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spk04: Good morning, and thank you for joining us today. I would now like to hand the call over to Megan Paul of Investor Relations. Megan, the floor is yours.
spk00: Welcome to the OpGen first quarter 2021 earnings call and business update. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a Q&A session. As a reminder, this conference call is being recorded today, May 13, 2021. Before we begin, I would like to caution you that comments made during this conference call by management may contain forward-looking statements regarding the operations of and future results of OpGen, including its subsidiaries, Curitas and Ares Genetics. I encourage you to review OpGen's filings of the Securities and Exchange Commission, including without limitation the company's most recent Form 10-K and Form 10-Q for the first quarter of 2021 that may be filed with the SEC, that will be filed with the SEC. which will identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statement. Factors that may affect the company's results include, but are not limited to, our ability to successfully achieve the expected synergies from the company's completed business combination with Curitas, and to implement the combined company strategy, the impact of the continuing global COVID-19 pandemic on our business and operations. our use of proceeds from the at-the-market offering that we commenced in February 2020, as well as the proceeds from recent warrant exercises and financing, such as the November 2020 pipe and February 2021 registered direct, pursuit of FDA clearance for the Acutus AMR gene panel for use of bacterial isolate, and for other products and services. The rate of adoption of our products and services by hospitals and other healthcare providers in general as well as in the current COVID-19 pandemic situation in particular. The success of our commercialization efforts and partnering strategy, the effects on our business and existing of new regulatory requirements and other economic and competitive factors. The content for this conference call contains time-sensitive information that is accurate only as of the date of this live call, May 13, 2020-21. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call, except as required by law. Joining the call today will be Oliver Schacht, President and CEO, and Tim Deck, CFO of OpGen. I would now like to turn the call over to Oliver Schacht for introductory remarks.
spk06: Thank you, Operator, and thank you, everyone, for joining us this morning. We're very pleased with our first quarter performance and are undoubtedly off to a strong start to 2021. We have an exciting, diversified portfolio of products in a strong cash position that supports an attractive combination of product revenue and partnership growth. We anticipate a robust pipeline of activity in the months ahead and look forward to establishing ourselves as industry leaders in the molecular diagnostics and bioinformatics space and believe we're well on the way. On today's call, we'll begin by discussing recent business highlights, as they relate to the company's core capabilities and top-line growth prospects. I will then pass the call over to Tim to review financial highlights from the first quarter, as well as recent financing activities. We'll then wrap up the call with an update on the company's strategic initiatives and pipeline outlook. I wanted to start by providing an update on one of the product portfolios Optin has previously highlighted with an improved focus for the company. our proprietary univiral platform and unique bioinformatics capabilities. This focuses on expanding the platform to include complicated urinary tract infections and invasive joint infections in the United States, with two upcoming prospective multicenter clinical trials for future FDA submission. Both clinical trials are anticipated to start in the second half of 2021, with the UTI trial in the summer and the IJI trial late in the year. We had submitted materials for a potential pre-submission meeting with the FDA for the Univero UTI product in the first quarter of 2021. Not too surprising, the FDA at this time has declined to host pre-submission meetings due to the ongoing pandemic. An option will be proceeding without such a voluntary meeting as FDA had indicated that they would require a resubmission of such a request and then would take many months before being able to review materials in preparation of such a meeting opportunity. Given that similar products in both clinical indications using identical corresponding sample types have been successfully developed on the Univero platform and CE-IVD marked and are commercially available in Europe and other markets today, Optin does not consider the FDA's inability to conduct such a precept meeting to be a material disadvantage at this time. Most excitingly, as it relates to our Univero platform, We announced earlier this year that we received regulatory approval from the Chinese NMPA for the Curatus Univero system as an IBD instrument system. Options subsidiary Curatus and its Chinese partner, Beijing Clear Biotech, continue to closely interact with the NMPA as it continues its review of the Univero A50 pneumonia cartridge. The product is the first Univero-based diagnostic application for the Chinese market. A dossier for the