Lucira Health, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Lucera Health Third Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Greg Hadadacek from the Gilmartin Group.

Thank you, Jonathan, and good afternoon, everyone. Earlier today, Lucera Health released financial results for the third quarter ended September 30, 2022. A copy of the press release is available on the company's website. Joining me on today's call is Eric Engelson, President and Chief Executive Officer, and Dan George, Chief Financial Officer. Before we begin, I'd like to remind you that during this conference call, the company will make forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including without limitation, the risk factor section in the company's most recently filed annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q. which identify the factors that may cause actual results or events that differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development and manufacturing, product potential, the regulatory environment, sales and marketing strategies, capital resources, or operating performance. With that, I'll turn the call over to Eric.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us. Welcome to the third quarter 2022 earnings conference call. Lucera had a solid third quarter in which sales were $34.4 million driven by demand for our PCR quality molecular COVID-19 test. This represents a 130% increase over sales in the same period last year and a sequential revenue increase of 32% over the second quarter of this year. On November 11th, we executed a marketing agreement with Pfizer to increase awareness of the risks of COVID-19 and the availability of treatment. The Pfizer partnership will provide financial and promotional support so that through Lucera Connect, test users who are positive for COVID-19 can immediately find high-quality information about the disease and its treatment options and access a healthcare provider consultation. In addition, Lucera has partnered with telehealth marketplace Sesame Care to offer all Lucera test users an immediate and affordable option to speak to a doctor about their test result without leaving home. If a consumer tests positive for COVID-19 on a Lucera test, a telehealth visit is completely free and can typically occur within 15 minutes of scanning one's test result to luceraconnect.com. To our knowledge, there is no other offering out there that combines such convenience, speed, and affordability. Just as Lucera's tests are one-time use with no additional investment in equipment required, our referral service can be utilized whenever needed without subscription. We believe that this combined offering is good for public health and good for business. Lucera Connect was built to seamlessly and immediately connect patients to the resources they seek at the moment they need it. the initial diagnosis. These developments provide the opportunity to partner with pharmaceutical manufacturers, brick and mortar locations, and virtual healthcare providers to ensure patients can immediately access high quality information from reputable sources. Lucera test users have the ability to rapidly confirm a diagnosis, speak to a doctor to determine the best next course of action to get to better, and requests of prescription, all without leaving home or spending valuable time and resources on multiple trips and appointments. Turning to some of our operating results. In the quarter, cash decreased to $39.8 million, primarily related to funding our operations and working capital in advance of the anticipated launch of the combination COVID-19 and influenza test kit in the fourth quarter of 2022. The combination COVID-19 and influenza test kit is a molecular test that demonstrated 99% accuracy for COVID and influenza A and B and is comparable to highly sensitive lab-based PCR assays. As of today, we anticipate having sufficient inventory of COVID-19 and combination COVID-19 influenza test kits to fulfill anticipated demand in the current respiratory season in our primary markets of the US and Canada. During the quarter, we received Canadian regulatory approval in the form of an interim order during Q3. We have not yet received authorization from FDA, despite having submitted our EUA in May of this year and maintaining strong advocacy throughout the review process by our DC-based regulatory attorneys. The user operation of the combination COVID-19 influenza test kit is identical to that of our COVID-19 test. And while our EUA submission contained all of the clinical data that was previously agreed in a pre-submission with FDA, the agency informed us in early November that they would grant only point of care approval at this time. The FDA has agreed to allow us to amend this point of care EUA to transform it to OTC use once additional prospective clinical data has been obtained through ongoing clinical trials. The Lucera product is designed primarily for OTC use, and the delay in obtaining the OTC EUA will significantly impact sales and consequently cash in Q4 of 2022. Our board of directors has initiated a review of strategic alternatives, including a potential sale merger, or other strategic transaction and of our financing strategy. At the same time, we are reducing costs, and this unfortunately impacts our workforce company-wide. Several weeks ago, we took action to reduce our workforce and notified 56 employees of a 60-day termination period. And today, we notified an additional 97 employees of a similar timeline. The decision to reduce workforce size was a difficult one. Not only are we disappointed to see these hardworking employees leave the company, the personnel reductions will also delay execution of product pipeline programs. The combined reductions in force represent an approximate 68% decrease of our workforce and are expected to result in $26.4 million in annual cost reductions. Before I turn it over to Dan, I'd like to recognize and thank the employees and contractors of Lucera that have worked tirelessly on behalf of the company's mission. I will now turn the call over to Dan George, our CFO, for a detailed discussion of financials.