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spk03: Welcome to the Core Diagnostic, Inc. first quarter 2022 earning results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your questions, Please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Andrew Benson, Head of Investor Relations. Please go ahead.
spk04: Thank you. I am Andrew Benson, and joining me this afternoon are members of the Co-Diagnostics Management Team, including Dwight Egan, Chief Executive Officer, and Brian Brown, Chief Financial Officer. We will begin the call with management's prepared remarks and then open up the call to questions from our analysts. Before we begin, we would like to inform the listeners that certain statements made by co-diagnostics during the course of this call may constitute forward-looking statements. Any statement about company expectations, beliefs, plans, objectives, assumptions of future events or performance are forward-looking statements. For example, statements concerning 2022 financial and operational guidance. The development, regulatory clearance, commercialization, and features of new products, plans, and objectives of management and market trends are all forward-looking statements. This includes statements concerning the company's forthcoming PCR testing platform, which is subject to FDA review and is not yet available for sale. The company believes these statements are based on reasonable assumptions. However, these statements are not guarantees of performance and involve known and unknown risks and uncertainties that may cause the actual results to be materially different from any future result expressed or implied by such statements. Important factors which could cause actual results to differ materially from those in these forward-looking statements are detailed in code agnostic filings with the SEC. CoDiagnostics assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, the company may discuss certain non-GAAP financial measures during today's call. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. we refer you to the company's earnings release out shortly before this call, which may contain reconciliation to the non-GAAP financial measures presented to their most comparable GAAP results. At this time, I would like to turn the call over to Co-Diagnostics Chief Executive Officer Dwight Egan. Dwight?
spk07: Thank you, Andrew, and thank you all for joining us. On this call, we will provide an overview of our results for the quarter, updates on key financial performance metrics, and a discussion of progress against our strategy. Then we will take your questions. The first quarter of 2022 saw CoDiagnostics achieve continued solid sales with strong gross margins. And we are proud that we have been able to exceed expectations. This quarter was a momentous period in the company's history. As we continue to integrate Idaho Molecular Inc. and Advanced Conceptions Inc. providing co-diagnostics with all existing and future assets and intellectual property related to our upcoming Codex at-home point-of-care diagnostic platform. We previously announced that the acquisition is expected to streamline the commercialization of this new Codex PCR platform. We have expanded the manufacturing space to incorporate production lines for sample cups, as well as production lines for the device. The device has been designed with highly specialized optics and other innovative features to accommodate multiplexed assays as we expand its future suite of products to include additional respiratory, STI, and other infectious diseases utilizing the company's patented co-primer technology. We are proud to be named as one of only six semifinalists. in the Disruptive Technology Award in connection with the 2022 AACC Annual Scientific Meeting and Clinical Lab Expo in Chicago later this July. AACC's Disruptive Technology Award competition recognizes innovative testing and disruptive technology solutions that improve patient care through diagnostic performance or access to high-quality testing. We are honored to be considered in this search for the next innovative testing solution that will transform patient care. Under the experienced and capable leadership of Dr. Kirk Ryrie, the final optimizations of the new PCR platform are underway, and we are confident that, pending FDA review, we will be able to launch a product that has revolutionary ramifications for the molecular diagnostics market worldwide. We are on track for commencement of clinical trials by our second quarter earnings call this August in anticipation of submission of the device to the FDA following the successful completion of those trials. We would like to emphasize that we believe this PCR platform will come to represent the highest level of utility for at-home point of care applications, extending far beyond COVID. While we have used different working names for this platform in the