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spk03: Good day and welcome to the co-diagnostic first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Andrew Benson, Investor Relations. Please go ahead.
spk00: Good afternoon, everyone. Thank you all for participating in today's conference call. On the line today from CoDiagnostics, we have Dwight Egan, Chief Executive Officer, and Brian Brown, Chief Financial Officer. Earlier today, CoDiagnostics released financial results from the first quarter and in March 31st, 2024. A copy of the press release is available on the company's website. We will begin the call with management's prepared remarks and then open up the call to analyst Q&A. Before we begin, we would like to inform the listeners that certain statements made by CoDiagnostics during this call are not historical facts and are forward-looking statements. This includes statements concerning the company's forthcoming CoDx PCR testing platform, which requires regulatory approval and marketing authorization for diagnostic use, is currently being reviewed by the US FDA and is not currently for sale. Actual outcomes and results may differ materially from what is expressed or implied in any statement. Important factors which could cause actual results to differ materially from those in these forward-looking statements are detailed in co-diagnostics filings with the SEC. Co-diagnostics 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 contains reconciliations in the non-GAAP financial measures presented to their most comparable gap results. At this time, I would like to turn the call over to CoDiagnostics Chief Executive Officer Dwight Egan. Dwight.
spk02: Thank you, Andrew, and good afternoon, everyone. Thank you all for joining CoDiagnostics first quarter 2024 earnings call. We are pleased with the progress we have made across several key initiatives in the first quarter that will bring us closer to the commercialization of our CODIX PCR platform. In recent months, we have added additional manufacturing capacity, implemented strategic changes to our organizational structure, and nearly completed our 510 submission to the FDA for our CODIAX PCR Pro and CODIAX PCR COVID-19 test kit. We believe that these recent and upcoming developments serve to advance co-diagnostics mission to establish ourselves as a disruptive point of care PCR diagnostics company. As mentioned, we are excited that our 510K submission to the FDA for our COTIX PCR Pro and COTIX PCR COVID-19 test kit is nearly complete. This will represent another major accomplishment for our platform as we approach a commercial launch and will serve as a benchmark for future regulatory submissions for additional tests in our pipeline. I'm extremely proud of the work our team has done over the past several months and look forward to building out our pipeline in 2024. In March, we made four leadership changes that we anticipate will be instrumental to our company's success in the coming months and years. We appointed Richard Abbott as president alongside the promotions of David Nielsen as chief operating officer. Christopher Thurston as Chief Technology Officer, and Seth Egan as Chief Commercialization Officer. I am very confident that the team now in place is well equipped to lead CoDiagnostics into the next stage of growth and development. Last month, we held the grand opening of our new manufacturing facility located just minutes from our headquarters in Salt Lake City. We now have dedicated space close to home with the ability to manufacture our own coprimers oligonucleotides in-house to supplement our existing third-party capacity and to help reduce research costs. The new facility in South Salt Lake will also allow for in-house manufacturing of our new CODIX PCR platform for the U.S. and certain international markets. In addition to growing capacity in Salt Lake, We have also been working to expand our manufacturing facility in India at Coursera Diagnostics, our joint venture. Coursera will assist in manufacturing and distribution to support the upcoming launch of our platform in India and in other areas of the world. As we continue development throughout the year on our TB, multiplex, and HPV tests, we are confident that expanded capacity in Salt Lake City and India will support future operational efficiency. Moving to our pipeline, we remain focused on the development of several tests that will serve as the cornerstones for our new platform. During the first quarter, we continued the grant-funded development of our tuberculosis test, which will play an important role in our commercial efforts and growth outside of the United States, where TB has a disproportionate impact on developing countries around the world. We remain on track to begin clinical evaluations for our TB test on the new platform this summer in preparation for pursuing regulatory clearance and submission of the test to the World Health Organization, or WHO, whose pre-qualification assessment would make the test eligible for use and commercialization in priority markets across Africa. The opportunity for tuberculosis testing is large and growing, especially for point of care diagnostic platforms. And we believe we have the manufacturing and distribution capacity to deliver tests to underserved markets like India, where there are 2.8 million cases of tuberculosis in 2022, representing 27% of the global burden according to the WHO's 2023 Global TB Report. Additionally, we are pleased with the continued progress we are making in the development of our upper respiratory multiplex test, driven by support from the NIH RADx-TEC Initiative. CoDiagnostics believes this test has the potential to play an important role in respiratory infection testing at home and at the point of care, given that it would provide gold standard diagnostic evaluation for multiple indications with one sample at a low unit cost and at a very low cost for diagnosis. Being run on the new CodexPCR Pro instrument, The multiplex test will detect COVID-19, flu A, flu B, and RSV all at once, which would increase efficiency and accessibility of respiratory testing in remote locations around the globe. We plan to begin clinical evaluations during the upcoming North American flu season and will continue to provide you with updates as we progress throughout 2024. Turning to HPV. Our development plans have been progressing with the support of a grant from the Bill and Melinda Gates Foundation, and we continue to focus our efforts in India, where there is a significant underserved population. Like tuberculosis, HPV is a high