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AXDX Accelerate Diagnostics

Participants
Laura Pierson Investor Relations
Jack Phillips President & Chief Executive Officer
Steve Reichling Chief Financial Officer
Will Fafinsk Craig-Hallum
Dustin Scaringe William Blair
Call transcript
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Operator

Hello, and welcome to the Accelerate Diagnostics, Inc.

Second Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Laura Pierson, Investor Relations. Ms. ahead. go please Pierson,

Laura Pierson

XXXX it call to within may XXA XXXX. Act of begin, Securities of presented Act Exchange the that during Section of of Securities the this contain of Section is we XXE share the important information meaning and Before forward-looking statements

company's report that Forward-looking are and are Form December Phillips. greater statements These cause reports those SEC. made now in that could are detail statements during about President discussed and other subject the historical my to not XXXX, this and for projections, in we future statements call ended and our year to CEO, is annual are with uncertainties risks, facts. the to It factors include conference results on materially. actual our Jack that All the our file forward-looking other XX-K pleasure XXst, introduce differ

Jack Phillips

welcome call. quarter we second Good through Thank our quarter to June. Laura. and results financial review earnings XXXX against will progress detailed afternoon XXXX you, made priorities call, today's our and On second

on new solution the goals. testing base, open, Pheno of progress to expansion are our we to X.X. through susceptibility the ID/AST standard quarter, our In We products stage next-generation commitment rapid XXXX, we integrated this establishing In care. of and market the these are unaddressed through segments meaningful committed launching setting advancing made platform market for the development increasing the as customer second

customer First in funnel installed contracts improving our new prospective and of conditions revenue-generating pandemic customers, base. increases contributed to

our advance development Pheno new system. a AST-focused and of launched kit the X.X test use we addition, on for In our Pheno system

to like it progress our the priorities in providing financial our quarter, over I review details to would Before to Steve? quarter second these results. additional against hand Steve on

Steve Reichling

million in Consumable for afternoon and the sales revenues same Net period quarter grew to This quarter the in second sequentially good $X.X XXXX. over and the Jack million $X.X quarter. you, were million first million by year-to-date. XX% and $X.X compares Thank everyone. $X.X in the

XX% $X.X factors. the the production compensation decline stock-based as by margins months instrument respectively, million grew efforts the and goods the year. $X same $X.X prior same XXXX. the of periods prior and were revenues costs. compensation gross non-cash stock-based of Non-cash year-to-date. place million million was the the and from $X.X and period were XX% R&D These same second XXXX This stock-based year year-to-date. year. the Non-cash to stock-based $X.X year-to-date and respectively. million period expense six in for excluding Selling, second first the the year. compares external same same in in were expense improved same other study-related The margins for year-to-date year. sold million and internal million $X.X to quarter gross million expense during These million to XX% periods costs of million were quarter cost prior compares of million million consistent resulting compared and in million consumable expense million remain result $XX.X $X.X gross were in to of and and $X.X the and Additionally, the Research in the million XX% $X excluding million Cost the million and the revenues costs million in year-to-date million were in and and quarter compensation $X $X.X compared of the efficiencies $X.X quarter that in XXXX. million compensation This during in lower cost-cutting were sold from quarter compares $X.X $XX.X from period periods development in non-cash in in This prior in and administrative while and $X.X decreases general the $X.X compared prior margins goods and the million of to inflation to decreases from from of of $X.X ongoing $XX.X expenses result and the XX% benefits the SG&A put resulted year-to-date. $X.X from to

Our net million the stock-based $XX.X compensation million and non-cash loss, for excluding $XX.X quarter was expense year-to-date.

$X.XX used loss financing a quarter and respectively. $X.X Our the for million share was year-to-date cash net year-to-date, flows for $X.XX million in $XX.X Net from was million million $XX.X resulting activities. GAAP of loss $XX cash quarter per and the net and excluding

the announced in on million we of contributed transaction $XX.X the These to transactions tranches the equal closed and in insider During quarter financing quarter, the December. second of million three we second year-to-date. that $XX.X

under In these results for ATM one greater of hand of I facility detail. the sale cash made review $XXX,XXX. will in addition, we we quarter activities ended Jack, our to and quarter second million. to Jack? back financing now our $XX.X Inclusive with it investments

Jack Phillips

Steve. Thanks,

we to launch customer and of of normalization increase ID/AST hospital improvements. integrated In prospective the and quarter, are PhenoAST readout the ID/AST second integrated the priorities meetings In quarter, hospital Pheno XXXX implementation launch and solution increasing that the our positive be a solution would further improved from require increased. of adoption rate and PhenoPrep by our formerly outlined registry of priorities [ph] first supported to Arc the Our of and access of a X.X. our number access study advance product adoption

we in in go-lives quarter. in lingering to COVID stakeholders and saw Despite fluctuating the access However, focus. inconsistent there hospital related customer leading pandemic key hospitalizations increases and continuing remain new contracts the remain to cases regions opportunities were impacts these headwinds,