review and potential future approval of the pneumonia cartridge was also provided. This dossier includes comprehensive data from various clinical trials and regulatory submissions of the Univero LRT and LRT-BAL products, both of which are FDA-cleared here in the U.S., and the Univero HPN cartridge for hospitalized pneumonia patients, which is CE-IBD marked in Europe. The start of commercialization by our partner, BCB, remains subject to approval of the pneumonia cartridge, which is still pending. We hope to be able to provide updates on the Chinese regulatory approval process and subsequently plan commercial launch in the coming quarters in 2021. At this point in time, however, the NMPA does not provide any specific guidance or timelines for their reviews. As mentioned before, The commercial side of the contract with Beijing ClearBio has been negotiated, and the deal was signed several years ago. To reemphasize, there is no need to negotiate a commercial deal in China anymore. It's already in place, and it contains minimum commitments of 360 Univero systems and 1.5 million cartridges over an eight-year period, cumulatively adding to about $180 million in revenue to option at current transfer prices in the agreement and at current Eurodollar exchange rates. On the topic of partnerships, in January, we announced that options subsidiary Curatus had entered into a distribution partnership with Anar Health Technologies in Colombia. Anar, headquartered in Bogota, is Colombia's leading diagnostics distributor and is already working with numerous renowned global IVD manufacturers. Under the distribution agreement, Anar has the exclusive rights to commercialize the Curatus Univero A50 instrument system, and its full suite of Univero infectious disease diagnostic application cartridges in Colombia. The distribution agreement has an initial term of three years, and it can be extended in one-year increments. In return, ANAR has committed to significant minimum purchases of Univero instruments and application cartridges over the initial three-year term, amounting to a total of at least 10 Univero systems plus significant numbers of Univero cartridges. ANAR is responsible for product registration, which has progressed nicely for the Univero platform and the entire portfolio of Univero cartridges during the first quarter and year-to-date in 2021. And they're actually working on an accelerated preliminary registration for the Univero system. ANAR is committed to introduce the Univero product line to the Colombian market. We continue to be encouraged by this partnership as it strengthens our commercial presence in Latin America and and is in alignment with our core commercialization and revenue growth strategy. In early 2021, as part of the launch preparation, a highly successful pre-marketing event was held at the 12th International Symposium on Bacterial Resistance, Diagnostic Stewardship, and Infection Control from February 24th to 26th, 2021, in Colombia. Option session within this program, where one of our key opinion leaders presented, was titled Detecting Antimicrobial Resistance Genes to Guide Patient Care. on February 25th. In March, we announced the final data from the Karolinska Institute study following publication in a peer-reviewed journal. This paper highlights options univaro HPN products for hospitalized patients with pneumonia, demonstrating a higher diagnostic yield than bacterial culture, with a high negative predictive value of 99.8% for pathogen detection. This strong performance data comprehensive coverage, and turnaround time of less than five hours from sample to result provides clinicians earlier data to inform antimicrobial decisions, especially in critically ill COVID-19 patients. As it relates to the Univero product line, I wanted to highlight the outcome of our very successful and highly attended webinar titled Pneumonia Diagnosis, Bacterial Superinfection in COVID-19 Patients that took place in April. Professors Christian Gieske, at the Department of Laboratory Medicine, Karolinska Institute, Stockholm, Sweden, and Drew Bell, the Medical and Public Health Microbiology Fellow at Indiana University School of Medicine, Indianapolis, presented their independent study results from the univaro-hospitalized pneumonia, HPM, and univaro-lower respiratory LRTBAL panels. Their studies demonstrated that syndromic testing of lower respiratory specimens with univaro-HPM and LRTBAL panels can indeed improve patient care, and time to appropriate targeted antibiotic therapy in COVID-19 pneumonia patients, as well as in non-COVID-19 population with a suspicion of pneumonia. The webinar highlighted that Univero detected bacterial pathogens up to seven days earlier and would have enabled prompted appropriate targeted antibiotics in 41.3% of cases and reduced time to appropriate therapy by 25.7 hours. Now, Shifting gears, I would like to discuss options subsidiary Ars Genetics activity contributing to top-line growth this quarter. We were excited to announce that Ars Genetics and Sondos, the number one global supplier of generic antibiotics, not only extended their collaboration within its pharma partnering program, but Sondos also added and procured another joint project in the first quarter of 2021 to assess the potential of molecular surveillance for better informed therapeutic guidance and antibiotic