past, like ICON and Your Test PCR, more important than the name is the fact that it facilitates gold standard PCR results in around 30 minutes, utilizing a disposable sample collection cup or cartridge that is considerably less expensive than other molecular non-PCR COVID-19 product offerings. In addition, a significant benefit of the platform is its ability to multiplex, that is, to test for numerous disease states with one sample. Ultimately, we anticipate end users will be able to differentiate between diseases that have similar symptoms through the multiplex syndromic panels that the company expects to introduce over time. Syndromic testing is a process by which an individual or their physician simultaneously tests for multiple pathogens with overlapping symptomology, which is a limiting factor of other non-PCR molecular technologies. This allows individuals and caregivers to perform one test to see if patients are suffering from any one of multiple causes, rather than having to test for each potential underlying reason for the illness. Our patented coprimer molecule has unique properties associated with multiplexing PCR, and we intend to bring the full power and capabilities of our proprietary technology to our new CODIX PCR platform. With the forthcoming product launch of the platform, we believe the company will be at the epicenter of at-home point of care testing throughout the world. We have been aggressively setting the stage for our product launch through attendance at multiple international and domestic conferences as we position ourselves to participate in a whole new field of at-home point of care testing for a range of pathogens when we are cleared to begin marketing activities for the product. We have made significant additions to our ability to service a worldwide launch of our new platform. This includes back-end support preparedness for logistics, e-commerce, customer support, sales and marketing. The company commissioned a comprehensive marketing study that is helping to guide the forthcoming implementation of our product offering. We have also added new senior level employees, consultants and engineering talent at both the parent and subsidiary companies while also engaging a new advertising agency with significant healthcare experience and an international reach to represent our Codex PCR platform through product launch and beyond. You will begin to see the look and feel of our forthcoming product offering on our website and other appropriate digital media exposures. All of these require compliance with certain regulatory constraints with which the company will carefully adhere. CoDiagnostics believes that in addition to ultimately representing the future of at-home and point-of-care testing, our new powerful platform also has the potential to help build a cloud-based pathogen surveillance system to thwart future outbreaks, all while giving individuals the power to know their COVID or other infectious disease status anytime, anyplace, anywhere. We are also excited about the centralized lab customers. We have served in over 50 countries and growing. This is what currently drives our sales and remains a large focus of our R&D efforts as we grow the product pipeline for this business segment, along with expanding our worldwide network of capable distributors and participating labs. For example, we are continuing our active development of a multiplex STI panel to detect and differentiate between four prevalent causes of sexually transmitted infections for which analytical performance testing is currently underway in collaboration with clinical partners. a malaria test designed to differentiate between the different species of the parasite known to be resistant to treatment, and the expansion of our Logic Smart ABC test to include respiratory synctyle virus, or RSV. As a platform technology company, our co-primer platform has wide-ranging applications, and other assays are being developed for several pathogens of significance in dentistry and mental health. Analytical performance is being evaluated for these assays with partnerships in each of these areas, along with our ongoing development of a liquid biopsy assay for detection of cancer-associated mutations present in human blood. Progress in our agricultural vertical also continues, including our work with Bayer Crop Services and LGC. And the company's mosquito abatement vertical is also seeing a record number of laboratory installations along with continued purchases from our existing customers. Overall, we believe that our strong profits and solid balance sheet are positioning co-diagnostics well for these and other future growth initiatives as significant investments in talent and R&D continue to yield positive results. This concludes my initial remarks. Let me now turn things over to Brian Brown for a review of the key metrics and numbers. Brian. Thanks, Dwight.