this many patient largest The of clearly per evaluate testing. This spanning clinical clinical our we decisions. the current win hospital Pheno quarter, times demonstrated and ever adopting susceptibility to time to in data to optimal XXX Pheno. length the to reductions In continue kidney their the business. see was business. stay. nearly sepsis resulted data the conducted the compare impacts use while our study testing, data rapid evidence using XX-day use mortality key the refine of optimize to most new outcomes strategy rapid XX.X% to sepsis to this of studies body to to material statistically clinical necessity the of the susceptibility data with These and our in data released that too comprehensive acute to for released that of compelling the patients and from are of reduced early from X% Notable, four prior mortality, build injury We was on on using of date of day Pheno state therapy clinical improvements the impacts therapy most it's Pheno in

resistance enthusiastic are are always result important customer product interest this offering. generating of daily the about We integrated outcome multiyear we a this. and Antimicrobial as of believe it's to and evolving to is ID/AST continue enhance study new our

of expand which performance infections improve and aim out AST rolling The is product first enhancements, for to menu wave Pheno's bloodstream these now.

Additionally, the metrics funnel in another we our updates drugs shipping and improvement execution deals installed live to address base we progressed US improvements to the instruments four two into US improving quarter. XX go-live. eco-friendly additions our customers patterns instruments. modest commercial XXX enhancements and sales with XX pending XXX instruments globally. revenue-generating live instruments our In new of kits. a brought and storage quarter access and algorithms packaging new resistance translated new adding to These reportability of of brought hospital including Collectively to evolving the prospective we to closed in and the test series gradually in In to improve instruments had brought dozens EMEA, contracted clinically additional the

testing. Pheno is integrated XXXX is providing products rapid new under-addressed offering a These of The existing [ph], on rapid area market prior PhenoTest identification sooner than kit results customers of second to workflows. investments for the result the have an MALDI-TOF seven and but results. focus the segment hours, an about and rapid existing or current in solution sample segments susceptibility launch appropriate lack Pheno in antibiotic new and answers ID/AST from new need This loads identification through customers opening in panel kit for already system regardless the test Our by PhenoTest preparation place identification. AST AST ERP United kit test complement new for workflow typical customers susceptibility in lab an launched day available testing the accepts The now an rapid rapid delivers who of system for States. AST avenue important adopt identification of a to

to are in platform. greater with menu identification. a result new these are a plus cumbersome alternative We also obtaining time. equipped of identification identification qualified leading labs syndromic is rapid deliver automates microbiology be result. and of interest leads. and rapid result MALDI the to U.S. formerly deliver the the with to ARC platform, seeing substantial Half by US MALDI time the strong a The access is a platform a customer PhenoPrep to laboratories an the which good affordable giving ARC a molecular panels for will by delivers price. method in front-end significant most a represented ARC, hands-on steps in MALDI at improvement customers struggle to more the initial a EMEA. increases But MALDI new in workflow

configurations profitability and market fast design. we internal hospitals our on Pheno estimate through to market and summary, system the Based and X.X and first allow deliver results a the accurate will consistent size into will our quarter. multiple with progress, learnings over we were higher current working Pheno incorporates testing This to market of profile. and X.X. us continuing fourfold available multi-sample platform, the types. are at X.X addition Pheno extensions, of will sample a different-sized improvement capable This system. expand expand confident ongoing across its increasingly across these system susceptibility available In and and next-generation that second of improve stepwise In results financial product our the that fraction to prototype our cost our our decades in various launch expectations quarter are We volume technology

AST-focused time as test interest and generating We accelerate result. and on are kit significant also launched our a

The registry intervention reduces Rapid costs. to and prior testing side unnecessary our lives, clinical study concluded rapid now are effects our of evidence. to hospital and avoids we of patient Lastly, antibody difficult ignore. save benefits susceptibility punctuating proven clinical challenge body is

I questions a Session would follow-on the of selling the change significantly larger address With a and market balance request the we world addressed, meeting send these the of overdue. Should call Pheno not questions market analysts. new or others for questions with integrated to and the product we collectively market the happy the have our of that you solution, to Question-and-Answer answer would investors@axdx.com. long waning, a the X.X, welcome now is to open be impact our to our with pace on offerings bringing will pandemic from increase

Operator

you. is a call Thank the from Alex question first as And note, with recorded. Yes. comes this Nowak And Craig-Hallum. being

Will Fafinsk

This guys. on Hey here Alex. is for Will Fafinsk

Just expansion questions what pre-pandemic maybe done to a see some levels? side, out of back here, do first, COVID? coming gross few And to the on get recapture you margin margin

Steve Reichling

the inflation settle whether macroeconomic factors those inflation, Yeah. raw of we've levels Right Certainly, increasing now, substantial pretty fixed to us leverage in broad those about are for labor or costs. value-add Also, production, we would as down seeing past, talked the helpful. costs. driving partners will material as help the certainly our from in in script, mentioned some our impact of we're through be

So drivers. those near-term are the two principal

Will Fafinsk

How extends with And the as or the QX previously virus hospital? into a control recovery about, more better rolls still a you to those now? and you Okay. the recent Got are back to, do next, and you get spoke offset reps Is this variant. or then, it into give with under Delta event it. take, think vaccine mid-XXXX thinking

Jack Phillips

Yeah.

