Co-Diagnostics, Inc.

Good afternoon and welcome to Co-Diagnostics' third quarter 2024 earnings conference call. All participants will be in 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 touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would like now to introduce Andrew Benson, Head of Investor Relations. Please go ahead.

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 third quarter ended September 30th, 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 the call to analyst Q&A. Before we begin, we would like to inform the listeners that certain statements made by co-diagnostics during this call that are not historical facts are forward-looking statements. This includes statements concerning the company's forthcoming CODIX PCR testing platform, which requires regulatory approval and marketing authorization for diagnostic use, is currently being reviewed by the U.S. 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 issued shortly before this call, which contains reconciliations of 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?

Thank you, Andrew, and good afternoon, everyone. Thank you all for joining CoDiagnostics' third quarter 2024 earnings call. I want to begin by extending my gratitude and thanks to everyone involved with CoDiagnostics. Our employees have continued to work extraordinarily hard to propel our platform and test pipeline forward this quarter, and we are pleased with the progress we have made. Our Codex PCR platform includes a low-cost, easy-to-use, and highly portable point-of-care real-time PCR instrument and mobile app, all designed to support a multitude of different tests. Over the past three months, our team has been focused on advancing the development of our platform and associated test pipeline. As we have reported previously, Earlier this year in June, we submitted a 510K application to the FDA seeking clearance for over-the-counter use of the Kodiak's PCR Pro instrument and Kodiak's PCR COVID-19 test cup. The FDA is substantively reviewing the application, and we continue to engage in the interactive review process and communications with the FDA. While we retain full confidence in the quality and integrity of the platform, The company can't predict the remaining review process timeline or outcomes. However, during this time, we have also been actively taking steps to broaden the potential reach of the CodexPCR platform by continuing the development of our tuberculosis, respiratory multiplex, HPV multiplex, and strep A tests, which I will discuss in greater detail shortly. I am excited by the progress that we continue to make each quarter and believe that Codiagnostics is well positioned to execute our strategy and goals through the remainder of 2024 and into 2025. During our last earnings call, we discussed our submission of a 510 application to the US FDA for the Codex PCR Pro, the mobile app, and the Codex PCR COVID-19 test for over-the-counter or OTC use. 510 OTC clearance would allow the platform to be utilized in the home, Workplace and point of care settings including skilled nursing and assisted living facilities and physician's offices in the U.S. As we continue to remain in active dialogue with the FDA regarding their review of our submission, we also are preparing for clinical evaluations and regulatory submissions outside of the U.S. for COVID as well as TB. HPV multiplex and respiratory multiplex in Central and South America, Africa, the Middle East, and India, where we believe there is an unmet need and an opportunity to accelerate the commercial adoption of our platform. We plan to target local health centers, point of care settings, and remote settings in these regions. In India, for example, we are preparing to seek clearance for multiple tests on the new platform from the Central Drugs Standard Control Organization, or CDSCO, in a region where we have gained a comprehensive understanding of the commercial and regulatory landscape through our joint venture, COSERA Diagnostics. COSERA has an established sales network throughout India for its 15 infectious disease PCR tests cleared by the CDSCO for IVD use in clinical labs. International markets remain in high need of a decentralized, portable, low-cost testing system, all of which we believe this platform can provide. During the quarter, we also attended several trade shows to showcase the Kodiak's PCR platform, as well as an international trade mission to Asia. At the end of September, co-diagnostics accompanied Utah Governor Spencer Cox, and the World Trade Center Utah executives to South Korea and Japan, seeking to strengthen the company's relationships with the state of Utah and with potential international partners. We learned a great deal about the healthcare systems in Asian markets and spoke with several key stakeholders to gain a better understanding of the regulatory and payor landscape. As we consider commercialization of the new platform outside of the U.S., We continue to identify regions of need and deepen our knowledge of potential market strategies in those regions. Additionally, in the third quarter, we attended, presented, and hosted a booth at the 16th Next Generation DX Summit in Washington, D.C. The conference was hosted by the Cambridge Health Tech Institute, who facilitated transformative discussions on diagnostic advancement. We also hosted a booth at the Association for Diagnostics in Laboratory Medicine, or ADLM, annual meeting in late July where we presented co-diagnostics at home and point-of-care PCR platform and its ability to support a wide range of potential indications. We are pleased with our engagement at renowned trade shows and expos and remain focused on driving global exposure for our platform. It is important to remember that this new technology represents more than a single test or even an instrument. Rather, it is a novel and comprehensive sample-to-result platform which we believe has global applications with the potential to be transformative. In