stewardship. The overall goal of this partnership is to develop a digital anti-infectus platform combining established microbiology laboratory methods with advanced bioinformatics and artificial intelligence methods to support drug development and lifecycle management. As it relates to Irish genetics, in February, we announced a peer-reviewed study highlighting best practice techniques for accurate antimicrobial resistance prediction. This study focused on whole genome sequencing data that supports harmonization of the development of good machine learning practices. This study adds to Ars Genetics' publication record, further validating our approach to becoming a globally recognized leader in the development of AI-powered, next-generation sequencing solutions for infectious disease testing. Addressing the U.S. FDA Action Plan, by developing good machine learning practice and robust algorithms will be key to moving our AI-powered solutions into clinical practice. Applying the proposed best practice techniques to RSTB allowed us to further improve predictive performance of whole genome sequencing-based AST. In this context, We're currently also working with several leading clinical centers in the United States to further demonstrate the potential of accurate whole genome sequencing-based AST and independent validation studies. We also received great news this quarter relating to our work with the New York State Department of Health. Opgen announced that our collaboration using a state-of-the-art solution to detect, track, and manage antimicrobial-resistant infections statewide has expanded and extended beyond the second-year expansion phase by another six months through September 30th of 2021. The six-month extension and expansion contract is valued up to an additional $540,000, which includes a quarterly retainer-based project fee as well as volume-dependent per-test fees. We're providing our ACUIDIS AMR gene panel for isolates for rapid detection of multidrug-resistant bacterial pathogens along with our Acutis Lighthouse software for high-resolution pathogen tracking. We anticipate that with our innovative solutions, we'll be able to proactively identify such pathogens, leading to early intervention and potentially life-saving treatment. This six-month extension period gives us time to also discuss and evaluate potential future forms of collaboration with the New York State Department of Health across the state. As of today, four testing centers that run the ACUTUS AMR gene panel tests on isolates are up and running, servicing more than 30 affiliated hospitals. We've seen significant ramp-up in testing volumes in the first quarter and into the second quarter of 2021. I will now turn the call over to our Chief Financial Officer, Tim Deck, who will review financial results for the first quarter and discuss recent financial developments for the business. Tim?
spk05: Thank you, Oliver. On today's call, I will briefly touch on the highlights of the first quarter, discuss our balance sheet position, and review underlying growth drivers for the business. Please keep in mind that the business combination closed on April 1, 2020. Therefore, Q1 2021 results include the full quarter as a combined company, whereas Q1 2020 numbers are for OpGen standalone only. Revenue for the first quarter of 2021 was $830,000, up 34.5% from $617,000 for the prior year period. The increase is largely due to the business combination of OpGen with Curitis, all set in part by lower collaboration revenue related to our New York State project and lower fish product revenue, which final orders processed and delivered in Q1 2021. We have now closed out the fish business entirely and will not generate any further revenue from this product line in Q2 2021 and beyond. Operating expenses for option for the first quarter of 2021. were $7.1 million compared with $4.6 million in the first quarter of 2020. Since the business combination, our OPEX byline has been consistent and right on budget. R&D was $2.8 million, essentially flat over the last four quarters. G&A was $2.7 million, also flat over the last four quarters. And sales and marketing was $900,000, likewise flat over the last four quarters. One item I would like to point out is in the other expense category. We reported a one-time non-cash accounting charge of $7.8 million associated with the war inducement, which raised gross proceeds of approximately $10 million. Net loss for the first quarter of 2021 was $14.9 million, or 50 cents per share, compared with $3.9 million, or 53 cents per share, in the first quarter of 2020. Our story has continued to resonate very well with investors throughout the beginning of 2021. We have strategically moved the company forward by continuing to strengthen our balance sheet this quarter by raising $34.7 million, bringing our cash position to $39.4 million as of March 31, 2021. The increase in cash this quarter was attributable to a $25 million registered direct offering in February, at a strong price point, and the warrant exercise and exchange of $9.7 million in March. Both the registered direct offering and the warrant exercise and exchange carry warrants at a strong strike price of $355 and $356, respectively. These warrants, along with the company's remaining capacity under its existing shelf, could generate additional proceeds of up