So this for question. Phillips. is, Jack the Thanks

I So over access dramatically to improved. would it's has evolving. past And say has hospitals that, quarter, the

the However, had Delta reset, weeks, we've notable over a to the relative past variant.

hospitals, call ICU to filled, are to see we're filled EDs therefore hospitals moving access to certain firsthand, to limited are being As beds again. are capacity starting on and again. fully they're we back filled

the retrenching, now are canceling are Zoom access been hospitals and that have is, of liberal experiencing over several new either we more or weeks calls. have past going guidelines what in So had kind meetings, place back some to --

basis. also, a were remote we frequent dramatic is having significant that, many calls versus still on at is those Even calls about, we're meeting year interest. It's the generating new much outside in now. they the said what improvement happening are a a However, of PhenoAST we at by seeing in more cautiously and lot ago of much, hospitals, or the funnel, our both, kit our for And ID/AST, though therefore, new solution stakeholders. new are where a but all are locations, Zoom-type optimistic though improvement interest a

Will Fafinsk

up for and Are lie? more tests? then, And the antimicrobial labs at buzz to the you Okay. cover to need Are guess That's does about, where helpful. this, me. equipment any opening COVID look last beyond I hearing one bacterial focus

Steve Reichling

Yeah.

for and our antimicrobial COVID. manage tackle business. resistance priorities serious U.S. the beyond very those a again, So, Delta in disease are They're -- to the around the diseases, reorganize having with squarely sepsis priorities been on reset teams There clearly, and that, said that, COVID. reset, starting and which I variant their that, a how also, of to line. And and specifically has area, in spiking around, beyond to a infectious But and stewardship infectious around is getting how across bit mean, other focus are important things

absolutely, it for is to been this past And we over again, a the has more of today continue. prominent trend ever discussion than expect it year. So

Jack Phillips

All right.

Next question.

Operator

comes Thank our you. William next Weinstein from question And Blair. with Brian

Dustin Scaringe

on there on This any about past. open update have To EMEA. expansion in particularly movement China, the as And I line Hi. for geographic about that? talked is Is little in in know, opportunity, I'm potentially a you Dustin as guys can you the wondering, up, bit talk you the guys Brian. if

Jack Phillips

Yeah. No problem. Yes sure.

over EMEA, Pheno. strategy EMEA as going We COVID for the utilization well. say we right Portugal touch of revenue we've in very and see the in Having progress focused Middle where that. and despite I well. -- very, access and believe some also East, Arabia year, Saudi a far markets on would generate strategy decent US year the level East good Italy, where based Kuwait. is in that's very Middle as got reorganized let the year, we So then a can like activity and of EMEA, EMEA working in on we me and developed having new seeing challenges we is as the good a good Spain, past specifically on really

Moving China. to on

testing to in still there. our type are get program ways We over the still away. We're market of middle Pheno on there

is while But that's in a CFDA We Kong have utilized being FDA approved still get or a system to to China Hong away. going today. be

Dustin Scaringe

amount this of shorten test? Great. And that. AST time I of to a is to the hours wondering work to just shorten get there way appreciate to Is what standpoint, result? to workforce from kind product done result potentially being the any of the

Jack Phillips

you So, groundbreaking. full been really standard seven Pheno than hours the is is about Pheno with full of Pheno today, the kind on our in today, and with with of I result today. really proven is it's a get days mean, We've which care faster -- ID studies. of can susceptibilities and

We're with solution the we're if market So improve again, product any that that again today. your the is ID/AST question, it quicker? where we be still at. to To rapid on at most always ways have, the looking can

today. our that on Pheno have as quicker. to regularly, on to getting we've exactly going is work the we key Pheno therapy to of comes improving part requirements improving the X.X, really it what come because down on that absolutely patients work and next-generation are and today our which about is to doing And to continue outcomes to managing result, sepsis speed And to and focus of right really result the time most platform. Specifically, speed. does clinical down It that's on there will talked be

Dustin Scaringe

provide that? one done know being I Could more the to work Thanks. What expand color mentioned that about you Great. menu. in there. menu? throw could more on briefly expanding I you is

Jack Phillips

sure. Yes,

what then, menu next relative so X.X branch other that's to and and not points we're then expansion and break will testing And that one our Pheno us look culture. should the for antibiotics a On forth. relative to light expansion positive for offered continuing the doing. on kind be the updating that menu organisms, and area as antibiotics to Pheno and on menu isolates are is overlooked exactly at today, we're at our just menu again, well, of as Pheno current be into significant we looking continually having menu also So, most we're beyond X.X alternate

would so So way regularly really the break results. again, leading I updated. are you results the And providing have updated industry CLSI are in say, that, is you're accurate getting the most that the breakpoints most Accelerate in points, that the

Dustin Scaringe

Okay. Thank you.

Operator

for presentation. Thank today's you. That session dialing the as question-and-answer in concludes you so call. much Thank well for as the

lines. now disconnect may your You