area of focus for the WHO, and we continue to work hard to move our test development efforts forward. As mentioned in previous communications, we are currently in development of a Strep A test which we believe could bring additional value to our test menu, especially in pediatric and family practice settings. Lastly, we are pleased that the Codex vector control footprint continues to expand in the U.S., including two mosquito abatement equipment installations in the first quarter. Our present vector smart testing products primarily include those for mosquito abatement, But an internal analysis of the flu marker in our existing logic smart flu AB and COVID-19 or ABC test shows that it would be capable of detecting the H5N1 virus or avian flu that has been recently found circulating in livestock populations. We are exploring the potential for a modified version of this test to meet certain needs for this market if necessary. and have also proactively completed the principle design work for a co-primers test specific to H5N1 in the event the need to develop such a product arises in the future. In summary, I would like to share why I believe that CoDiagnostics is uniquely positioned to become a leading global point of care molecular diagnostics company. First, the technology of our platform is truly differentiated and unlike any current instrument or test on the market. Beginning with our patented co-primers technology, which produces enhanced test quality via significant primer-dimer reduction. In turn, leading to fewer false positives. The platform returns test results to a mobile app in just 30 minutes. delivered via our platform's cloud-based technology, which can allow for HIPAA-compliant integration into electronic medical records for health and government official monitoring and tracking. Additionally, we continue to be deliberate with our spending and have invested appropriately in our COTIX PCR platform development and manufacturing capacity to support a commercial launch. We have received support from multiple renowned organizations, including grants to further the research, development, and manufacturing capacity of our test pipeline and instruments. Through the investments made in our facilities, we are now able to begin producing our own co-primer molecules in-house, enabling greater cost efficiencies for R&D and ultimately for product manufacturing as well. The new platform's features and our joint venture relationship provide co-diagnostics with the opportunity to address some of the most vulnerable and underserved populations around the world who may not have access to infrastructure such as a hospital, doctor's office, or clinical laboratory facilities. In India, where diseases like TB and HPV are most prevalent, COSERA will play a vital role in distributing the new platform to places that are harder to reach than more accessible point of care target locations for the Codex PCR Pro and have a large unmet need for high quality diagnostics, which is all keeping with our mission of improving the quality of healthcare on a global scale through increasing the availability of the highest quality of diagnostics to communities and patients everywhere. I'm very proud of our team at CoDiagnostics and our accomplishments so far in 2024. I believe we are now closer to achieving our long-term goals, and I look forward to updating you on our progress throughout the remainder of the year. I will now turn the call over to Brian to discuss our first quarter financial results.
spk01: Thanks, Dwight, and thanks to everyone who joined today's call. For the first quarter of 2024, total revenue decreased to $0.5 million as compared to $0.6 million in the prior year's same period. Grant revenue in Q1 2024 was $0.2 million and product revenue was $0.3 million. Gross profit for the first quarter increased to $0.2 million compared to $0.1 million in the prior year comparable period. Total operating expenses for the quarter ended March 31, 2024 increased to $10.5 million compared to $10.1 million in Q1 2023. The increase from the prior year is primarily due to strategic investments in research and development to support our development and commercialization initiatives for our Codex PCR platform. Research and development expenses in the first quarter were $5.7 million compared to $5.0 million in the comparable prior year period. The year-over-year increase was driven by investments in our Codex PCR platform and the ongoing development of our diagnostic pipeline. For the first quarter, income before taxes decreased to a loss of $9.3 million as compared to a loss of $8.0 million reported in the prior year. Income tax expense in the first quarter was $0.02 million, representing an effective tax rate of 0.2%. We have previously discussed that our effective tax rate will differ from the U.S. federal statutory rate of 21.0% due to state taxes, permanent items, and discrete items, including changes in valuation allowances. Net loss for the first quarter of 2024 was $9.3 million, or a loss of 31 cents per fully diluted share. compared to a net loss of $5.8 million or a loss of 20 cents per fully diluted share in the prior year. Adjusted EBITDA was a loss of $8.4 million compared to an adjusted EBITDA loss of $7.2 million in the prior year. We ended the quarter with $50.0 million in cash, cash equivalents, and marketable securities and continue to manage our spend as we look to maintain a healthy balance sheet to position ourselves for long-term growth. CoDiagnostics remains focused on maintaining our cash position through appropriate and diligent spend to position the company for success upon a future commercial launch of our platform. We believe that we are operating from a strong cash position and will continue to focus on driving operational efficiencies. We remain excited about our 2024 plan and are very optimistic about our test pipeline and the Codex PCR platform. I look forward to updating you on our next earnings call. With that, I will now turn the presentation back over to Dwight.
spk02: Thank you, Brian. Before opening for Q&A, I want to take this time to extend a warm thank you to our Codex shareholders, in addition to our employees, distributors, and consultants, whose hard work, support, and belief in the value of our platform helps us execute on our goals every day. We will now take questions from our analysts. Operator?
spk03: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. This concludes our question and answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.
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