to $37.9 million for the company, if all were exercised in full. Total shares outstanding as of today are approximately 38.3 million shares, and the fully diluted number of shares would be 49.8 million shares. I would like to make a brief comment on Proposal 2 and the proxy statement requesting stockholder approval to increase our authorized shares from 50 million to 100 million. The Board and management thinks it is very important that this proposal be approved. Our fully diluted share account is bumping up against the current maximum number of shares authorized. We certainly realize we might be able to access an additional $30-plus million of cash via the warrant that I mentioned a moment ago. However, the additional authorized shares would be beneficial for a number of reasons, including strategic business development efforts, corporate expansion, and potential future M&A activities. I mentioned in March that I would be considering providing additional guidance on the company. I think due to the continued challenges presented by COVID-19 pandemic, we will refrain from any specific revenue guidance today. However, I will retouch on a few things I previously stated. I will echo my comments in March. The company continues to see growth in its Univera, LRT, LRT, BAL, and UTI product lines with 11 additional Univera analyzers placements during the court. We continue to be very optimistic on the traction we are seeing from these products. I also mentioned, and Oliver touched on a moment ago, that one of the company's most significant long-term growth drivers would be China. Currently, the timeline for NMPA approval of the company's Univera pneumonia cartridge remains unclear. Once approved, though, our partner, Beijing Clear Bio, has committed to a minimum purchase of 360 Univera systems and 1.5 million cartridges, cumulatively over an eight-year time period with total revenue of up to $180 million. And I also previously discussed potential Ares licensing and partner deals. We remain actively involved on those fronts, but given the stage of negotiations, it would be prudent to assume that any material deal would not happen until later in the year. And finally, cash burns. The company took strategic and operational measures in late 2020 with the discontinuation of its fish product line and cancellation of its ACUTUS AMR urine trial, as well as moved to a smaller and tailored new headquarters facility and lab and warehouse space to reduce its cash burn. We expect to utilize these savings in the form of prospective trials for our Univera UTI and IJA products in the U.S., as well as expand our investment in our AERIS genetics and A30 technologies. We expect the additional cost savings from late 2020 and to have a similar cash burn pattern during 2021 of $5 million to $6 million per quarter. With that, I'll turn the call back to Oliver to discuss additional key milestones. Thank you, Tim.
spk06: I would now like to briefly highlight some of OPCN's key upcoming milestones in our development programs and commercial activities. As stated earlier and on previous calls, Optin has remained in constant dialogue with the FDA regarding the status of the ACUTUS AMR gene panel for isolate 510K submission, despite the ongoing delays in the review of non-COVID-19 related submissions. Last October, Optin had issued our formal response to the agency's additional information request, which we had received earlier in 2020. Following this submission in November 2020, we received notice from the FDA indicating they would be reallocating CDRH staff from open submissions to prioritize emergency use authorization or EUA requests for in vitro diagnostics intended to address the COVID-19 pandemic. While the staffing focus on COVID-19-related EUAs within the FDA continues, we were pleased to report that at the end of January, the FDA had informed Optin that they have formally resumed the review of our submission. Optin had anticipated that this reallocation of FDA staff towards the review of its submission should have allowed for a near-term clearance decision for the Acutis AMR gene panel, although the FDA has recently reiterated to Optin that it is still not able to commit to any MDUFA timelines. Recently, in the last couple of days, the FDA provided further written updates to OPTION on their timelines and stated that they now, and I quote, expect to provide substantive feedback, review feedback, within 120 days of the 29th January 2021 restart of the formal review, i.e., by the end of May of 2021. And yes, we can confirm that most of such substantive feedback has already been received to date and An option has already responded to such FDA feedback with our revised documents. Comments to the few remaining open items are expected in the coming days in May. The FDA also stated that they, and again I quote, expect to complete the review within 210 days, end quote, of the review restart, i.e. that would be on or before 27th of August of 2021. However, the FDA cautioned that the, and again I quote, review completion timelines can be affected by submission complexity as well as other incoming workloads and public health priorities, end quote. So again, to reiterate, this would suggest that all substantive feedback should be in by the end of May and the FDA's completion of review and subsequent clearance decision should come on