overall in a to we're

Catherine Schulte

When and what a talk Okay. will you And improve Got differentiate or you're they'll bit those request? do diagnostics? you be can with custom more little your doing it. just think available about kits how

Andrin Oswald

Yeah.

we be too expect we with is how that working have that in we this are their year rolled and terms expect we that rollout what rapid further cannot solution. given what teams them. give to you I to deal we as to offer So, of we into think [indiscernible] cannot this plan when much collaboration year, next CentoCloud in a exact before out our -- accelerate And to insights our to of them quarter the more with I the expect highlighted But we and on also -- share it say testing have announcement alignment on will a progress. decentralized

Catherine Schulte

you. Thank Great.

Operator

Thank you question. for your

Ji Please the from have ahead. next go We Nam question BTIG. Sung for

open. is line Your

Sung Ji Nam

Hi. taking questions. Thanks the for

signed this from or XX the curiosity, the or what from percentage is the have that sense even customers out XX contracts pharma years, year, coming you've last, is do of to plus year-to-date, say, two customers? coming months roughly existing a you percentage Just would versus I even of new XX of new

Andrin Oswald

Yeah.

at look customers. majority contracts, number in new it the you of how So, are terms of from

companies for a of In of some from are of some split, you're contracts, I half and significant are buying would hence smaller. terms have say but value, asked the new of size, more past. course, existing a ones about if value the the And roughly,

Sung Ji Nam

just projects the ones ahead. projects, the for completed have a drivers? that have -- Gotcha. and Okay. they're not out curiously, And main go their for what Or have expecting? do sense are that signed Yeah, not of you on if have new

Andrin Oswald

repeat have, rare. Some of And large be or partnerships us. we that of starting a on to and right? disease then relatively priorities, program would approach. on buying of I a the of can exist will to needs to with the -- forward-looking And date scientific if make that I but to that need partnerships, specific And overall, not company, -- think, then the course, needs I continue. working by course collaboration it one Then them it a other think are next the but of we these it's with course, have most the companies specifically date they project, focused that fails, have to likely then, it rare either statement, larger certain given be stops, you customers. I tends needs all say to mean, I lot

Sung Ji Nam

to target? be just long-term growth on rate side, drive growth your place are underway to the able efforts able business further your have on diagnostic then there? you continue or And in infrastructure place Gotcha. of there in achieve that to to of view kind core in to the side, are currently diagnostic Or do be kind

Andrin Oswald

I building are it I terms. have the expect. infrastructure, of an have If U.S., takes still, we depends when it it not that at capacity, a which consider presence the I The labs, infrastructure decentralized us. to relates I call commercial what investments I that up and what think it relates mean mean, where that, important with we would say we and again, do we in but U.S. have our are do in have and stage a think it, two not be gap highlighted stand at as in also share why option is, to least it ourselves has there and one help it's the the partner mentioned can project maybe the we to is like. at always we and proposition that I Difficulty] developed would it's past at laboratory different that we CentoCloud, commercialization And the we And couple exploring we that's see strengthened in partnerships. opportunities months working course, look significant look of in already that U.S., value interested in Infrastructure, we as partnership our a what there to [Technical U.S. because the potential are you who with and we'll but our as for you footprint need. is you the I someone where

Sung Ji Nam

taking Thank questions. for the Great. you

Andrin Oswald

right. All

minutes. Before here we more? take are we four a over little bit one about Should

Operator

There you like are no the conference? to further end questions, Do sir.

Andrin Oswald

better. Even

Andrin Oswald

Right. All

then think close can we Lennart, the call. I

Lennart Streibel

Thanks you quarter to talk very events and well. joining during us the for and Yeah. you much next and goodbye. investor as Thank

Andrin Oswald

for Thanks calling. everyone. Bye-Bye