Accelerate Diagnostics, Inc.

Good day and welcome to the Accelerate Diagnostics Incorporated second quarter 2024 results conference call. All participants will be in a listen-only mode. After today's presentation, there will be a question and answer session with covering analysts. Please note this event is being recorded. I would now like to turn the conference over to Ms. Laura Piercing of Accelerate Diagnostics. Please go ahead.

Before we begin, it is important to share that information presented during this call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include projections, statements about our future, and those that are not historical facts. All forward-looking statements that are made during this conference call are subject to risk, uncertainties, and other factors that could cause our actual results to differ materially. These are discussed in greater detail in our annual report on Form 10-K for the year ended December 31st, 2023, and other reports we file with the SEC. It is my pleasure to now introduce the company's president and CEO, Jack Phillips.

Thank you, Laura. Good afternoon. Today I would like to provide exciting updates on our WAVE program, including the preclinical trial results, commercial readiness progress, and meaningful incremental funding to further deliver strategic milestones. I will then pass the call to David Patience, our CFO, to summarize our financial results for the quarter before opening up the call to take questions from our analysts. As a reminder, Accelerate is uniquely positioned to disrupt the microbiology susceptibility testing market. with our second generation antimicrobial susceptibility system, WAVE. WAVE addresses the entire AST market, including both positive blood culture and traditional isolated colony testing. The combined global AST market is estimated at $2 billion. By processing all AST testing on the same instrument with a cost structure competitive to the market leaders in traditional automated isolated colony testing, customers will have the opportunity to consolidate all testing on a single AST platform. Further, WAVES product differentiators include same shift results in four and a half hours on average, a lab-friendly workflow which does not require sample preparation instruments, a scalable platform to meet the testing needs of all lab segments, while delivering a significantly improved cost structure to return higher platform margins and incremental cash flow generation. Moving to our preclinical trial, we are pleased to announce our preclinical trial was a success, measured by several meaningful endpoints. First and foremost is the clinical performance, which included a data set of 1,570 unique bug drug combinations tested on the WAVE platform compared to the reference method, Broth microdilution. Our overall performance is measured by essential agreement and categorical agreement, both of which were approximately 95% across 20 antibiotics. It's important to note the study included an equal number of fresh and contrived samples, resulting in excellent concordance between prospective patient samples and site-selected challenge stock samples. Our strong performance was achieved with an unprecedented time-to-result of four and a half hours on average, delivering true same-shift susceptibility results to clinicians, which is not achieved by any emerging AST platforms today. Beyond a strong data readout and time-to-result performance, the trial measured assay reportability, system reliability, ease of use, and laboratory workflow. A remarkable 99% of wave runs reported a minimum inhibitory concentration result. There were no major hardware failures that required a service engineer to visit the labs, and assay reliability was excellent. After a few hours of operator training, lab technicians ran all specimen testing during the preclinical trial. Operators were pleased with the simple pre-analytical workflow, the ease of use, intuitive interface, and random access capabilities. In conclusion, the preclinical trial was a great success, which gives us confidence we have both the right product design to take to a clinical trial, and in turn, commercialize. We are now ready to start the clinical trial, which includes four external sites. WAVE systems have been installed in all sites and all necessary gram-negative test kits have been manufactured. The start of the clinical trial is imminent. As previously outlined in prior earnings calls, our three-step strategic roadmap to maximize WAVE's commercial impact includes initially leveraging our position in the PBC market with existing customers in the U.S. and EMEA. followed by expanding into the isolate susceptibility testing market by offering new assays to increase customer engagement and wallet share. And thirdly, by applying our holographic imaging technology to other areas of diagnostic testing. First, by launching WAVE with the appropriate regulatory clearances and converting our existing customers already implementing rapid susceptibility testing provides a commercial platform for strong initial uptick while also reducing overall cash needs of the business and sets the company on a path to cash flow positivity. We now have approximately 75 percent of our U.S. customer base signed to longer-term contracts ahead of the wave commercial launch. Secondly, by launching an incremental menu for gram-positive PBC as well as subsequent isolate assays, we provide microbiology labs with a comprehensive diagnostic solution for all susceptibility testing. We estimate by expanding into the isolate testing, we can grow our existing customer annuities by three to four times by offering comprehensive PBC and isolate assays, on the same wave platform. This growth in revenue is coupled with a very attractive margin contribution given WAVE's low-cost structure compared to emerging PBC and traditional isolate competitors. We continue to concurrently develop our gram-positive PBC assay, as well as have demonstrated our ability to produce susceptibility testing on isolate samples. Finally, we also see WAVE capable of completing other microbiology assays such as yeast and anaerobes, along with antibiotic development opportunities with pharma, which could expand WAVE's addressable market even further. We continue to focus on delivering WAVE's strategic roadmap to ensure we maximize the benefits of WAVE's holographic imaging technology to improve patient outcomes, grow market share while expanding customer wallet share, and finally, further expand our addressable market. To this end, and now with our strong preclinical trial results, we have decided to focus on achieving further critical wave operational and development milestones. We believe this focus will drive more value for all Accelerate stakeholders ahead of signing a strategic partner. We are excited to announce we worked with our existing lenders to bring in additional capital to fund the company through 2025. The financing also allows us to focus on delivering an FDA-cleared WAVE system and gram-negative PBC menu, along with developing incremental assays to further demonstrate WAVE's capabilities. We feel this strategy will now ensure we have the cash runway to deliver these important, value-inflecting program milestones and, in turn, further demonstrate an increased value for our wave system with strategic partners. I will now turn the call over to David to discuss the Q2 2024 financial results.