or around late August. We're confident that OPTION has addressed all of the agency's comments and suggested edits to key documents, such as the intended use statement, the instructions for use or package insert, electronic user guide, and operating manual for the Thermo Fisher Quant Studio 5 already. FDA feedback in common to the 510 case summary are still pending. Nonetheless, we anticipate a clearance decision at the FDA's earliest opportunity in line with the aforementioned timeline, which according to the FDA could now extend into Q3 of 2021. While the FDA is working towards their final clearance decision, we have continued full scheme ahead with commercial launch readiness activities. We've already manufactured several batches of Acuritus AMR gene panel for isolate product in preparation for commercial release. In other words, our commercial team is poised for launch. We've also made further excellent progress during the first quarter and year to date in the final development phases of our Univero A30RQ platform. we reiterate our expectation that by mid-2021, we should have a series of 10 instrument systems readily available for final verification and validation testing. We've already established several assays on the A30 cartridges, including one for SARS-CoV-2, flu A and flu B, and RSV, and one assay for several AMR markers. As previously mentioned, we can confirm that Optin continues its dialogue with several potential partners for such a platform. We have received specifications for several potential products that could be developed onto such type of a system, and we believe that a partnering opportunity for option around the 830 platform assets may present itself in the next several quarters. In closing, we're very pleased with our results for the first quarter of 2021 and head into the second quarter with a much stronger balance sheet and cash position and a robust pipeline of activities and a corporate strategy that supports growth across the entire portfolio. We believe OPTION is in a strong position to pursue value-creating opportunities to meet our growth and profitability targets. We're well on the way with exciting announcements, such as the extended partnership with New York State, validating peer-reviewed publications, and a prospective pipeline that includes the pending FDA clearance decision, per the guidance that the FDA provided, which we outlined during this call, and a swift subsequent commercial launch of the ACUIDIS AMR panel for isolates in the U.S. As always, thank you for your unwavering support and for participating in this morning's call. I would now like to turn the call back to the operator for questions.
spk04: Thank you. We will now begin the question and answer session. If you do have a question, please press star 1 now to be placed into the queue. A confirmation tone will indicate you are in the queue. If you would like to remove yourself, please press star 2. One moment, please, while we poll for your questions. Thank you. Our first question has come from the line of Yi Chen with HC Wainwright. Please proceed with your questions.
spk03: Thank you for taking my questions. My first question is, you mentioned that there are still some remaining items that need to be addressed as requested by the FDA. Is that correct?
spk06: That is correct. I think, I mean, the one that I specifically called out was the 510 case summary. Now, as the name suggests, the 510 case summary is the overall summary of all of the other documents, including the intended use, the instructions for use, the user guide, et cetera. So what we've already done, given that we have already received and incorporated all of the other feedbacks, we have proactively already put into this 510 case summary the all of the items that we logically would anticipate the FDA to request since they have asked for those edits, wording changes, et cetera, to be made in other documents. So once we do get their feedback on that, we should be able to turn that around very swiftly and get it back into the FDA's hands. Got it, got it.
spk03: And assuming you obtain marketing clearance at the end of August, what would be the potential market uptake during the remainder of this year after launch?
spk06: Well, so we're obviously not providing any specific revenue guidance at this point. But, you know, the way to think about this launch, like, you know, frankly, any other similar platform launches in the rapid molecular diagnostic space, if you're targeting large academic centers and public health institutions, of which there are several hundred across the U.S., you'll likely see a wide range of annual testing volumes. This could start as low as a couple of hundred tests a year and up to well over 1,000 tests per year per installation. So given our initial list price for this first-in-class and first-to-market broad genetic AMR gene panel of $175 a test, and then typical volume-based discounting and commercial model that will likely rely on reagent rental, you can anticipate that per-installation annuities Once these sites go live into clinical and commercial routine, it could be somewhere in the, you know, $50,000 to $150,000 per installation.
spk03: Got it. And with respect to the collaboration with New York State Department of Health, so after September 2021, what could likely happen in terms of another extension?