spk05: And thank you for joining today's call. As Dwight mentioned, our record performance during the first quarter was stronger than forecasted. In addition to the encouraging results this quarter, we also made significant progress on the commercialization strategy for the Codex PCR home testing platform. We are encouraged with the progress we have made both from an operational and financial standpoint and remain excited for the future. Now to review our performance during the first quarter of 2022. For Q1, revenue increased 13.5% to $22.7 million as compared to $20.0 million during the prior year period. This increase in revenue on a year-over-year basis was primarily driven by increased global sales of our Logic Smart COVID-19 tests. Gross profit for the year increased 15.5% to $19.4 million compared to $16.8 million in Q1 of 2021. Our gross margin percentage of 85.5% for the quarter increased from 84.0% in the prior year period. The 150 point basis increase in gross margin from last year reflects continued improvement in our manufacturing processes. Record revenue and gross profit performance driven by increased sales of our logic smart COVID-19 tests enabled us to achieve significant year over year growth. Total operating expenses for the three months ended March 31, 2022, were $9.6 million, an increase of $3.2 million compared to $6.4 million in the first quarter of 2021. The year-over-year change was driven primarily by a $1.6 million increase in our research and development expenses over the prior year period, most of which can be attributed to further investment in the development of the CoDx PCR home testing platform. Sales and marketing expenses for the quarter also increased from the prior year same period to $2.6 million. The year-over-year change was primarily driven by higher third-party commissions on international sales. Additionally, we continue to invest in our people and processes, including our sales and marketing team, as well as marketing mediums. As we disclosed in the recently filed 10-K, as part of the consideration given in our recently completed acquisitions, the acquirees receive contingent consideration based on the achievement of certain milestones. At each quarter end, we are required to remeasure the value of the contingent consideration. The remeasurement calculation at March 31, 2022, created a gain of $3.4 million that has been recognized as other income on our income statement. For the first quarter of 2022, income before taxes increased 32.3% to $13.1 million, as compared to $9.9 million achieved in the prior year's same period. Income tax expense for the quarter was $1.4 million, representing an effective tax rate of 10.6%. Our effective tax rate will generally differ from the U.S. federal statutory rate of 21.0% due to state taxes, permanent items, and discrete items. Specifically for this quarter, the rate is lower than we have experienced in the past due to R&D credits and the tax treatment of the gain on remeasurement discussed earlier. First quarter net income for 2022 was 11.7 million, or 34 cents per fully diluted share, compared to net income of 7.9 million, or 26 cents per fully diluted share in the prior year. Adjusted EBITDA for the quarter was flat on a year-over-year basis, coming in at 11.4 million for Q1 of 2022, and Q1 of 2021. Operational expenses incurred during the quarter for our new subsidiaries offset the year-over-year increase in revenue and gross profit. We remain committed to improving the health and flexibility of our balance sheet. Our diligent approach during fiscal 2021 allowed us to opportunistically close on two acquisitions during the fourth quarter, both of which are key to the continued development and future manufacturing of the CoDX PCR home testing platform Cash, cash equivalents, and marketable securities increased to $97.4 million at March 31, 2022, up from $89.9 million at December 31, 2021, representing an increase of $7.5 million. Our highly liquid no-debt balance sheet enables us to execute on our strategic growth plan. We continue to invest in our people, processes, and research and development as we look to scale and expand to new verticals to solidify our future. In March, we announced the authorization of a $30 million share repurchase program. We believe this element of our capital allocation strategy is aligned with our commitment to return value to our shareholders. This authorization also reflects confidence in our balance sheet and strong cash flow generation capabilities. Additionally, we believe that this authorization provides us with an opportunity to strategically allocate capital in a way that demonstrates our positive outlook for the future of co-diagnostics. The dedication from our team to deliver solid performance remains on full display. Our record performance during the first quarter would not have been possible without their many contributions. As we look to the balance of fiscal 2022, we remain encouraged by the demand for our products and the operational and scientific teams we have established to support our future growth. Turning now to our visibility around the outlook for the balance of the year. While we experienced strong demand for our products during the first quarter of 2022, changes in our operating environment and markets have restricted our near-term visibility. We will continue to navigate the near-term environment with caution, but as a result, we'll not be providing quarterly guidance at this time. To be clear, we remain very confident about the long-term potential of our business and the demand for our products. Our ability to accurately forecast logic smart COVID-19 test sales through the balance of the year has diminished due to decreased mass mandates in the United States, continued emergence and spread of new variants, and persistently low vaccination rates in many parts of the world. Furthermore, we are experiencing sizable fluctuations in order patterns from our customers that are not cleanly captured in a particular quarter as testing requirements continue to vary across the many geographic regions we serve. As a result, it has become difficult to predict with an expected level of precision the cumulative impact of these and other factors on our future financial results. Despite these dynamics, we continue to believe that we are at an important point in our growth trajectory that will enable us to expand into new verticals, new markets, and innovative molecular diagnostic solutions, such as our forthcoming CoDx PCR home testing platform. With that, I'll turn the presentation back over to Dwight. Thank you, Brian.
