iSpecimen Inc.

Good day, everyone, and welcome to iSpecimens' first quarter 2022 conference call. At this time, participants are in a listen-only mode. A question-and-answer session will follow management's remarks. This conference is being recorded. A replay of today's call will be available on the Investor Relations section of iSpecimens' website and will remain posted there for the next 30 days. I will now hand the call over to Alison 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 iSessment's first quarter 2022 results conference call. With us on today's call are Christopher Ionelli, iSessment'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 within 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 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 factor section of the company's Form 10-K for the year ended December 31, 2021, filed with the SEC. Copies of this document 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 with revisions or changes after the date of this call, except as required by law. Now, it is my pleasure to introduce Chris Ionelli, CEO and President of iSPECIMENT. Chris, please go ahead.

Thank you, Alison, and good morning, everyone. Thank you for joining us for today on our first quarter 2022 earnings conference call. I'm excited to provide you with an update on our progress following three completed quarters of operation as a public company. With me are Tracy Curley, our Chief Financial Officer, and Jill Mullen, our Chief Operating Officer. I'll begin by providing an overview of our operational performance, followed by a review by Tracy of our financial performance during the three months ended March 31st, 2022. Following that, we will open the line to take your questions. Q1 was another exciting quarter for the company, marked by a tremendous amount of activity and a few challenges, the latter of which stemmed predominantly from the military conflict between Ukraine and Russia and the resulting geopolitical unrest. Starting with our operational highlights, as we have discussed on our prior calls, following our initial public offering last June, management has been intensely focused on expanding the capabilities of the iSpecimen Marketplace platform accelerating the growth and utilization of our global supply chain, and invigorating revenue growth for long-term value. I'll cover each of these separately, starting with the work being done on our Marketplace platform. I'm pleased to let you know that several weeks ago, we announced a new release of the iSpecimen Marketplace. This was a culmination of planning and work that began in the second half of last year. It's important to stress that this update was the first of a series of updates we plan to release each aimed at delivering incremental yet foundational improvements to our software platform that align with our long-term strategy. As we have discussed on prior calls, our unique marketplace platform is a critical component of our business model and strategy to capture market share by defragmenting and automating a historically inefficient process by which valuable biospecimens are sourced and procured. This latest software release includes new data integration capabilities to further grow and federate our supply chain, such as automated data ingestion tools and data harmonization tools. These new tools improve the ability of biobanks and healthcare providers to add and maintain biospecimen inventories to our platform. Additionally, this release includes a redesigned, easy-to-use interface for researchers to directly search for desired samples in iSpecimen's provider network via an intuitive Google-like search bar with support for additional search criteria. These search capabilities have now been extended to our suppliers, enabling them to better manage their biobanking operations as well. We are confident that the enhanced iSpecimen marketplace will better support our research clients' needs for critical research specimens across the world and make it easier for our suppliers and customers to transact. resulting in increased new client interest and revenue opportunities. In parallel to this first round of work on our software platform, I'm also pleased to announce that we have moved forward into a significant data sharing arrangement with a major nationally recognized cancer center. Through this partnership, we have begun ingesting large sets of deep clinical data that will ultimately be utilized by the marketplace platform to identify patient encounters and many of which may serve as a source for prospective biospecimen collections. We are actively pursuing other data sharing deals like this as part of our plan to accelerate and scale our ability to conduct the highly specific prospective biospecimen collections that represent a growing proportion of our business. On the personnel side, as we continue to advance our unique platform and approach, we saw an opportunity to bring on another outstanding leader to the organization. With this call, we are happy to announce the addition of Evan Cox to the iSpecimen team as vice president and the new head of product management. Evan comes to us from Definitive Healthcare and brings with him a deep understanding of the markets relevant to our value proposition and a set of experiences that align perfectly with iSpecimen. We are fortunate to have Evan on the team, working side by side with our CIO, Ben Belock, and the head of our growing engineering team, Madhu Valuri. It's important to stress the critical role that technology plays in our marketplace platform approach to iSpecimen sourcing and procurement, as well as our long-term strategy. We are pleased with the progress we have made to date and the traction we are getting on this front and plan to continue investing in product design, data engineering, and software