spk06: Well, when you look back, originally we had entered into the New York State Department of Health project back in 2019. It was designed to develop the platform for rapid and effective infection prevention and outbreak tracing and tracking and monitoring. The year two, which started on April 1st last year, was designed to deliver the testing volume and the data for the New York State Department of Health to assess the impact and how to best think about the potential statewide rollout across more hospitals and more labs in New York State. Since we saw, you know, that sort of during 2020 and due to COVID-19, testing was suspended for a couple of quarters and only restarted in fall, that's why we did the six-month extension. And we've seen great uptake and uptick in testing volumes across all of the sites since then. When you sort of think about a year three and beyond, there's multiple potential components. So one thing, obviously, we would want to see the sites moving from using the research use only or RUO-labeled acute AMR kits over to the IBD clear kits once they're FDA clear. The next thing, we would anticipate adding more sites across, you know, the state of New York to really get it ultimately statewide. Right now, we have four centers, Wadsworth as the New York State lab, and then, you know, a large central lab at Northwell, one way at NYU. with, you know, these 30-plus affiliated hospitals sending samples in for testing. One thing we've already seen here in recent weeks and months is having added additional sites that are sending samples either to Wadsworth or to some of these New York City-based labs. But, again, so additional installations for additional testing sites, expanding the hospitals that are in the network sending in specimens, And then ultimately, you know, once this has been proven to work as a model in the state of New York, clearly also looking at phases of potentially rolling this out to other states across the country.
spk03: So does that suggest that by the end of this year, there could be a potentially a formal commercial contract between Auction and New York State?
spk06: I mean, there already is. The contract we have with New York State is a commercial contract. Again, it specifies the dollar amount that they're guaranteeing as a retainer. But could there be another extension? Yes, absolutely. I mean, our objective, and we've done that with the year two, which was seamless right after the end of year one. We had that second year contract start April 1st without missing a beat. We did the same thing for the six-month extension. The year two formally ended March 31st, and as of April 1st this year, we now have that extension in place. So our objective would clearly be to continue that relationship seamlessly beginning with the fourth quarter of this year.
spk03: Got it. And finally, do you have any visibility at this time regarding when could Chinese NMPA approve the univariate partridge for pneumonia?
spk06: As we stated in the call, we do not have any visibility. You know, we're fortunate enough that for the first time in the year, the United States FDA has finally come back with a timeline, which is robust and very specific and clear. The Chinese NMPA has so far not come back with any timelines. But, again, they hadn't done this for the instrument either. When, you know, there were questions that we had received and responded to back in the fourth quarter and late fall of 2020, They then went radio silent and then in Q1 sent across the approval. So, so far we have responded to all of the requests for additional data in the dossier on the cartridge. We've provided, frankly, all of the data that exists from clinical studies and trials within, you know, the option group, be it from U.S. FDA, Univero pneumonia tests, or from the European versions, as well as a number of external sources, third-party studies. So, you know, we believe we've provided everything there is, but, you know, we do not have visibility on their timeline. Very similar, so there is very similar to the United States. They have, you know, timelines in general that are similar to MDUFA timelines, but like here, they've essentially suspended those timelines.
spk04: Got it.
spk06: Thank you.
spk04: Thank you. Our next questions come from the line of Maxim Jacobs with Edison Group. Please proceed with your questions.
spk01: Hi, guys. I just have one question, which you may or may not be able to answer. I was just wondering, so you mentioned that one of the reasons for the increase in authorized shares is potential M&A activity. So I don't know if you could just give us a broad sense of, like, if there were M&A activity, what would a potential acquisition look like?
spk06: Good question, Max. And so, obviously, at this point, there is nothing concrete or specific. So we're not, at this point, working on any transaction or any specific acquisition, nor have we publicly guided to any particular point. Now, if you look at the history of Optin, though, Optin today is the result not only of the M&A transaction between Optin and Curatus and Ars Genetics, But option historically itself had been the product of a merger between option and Adventix. So we have a history of, you know, looking at complementary products that can be added into the portfolio that could be a good commercial fit. So, you know, we clearly strategically intend to remain focused on our core theme of fighting antimicrobial resistance. So anything that's within infectious disease with a clear focus on AMR, and that is a synergistic fit to the product portfolio and pipeline. Looking at, you know, potentially areas to strengthen the bioinformatics and RS genetics-based, you know, service and product offerings, those might certainly be areas to look at further future growth. And, you know, some of the acquisitions historically, you look back at the acquisition of what has now become RS genetics from Siemens was a cash-based deal. So it wasn't actually a share-based deal, similar for the 830 platform when we originally acquired it. It was a cash deal for the asset acquisition. So it's really more of creating the flexibility and the means to, you know, potentially raise additional capital and or, you know, strategic potential portfolio roundouts and expansions.