connection with these ambitions, we remain highly focused on the development of our tuberculosis or TB test. To date, CoDiagnostics has completed several preliminary analytical studies for TB. We plan to initiate clinical trials in South Africa and India in early 2025, which remain our priority markets for TB testing. As mentioned, in India, we plan to pursue a regulatory pathway through the CDSCO and will initially target point of care, remote settings, and local health centers. We also plan to pursue South African Health Products Regulatory Authority, or SAFRA, Clearance, and World Health Organization, or WHO, prequalification, which would facilitate introduction of the instrument and TB test as an in vitro diagnostic into several African markets. As CoDiagnostics pursues the commercial opportunities in India, we remain engaged in discussions with NGOs and potential future customers, gathering detailed data to support the go-to-market strategy for the TB test on the Codex PCR platform. and ultimately contribute to the Indian government's initiative to eradicate TB from the country. For example, the company has conducted dozens of onsite evaluations of higher throughput smear microscopy centers where many TB samples are currently processed, as experts believe that these centers need to rapidly transition to using molecular diagnostics, including gold standard PCR technology. Turning to our upper respiratory multiplex tests, we made great developmental progress in the third quarter. We believe that this test, which has been designed to detect COVID, flu A, flu B, and RSV infections at the same time from a single sample, brings significant strength to the point of care and at-home settings globally. By expanding accessibility to low-cost testing through a four-in-one multiplex test, The CodexPCR platform has the potential to deliver quick and efficient results to high-need locations. We see the most initial significant opportunities for this test in the U.S. and Latin America, which represent our initial target markets. In the case of the latter, we believe a U.S. FDA clearance could expedite the registration of the test and instrument in several regions across Central and South America. We are also encouraged by the significant progress that we have made on our HPV multiplex test on the platform. The co-primers-based HPV multiplex test has been fully ported over to test cups for the Kodiak's PCR-Pro instrument, and results show that chemistry optimization appears to be complete. We expect to begin clinical evaluations early next year. We have emphasized international opportunities for this test and plan to initially target India, followed by Africa, given the higher prevalence of HPV in those regions compared to the rest of the world. Co-Diagnostics has continued to work closely with our Indian joint venture, COSERA Diagnostics, on testing needs in India, where a lack of accessibility remains a large problem. As you may recall, the HPV test development efforts are supported by a grant from the Bill and Melinda Gates Foundation. The work that we are doing with our test is an important step in making testing more accessible and efficient, thanks to the advantages afforded by the CodexPCR platform technology. We anticipate our clinical locations Regulatory Strategy and Efforts, and Target Markets to be influenced and facilitated by our HPV testing funding partners. In August, the World Health Organization declared mpox, formerly monkeypox, a public health emergency of international concern. More recently, several health officials have indicated that clade 1b monkeypox, or mpox, a new strain recently found to be circulating among some affected populations is both more severe and more transmissible between humans. In response to the recent surge in cases, which includes over 22,800 cases and 622 deaths, in Africa alone, as of the end of August, CoDiagnostics conducted an in silico analysis of the logic smart mpox2 gene RUO test. The analysis demonstrated that the test designed and developed in 2022 should retain full reactivity against all MPOX strains that have circulated over the past year, including CLADE1B. We are pleased with these results, which highlight the potential for co-diagnostics to provide a viable and effective MPOX test to those in need. At the end of August, the World Health Organization asked manufacturers of MPOX tests to submit expressions of interest for their tests to be considered for Emergency Use Listing, or EUL, A WHO EUL would allow a test to be used as an in vitro diagnostic and streamline its adoption in many African markets. And CoDiagnostics has been working with the WHO to determine whether an updated version of our logic smart test would meet the criteria for an EUL. Our ongoing emphasis on our new technology as a platform to transform PCR diagnostics on an international scale has also motivated our recent work with NGOs, which has been a focus of our efforts this last quarter. The initiative is currently in process, primarily centered on bringing the tuberculosis and HPV tests on the new platform to market in affected regions around the world through a combination of grant funding opportunities and introductions to other stakeholders with mutually aligned missions in these areas. They involved granular research into prospective point-of-care and near-point-of-care users and distribution pathways, validating and generating pre-analytical data on the test performance, responding to in-depth due diligence requests, and regular status updates and debriefings. We anticipate that our partners in these efforts will be instrumental in helping us achieve our ambitions and that our regular, considerable work with them is an investment in the company's near and medium-term future. Wrapping up on our pipeline, our team has continued to make progress in the development of a strep A test, which is one disease area that we anticipate would contribute to our platform's value proposition in point-of-care settings.