spk07: We will now take questions from our analysts. Operator?
spk03: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your questions, press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question is from Yi Shen with HC Wainwright. Please go ahead.
spk02: Just a quick question on your at-home PCR testing device. I don't know if I've understood it quite accurately, but did you just change the name from the icon test, or are there also functional and capability-related changes as well to the device? as in the ability to look at multiple pathogens, et cetera. So I'm just trying to figure out the difference between what has changed or is it just a change in the name.
spk07: Thank you for the question, Yi. The change is just as to the name. We've gone through an evolution as the product has been developed of focus groups and trademarking and other issues that have made it so during that period we have made a few different name changes in terms of the working title of the device. And we are now concentrating on the Kodiak's PCR home platform. When we refer to the device, it will be the Kodiak's PCR home device. And when we talk about the cartridge or the collection cup, it will be the Kodiak's PCR home collection kit or test. So it's just a name change. From the get-go, we designed this particular instrument to be responsive to multiplexing capabilities. It's one of the unique properties of PCR as compared to other non-PCR-based molecular systems that identify COVID. So when you look at our product offering our prospective product offering, you'll notice that we will be including these syndromic panels that they include multiple disease states at one time, as opposed to just a single pathogen or maybe one or two pathogens, which are limitations that are placed by using technologies such as isothermal or lamp technologies. So the name changes what we're referring to when we talk about these changes.
spk02: Excellent. Thanks a lot. And a quick follow-up on the logic smart detection test. I know you spoke about the fact that you couldn't – I mean, it's not – now is not the right time, like, give guidance. But are you already seeing a decline in the number of orders for the test, or is it mainly a fluctuation in the total number of orders? Yes. and the timing of customer orders. And in the same context, I know you spoke about it during your prepared remarks, but maybe if you could summarize how you could leverage the existing co-primer technology for other indications, that will also be very helpful for our understanding. Thank you.
spk07: We have a little bit of a problem hearing all of the questions that you just answered. or that you just asked. So if you wouldn't mind, would you please repeat the most important part of the question that we can hear?
spk02: Sure. Sorry about that. So with the logic smart detection test, are you already seeing a decline in customer orders or are you refraining from providing a guidance mainly because it's tough to like predict the environment moving forward? And in the same context, I was wondering if you could, I know you spoke about it during your prepared remarks, but I was wondering if you could, you know, essentially summarize how you could leverage your co-primer technology for other indications, assuming, you know, COVID-19 testing decreases throughout the rest of this year.
spk05: Yeah, thank you for the questions. This is Brian. I can respond to the first question that you asked. It's more about the timing and being able to forecast the timing of orders is the bigger issue. It's not necessarily a demand issue that we're seeing. It's more of just timing of being able to accurately forecast what's coming in. And the last thing we want to do is provide guidance that we're not confident in. And so that's one thing you'll note going forward is if we're not confident in providing guidance, then we won't provide guidance.