spk01: Okay, great. That was very helpful. Thanks for taking my question.
spk04: Thank you. Our next question has come from the line of Ben Hainor with Alliance Global. Please proceed with your questions.
spk02: Good morning, gentlemen. Thanks for taking the questions. First off, for me, on the ARIES universal pathogen assay, I think this is the first time you guys have disclosed, or at least that I've seen, that it covers over 6,000 genetic markers for AMR. That seems like I guess potentially several orders of magnitude above most currently available tests. Can you kind of give us a little bit more color on that assay and kind of some of the finer points of that?
spk06: Good, you know, good spot there. Indeed, it is the first time that we have disclosed that. Now, as the name, UPA stands for Universal Pathogenome Assay, so the goal here is really using next-gen sequencing and the full power of next-gen sequencing to bring, you know, a very broad panel that allows you to, you know, identify these genetic markers. Now, the way to think about this from a commercial rollout, this will initially be, you know, research use only provided as a service. In Europe, that, you know, would certainly be a, you know, sent in service into the ARIS lab out of Vienna, Austria. Here in the United States, you know, of course people can always send isolates across the pond, but we're likely also going to be looking at channels of bringing information bringing that essay here, and then you can imagine over time from, you know, from that universe of 6,000 markers, you could, for specific questions, critical questions, You could imagine having targeted subsets. I would say it is prudent to assume that you're likely never going to take, I shouldn't say never, but not anywhere in the near future would you take a panel as broad as this through an FDA process simply because it would be a daunting task from a clinical validation standpoint. There's a reason why essentially all next-gen sequencing providers and platforms have opted for a CLIA lab route. rather than going the IVD kit and FDA clearance route. But, you know, it also sets a benchmark for the type of depth and breadth of what we're able to get out of R's database and launch commercially as a service offering. And to remind you, I mean, this is, in fact, the panel that we have first pilot customers from the – you know, Austrian equivalent to the Austrian FDA, and by now a handful of commercial customer sites across Europe. So it's definitely gaining quite some interest. And we'll be, in the coming earnings calls, we'll be mapping out a very clear roadmap for the way to think about Aris Genetics launching and deploying its various services, starting with isolate sequencing service, going to the universal pathogenome more broadly, as well as some of the bioinformatics software-specific offerings. So this is the first step in a series of launches that we anticipate making here commercially over the coming months.
spk02: Okay. That's very helpful, Culler. You know, I guess on the FDA's written responses to the Univero UTI report, meeting request application, you know, were there any surprises in there? And then, you know, just I know it's commercialized outside of the U.S., but is there anything with that that kind of hinges on the acutest decision? I know that's for isolates and not urine-based, but just anything to be thinking about on that front?
spk06: No. So for the Univaro UTI, we had submitted what's called a request for a pre-sub meeting. These are entirely voluntary. It's always an opportunity when you have a pre-sub meeting to get in front of the FDA. Usually it's a one-hour meeting, and we even proposed doing this virtually and saying, you know, here's a handful of questions that might have incrementally helped, you know, shaping the clinical trial. Now, Given their priorities and given that they're backlogged, you know, it was absolutely no surprise that they said, and all they said is, look, at this point we're not hosting any pre-sub meetings, just not on our priority list. There was no substantive feedback whatsoever. I'm not even sure they read the document in our questions. They basically said you can resubmit, but then it's going to take several months for us to review the request, and it's likely going to be resubmitted. you know, many months before we even begin starting thinking about scheduling. So we said, well, on balance, Optgen had previously had a number of these precept meetings around the ACUDA's urine trial. So we've actually got the benefit of quite some color and feedback from the FDA already, and that, frankly, will be sufficient, again, given that until last summer there was an ongoing prospective multicenter urine trial going Yes, on a different platform, but ultimately from a pathogen and AMR marker coverage, extremely similar. So no surprises there. Also, you know, just to expand on the FDA feedback we did receive in writing on all of these documents for the Acute as AMR, not a single surprise, not a single new question. These are what I would, you know, characterize as let's call them cleanup edits. footnote wordsmithing, table formatting, where the FDA had come back and said, look, you know, we'd like you to combine three different genetic AMR markers that are all from the same family into one in your results report. And after we'd done that, you know, they sort of said, yeah, and then now you should kind of combine those three lines in that table into one. It gives you a sense of, I mean, they're trying to clean up the documents, format the bullet points, format the tables. you get the sense that they're getting ready to get this off their workload there. So, again, we're confident that there's not been any substantive surprise or, again, no new question, no new issue raised. It's a question of time for the agency to work through the process and work through the motions.
