Cue Health Inc.

Good day and thank you for standing by. Welcome to the QHealth fourth quarter 2023 earnings call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Caroline Corner, Investor Relations. Please go ahead.

Good afternoon, and welcome to Q's fourth quarter and full year 2023 earnings conference call. Joining me today are Ayub Katak, Chairman and Chief Executive Officer of QHealth, and Asim Javed, Chief Financial Officer. Before we get started, let me begin by reminding you that we may be making forward-looking statements, including statements related to the submission of any FDA applications and expectations around receiving clearance and authorization, expectations regarding production capacity, expectations related to the availability of our programs and testing volumes, the expected performance of our business, future financial results and guidance, strategy, long-term growth, and overall future prospects, as well as the impact of the COVID-19 pandemic. These statements are subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those described. These risks and uncertainties include, but are not limited to, those outlined in today's call, as well as other risks identified from time to time in our public statements and reports filed with the SEC. Forward-looking statements that we make on this call are based on assumptions and beliefs as of the date they are made, and the company disclaims any obligations to update these statements except as required by law. In addition, on today's call, non-GAAP financial measures will be used. Reconciliations between GAAP and non-GAAP financial measures are included in our earnings release. Finally, I would like to mention that the press release and a recording of this call are available on the investor relations page of our website. With that, I would like to turn the call over to Ayub.

Thank you, Caroline, and thank you, everyone, for joining us today. We're excited to share our fourth quarter results and significant progress we've made in 2023. We reported total revenue of $19 million in the fourth quarter, ahead of our guidance, driven by strong cold-through-reform installed base of Q readers and the continued adoption of our Q integrated care platform. 2023 was a year of significant milestones for Q. We attained two FDA authorizations, specifically a de novo approval for our at-home and point-of-care COVID-19 molecular test, the first molecular diagnostic, and the first respiratory test ever to receive full FDA approval for home use. and authorization for our molecular mbox test, our first sexual health test. In 2023, we also submitted our RSV test and flu test for de novo approval and were awarded a nearly $30 million contract from BARDA to develop, all the way through full regulatory authorization, a combined test for flu, COVID-19, and RSV for home and professional use. In addition to our work on our flagship Q health monitoring system menu, We also expanded our Q integrated care platform offering significantly in 2023. We now offer 16 home collection test kits through our Q Lab product line, including test kits for categories like heart health and sexual health. Through Q Lab, we empower individuals to conveniently collect test samples at home, obtain their lab results digitally, and interact with clinicians for lab result interpretation and follow-up actions. Rounding out our offering on the treatment side, we've extended our original electronic prescription and delivery capability for infectious diseases like COVID-19 and flu to provide treatments for many more common health needs. For example, our treatment offerings now include therapeutics for sexually transmitted infections, GLP-1s for weight management, and antivirals for cold sores. In short, we're proud of the great progress we've made in 2023 in driving forth our vision of empowering people to live their healthiest lives. And we accomplished all this while streamlining our operations over the last year, reducing our cost structure by over $200 million on an annualized basis. These milestones have positioned us for an exciting 2024, and we are anticipating significant progress on our number one strategic priority, menu expansion on the QHealth monitoring system. Looking ahead now, I'd like to provide some updates on test menu expansion for the QHealth monitoring system. First, the QRSV molecular test was submitted to the FDA for de novo approval last May, and we received and responded to FDA's feedback. We were asked to provide additional clinical data reflecting the addition of more infants and elderly into our clinical population. We successfully executed the clinical studies to collect the additional data, saw very good performance, and submitted the additional data to FDA. We anticipate that an approval for RSV could come in the third quarter of this year. Once we have approval, It's our intention to immediately launch the test to our customers for use with our installed base of over a quarter million Q readers. Additionally, we believe that approvals of additional tests in our pipeline will help grow our installed reader base. Our flu molecular test was also submitted to the FDA for de novo approval last year. During the review process, the FDA asked that we provide a greater number of clinical samples for flu B, which has had a low incidence over the last three years with almost no circulation in the northern hemisphere. We conducted additional clinical studies in the southern hemisphere and were able to collect a sufficient number of flu B samples to meet the FDA's requirement. We are still working on providing additional stability data for higher temperature storage as requested by the FDA, and thus we would expect a de novo decision for flu later this year in the third quarter. In January, we announced that the FDA had declined to issue an EUA for our flu code multiplex test. You may recall that this is our first multiplex test submission and sought to enable use for both at home and point of care use. This test performed very well in our clinical studies for both flu and COVID-19. However, the feedback that the FDA had was primarily for us to use a different comparator test for COVID-19 and to provide more real-time stability data. We are in active dialogue with the FDA to address these items. We hope to resubmit this application and achieve authorization in the second half of the year. To complete a respiratory pipeline update, we're making strides with our combined flu, RSV, and COVID all-in-one multiplex test, supported by a $28 million BARDA contract. We plan to start clinical trials this summer in the southern hemisphere and aim to have this test on market by the end of 2024 as an EUA, progressing to a full clearance in 2025. We have planned this two-stage approach to getting to market with this test, and the program is funded through the full clearance. Stage one is the EUA regulatory pathway, and in support of stage two, we will continue our clinical studies throughout the respiratory season in the northern hemisphere this winter and plan to submit for full clearance next year. Moving to our menu expansion efforts in the sexual health category. We are in late-stage development and plan to submit our herpes plus mpox multiplex test under an EUA. We've had constructive conversations with the FDA regarding our validation plan for our submission. This test will allow us to build on our NPOX authorization last year to serve the very large underserved chronic care herpes testing market. With the addition of herpes, this test has strong potential to be a go-to test for anyone experiencing a lesion in the sexual health context. We still plan to submit for an EUA in Q2 2024 and would expect to receive authorization by year end. Moving to our chlamydia and gonorrhea test. This test is development complete and ready to enter into clinical studies. We have sites contracted and the IRB process is complete. However, we strategically decided to delay the start of our clinical studies for chlamydia and gonorrhea tests to preserve cash in the near term. This action is similar to what we decided with the strep throat program. We remain committed to our full pipeline of respiratory and sexual health tests while being mindful of the need to balance near-term costs and long-term opportunity and feel we have a very strong near-term pipeline in both categories. As soon as we receive FDA authorizations, we'll be ready to launch into our existing sales channels and then continue progressing menu expansion, such as the chlamydia and gonorrhea and strep throat tests through clinical studies. As a reminder, all the QF monitoring system tests share the same cartridge backbone and manufacturing process, including our combined flu COVID RSV test. Our new testing products will be made on our automated production lines without significant additional capital investment. We've demonstrated reliable production at scale, having produced and sold over 17 million molecular tests to date. As I mentioned earlier, we've made significant progress on the Q integrated care platform, our solution that seamlessly extends the capability of our foundational Q health monitoring In its current form, the platform enables an end-to-end customer journey from obtaining an accurate diagnosis to consultation with a healthcare provider through our apps to receiving treatment via delivery or local pharmacy pickup. We have integrated many of these building blocks over the last 18 months. In 2022, we launched QCare, allowing for video consultation with clinicians and prescription deliveries. Since then, we've seen traction with our installed base, and today we offer tests and treatments across the care spectrum, including not just antivirals, but therapeutics ranging from GLP-1 to treatments for STIs. In summary, 2023 was a year of significant accomplishment by the team at Q, and we're well positioned for an exciting 2024 with a much lower cost structure as we continue to expand our test menu, drive adoption of our integrated care platform, and empower people to live their healthiest lives. We look forward to updating you on the progress in the coming quarters. With that, I'll turn the call over to Austin.