OraSure Technologies, Inc.

Thank you for standing by. Welcome to the OraSure Technologies Incorporated 2020-24 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's 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 would now like to hand the conference call over to your first speaker today, Jason Plagman, VP of Investor Relations.

Good afternoon, and welcome to Orisher Technologies' second quarter 2024 earnings call. Participating in the call today for OTI are Kerry Eglinton-Manner, our President and Chief Executive Officer, and Ken McGrath, our Chief Financial Officer. As a reminder, today's webcast is being recorded and the recording can be found on our Investor Relations website. Before we begin, you should know that this call may contain certain forward-looking statements, including statements with respect to revenues, expenses, profitability, earnings or loss per share, and other financial performance, product development, performance, shipments and markets, business plans, regulatory filings and approvals, expectations and strategies. Actual results could be significantly different. Factors that could affect results are discussed more fully in OTI's SEC filings, its annual report on Form 10-K for the year ended December 31, 2023, its quarterly reports on Form 10-Q, and its other SEC filings. Although forward looking statements help to provide more complete information about future prospects, listeners should keep in mind that forward looking statements are based solely on information available to management as of today. OTI undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. With that, I am pleased to turn the call over to Carrie.

Thanks, Jason, and thank you to everyone for joining us today. We are pleased to provide an update on the progress Orchard is making on three pillars of our strategic transformation, strengthening our foundation, elevating our core growth, and accelerating profitable growth. A few notable highlights during the second quarter include that we delivered Q2 revenue that was near the top of our guidance ranges for both core revenue and for COVID-19 products, where we successfully fulfilled the remaining portion of our largest contract with the federal government. In product extensions, we earned World Health Organization prequalification for our OraQuick HCV self-test. representing the first hepatitis C self-test to achieve this designation. OraSure is proud to add the WHO PQ milestone to our legacy of firsts in the diagnostics industry, and we look forward to working with the global health community to expand market access and bring this test to populations in need. We launched new FDA-cleared packaging and labeling for our OraQuick HIV self-test, which is expected to increase shipping efficiencies and reduce shelf space and plastic usage. Hang on. Sorry about that. The new labeling also removes the contraindication for users on PrEP, potentially expanding access for a population that is recommended to test four times per year. We are seeing positive momentum with Syphilis Health Check following our launch of this key sexual health portfolio product at the end of Q1. We broadened relationships with several leading oncology companies to expand OraCollect DX collection devices into saliva-based liquid biopsy. We expanded our agreement to become a supplier of saliva collection devices for exact sciences. Our OraCollect DX saliva collection device will be utilized in exact hereditary cancer and therapy selection tests. And with our healthy balance sheet, we continue investing in our innovation roadmap and opportunities to leverage our existing strengths in order to position OTI for sustainable, profitable growth. Starting with operating efficiency, we continue to strengthen our foundation and drive operational improvements. As we discussed in May, we launched several new initiatives to further rebalance our cost structure, consolidate our footprint to leverage our centers of excellence, and focus on our core strengths. We made significant progress on each of these programs during the last three months, and Ken will provide additional details in a few minutes. Overall, these important steps, as well as our enterprise-wide focus on continuous improvement, give us confidence in achieving our targets to break even in operating cash flow from our core business by the end of 2024. Our work in the past two years has both allowed OTI to deliver a strong return on the COVID-19 opportunity, and it's well positioned us for the future. Moving to IntelliSwap. We had shared that we would fulfill the remaining portion of our largest contract with the US government during Q2. And we did that, closing strong with $19 million of revenue in the quarter. Moving forward, it's all about our core business. Q2 core revenue of $35.4 million was near the top of our guidance range. Performance in both diagnostics and sample management solutions was consistent with the outlook embedded in our guidance. Within our diagnostics portfolio, we are seeing good momentum with syphilis health check following our launch of Diagnostics Direct's product at the end of Q1 and are receiving strong interest from both existing and new customers. And more broadly, we are having success with multi-product sales across our portfolio of HIV, HCV, and syphilis tests, as healthcare providers and public health organizations, such as the National Coalition of STV Directors, recognize the need for a syndemic approach to rapid testing, given the significant overlap in patients at risk for these infections. Additionally, organizations such as the CDC and SAMHSA have already started to ease restrictions on existing funding streams to increase syndemic testing programs rather than focusing solely on HIV-related purchasing. This evolution is well aligned with our infectious disease product portfolio and our sexual health strategy aimed at expanding our menu of diagnostic tests serving more people. In HIV, during Q2, we received FDA clearance for a new packaging configuration with updated labeling for our OraQuick HIV self-test, which is expected to increase shipping efficiencies, conserve shelf space, and reduce plastic waste. In addition to sustainability improvements, our product is also now labeled with appropriate warnings for use in individuals on PrEP. instead of the original contraindication, a change which has potential to open up a new segment for our offerings as individuals on PrEP are recommended to test for HIV multiple times a year. We have received very positive feedback from our customers, including public health organizations, as well as retailers, regarding the potential benefits of the product extensions for our leading HIV self-test. In another example of product extension innovation, in our sexual health portfolio. We are proud to share that in July, we earned the first pre-qualification for any hepatitis C self-test from the World Health Organization. We are excited to bring our OraQuick HCV self-test to the global health community while adding its important WHO PQ designation to OTI's legacy of first in the diagnostic industry. We are confident in our hepatitis C self-test potential to expand service for populations in need, including the 50 million people living with HCV and the 1 million individuals who acquire HCV each year and to help stem its spread. This opportunity is closely