spk02: Okay, that's helpful. And then on the New York State, you know, obviously they're plenty busy, and thanks for the color earlier on, you know, what an extension could potentially look like. But you also mentioned that, you know, moving this into additional state, you know, kind of Department of Health type, situations. My recollection is a while back you guys might have had some conversations with folks, not formally, it doesn't sound like it, in other state Department of Health and such. Is there anything that is kind of ongoing in discussions with other entities within other states right now or Is everyone still kind of too busy with COVID to focus too much on it?
spk06: I would say in general, folks are probably still, you know, coming to grips with what's hopefully the tail end of the COVID situation. Now, we've certainly identified across the United States a significant number of, you know, states and local health authorities and institutions that might very well be you know, interesting partners and to have these types of conversations. But at this point, our focus for the ACCUIT is AMR gene panel. Number one is the FDA clearance. Number two is then converting the New York State sites that are using it to the FDA clear kit. Number three is to get the New York State extension. And based on the learnings, all of the lessons learned, we're actually working very closely with all of the stakeholders across all of the sites at New York State to also think of ways we can publish the data that's being generated throughout that two-year collaboration project. It's going to be a blueprint and a role model showing the benefits and the power that this type of solution can have. And then having that data in hand and having the clear, you know, here's what we found, here's how it benefited, here's why we're continuing rolling this out more broadly in New York State, that's a much stronger pitch than, you know, going to any of these other states at this point. And the first question you're going to get, well, so how's New York State doing with the broader rollout and, you know, where are you on the FDA clearance? So... It's got to be a question of timing, so at this point it would be premature to speculate on any specific conversations there.
spk02: Okay, that makes sense regarding kind of the sequencing of, you know, other institutions. And then, you know, finally this is kind of open-ended, but, you know, just curious on, you know, the reactions you've gotten from some of the study results and webinars that you've hosted, you know, You know, the co-infection study with the HPN panel, you had the pneumonia webinar. You know, is there anything of note that investors might be interested in, you know, with regard to the reaction you've gotten from some of these things?
spk06: I mean, again, for the pneumonia webinar we hosted, we had well over 1,000 preregistered participants. and it was really global, so I'm going to say it was probably roughly 50-50 between the U.S. and, you know, around the world. A lot of, you know, a lot of positivity. The data, I mean, you look at a negative predictive value of 99.8%. I mean, I've been in molecular diagnostics for almost 25 years. You don't often get to see this type of data. Mathematically, it doesn't get much stronger than that. So a lot of positive feedback, obviously a number of – As you always get, you know, you always attract a competitive crowd listening in to these things. as you're publishing data, but also a lot of, you know, potential customers and leads and, you know, stakeholders within those sites. So it certainly helps strengthen and broaden the funnel of commercial sales opportunities. So we obviously have a number of ongoing conversations. You know, as these types of studies, since they were independently done, independently analyzed and presented, you know, it's clearly validation of the, you and the clinical value potential of the platform. So it's been very positive, indeed, from a feedback perspective.
spk02: Okay, great. Thanks for all the code, gentlemen. That's all I had. Congrats on the progress. Thanks, Ben.
spk04: Thank you. That's all the time we have today for questions. I would now like to turn the call back over to Mr. Schaft for any closing comments.
spk06: Well, really, thanks, everyone, for joining us today. Please visit the investor section of our website and our SEC filings for updates on the company. Thank you very much, and look forward to keeping everybody apprised of the exciting news coming up. Thanks.
spk04: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
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