iSpecimen Inc.

Good day, everyone, and welcome to iSpecimen's second quarter 2021 conference call. At this time, participants are in a listen-only mode. A question and answer session will follow management's remarks. This conference call is being recorded. A replay of today's call will be available on the investor relations section of iSpecimen's website and will remain posted there for the next 30 days. I will now hand the call over to Allison Sauce, investor relations, for introductions, and the reading of the Safe Harbor Statement. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to iSpecimen's second quarter 2021 results conference call. With us on today's call are Christopher Rinelli, iSpecimen's Chief Executive Officer and President, Tracy Curley, Chief Financial Officer, and Jill Mullen, Chief Operating Officer. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management made with the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended, including with respect to the company's recent IPO and the anticipated use of the net proceeds as well as concerning future events. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, Estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factors section of the company's registration statement and final prospectus for the company's initial public offering filed with the SEC. Copies of these documents are available on the SEC's website at www.sec.gov Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law. Now, at this time, it is my pleasure to introduce Christopher Rinelli, CEO and President of iSpecimen. Chris, please go ahead.

Thanks, Allison, and thank you, everyone, for joining us today on our second quarter 2021 earnings conference call. As this is our first earnings conference call as a public company, before reviewing the highlights of the second quarter and the first half of 2021, I'd like to talk a little bit about who we are, our history, our accomplishments, and how we have positioned the business for future growth. Afterwards, our Chief Financial Officer, Tracy Curley, will review the highlights of our Q2 financial results. Following that, we'll be happy to take your questions. So to start, iSpecimen is a technology-enabled life sciences company. focused on accelerating scientific and medical discovery via our online biospecimen marketplace. Simply put, we have developed a marketplace platform that enables life science researchers to instantly search for and gain access to patients, biospecimens from these patients, and related healthcare datasets from a global network of healthcare providers. Our story began in 2012 when we raised our seed round of financing and began building the first generation of our marketplace technology. At the same time, we began establishing a healthcare provider network to provide us access to patients, specimens, and healthcare data, the latter of which is a key enabler and differentiator for iSpecimen. In 2016, once we achieved a critical mass of biospecimen suppliers, we hired our first vice president of sales and began aggressively building our customer base. In 2017, we introduced our initial version of our customer facing online iSpecimen marketplace, successfully entering our next phase of expansion. Fast forward to today, and I can say with great confidence that iSpecimen has become the preeminent online marketplace for human biospecimens and enjoys a meaningful and significant first mover advantage in the rapidly growing biospecimen market. The driver behind our growth in the entire human biospecimen market is the explosive expansion of life science research and development, or life science R&D, driven specifically by advances made in molecular medicine, precision medicine, and regenerative medicine, all of which continually require access to a diverse range and growing number of biospecimens. The supply of biospecimens derived from healthcare providers, including biofluids, solid tissue, and hematopoietic cells, which are the cells that constitute our immune systems, is what fuels medical research and its various applications such as biomarker identification, biomarker validation, diagnostic test development, and drug discovery and development. The worldwide biospecimen market is substantial, with an estimated $3 to $4 billion spent annually on biospecimen procurement, growing at a rate of 10 to 15% annually. Having said that, this market, while large, suffers from an inefficient and highly fragmented supply chain that is further hampered by legacy manual processes. At a high level, these inefficiencies and fragmentation make it extremely challenging for healthcare providers and life science researchers to connect. And even more challenging for them to access the patients samples and data sets needed to power today's r&d pipelines. It is a market that is ripe and in fact overdue for an online marketplace solution. it's ironic that, while there is a large growing need for research specimens hampered by supply chain challenges. The billions of patient bio specimens are discarded annually from clinical and pathology labs throughout the world after clinical testing is completed. many of which could be useful to researchers but are simply not made available to them. Moreover, billions of patient encounters occur across the globe where a specimen could be obtained specifically for research, but the patient simply isn't offered the opportunity. These are potential research opportunities that are lost on a daily basis, slowing down the pace of medical advancements. In addition, every discarded specimen and every squandered patient encounter represent missed revenue opportunities for healthcare providers, most of whom need additional income sources. Our pioneering technology, the iSpecimen Marketplace solution, solves these biospecimen procurement challenges. The platform uses healthcare data to instantly connect researchers to a global network of patients and biospecimens to accelerate time to discovery and ultimately time to market for new diagnostics and new therapeutics. It draws directly from healthcare data sets that our supply partners and makes available patients and specimens searchable via user friendly web interface that in many ways is very similar to other b2c E commerce platforms. Researchers can intuitively search for specimens and patients across a partner network of hospitals labs file banks blood centers and other healthcare supplier organizations. Not only do we connect our supply partners to our research clients to enable the quick searching of specimens, but our workflow automation software manages the entire procurement process from invoice to inquiry, including contracting, compliance management, sample logistics, and data management. Utilizing our platform, researchers can procure biospecimens more efficiently and greatly reduce the time to obtain these valuable samples. The iSpecimen marketplace doesn't only offer benefits to researchers, healthcare providers and our supply network benefit as well. Providers realize increased revenue and help advance the pace of healthcare discovery on the platform that ensures for them compliance with today's privacy rules, protecting patient privacy and security of patient information. At the same time, researchers save time by procuring biospecimens quickly and efficiently. which in turn accelerates their diagnostic, therapeutic, and