spk07: As to the second question that you've asked with respect to multiplex pathogen syndromic panels, the intention of the company is to provide a number of different syndromic panels over time. As we announced in our last call, we have a very sophisticated and able scientific advisory board, which has such luminaries as Dr. Carl Witwer, who chairs that board, Dr. Anne Wiley from Yale University School of Public Health, who is an expert on saliva technologies and PCR. We have Dr. Carol from Johns Hopkins University, head of pathology. Noriko Kusakawa. that was previously at Arup Laboratories here in Salt Lake City, and of course our founder, Dr. Brent Satterfield. So we have done extensive study and research into the types of diseases and panels that we want to have available on the new device, and that's what's guiding our development with our scientific teams. The first test that we come out with will be the COVID-19 test because it is a primary differentiator at the present time. But subsequently, you'll see a more robust multiplex respiratory panel that will include things like flu A, flu B, COVID, and perhaps COVID. all in a single test. You'll also see a sexually transmitted infection syndromic panel that includes four of the most prevalent diseases associated with sexually transmitted infections. and then we'll go on from there. This device goes way beyond COVID. It is designed to be able to meet the needs around the world of various pernicious disease states. You kind of have to go to a pre-COVID environment and imagine that, you know, molecular diagnostics was a very robust environment pre-COVID, and it will continue to be so after COVID. But for the next several years, and probably until the end of time, COVID will be a necessary differentiator when you're testing for anything else, because yes, you want to know if you've got the flu, but you really want to know if you've got COVID. And so these multiplex panels, we think will be the thing that distinguish our product at the end of the day, not only from being the gold standard PCR standard, but also the ability to multiplex very robustly going forward.
spk02: Thank you so much. That was very helpful. as we think about your product.
spk07: And lastly, on the same... Let me jump in and add one other thing because I think you also asked about our co-primer technology specifically as it relates to these multiplex panels. And what I would say about that, and, you know, you can read about co-primers in the Journal of Molecular Diagnostics where it was a featured item where we demonstrated a 2.5 million-fold reduction in nonspecific amplification errors, which are commonly known as primer dimers. And so what we have in this new device is not only the ability to multiplex because of its PCR technology, but we are also accentuating that with our co-primer PCR technology, which kind of puts us in a class by ourselves in terms of how robust our multiplexing is because of the fact that we eliminate, for all practical purposes, the formation of primer-dimers in a PCR transaction. This is a very important flagship technology, our co-primers. And as I mentioned in my remarks, we intend to bring the full power and capabilities of that to the floor.
spk02: Excellent. Thank you so much. That was very helpful. Lastly, on the regulatory front, where are you with the FDA submission? And I know I'm assuming you have to collect a lot of clinical evidence. So I'm just wondering if there's like a certain timeline regarding your FDA discussions and the subsequent approvals.
spk07: We are working on certainly an internal timeline with expectations about the conclusion of our optimizations where we put the product into clinical trials and then subsequently to the FDA for approval. It's an all hands on deck environment in doing these optimizations and preparations for this process. So, you know, we're not putting out a discrete calendar number for you, except to say that, as we have said in these prepared remarks, by the time we talk again on our second quarter results, that we expect to be in our clinical trials at that point. And that's kind of the point in the whole process where we lose control of the timing. And we don't know exactly how long the clinical trials will take, and we certainly don't know how fast the FDA is likely to respond to us. So we're on track to do what we're expecting to do from an internal standpoint. We're incredibly enthusiastic about the capabilities of this device. We have said on more than one occasion that we knew we wouldn't be the first ones to market with an at-home application, but we wanted to be the first to get it right. And by that, we mean we want to be the first to have a gold standard PCR device that is capable of multiplexing with syndromic panels. That can be fast in about 30 minutes, inexpensive so that it's affordable, and also accurate. And that's what we've been focusing on the most so that when we actually go out with a product, it is the most optimized product that it can possibly be. and also serves the broadest breadth of customer base that we can envision because we anticipate a worldwide launch here, not just a domestic launch. And as we mentioned in our prepared remarks, we're doing conferences in many, many places of the world. Recently, we've been in London. We've been in Portugal. We've been in Brazil. We will continue to attend, you know, multiple conferences around the world as we begin to introduce this product.
spk02: Excellent. Thank you so much for taking my questions, and looking forward to speaking again during your next earnings call. Bye. Thank you.
spk03: Thank you. Next question is from Jim Sidoti with Sidoti & Co. Please go ahead.