development throughout the year. Rest assured, we will continue to aggressively qualify and monitor these investments and these allocations of capital to maximize their return and long-term value to the company. We look forward to providing you with additional updates throughout the year, highlighting new capabilities to support the growing data needs of the research community, the development of workflow automation tools to streamline the procurement process, and solutions that make it even easier for our healthcare provider partners to support the demand for prospective collections. Turning now to the progress we've made with our supplier network, in Q1, we successfully expanded our geographic footprint, securing new suppliers in countries that include the United States, Estonia, Turkey, India, and Venezuela. These new supplier relationships helped expand the capabilities of our biospecimen network by providing us access to specimens such as sequenced COVID-19 samples, a broader array of oncology biofluids and tissues, and both fresh and cryopreserved hematopoietic cell products, among others. As part of this expansion, we added Acutis Diagnostics, a clinical diagnostics laboratory, to our platform as a services provider. Throughout our relationship with Acutis Diagnostics, iSpecimen, I'm sorry, through our relationship with Acutis Diagnostics, iSpecimen now offers sequencing services to its research clients, assisting them with the genetic characterization of a wide variety of biospecimens to better assess the impact of specific mutations on diseases such as COVID-19 and cancer. Combined, these efforts have allowed us to surpass 200 healthcare provider organizations in the iSpecimen Marketplace Supplier Network. Ending the quarter, Q1, we had 205 unique supplier organizations under agreement at iSpecimen. The growth of our supplier network was mirrored by similar growth in our customer base during the quarter. again measured by the number of unique organizations that have procured specimens from iSpecimen. As of March 31st of this year, we had successfully fulfilled biospecimen orders for a total of 437 unique customer organizations, an increase of 25% from the 349 during the same period last year. These new organizations consisted primarily of commercial biotechnology, pharmaceutical, and diagnostic companies. It also included some universities, not-for-profit research centers, and a number of government agencies. Measuring the number of both supply-side and customer-side users that interacted with the iSpecimen Marketplace platform during the first quarter of 2022, we are pleased to report an increase of nearly 35%, and that's compared to the same period one year earlier, Q1 2021. Taken together, we continue to form an increasingly solid base of customers and suppliers, all connected by our marketplace technology. We're confident that our investment in this technology platform will result in a return to growth later this year. Additionally, we expect the recent investments that have been made to bolster our field sales force, which has essentially doubled in size over the past quarter, will also have a material impact on revenue growth in the second half of the year. These additional sales personnel are mid-ramp or starting to ramp and will give us more complete coverage of territories and improved penetration of new accounts throughout the rest of the year. Next, turning to the challenges we encountered during the first quarter. The pandemic continues to pose some lingering issues for us. On the supply side, some healthcare providers in our network continue to face intermittent constraints relating to regional COVID outbreaks in their areas during Q1. While we're now in a period of relatively low COVID transmission and our healthcare provider sites are mostly open, we do remain guarded about additional COVID outbreaks that could disrupt our supply chain. On the customer side, we continue to transition from COVID-related specimen requests dominating the order flow, meaning the heterogeneity of our order flow from customers continues to improve as the pandemic subsides. We believe that our customer base is now on the tail end of their post COVID ramp up back to a level of research activity and particularly preclinical research activity that existed pre pandemic. Tracy will provide more details around COVID related revenue and her comment shortly. Additionally, and significantly during the first quarter, we experienced a sudden shutdown of our supply network in both Ukraine and Russia due to the military conflict and the ensuing unrest. While this affected approximately $1 million in open purchase orders, we demonstrated operational resiliency and flexibility by successfully transitioning the majority of both feasibility assessments and the majority of scheduled vial specimen collections to suppliers in other regions, which is a testament to our business model and the global reach of our network. However, these unexpected supply site closures did have an adverse effect on revenue for the first quarter. For Q1 2022, We reported revenue of approximately $2.5 million compared to approximately $3 million for Q1 of 2021. This diminution in revenue was primarily attributable to the Ukrainian-Russian conflict. And while we moved most open orders to suppliers outside of the region, fulfillment and revenue capture were delayed and are expected to take place throughout the remainder of 2022. Despite this setback during the quarter, we remain extremely confident that the execution of our strategy, along with our investments in technology and key personnel, especially the sales force, will continue to improve our position to gain additional market share over the coming quarters. With that, I'll now pass the call on to Tracy Curley, who will review our financial results. Tracy.