vaccine research, while also reducing the risk for the platform that manages contracting and compliance processes. Over the past five years, we've made considerable progress as an organization. As of the end of this year's second quarter, we had 190 unique supplier organizations under agreement, providing us access to over 1,000 hospitals, thousands of clinics and medical practice groups, more than 135 clinical research centers, approximately 55 biorepositories, more than 45 clinical and pathology laboratories, five blood centers, and three healthcare information exchanges, what are also known as HIEs. During the same period, we grew our customer base, meaning unique customer organizations that have purchased from us. From 24 at the beginning of 2016 to nearly 380 organizations at the end of this past June, a 65% compounded annual growth rate. We also increased registered individual users on the iSpecimen Marketplace platform from 43 to more than 3,800, a 126% compounded annual growth rate. That is substantial growth by anyone's standards. To date, 70% of the top 20 pharmaceutical companies and 70% of the top in vitro diagnostic companies worldwide have procured specimens from iSpecimen. We have delivered more than 155,000 specimens to researchers across 2,000 projects for our customers. In 2016, the first year we focused on customer acquisition, we reported revenue of 1.4 million. The following year, 2017, revenue more than doubled to 3.1 million. And between 2019 and 2020, we experienced 90% year-over-year revenue growth, ending 2020 with about $8.2 million in revenue. In summary, between 2016 and 2020, we realized a revenue growth rate in excess of 53% compounded annually. These are impressive results and are even more telling considering the many challenges the medical and life sciences research industries faced in 2020 from the COVID-19 pandemic, which included temporary office and facility shutdowns, supply chain disruptions, and challenging working conditions. I'm extremely proud of our talented and extremely dedicated team for everything we achieved during both 2020 and the first half of 2021. I'd like to personally thank our entire team for their countless hours and significant contributions to our continued growth, success, and our recent IPO. Turning to our second quarter 2021 financial results, I'm pleased to report that we continue to show strong growth. During the quarter, we posted revenue of $2.9 million, a 93% increase compared to the $1.5 million for the second quarter of 2020, and revenue of $5.9 million for the first six months of 2021 compared to $3.2 million for the same period in 2020, an increase of 82% year over year. We also grew purchase orders to 8.8 million for the first six months of 2021, a 31% increase over the same period in 2020. We achieved many significant milestones in our development during the second quarter and throughout the first half of 2021. On June 16th, we successfully priced our IPO and the next morning began to trade on the NASDAQ capital markets under the symbol ISPC. All in all, we generated gross proceeds of $20.7 million through the offering, which included the full exercise of the underwriter's overall allotment option. This was an important milestone for us, as a significant portion of the proceeds will be used for technology development, to hire, train, and deploy additional sales teams, and enhance our marketing efforts, to expand and strengthen our supplier relationships and bolster customer acquisition, and on other general corporate purposes. We estimate this capital can take us to profitability and positive operating cash flows. In addition to providing us with important capital to fuel our organic growth, this NASDAQ listing also expands our access to capital from new sources that were previously unavailable to us. While not part of our immediate plans, a future capital raise could be very strategically important to the company should we choose to accelerate our growth by deploying inorganic growth tactics. Currently, there is some consolidation occurring in the biospecimen procurement industry via mergers and acquisitions, and we may elect to also participate in this way. Our IPO is only one of our recent achievements. In early February 2021, we expanded our viable cell-based biospecimen offerings by introducing new cryopreserved stem and immune cell products for life science research and preclinical drug development. These new products are intended to support the growth of precision medicine and regenerative medicine by giving researchers broader access to necessary materials for developing new diagnostics and therapies for cancer, autoimmunity, and numerous infectious diseases. Researchers can now request these products through the iSpecimen marketplace. More recently, in June, we expanded our board of directors, commensurate with our IPO, with the appointments of John Brooks and Margaret Lawrence as independent directors. We are very excited to welcome John and Margaret to our board, both of whom bring considerable expertise in healthcare, marketplaces, startups, and capital markets to iSpecimen. We are confident that they will provide valuable contributions as we continue to expand our online marketplace and grow our platform. In closing, we have accomplished a great deal since iSpecimen raised its first round of financing in 2012. Since that time, we have established a global healthcare provider network and built an extensive database of millions of unique specimen and patient records. We have proven the benefits of our technology platform and our operating model as evidenced by the substantial revenue growth we have achieved. We continue to expand our supply network, enrich our data assets, and enhance our platform, all of which contribute to the strong research and supplier adoption of the iSpecimen marketplace. We also continue to expand our market penetration through increased sales and marketing initiatives, as evidenced by our strong sales pipeline. In essence, we believe that we have a great first mover advantage and are well positioned for the future. Moving ahead, we expect our sales momentum and revenue growth to continue as more suppliers and customer organizations embrace the iSpecimen marketplace, which is disrupting the biospecimen procurement process for both researchers and suppliers that recognize the benefits of working with iSpecimen. We are positioned to accelerate our growth and we'll use the IPO proceeds to expand and enhance our technology platform, supplier, and customer relationships. Complementing this in the future, we expect to create new revenue streams, leveraging our broad and growing data asset that's a key enabler and differentiator for iSpecimen. By continuing to execute on these plans, we expect to further expand our number of supplier organizations under agreement, advance our technology, and grow our registered users on the iSpecimen marketplace and further expand our revenue. We are very pleased with what we have achieved already, including our IPO, and we are even more optimistic about our future prospects with the latest capital raise. We look forward to speaking with you all again on future earnings calls and updating you as we continue to execute on our growth plans for 2021 and beyond. Now I'll pass the call on to Tracy, who will review our financial results. Tracy.