spk01: Hi. Good afternoon. Thanks for taking the questions. I just want to be clear on the guidance. I mean, based on all the factors you laid out, it sounds like you don't expect demand for COVID-19 testing to go away in 2022. You're just not sure, you know, the timing of when you'll get the orders. But you still think there'll be some level of demand for the remainder of the year. Is that accurate? Yep, you're absolutely right. Okay. Can you talk about... Inventory, it seems to bounce around quarter to quarter, end of this quarter, pretty considerably from the year. Why is there so much fluctuation in your inventory levels?
spk05: Again, it really goes back to the timing of orders. I mean, we try the best we can to produce tests that have the longest life possible for our customers. And so a lot of the inventory that we do create is real-time. You know, we'll create orders and ship them out immediately. So it's really based on the timing of orders that come in, and then we build inventory in preparation for those orders to come. So it's really just there's no rhyme or reason for the timing. It's just really based on orders.
spk01: Okay. So, I mean, if you have inventory levels at the higher end, it seems like maybe you're expecting that, have a fair number of orders in the relatively near term to use up that inventory?
spk05: You can ask that question, but we've already said we're not providing guidance.
spk01: Okay. I'm just trying to get directional kind of trends here. Understood. Okay. Clinical trial, you know, it's not like for a medical device where you have to go out and find patients and do procedures. I assume you have, you know, samples, known samples that you're going to run the device with. Can you just talk about how that will work and how many samples you think you'll need to run?
spk07: Well, the number of samples required for an emergency use authorization are significantly smaller than the number of samples that would be required, say, for a 510K clearance. So we certainly anticipate that we'll have plenty of opportunity to have sample availability. We are engaged with a very top firm in the country to conduct our clinical trials. They've also done some other work with us as we have prepared to go through this process, including representation before the FDA. So, you know, in terms of getting samples, we have a country right now, the latest stats I've seen in the last few days would indicate north of 70,000 cases a day, confirmed cases that are being experienced in the United States of COVID. And certain sources believe that that is wildly understated, that it's maybe eight times that amount, which puts us well over a half a million cases a day currently being experienced because of new variants that continue to emerge. So I don't think we're going to have any trouble getting samples for our trials.
spk01: All right, and then last kind of big picture question. You know, you closed today. The market cap was $135 million. You have $97 million in cash. You just reported a profitable quarter. It doesn't sound like you think demand is going to, you know, fall off to nothing over the next, you know, quarter or two. You know, what do you think that the street is missing from your story right now?
spk07: Well, I think that's a great question, Jim. And we believe that we're very much on the right track. Dr. Scott Gottlieb, who's the former commissioner of the FDA, has said recently three important things that we would call your attention to. One is that home testing will become ubiquitous or universal. That's point number one. Point number two is he said that home testing represents the biggest paradigm shift in medical devices, sort of courtesy of COVID that the FDA has agreed to get behind. The FDA, he said during his days would have never ever considered allowing this. That is the ability to test for severe disease such as COVID, which has killed approximately a million people in the United States alone, well over that worldwide. The fact that the FDA is countenancing the home testing of such a devastating pathogen shows what kind of a paradigm shift has occurred. Dr. Gottlieb says with COVID, they just got over it. And then he, of course, talked about the result of all of that is that he said this opens up a whole new field field of at-home testing for a significantly larger range of pathogens. And so that's why we have prioritized with our scientific advisory board the very pathogens that we think are the most necessary at the point of care or in an at-home setting. which includes primarily upper respiratory and what's going on in sexually transmitted infections, certainly includes things like strep, and may also ultimately include lower gastrointestinal. So we have a prioritized hierarchy of development with our scientific teams. Keep in mind that, you know, in these two acquisitions that we just completed, that we brought on board. We more than doubled our employee base. Let's start there. And we brought on a capable scientific horsepower in the form of people like Dr. Carl Witwer, Dr. Kirk Ryrie, who were both the co-founders of BioFire. which was purchased by BMRU. These people and many, many others who have come along with them represent a significant bench of horsepower in scientific strength. And we really brought on top talent to accomplish these tasks. And as I mentioned, we've also commissioned and have completed a very comprehensive market study that is all guiding what it is we're producing in our lab so that as soon as we have this device out, we're on to the next clearance for the next syndromic panel. And this will just continue time after time as we fill out the menu for our new at-home and point-of-care diagnostic platform. This is a beautiful platform. You'll get a chance to see it. more up close in the coming weeks and months as we have more exposure on our website and other things to show you just how this device looks and works and how it positions itself on a bathroom or a kitchen counter and so on and so forth. I cannot tell you how excited we are about what this device means in the world. And I really point you to those three benchmark comments from Dr. Gottlieb because we believe that our company is at the epicenter of those three comments going forward.