aligned with our strengths in delivering high quality, affordable tests to enable access for more people at scale. Furthermore, We believe our HIV and HCV product extension launches are great examples of OTI's leadership in not just developing rapid diagnostic tests, but also in the innovation that enables ongoing market expansion opportunities over a product's lifecycle. I'll share a few more examples of product extension innovation and its potential to fuel market expansion after I finish summarizing Q2. Shifting to sample management solutions. We are currently seeing a stabilization and early signs of a still gradual recovery in the market environment as genetic testing and research segments adapt to the post-COVID environment and an evolving regulatory environment for diagnostic labs. Additionally, we are seeing increasing interest in our sample collection devices from customers in emerging growth segments like liquid biopsy, animal health, and others. Overall, we remain confident in our strengths leading the market, and as the only 510 cleared collection and stabilization devices in several categories. We are also pleased to announce progress in broadening our relationships with several leading oncology companies. We have signed an agreement to become a supplier of saliva collection devices for Exact Sciences, a company dedicated to helping eradicate cancer through prevention, early detection, and personalized treatment. Our OraCollect DX saliva collection device will be utilized in ExactScience's hereditary cancer and therapy selection test. We believe these two tests offer important advancements in precision oncology by providing actionable insights that empower patients and doctors to make informed decisions about treatment options. As the field of precision oncology continues to expand, we are committed to strengthening our partnerships and supporting the advancement of this promising frontier in cancer detection and care. We are also proud to share that we have expanded our relationship with Variantix, a commercial laboratory specializing in genetic testing for rare genetic disorders, reproductive health, and precision oncology. We believe their whole genome platform stands out for its high resolution detection and characterization of all clinically relevant variant types, providing a comprehensive report from a single sample. Notably, our ORAGENE DX and ORACOLLECT DX saliva collection kits play a crucial role in Variantix's suite of more than 30 tests. Advancing genetic science and precision medicine, through patient-centric solutions that offer easy, accessible and efficient saliva sample collection. It is our goal to power sample collection and management for every molecular diagnostics innovator, to contribute to progress in precision medicine and to help provide actionable insights that guide critical treatment decisions for physicians, patients and families. We continue to highlight that The strengthening of our balance sheet in the last two years is allowing us to invest in innovation for our next phase of accelerated growth. These investments range in innovation from new products and technologies to market expanding product extensions. The vitality of our product lifecycle is key to our near and long-term growth strategy. Product extensions include areas of innovation like these I just shared, achieving the first WHO pre-qualification of our HCV self-test for global markets and clearing with the FDA our HIV packaging improvements and labeling updates. Another example is our recently submitted request to the FDA to expand the range on our HIV self-test to include adolescents. Today, our HIV self-test is labeled for use by patients 17 or older. In working with our partners, we identified a critical public health risk for youth, which translates to an important opportunity to expand access to HIV testing for a broader segment of vulnerable populations. In this case, extending to include 6.4 million sexually active 13 to 16-year-olds in the U.S. each year. In our sample management business, we have additional areas of expansion, such as in the application for saliva-based liquid biopsy. As noted, we have several customers using our current clear devices for work in oncology and are poised to expand our commercial footprint as these markets gain momentum. Also in sample management, we continue to make innovation progress on our Coli-P self-collected urine device. Building on our existing EU clearances, the potential for Coli-P leverages clinical studies, which are required for regulatory clearance, and translates those into adoption for future clinical practice. We previously talked about our Coli-P studies in Europe, which show that people prefer self-collected urine versus swabs. whether self-collected swab or physician-collected swab. For STI reasons, sorry, for STI testing, there are four main reasons for this. It's private, it's painless, it's simple to use, and it's convenient to perform at home. And beyond preference for the device, enabling self-collected urine, another key aspect of Coli-P innovation is stabilizing and preserving the sample. On this front, we recently filed for a new patent for proprietary chemistry to preserve both DNA and RNA and STI applications, which marries urine collection with ambient preservation capability. We've demonstrated success with this strategy in saliva, and ColiP intends to do the same in urine. Regulated healthcare innovation is a multi-year process. And these examples demonstrate why it's worth it. KALI-P has the potential to expand meaningful market opportunities in large and growing clinical segments, such as STIs. We plan to submit to the FDA for KALI-P's STI application before the end of 2025. Before I conclude, I also want to discuss the strengths of our assets and capabilities. and highlight some of the elements that give us confidence in our ability to leverage them to drive sustainable, profitable growth. First, OTI has high-quality, differentiated products that are recognized as category leaders. Our investments in innovation, both new and product extensions, have allowed us to maintain our leadership in our core product lines and position us to further expand our product portfolio. with additional tests for more people and diagnostics, and additional sample types, analytes, and applications in sample management. The strength of our products and our experienced sales team has allowed us to build long-term, durable relationships with our customers. Plus, our multi-year investments in our quality and regulatory programs have further enhanced our internal expertise and our external credibility around the globe. These capabilities allow us to successfully navigate increasingly complex and rigorous regulatory review and approval processes, and to reliably partner with clients subject to the same stringent requirements. Our balance sheet is strong and our collaboration with the government during the pandemic has allowed us to significantly expand our automation capabilities and capacity across multiple product lines. Finally, our focus on instilling an enterprise-wide focus on continuous improvement has provided our organization with the tools to drive meaningful operating leverage as our end markets recover and return to growth. With that, I'd like to turn the call over to Ken to discuss our financial results and guidance.