spk05: Jim, the other thing, this is Brian. The one thing I will mention, too, is Ike, you know, iterated about the acquisitions. I mean, the other thing to remember, and we've disclosed this, is those acquisitions were done with strictly equity. So, you know, those very bright, intelligent scientists that we brought on and those groups that we brought on, they believe in what we're doing, just like we believe in what we're doing. If the market cannot get on board, then they will get on board at some point. Okay.
spk01: All right. Yeah, it's puzzling, but thank you.
spk03: Thank you. The next question is from Theodore O'Neill with PSA.
spk06: litchfield hills research please go ahead thank you very much and congratulations on a good quarter uh brian this question is for you i'm reading the queue and in the first quarter there was a less than two percent of sales were third you know sale of third-party manufactured equipment consumables um and i know it's a small number but will those be re will that will those sales be replaced by the codex um
spk05: product and the reason I ask is because I assume the margins would be better rather than selling third-party product through your through no fair question those really represent lab devices that we sell currently that are really designed for a different application than what our new device will be you know used for I think it's a different application so they won't be replaced by it necessarily
spk07: Okay. Thanks very much. I think that the additional comment I would add to that is that we continue to pay a great deal of attention to our lab-based business, which drives most of our current sales. And we have set up a terrific reputation around the world, literally in more than 50 countries and continually growing, both in terms of countries we serve and distributors that are representing our product. And And the centralized lab environment is going to maintain a critical place in the whole development of the forward-going diagnostic ecosystem. And I think you have to just think for a moment what happens in places like India or other countries that may be developing countries when you give them a device such as our CODIX at-home and point of care platform that enables a very small lab to all of a sudden become a molecular lab. There are tens of thousands of labs that currently do not have molecular lab status that can become molecular labs for important disease states because of the product offering that we're coming out with. So we won't be neglecting our Our centralized lab business, as I explained, I think, in our last call, you should look for two verticals to be explicated in our reporting. One is our centralized lab business, and the other will be what happens as a result of our forthcoming at-home and point-of-care device.
spk06: Thanks for the clarification.
spk03: Thank you. This concludes our question-and-answer session. I would now like to turn the conference back to Dwight Egan for closing remarks.
spk07: Dwight Egan Well, thank you again to our analysts and everyone else joining us on this call. We've never been more excited and optimistic about what the future holds for co-diagnostics, and we've never been better positioned for success than we are today. You know, two years ago this month, when we first conceived of our Codex PCR home platform, we only had the slightest understanding of the importance it would have not just to our company but potentially to the world at large. To think that gold standard PCR diagnostics tools right on your kitchen counter which were inconceivable at the beginning of 2020, are now on the cusp of becoming widely accessible following our product launch, speaks to the enormity of what we've already accomplished so far and the bright future in store for co-diagnostics as we close in on our ultimate vision of making PCR accessible and affordable around the world. This is truly an inflection point in history, and we're honored to be able to play an active role in improving the state of healthcare across the globe with our new platform and existing centralized laboratory business segment. Thank you again, and we look forward to bringing you more exciting updates on our next earnings call three months from now. Good day, everyone.
spk03: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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